ARLINGTON, Va. -- Are the majority of credit unions already offering their members, in effect, the low-dollar, short-term loans which have generally characterized payday lending?
Almost 82% of state chartered CUs offer their members unsecured, low dollar loans, according to the NASCUS survey of state chartered credit unions the organization released yesterday.
The survey reported that 81.51% of the representative sample of state chartered credit unions offer their members unsecured loans of less than $500 and almost 96% of surveyed CUs offer unsecured loans of less than $1,000. This at a time when the CU industry overall has mounted a significant push to help CUs offer their members loans which are explicitly identified as a payday loan alternative products.
Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions said the lower-dollar loans the surveyed CUs reported offering may not be marketed broadly to members or might have underwriting criteria which preclude them from really being an alternative to payday loans.
"Every low-dollar, unsecured loan is not a workable alternative to a payday loan," Rosenthal said.