Mazuma Hits Roadblocks As It Attempts To Help
With nary a bank in sight and a large population of low-income residents in need of cash,
On average, they charge between 15% and 18% per $100 borrowed and roll that over every two weeks on any loan
"By the time these loans get paid off, they've collected anywhere from 200 to 400% interest," said Rob Givens, CEO
Those types of lending practices made Givens angry enough to take action. Unfortunately, he said, state regulatory
But, because the CUs lending formula includes both a fee and an interest rate, the state regulator won't allow it.
"The state says you can charge a fee or you can charge interest, but you can't do both," Givens said, explaining that
The passage of recent legislation didn't help much either. Givens said it was suppose to cap payday lenders, "But in
Nevertheless, Givens is not giving up. he recently formed a task force of area leaders from CUs of various sizes to
Right now, he said, the task force is waiting for written input from area leaders. He expects they will meet to discuss
"That area supports and needs this kind of service," Givens said. "It is a comeback area with a lot of subsidized and
To help learn more about payday operations and the kinds of people who use them, Givens said, he sent his
"To get a payday loan, you must have a checking account and be employed," he said. "They want to see post-dated
Borrowers who can provide those types of materials indicate to Givens that they are earnest and responsible, but just
What Else Was Discovered
His team also discovered that payday operations are willing to take everything from car titles, jewelry and other
Givens said after a local news station reported the results of his team's investigation, a 61-year-old elementary
"She said she had $6,000 in payday loans," he said. "She was paying $1,800 a month in fees, never touching the
Mazuma CU was able to help her. But, he said, his credit union and others in Kansas City want to do more.
"Ultimately, I'm going to fix this thing," he said.