WI CUs Save Consumers $1 Million In Loan Costs

PEWAUKEE, Wis. - The Wisconsin CU League has released an analysis suggesting that the state's credit unions have saved residents who otherwise would have turned to a payday lender more than $1 million in short-term borrowing costs.

"Payday lenders like to say they're the only option consumers have to get a small loan quickly and without credit checks," WCUL CEO Brett Thompson said. "That's a huge misperception that's costing working families hundreds or thousands of dollars every year. Credit unions have always made small loans to meet immediate needs. And people who have come to credit unions seeking payday alternatives often discover that they don't need a payday loan if they use one of credit unions' other loan products."

The league cited data from the state's Department of Financial Institutions, Wisconsin has more than 500 payday lenders that, in 2006, made 1.6 million loans totaling more than $661 million. "These loans disproportionately target people with low incomes," the league said, adding that a DFI study in 2001 cited 87% of payday borrowers earning at or below $24,000 per year. (c) 2007 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com