More than 200 credit union officials turned out here last week seeking ways to beat payday lenders.
The group was attending a Partnering and Leadership Successes (PALS) workshop put together by NCUA board member Debbie Matz, and speakers shared dozens of credit union innovations that have been successful in reaching new members who typically turn to high-rate payday lenders for loans.
"Many credit unions are providing their members with needed alternatives to the insidious and pervasive predatory lenders who are taking billions of dollars out of low-income communities," Matz observed.
Among the ideas shared on the lending side:
* Risk-based loans, or loans priced according to credit history.
* Payday loan alternatives-small, short-term loans paired with free financial education.
* Affordable mortgages with 0% or 1% down payments and no PMI.
* Loans on Manufactured homes for first-time homebuyers.
On the deposit side, ideas proposed included:
* Low-cost check-cashing.
* Individual Development Accounts that match funds as members save for life-changing goals.
* Transitional products, such as checkless checking (stored value cards), club accounts, credit builder CDs and other products designed to help members break free of dependence on basic transaction services.
Ideas were also forwarded on the services side, including:
* International remittances as a low-cost gateway to life support for families of immigrants.
* Volunteer income tax assistance (VITA), which helps members receive all refunds they have earned.
* Neighborhood Contact Offices, which reach underserved areas through churches, Latino centers, and other community agencies.
In her closing remarks, Matz outlined some of the lessons shared by the presenters in reaching out to underserved populations, which includes seeking out partnerships. Other ideas, she said, include building trust, offering convenient locations; making the lending process fast and easy; learning about the potential members; working with community groups, and more.
