CHESAPEAKE, Va. -- The $345 million ABNB Federal Credit Union is the most recent credit union to offer its members an alternative to expensive payday loans.
Beginning this month, the CU is offering the CU Express Loan, a loan program for small denomination loans, which will carry an interest rate of 18% and a $35 annual fee. This economic alternative comes at a perfect time, as some payday lenders have stopped offering their services to military members after the Department of Defense released a report stating that payday lenders target military personnel and that predatory lending undermines military readiness and harms morale, the CU noted, adding that it had developed CU Express Loan in response to the credit union philosophy of "people helping people." The typical payday loan can charge as much as 391% once the fees are annualized. ABNB's program is designed to meet the short-term borrowing needs of their members, and is available to members with a direct deposit relationship, ABNB added. Free financial counseling is also available to help members break the cycle of debt dependency.