HARRISBURG, Pa. (7/9/13)--The savings plan that credit unions offer as part of the Credit Union Better Choice program in Pennsylvania was endorsed Friday in an editorial by the Harrisburg (Pa.) Patriot-News Editorial Board.
"Credit unions, working with the state, offer struggling Pennsylvanians short-term loans with more affordable interest rates and longer payback times," said the editorial. "The loans include a savings plan to help the borrowers build up a financial cushion. That way, they won't get locked into repeatedly taking out those expensive short-term emergency loans.
"Instead of letting legal loan sharks set up shop in Pennsylvania, the legislature should be trying to make the credit unions' responsible, short-term lending alternative available to every Pennsylvanian who might need it," the editorial added.
The Pennsylvania Credit Union Association's Better Choice Program offers a payday loan alternative that includes financial counseling and required saving with a lower-cost, short-term loan. More than 70 credit unions in the state offer 90-day loans with a $500 limit. Since the program began in 2006, it has loaned more than 64,000 short-term loans--totaling $32 million--to credit union members (News Now June 5).
The program has saved borrowers more than $23 million over using a traditional payday lending product, said PCUA.
To read the editorial, use the link.