HARRISBURG – The Pennsylvania Credit Union Association (PCUA) supports the recent decision by the Commonwealth Court in preserving the Pennsylvania Department of Banking requirements that payday lenders be licensed.
On July 10, the court ruled that Internet payday lenders, and other out-of-state companies that issue consumer loans to Pennsylvanians, must be licensed by the Department of Banking and comply with state laws.
“Everyday consumers are charged exorbitant interest rates and fees to borrow money using payday lenders,” said PCUA President/CEO Jim McCormack. “We applaud the Court for upholding the Pennsylvania Department of Banking rules that protect consumers from lenders who take advantage of those most vulnerable.”
In 2007, credit unions in Pennsylvania launched the Credit Union Better Choice program, an affordable alternative to high cost payday loans. Using the Credit Union Better Choice program, members can obtain a 90-day, $500 (or less) installment loan, at an 18 % (or less) interest rate, with an application fee of $25 dollars (or less) from a participating credit union. In addition to providing lower cost loans, the hallmark of the Credit Union Better Choice program is to promote wealth building and financial education. To support wealth building, at the loan’s disbursement, an amount equal to 10 % of the loan is deposited into a savings account in the borrower’s name. Lastly, all borrowers are offered financial counseling.
The Credit Union Better Choice program is offered at 82 credit unions with 215 branches throughout the Commonwealth. A list of participating credit unions can be found at www.PaCreditUnions.com
Credit unions are financial cooperatives that provide affordable financial services to help their owner/members to be better consumers. The Harrisburg-based Pennsylvania Credit Union Association is a trade association that provides legislative, promotional, educational and operational support for nearly 600 credit unions in Pennsylvania. These credit unions have assets in excess of $28 billion and serve nearly three and a half million members. For additional information about credit unions or to find a credit union near you, visit www.ibelong.org
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