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Article CUs an alternative to Wis.s payday loans
MADISON, Wis. (8/7/09)--Wisconsin credit unions are striving to be an alternative to costly payday loans for state residents in need of cash, said an article about the state’s lack of a ceiling on payday lending rates. Credit unions are attempting to meet the need for small, short-term loans, said Christine Henzig, director of communications for the Wisconsin Credit Union League (The Capital Times Aug. 5). A 2008 survey indicated that 60 Wisconsin credit unions offer loans that in essence are alternatives to payday loans, even though they are not uniformly marketed that way, Henzig told the newspaper. The article also mentioned the national initiative to help credit unions develop products to improve their members’ creditworthiness and build wealth---REAL Solutions. The program is offered by the National Credit Union Foundation. University of Wisconsin CU, Madison, Wis., told the newspaper it is encouraged by members’ responses to its Paycheck Advance program, which lent more than $21,000 in 51 loans to members since its inception in June. Through the program, members can borrow up to $500 at a 21.75% interest rate. They must pay back a $50 minimum each month. Borrowers must be members of the credit union, maintain a positive balance in their accounts for six months, and have their paychecks directly deposited into their accounts, the paper said. “Compared to payday loan interest, [the program] offers significant savings to members who have trouble qualifying for a traditional loan,” Mike Long, the credit union’s executive vice president and chief credit officer, told the paper.
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