KALAMAZOO, Mich. (3/1/13)--The newly opened Community Promise FCU in Kalamazoo, Mich., is looking to be an agent of change by using education to combat payday lending abuses targeting the city's low- and middle-income populations.
The Michigan Credit Union League offered advice to the new credit union, as did other credit unions in the state and the Michigan Credit Union Foundation when the credit union was being established. The league will continue to offer advice and support as it does with all small-asset-size credit unions, Mona Shand, MCUL manager of public relations, told News Now.
To help members obtain a better understanding of borrowing and lending, the community development credit union explains how borrowing money works, said Jim Houston, chairman of the board of directors for Community Promise (mlive.com Feb. 27).
The credit union's lending involves a large educational component, Lee Kirk, Community Promise director of community relations, told the publication.
Community Promise will teach basic money management skills by working with two organizations--Kalamazoo Public Schools and Communities in Schools of Kalamazoo.
The credit union will help provide members with financial services that are not offered by bigger financial institutions, Kirk told mlive.com.
Those services include: credit-building loans up to $2,500 during a 12-month period; unsecured emergency loans of up to $2,500 for 12 to 24 months; short-terms loans for up to $1,000, to be repaid in six months; auto loans for up to $5,000, to be repaid in 24-, 30- or 36-month terms; and shared secured loans of up to $5,000 to be repaid in up to 60 months.
Community Promise also offers check-cashing services for $3 without a compensating balance, money orders, notary public service, and handling outgoing wire transfers.
A high volume of low-level loans is needed to make the credit union successful, Kirk told the publication. Community Promise is looking to attract 35 new members each month, issue at least 12 loans per month and eventually grow its ranks to 2,000 members, he added.
Other credit union organizations supporting the new credit union include: the National Federation of Community Development Credit Unions, Educational Community CU in Kalamazoo and First Community FCU in Parchment, Mich., said mlive.com.
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