Pennsylvania Credit Union Association

Pennsylvania Borrowers Save Big $

8/19/2008 HARRISBURG — In a rough economy, it is comforting to know that there are affordable loans available for those in need of quick cash.  Since launching in October 2006, the Credit Union Better Choice program has saved consumers more than $3.2 million dollars in interest and fees over using traditional payday loans.

The Pennsylvania Credit Union Association is pleased to report its semi-annual figures for the Credit Union Better Choice program, an alternative to payday lending developed in conjunction with the Pennsylvania Treasury Department.  Since the program’s inception, 73 credit unions with 198 locations have agreed to offer Credit Union Better Choice loans, with additional participants continuing to sign on.  From the participating credit unions, 66 have made nearly 9,500 loans totaling $4.47 million dollars in volume.

“The success of the Credit Union Better Choice program continues to indicate that Pennsylvanians need access to low-cost short term loans.  I’m pleased that credit unions are fulfilling that need in Pennsylvania and clearly demonstrating our mission of People Helping People,” said Jim McCormack, President/CEO, Pennsylvania Credit Union Association.

“At a time when high gas and food prices continue to strain budgets across the Commonwealth, Pennsylvanians who need quick access to funding should not have to worry about getting trapped in a predatory debt cycle,” Treasurer Wiessmann said.  “I am pleased that so many Pennsylvanians continue to make the Better Choice, receiving not only the short-term loan they need but also practical financial skills, through the program’s savings and education components.”

A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or approximately $450 over 90 days.  A $500 Credit Union Better Choice loan costs consumers approximately $42.50 for the same 90 days and at the end of the loan term, the consumer has $50 in a savings account, which allows them to develop a savings habit.  In addition, the program builds upon this new wealth-building component by providing financial education to consumers in an effort to help them make better informed financial decisions.

Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through a Credit Union Better Choice loan rather than through a typical loan from a payday lender.  This translates into more than $3.2 million that consumers kept in their own pockets by using credit unions that offer Credit Union Better Choice loans.  In addition, borrowers were able to place $447,327 into savings accounts for future needs.

To learn more about the Credit Union Better Choice program and a list of participants, visit www.PaCreditUnions.com. 

Total Number of Loans Issued
(10/19/06-6/30/08)

Total $ Amount of Loans Issued

Total $ Amount of Consumer Savings vs. Payday Lender

Average Loan $ Amount

 

9,499

 

$4,473,274.91

 

$3,220,758.40

 

$470.92

 

Credit unions are financial cooperatives that provide affordable financial services to help their owner/members.  The Harrisburg-based Pennsylvania Credit Union Association is a trade association that provides legislative, promotional, educational and operational support for more than 500 credit unions in Pennsylvania.  These credit unions have assets in excess of $25 billion and serve nearly 3.5 million members.  For additional information about credit unions or to find a credit union near you, visit www.ibelong.org

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