Arkansas FCU Unveils Military Payday Loan

JACKSONVILLE, Ark. – Arkansas FCU said it will introduce a new low-cost payday loan product for the military Oct. 1, the day the new federal cap on interest rates for military personnel takes effect. The annual percent rate for the credit union’s payday alternative loans will be 18%, half of the new 36% cap on payday loans for military personnel. The credit union’s payday loan product was designed by Hank Klein, its former CEO, who now spearheads the fight against predatory lending on behalf of Arkansas Against Abusive Payday Lending. Under the program the credit union would lend as much as $750 to members of the military plus put an additional $375 into a savings account, funded by the interest payments. The money in the savings account will be placed on hold until the entire loan is paid off over the course of a single year.