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FAIRBORN, Ohio – With support from the Ohio Credit Union League and Filene Research Institute, an Ohio credit union is pushing the idea of a nationwide CUSO to bundle payday loans and share in the risk by pooling fees. If successful, the proposed nonprofit CUSO, being pursued by the $1 billion Wright-Patt CU and to be headquartered in Ohio, would enlist CUs across the U.S and eventually serve as a springboard for wider CU-branded programs on financial education to be advertised nationally. Wright-Patt is basing plans for the payday CUSO on a now three-year-old pooled program it administers for 10 western Ohio CUs in which CUs direct collected fees to a segregated account at Wrigh-Patt. Under the proposed CUSO, the collected fees would be funneled to a central fund, and if a loan is charged off, the CU would apply to the fund for reimbursement of 90% of the losses. “If a credit union eventually collects on the loan, they must return these funds to the pooled funds of the CUSO,” explained Jeff Carpenter, vice president of cooperative development at Wright-Patt. Since 2003, the current fund balance on the segregated accounts at Wright-Patt has grown to more than $50,000, said Carpenter adding the balance “means that the annual fees have exceeded the losses by this amount.” Wright-Patt has been offering an 18% payday product called “Stretch Pay,” a 30-day line of credit loan at either $250 accompanied by a minimum $35 fee.

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