|There are more payday lending franchises in the U.S. than McDonalds and Burger Kings combined -- so how can credit unions help their members avoid the high cost of fast credit?|
Lois Kitsch, National Program Director for the National Credit Union Foundation's REAL Solutions program, offers helpful advice.
"Credit unions must be ready to offer low-cost financial products for this very diverse market," Kitsch told the Credit Union National Association's Your Essential Strategies (YES) Summit. "When deciding to offer payday loans, credit unions should think about the target market, product mix, delivery system, education, employees, and resources."
REAL Solutions has helped pioneer payday lending alternatives and many other services for underserved borrowers at credit unions in more than 20 states.
Some of the most unique payday lending alternatives leverage credit unions' ability to work together as not-for-profit cooperatives.
Alternatives across America range from "Stretch Pay" loans, where credit unions can offer more affordable rates by pooling their loan loss reserves, to "GoodMoney," where credit unions can collaborate with Goodwill stores and an affiliated financial education provider.