SAN ANTONIO (7/8/14)--Select FCU is providing consumers with access to affordable funds after the city of San Antonio filed a lawsuit against seven payday lending establishments that were allegedly in violation of a city ordinance.
The ordinance requires payday and auto-title lenders to register with the city, pay a fee, and limits the amount of the loan. Perhaps the biggest challenge is enforcement. If the city's lawsuit prevails, it will be a major victory for the regulatory effectiveness of city law.
To be effective as a replacement for payday lenders, SFCU first had to establish a presence where the loans were needed. The credit union established a branch at the Ella Austin Community Center.
"We want to dedicate this branch to sitting down and talking with people," John Garcia, head of business development and marketing at $33 million-asset credit union, told The Rivard Report (July 7).
The credit union is also working on other partnerships with local businesses and institutions to bring virtual or mini-branches to their facilities.
The credit union doesn't want to simply offer loans, it wants to help members obtain financial stability, Garcia said.
SFCU is a designated community development financial institution, one of only two in San Antonio. As a CDFI, the credit union identifies members who seem to be relying on payday loans for non-essential costs and can offer financial counseling to help them curb their spending.
SFCU is also working with the City of San Antonio to align lenders for applicants who want to move into Wheatley Courts, a former Section 8 development that being transformed into mixed-income housing.