Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Texas CUs offer payday loan alternatives
DALLAS (7/6/09)--Credit unions in north Texas are working together to develop a payday loan alternative that will cap the interest rate paid by borrowers at 18% (Fort Worth Start-Telegram and Lone Star Leaguer July 2). Credit unions in the Texas Credit Union League (TCUL) are developing the payday loan program as part of the league’s participation in the National Credit Union Foundation’s REAL Solutions program. Representatives of the participating Texas credit unions are currently examining credit union payday loan alternatives developed in Iowa, New Mexico and Pennsylvania. For example, $44.9 million-asset Hershey FCU in Hummelstown, Pa., offers loans of up to $500, which must be repaid in 90 days at 18% interest plus a $25 fee. Ten percent of the loan amount is deposited in a savings account. Loan applicants must be credit union members for 90 days, provide proof of income and be employed for six months. The Texas group hopes to launch its own payday alternative by year-end. Credit unions planning to participate include $5.7 billion-asset Guardian First FCU, Fort Worth; $49 million Security One FCU, Arlington; $36.5 million First Class American CU, Fort Worth; and $5.322 billion American Airlines FCU, Dallas. Payday lenders typically charge interest rates of 300% to 400%. Fifteen states have capped the interest rate at 36%, but a 2008 attempt to limit payday loan interest rates in the Texas legislature failed.


RSS print
News Now LiveWire
NJ Lt Gov Kim Guadagno shares her #creditunion story at @NJCUL convention #NewsNow http://t.co/2B7QiuUK9p
12 minutes ago
#NewsNow: 2013 mortgage data shows 14.8 mil applications, 2.8 mil purchases and more. http://t.co/DId2VFrsEr
1 hours ago
The story of @allegiancecu's Florence Rogers is captured in expanded OklaCity bombing memorial via @WSJLife http://t.co/CmF0xfPcJ4
1 hours ago
.@VACUL breaks ground for new HQ in Richmond #NewsNow http://t.co/cOC0rqqJ9o
2 hours ago
White House honors N.M. #creditunion employee for Hispanic fin. lit. #NewsNow http://t.co/22uAEd6ZJ9
2 hours ago