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Pa. treasurer touts CUs payday loan alternative
WILKES-BARRE, Pa. (4/13/11)--Pennsylvania State Treasurer Rob McChord visited Cross Valley FCU, Wilkes-Barre, Pa., Tuesday to tout the "Credit Union Better Choice" program, a money-saving alternative to predatory payday loans that helps improve consumers' finances in the long run. The program has already saved state consumers $15 million in exorbitant fees and interest when compared with traditional payday loan products. Credit Union Better Choice is a partnership between Treasury and the Pennsylvania Credit Union Association. McChord visited the credit union to hear firsthand how the program helped three local women meet unexpected expenses and start on the path to financial security. He encouraged consumers during National Financial Literacy Month to take control of their financial future by developing a monthly budget and building personal savings. "This program--with its financial counseling services and savings component--can help to get you started," he said. A $500 Better Choice loan costs consumers $42.50 for 90 days, compared with payday lenders' charges of $15 per $100 borrowed for two weeks, or about $450 over 90 days. Participating credit unions have made 43,000 Better Choice loans totaling $20.5 million since 2006, when the program was established. Cross Valley FCU has issued 280 Better Choice loans to 101 members since 2007. The loans are available at 79 credit unions with 222 locations in the state. According to PCUA President/CEO Jim McCormack, the partnership "allows borrowers access to low-cost loans for short-term borrowing needs through credit unions. Every day, credit unions work to better the lives of their members and this is just one way in which credit unions can help." Edward Kaushas, president/CEO of Cross Valley FCU, noted that the decision to offer the program "was an easy one. This program best illustrates the fundamental mission of credit unions, which is that of 'People Helping People.'"
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