APPLETON, Wis.-Prospera CU, a pioneer in credit union payday loans has closed one full-service branch and two of its GoodMoney payday loan sites inside Goodwill stores as part of a restructuring.
A total of six positions will be eliminated as a result of the closures.
The credit union earned national attention for the Goodwill partnership at the time it was announced in 2006, including a grant from the National Credit Union Foundation and the community's highest honor, a Herb Wegner Award. Prospera Credit Union will continue to offer "GoodMoney" loans at its four full-service branches.
The GoodMoney facilities inside the Goodwill stores in Green Bay and Darboy, Wis., will be shuttered June 4.
Sheila Schinke, interim CEO for the $147-million CU, told Credit Union Journal GoodMoney is a "low-margin product," and "offering it through the standalone facilities created a challenge, which is why we are pulling it back to our existing branches."
The payday loan alternative is more of an educational opportunity for members than a source of revenue, she added.
"Prospera will continue to offer the GoodMoney product at all of our branches, as we have since 2006," Schinke said. "These were standalone locations that only made GoodMoney loans; they were not full-service branches. We felt it was not necessary to have the standalones, as it would be more efficient and more cost-effective to make the loans in our existing branches."
Even though 75% of the payday alternative loans were being made at the two locations marked for closure, Schinke said the restructuring "makes sense" for the CU. One factor: one of the two standalones was slightly more than 1 mile from an existing branch, creating "overlap."
Prospera does not foresee making any changes to the GoodMoney product, she said. "We have been offering it for four years and we are very comfortable with it."
Volume is cyclical on GoodMoney loans, with a tendency toward more use in the second half of the year, Schinke explained. Volume was slower in the first quarter of 2010 than on the fourth quarter of 2009, but she said that is typical. Transaction volumes have increased each year: Prospera made 7,248 GoodMoney loans in 2009, compared to 6,306 in 2008, nearly a 15% increase.
Along with the GoodMoney restructure, Prospera has chosen not to renew its lease for its full-service Tri-Park branch in Appleton. The lease is scheduled to expire this year. The branch will be closed June 5.
