Credit unions aim to get members out of payday loan cycle, CFO says

The credit union mission stood out during a Consumer Financial Protection Bureau hearing in Richmond, Va., Thursday, as panelists addressed various aspects of payday lending. The field hearing was held in conjunction with the bureau’s new proposal on payday lending.

While some at the hearing defended such lending as a consumer’s choice, and others compared payday loans to “giving a starving man food laced with poison,” panelist Stan Leicester of BayPort CU, Newport News, Va., offered a simple alternative: come to a credit union.

“Credit unions have two primary objectives: get the member out of the payday lending cycle from week to week and improve credit scores,” said Leicester, senior vice president/chief financial officer at BayPort CU.

“We feel like our two primary objectives have been reached: We’ve done over $50 million [in short-term loans] since we started our program, and we’ve converted about 3,300 members out of the payday lending cycle. We’re really proud of that.”

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