Municipal Credit Union Launches Payday Alternative
The $2.1 billion Municipal Credit Union announced it would launch a program that would help roughly 2,000 of its members break away from using payday loans.
The New York City based, 367,000-member credit union did not specify a date the “Step Line of Credit” will become available for members, but a July 9 statement about the program said it would become available this month.
Municipal said it will commit $1 million to the program and offer members fixed rate loans of between $250 and $750 to help them pay off existing payday loans and break the payday loan cycle. The Step Line loans will also carry a 15.99% interest rate, Municipal said in the announcement.
Municipal also put the program in the context of the Clinton Global Initiative, a program run by the Clinton Foundation, to bring leaders and corporations together to launch innovative programs to address economic development challenges in the United States and other nations. Municipal announced the program at a meeting of the Clinton Global Initiative America in Denver.
“By offering the Step Line of Credit program to our members, and formalizing this commitment with the Clinton Global Initiative, we hope to improve our members' financial well-being. Our program will help to break the predatory lending cycle they are trapped in and provide guidance to better manage their finances and prepare for future emergencies," said Mark Brantley, Municipal chairman, when announcing the program.