Q&A On How CUs' Payday Loan Program Works
Day Air CU CEO Bill Burke fielded a number of questions about the Dayton, Ohio-area credit union's payday lending alternative from participants at the CUES Annual Convention. Highlights from that question and answer session included:
Q: Do these members become viable members who go on to get other loans at the credit union?
Burke: We chose to limit loans to those who are already members. Many were long-time members with auto loans and debit cards, but they also have a short-term need for cash. At the other end of the spectrum there are the short-term members who may or may not develop those type of relationships."
Q: Is it the same members borrowing again and again?
Burke: It falls all over the spectrum. Some pay the $35 (annual fee) and borrow and pay the 18% and it's a one-time borrowing experience. There are others who pay it off and then come back. The average has been running between six and seven advances per member.
Q: How did you get word out to the community?
Burke: We did a soft launch three years ago with just word of mouth. But we graduated, if you will, to the more typical marketing. We only market to our members with the newsletter, statement inserts, and n our website. But we have also gotten good press through the Dayton Daily News and some of our sponsors.