CU's Payday Loan Product Hits $600,000

WOODBRIDGE, Va. – Fort Belvoir Federal Credit Union is getting big volume on its payday loan alternative – close to $600,000 in the first year. “We consider our Advance Pay Loan a real success story,” said Patricia S. Kimmell, president/CEO of the $203 million Fort Belvoir. The payday product, introduced in January 2005, is aimed at helping reduce military dependence on the high-interest products offered by the payday outlets near the U.S. Army base. The Advance Pay Loan allows members to receive up to $500 cash immediately without incurring high interest and without a credit check. Members have up to three months to repay the loan at a rate of 16-18% APR. Since the product was offered, FTBFCU has issued 665 loans for a total of $575,052. The experience of Fort Belvoir and other CUs in providing payday alternatives comes amidst new Pentagon scrutiny on ways to curb exploitation of military personnel by the payday firms.