CUs, fin. ed. provide alternatives to payday loans: MCUL's Adams
LANSING, Mich. (2/2/16)--Michigan Credit Union League President/CEO Dave Adams urged Michigan residents to vote “no” on legislation that would expand payday lending authority in the state in a guest commentary featured in Bridge, a magazine published by the nonpartisan think tank Center for Michigan.
Adams offered an alternative: financial education--such as that already provided by the state’s credit unions.
Adams told the story of Kathy from Lansing, Mich., who fell victim to the payday lending cycle. Kathy dug herself into deep debt through multiple loans, high interest rates and prohibitive fees.
“This type of cyclical lending lies at the core of the payday lenders’ business model,” Adams wrote.
Kathy escaped the payday lending cycle with the help of Lake Trust CU, Brighton, which offered her a loan and monthly payment that was less than half what she was paying before. Twenty-six other Michigan credit unions offer specific payday loan alternatives.
“Credit unions across the state offer robust financial education programs including implementing more than 300 in-school, student-run branches reaching nearly 50,000 students--the largest number in the nation,” Adams wrote. “In addition, credit unions conducted 21 teen reality fairs, which provide students with real world budgeting experience through hands-on simulations.”
Adams noted that a Michigan law that allows high school students to take a financial literacy class to help meet the math requirement mandated for graduation will go into effect this month.
“You can play a role in Michigan’s financial literacy by telling your legislators to vote ‘no’ on payday lending authority expansion,” Adams wrote. “You can also check out financial education opportunities available at places such as credit unions, attend community events including Show Me the Money Day, and by investigating reputable financial institutions if you need emergency cash.”