Pentagon FCU Unveils PaydayLoans

KILLEEN, Texas - (12/16/04) -- Pentagon FCU said its new non-profitfoundation has started a payday loan program at the credit union'sbranch at Ford Hood here. Under the program, called ARK--for AssetRecovery Kit--soldiers can obtain a payday loan, an advance ontheir semi-monthly pay, for a flat $6 fee. That compares to the $19per $100 fees charged by competing payday lenders, according toRocky Mitchell, director of the Foundation. The loan is madethrough the credit union, which is almost guaranteed repaymentbecause participants must have direct deposit. The Foundation hasraised money for a loan loss reserve for the program. One of therequirements of the payday loan program is that participantsparticipate in a credit counseling program on base. "We realizemany of these soldiers in need of short-term cash have otherfinancial needs that maybe aren't being met," Mitchell told TheCredit Union Journal.