X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

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.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.