DUBLIN, Ohio — Credit unions here and in Pennsylvania were expecting this week to be stepping up their promotion of payday alternative products, including StretchPay and Better Choice, in the wake of major legislative and regulatory setbacks to the payday industry.
“We’re in the business of building consumer wealth not stripping it,” said a spokesman for the Pennsylvania Credit Union Association in Harrisburg commenting on that state’s Supreme Court ruling last week striking down as illegal Advance America’s payday product offering $150 monthly fee plus 6% interest.
Meanwhile, Ohio Gov. Ted Strickland signed into law a 28% limit on payday loans to go into effect in August, a move expected to shut down scores of payday shops across the state. The Community Financial Services Association, the Washington-based lobbying group for payday firms, lamented the Ohio action as regrettable decrying lawmakers “for playing politics and ignoring more than 30,000 letters from payday lending customers and the tens of thousands of emails, calls and meetings.”
While not commenting specifically on the 28% law, the Ohio Credit Union League said it monitored the progress of the payday bill in the legislature “to make sure that StretchPay would not be included” in restrictions. StretchPay launched two years ago in the Dayton market and now spread to other states, provides an 18% rate on a 30-day $500 loan with a $35 enrollment fee.