Utah Religious Group Challenging CUs on Payday Lending
Hard on the heels of a report suggesting that credit unions are unlikely to be able to offer payday loan alternatives, a religious group in Utah is criticizing the short-term, low-dollar loans that state's CUs offer.
The Salt Lake Tribune has reported that the Coalition of Religious Communities, a consumer group in Utah which describes itself as "advocates of social justice" has charged that eight Utah credit unions have been making what is said are predatory payday loans.
The credit union short-term loans have annual interest rates the equivalent of 254% to 312 %, Linda Hilton, a coalition spokeswoman, said at a recent press conference.
"This is not what I expect from my credit union," the paper quoted Hilton as saying at the press conference, noting she is a member of America First Credit Union, which was identified in a recent national study as one of eight Utah credit unions that offer the loans.
The others the group named were Alliance, Cyprus, Family First, Heritage West (now shuttered), Mountain America, Southwest, and USU Charter.
The paper also quoted Scott Simpson, spokesman for the Utah League of Credit Unions defending the loans as better for consumers than standard payday loans. Neither the Coalition nor League have yet returned calls for comment.