CUNA News
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Jobs
  • Contact

News

Home » Countering payday lenders
Lending Leadership

Countering payday lenders

Loan products meet community needs and allow Afena FCU to thrive, says CEO Karen Madry.

May 1, 2022
Darla Dernovsek
No Comments
Karen Madry

Listen to the article

Countering payday lenders

Listening to the community helps Karen Madry stay in tune with the 8,000 members of Afena Federal Credit Union.

“Our community is at the core of everything we do, particularly the work we are doing to provide alternative lending solutions for underbanked and low-income individuals,” says Madry, president/CEO of the $84 million asset credit union in Marion, Ind. “Like many high-poverty communities, we have a proliferation of high-interest loan stores and payday lenders that prey on financial vulnerability. It’s our job to educate as many people as possible that there’s a better way.”

Madry’s commitment to providing low-interest, small-dollar loans as an alternative to payday lending led to the creation of “Bridge the Gap” loans, a unique partnership between the credit union and the Community Foundation of Grant County.

The loans provide members with emergency funds between $200 and $2,000 and are available exclusively to people earning below 80% of the median family income. Repayment terms vary by loan amount but favor small payments—typically less than $50 per month—to reduce stress on family budgets created by predatory payday lending.

Madry developed an additional program to help members who have already fallen into the clutches of high-interest loan stores.

“We have members with loans at finance companies who are paying upwards of 50% to 60% APR, sometimes more,” she says.

‘It’s our job to educate as many people as possible that there’s a better way.’
Karen Madry

Refinancing high-interest debt saves members thousands of dollars in interest. Madry shares how one member lowered his monthly payments by $1,200 when he refinanced his loans through the credit union.

Designing loan products that meet the community’s needs has helped Afena Federal Credit Union thrive, but growth can be challenging.

“My biggest difficulty is figuring out how to beef up my staff in a society where people are looking more and more to work remotely and still ensure members have great service when they are in the branch,” Madry says. “Older members are more brick-and-mortar while younger members are all about technology. We are constantly trying to thread that needle.”

CUNA Small Credit Union Resources

CUNA Small Credit Union Resources

The credit union’s shares and loans increased  more than 12% year-to-year at the end of October, while assets grew more than 15%. Introducing remote deposit capture, instant-issue debit cards, and a rewards credit card program in 2022 will allow Afena Federal Credit Union to continue to grow.

Madry, who joined the credit union as CEO in May 2014, thrives on a busy schedule, relying on her faith and daily prayer to “refill the well.”

Serving on CUNA’s Small Credit Union Committee provides networking and inspiration, including “permission to think outside the box.”

“I think the reason so many small credit unions are disappearing is that they’re stuck in the way they’ve always done it,” Madry says. “We have to be continually willing to reinvent ourselves.”


KEYWORDS Forging a Path Lending 2022 small credit unions

Post a comment to this article

Report Abusive Comment

Credit Union Magazine: Winter 2022

Winter 2022

Credit Union Magazine’s Winter 2022 issue highlights data-driven marketing, the board’s role in cybersecurity, elder abuse scams, credit unions’ auto lending advantage, and more.
Digital Edition •  Subscribe

Trending

  • House passes CUNA, League-led board modernization bill

  • Reps introduce bipartisan Credit Union Board Modernization Act

  • CFPB issues CUNA-opposed proposal on credit card late fees

Tweets by CUNA_News

Polls

Vote for the 2023 CU Hero of the Year

View Results
More

Champion for the Credit Union Movement

Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • Membership
  • Contact Us
  • Careers

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Providers

Our Affiliates

  • American Association of Credit Union Leagues (AACUL)
  • Credit Union Awareness
  • Credit Union House
  • CUNA Strategic Services
  • National Credit Union Foundation
GET CUNA UPDATES
© 2023 Credit Union National Association | ADA Compliance Notice & Legal
Email Us