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Crains Ohio CUs program a payday loan alternative
CLEVELAND (4/17/09)--Ohio credit unions' StretchPay program is featured in Crain's Cleveland Business (April 13) as an alternative to payday lenders. "Ohio's credit unions--long considered a conservative bunch--say they are seeing growing interest in their StretchPay program, which is geared to short-term borrowers," said the article. In Northeast Ohio, 11 credit unions offer the program, with terms varying and with an annual rate of 18%. Crain's interviewed three credit unions: TeleCommunity CU, Akron; Community United CU, Strongsville; and Eaton Family CU, Euclid. Veronica Cromer, vice president of lending at TeleCommunity CU, told Crain's there had been a slight increase in business from people who used payday lenders in the past. She added that people don't understand how much payday lenders really cost them. The credit union explains to them how much they're paying when they visit check-cashers. "It's probably five times higher," she said. Julie Gee, CEO of Community United CU, saw a pattern of young adult borrowers making bad financial decisions and wanting to improve their credit. The loans under StretchPay can be used to boost credit ratings, she said. Fred Siegel, marketing manager at Eaton Family CU, said payday lending alternatives still have a long way to go because payday lenders are "still in the game."
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