Religious coalition says unfair short-term lending can hurt consumers
Eliminating short-term loans offered either by payday lenders or credit unions,
does not eliminate the need for them. It's unwise to blame payday lenders or
credit unions, as they are providing a service that is needed. The key is to use
the loans responsibly which requires education on financial matters. Credit
unions are tax-exempt, so they can offer lower rate loans, but the
qualifications are stringent and their membership is restricted. That why people
turn to payday lenders when in need.
Rather than forbid credit unions from giving these loans, they should rather be
forced to publish online, in newspapers, and in libraries how much they make off
these loans, how much they make off these loans as a percentage of their total
income, and the default rate. Also, at the time of contract, fine print should
be forbidden. I would only consider this type of lending predatory
if it were done deceptively. A product is a product and as long as people know
what they are potentially getting themselves into, they should have the
opportunity to choose to get into it. So rather than doing away with the loans,
let's try to reform how they must be presented and reported about to the public.
@stanfunkyHehehehe, that's funny you called them a conservative group.
I think Americans should have the privlege in a free society to get the kind of
loan they want, even if they pay 500% to get it! Those who go for those loans
must know what the interest rate is; otherwise, they wouldn't go for it. Try to
get a small loan from a conventional bank and you can't get it. Let me be
responsible for the loan I make. Don't punish the loaning company.
Re: stanfunky: No, this Coalition of Religious Communities is NOT a
conservative religious group. Rather, they sound like a fairly LIBERAL
religious group, pushing for “social justice,” more government
programs, and more government spending.If they don’t like this
kind of loan, then they should simply encourage their followers to not use the
loans. But if they try to get these loans prohibited, that’s going too
far. As you have said, it’s a free-market offering. It’s legal and
The solution here is for the people who see the need to fill it. These people
need to form a credit union with their own money and offer low-rate loans to the
people who would otherwise use payday loans or credit union payday alternative
loans. Show the rest of us how to make their business model work, if it is
possible to do so.
If these loans are a bad deal (and they are), then, fine, this group
doesn’t need to get them. But for some people they might be a temporary
life-saver. If the credit unions (and pay-day lenders) are clear and open about
the terms of the loan, then it’s a legal, voluntary contract. We
don’t need more do-gooders to further increase the size of our obese
nanny-state government, to protect us from ourselves. Personally, I prefer
This is a 'free market' solution as defined by the conservatives in this state.
Yet a conservative, religious group, is protesting it. Interesting. If there
is demand for something, supply is provided, and the only way to stop such
supply is...gasp...BIG GOVERNMENT INTERVENTION! REGULATION! Guess that means
these loans won't be going away anytime soon.
Religious groups should stick to what they do well: descriminating against
people who are different than themselves, putting down other religions, and
Why are banks not doing this? Aren't they the big bad guys? Let's face it, the
CU's are in dire need to make money to offset bad loan portfolios. Of course
they hide their problems by "merging" problem CU's with big CU's (see So. Ut Fed
CU)rather than failing. They never write off bad loans banking on the market
coming back to maintain their fragile reputation for soundness. For the sake of
us all I hope it works out because we don't need another S&L crisis.Of course, Banks too have considered these loans but most did not want the
reputational risk. I say CU payday loans are fine. For once, even if for the
wrong reason, the CU's are serving the underserved.
I'm sure these people mean well but a red flag goes up for me when I hear the
term "social justice". It is code for socialism/communism for the far left. If
church groups are trying to help the poor with there own money that's great but
if part of their agenda is to get the government to even the playing field at
the expense tax payers then they are moving to socialism, which leads to
communism. The far left is making a huge effort to infiltrate churches to
accomplish their goals. Remember: social justice-bad, equal justice-good!
I despise the payday loan stores and their predatory practices but as long as
their is demand for those type of products, there will be supply. The
entitlement complex in our society beguiles us into believing we have a right to
borrow on credit. As soon as financial responsibility is understood by all, then
demand for these products will cease.
I share the concerns of the CORC over the high cost of payday loan products. I
recognize the damaging effect that payday loans have on an individual’s
finances. Credit unions initiated these programs specifically to help consumers
move away from payday lending. Unlike “payday lenders,” I
don’t let members get caught in a cycle of larger and larger short-term
loans. Instead, I work closely with members to pay off the debt over time. The
huge difference between my work as a credit union employee and typical
“payday lenders” is that I strive to help members through short-term
crisis, and I help provide a path back to access to conventional credit sources.
I offer members alternatives, such as financial counseling or less expensive
products. CU payday loan alternatives are considerably less expensive than
traditional payday loans -- a fact that cannot be so easily dismissed.
Alternative products are exactly that--alternatives to payday loans. No one is
saying these are perfect loans, but by definition higher risk means higher cost.
I do not accept the implied notion that people who are in short-term financial
difficulty should simply be shut out of access to credit.
If a high number of these loans are being written off they should not offer
Simple solution. Don't get the loans. Perhaps Rebecca could offer a better
deal. I know I don't want my money loaned to poor risks.
So, Rebecca Palmer, perhaps you could have included in your article what the
loss experience for the CU's is on these types of loans. How many of these loans
end up being charged off? What is the cost to the CU (to process just one loan)?
How many must be repeatedly extended? How does the CU loan compare to the Payday
loan? Maybe this group should also protest the price of tickets to a
Oh leave those little ol' credit unions alone. After all, as Anatole France so
wisely reminded us: "The law, in its majestic equality, forbids the rich as well
as the poor to sleep under bridges, to beg in the streets, and to steal bread."
No bank or credit union is in the business of losing money. The high interest
rates are necessary to cover the losses that they will be taking because of the
higher defaults on these types of loans. After this criticism, if I was running
a credit union, I would just stop lending to anyone that didn't have the credit
to get a normal loan. They get poked in the eye for trying to help people who
have completely ruined their credit. The critics should get a life and find a
way to help these people instead of trying to cut off all credit to them.
In paragraph five Humanism should be capitalized as are all the other religious
philosophies.Florien Wineriter,past president, Humanists of Utah.
Fortunately I havent had to use these loans but for those that do, it can be a
lifesaver. I dont blame the credit unions as they are providing a service that
is needed. The key is to use it responsibly and that goes back to the individual
and the need for education on financial matters. I have found credit unions to
be very fair. For this type of loan they do have to charge enough interest to
cover their losses in case other people dont re-pay their loans. Simple solution
is that if you dont like the loan terms then dont use the loan.
Isn't this the capitalism people keep talking about? If you don't have the
personal responibility to NOT take such a loan - which I'm sure shows you the
interest rate at which you'll pay it back - then that's your problem, not the
bank's or the credit union's. If there's no demand for these loans, they will
I don't think the loans are as much the problem with the terms. They really
should bring back usary laws.
"I thought credit unions were so you'd have fair stuff for people, both sides,"
said Dorothy Talbert.Perhaps Ms. Talbert and Esquire can start their own
credit union and show everyone how its done. They can be "fair and just", of
course then they would have to take the risk of losing their money. Much easier
to snipe with no skin in the game.
May I make the respectfully suggestion that the members of CORC mind their own
business concerning Credit Unions. In other words, mind your own business on
So why are they targeting the Credit Unions and not the PayDay lenders? This
group seems to be a bunch of employees of Payday lenders fearing losing their
jobs or people with outstanding loans with the PayDay loan sharks. A little
kickback credit on loans with them?At least banks and credit unions
have some regulatory controls on doing business. Has this group lost touch with
reality and who the real criminals in short term lending is? They should be
marching on the Pay Day lenders stores who are their enemy of the group. Or even
the legislators to shut down all lending of this type as predatory. That's why
loan sharking is illegal, its predatory just as all payday lenders are. How
ever, the credit unions are under state and federal regulations and the pay day
lenders have no restrictions or regulations on them.Credit Unions
are taking business away from the sharks and this looks like willful attack by
these sharks to draw attention to their competition in a multibillion dollar
predatory industry in Utah.
If you disapprove of the money first before social responsibility way of doing
business, you first need to push the legislature to pass the consumer protection
laws to force banks and credit unions to play "nice". Utah has the least
consumer friendly "folks on the hill" of any state in the nation. They sold
their collective soul long again to rid the books of usury laws under the
premise that doing so would bring in regional credit card processing centers
with lots of slightly above minimum wage jobs. Find out who pays for the
campaigns of legislators and who they work for, before voting. Most states have
made it very hard for payday and mini loan strip mall lenders to operate, but
Utah, well forget it. You deserve who you vote for and Utah has so much to be
embarrassed about. The protestors have no effect because these people will do
anything for more money. Sex and money corrupt anyone and everyone, just recall
the scandals of so many politicians and religious figures. Without laws,
If credit unions are offering payday loans, shame on them. Why can't we have
usury laws back?