ST. LOUIS (5/1/14)--A credit union professional recently appeared on a Missouri-based television show to talk about how people can begin breaking away from credit-busting payday lenders when in need of some quick cash (Missouri Difference April 30).
Caption: Mike O'Brien (left) talks with Mike Ferguson, host of Missouri Viewpoints.
Payday lenders notoriously offer small-dollar loans--often to the under-banked and economically disadvantaged--and charge exorbitant fees and interest if the loan isn't paid off promptly.
Speaking on the show "Missouri Viewpoints," which is broadcast throughout the Show Me State, Mike O'Brien, senior vice president and chief advocacy officer of St. Louis Community CU, said that credit unions offer programs to help people correct problems with credit, and avoid the pitfalls associated with using payday lenders.
"Credit unions are a very viable option," said O'Brien, representing the $229 million-asset credit union. "There are small-dollar loans available through most credit unions, and some credit unions even have payday loan alternatives that have very fair terms and low-interest rates and fees."
O'Brien added that consumers need to take steps to establish a relationship with a credit union or community bank before securing a small-dollar loan.
Because these smaller, signature-type loans don't require any collateral, the risk tends to be higher for the lending institution.
"Most credit unions that offer these types of products want you to have some type of a relationship with them, say six months minimum . . . with a checking account in good standing," O'Brien said. "Then that way they will make that credit available to you, and do so at a rate and a term that is much more favorable for you as compared to a traditional payday lender."
Many credit unions also offer credit-building loans to help repair credit, which can lead to more affordable lines of credit. O'Brien also said not to be afraid to ask for help at credit unions, which often provide financial consulting services.
Segments of "Missouri Viewpoints" are broadcast on television and the radio throughout the state. The Missouri Credit Union Association helped coordinate O'Brien's appearance on the show.
To watch the full episode, use the resource link. O'Brien's interview starts at the 15:46 mark of the video.