Six Credit Unions Selected to Seek Payday Loan Alternatives

NEW YORK–( COMPANY WIRE )–Nov. 10, 2004–JPMorgan Chase & Co. in addition to nationwide Federation of Community developing Credit Unions have actually selected six credit unions in five states to produce and develop options to high-cost “payday” loans for customers.

Starting early the following year, the lender is going to work with all the credit unions in Ca, Illinois, Louisiana, ny and Ohio to simply help low-income customers whom now utilize short-term loans to hold them over until their next paycheck. These customers are faced with high fees and rates for loans as short as a week or two with few choices.

” by way of a rigorous approval procedure, we selected these credit unions due to their strong documents of enhancing the communities they provide,” stated Lewis Jones, president associated with the J.P. Morgan Chase Foundation. “These brand brand new lovers will continue to work difficult throughout the year that is next find practical alternatives which will help customers and their own families keep a lot more of their hard-earned cash.”

The funds totaling $225,000 goes to (in alphabetical purchase):

ASI Federal Credit Union (Harahan, Los Angeles) $25,000 – ASI FCU serves individuals, families and companies from five parishes in Louisiana. The credit union will introduce “APPLE” consolidation loans to greatly help people pay back debts all the way to $1,000 which are owed to predatory loan providers. Borrowers could have as much as 1 . 5 years to pay for straight straight back these low-interest loans, at A apr that is fixed of 10 %. ASI could also be helpful their people develop assets while paying down their loan; a percentage of each APPLE loan payment should be positioned in a brand new family savings, to simply help the user through future emergencies. Borrowers will also be asked to pledge not to ever borrow cash from any payday or predatory lenders for the length of these APPLE loan.

Bethex Federal Credit Union (Bronx, NY) $25,000 – For 34 years, Bethex FCU has offered communities when you look at the Southern Bronx, where there are many check cashers borough-wide than virtually any services that are financial. Bethex uses their APPLE grant to enhance their “Cash-in-a-Flash” system, which supplies crisis loans up to $500 without a checking account or credit history that is good. Loans are usually available the day that is same are required consequently they are designed to bring individuals in to the credit union where they get credit guidance, funding literacy training, as well as other development solutions.

Faith Community United Credit Union (Cleveland, OH) $50,000 – for longer than fifty years, Faith Community United Credit Union happens to be supplying affordable financial solutions to low income residents of Cuyahoga County, Ohio. Presently, nearly 30 % regarding the credit union’s people have actually incomes below the federal poverty line and many users that meet with the minimum needs take advantage of the credit union’s “Grace” payday advances. Faith Community United use their APPLE grant to relieve these needs for more recent users while increasing their Grace Loans by 30 %. The most for the Grace Loan is $500 in every thirty days, together with credit union requires borrowers to save lots of no less than $10 each month and reveal proof of work. Faith additionally encourages brand new individuals to make the most of their other asset-building programs, including literacy that is financial homeownership classes.

Lower East Side individuals Federal Credit Union (nyc, NY) $25,000 – Reduced East Side individuals Federal Credit Union ended up being chartered in 1986 and it is a community that is full-service credit union whoever objective would be to offer usage of affordable monetary solutions to all the residents and organizations within the Lower East Side of brand new York City. Based on the 2000 Census, over fifty percent of most households in this region reside in poverty and more or less 27 percent of this population that is local foreign-born. The credit union shall utilize their APPLE grant to provide crisis, non-renewable loans as much as $500 to your used user whom gets paid by check. The credit union expects to help make at the least 500 loans that will aid as options to high-cost payday and income tax refund expectation loans. The credit union also expects that 250 borrowers will sign up for monetary literacy classes and 200 will get economic guidance about financial self-reliance.

Northeast Community FCU, Mission region FCU and Patelco CU (san francisco bay area, CA) $50,000 – Northeast Community FCU, Mission region FCU and Patelco CU have actually created a consortium to jumpstart activity that is financial solutions being among the most underserved populations in san francisco bay area. The consortium promises to refine Northeast’s “Grace Loan” system and expand it to Visitacion Valley, Excelsior and Bayview-Hunters aim. Research indicates that these two linguistically and culturally diverse areas are particularly at-risk to payday loan providers. The 3 credit unions will contact these grouped communities by making a Credit Union Service payday loans Wyoming Organization (CUSO) sufficient reason for a satellite branch workplace and industry workplaces within the target communities.

Southern Side Community Federal Credit Union (Chicago, IL) $50,000 – Southern Side Community FCU is really a newly chartered credit union which includes skilled significant development since opening its doorways in November 2003. Serving a place of Chicago more targeted by payday loan providers than just about every other, the credit union has introduced the payday that is first alternative when you look at the South Side of Chicago. The credit union has modeled its approach from the Payday that is successful Alternative (PAL) item of Northside Community Federal Credit Union, and can utilize its APPLE grant to a lot more than triple the number of PALs available in 2005.

JPMorgan Chase while the Federation continue steadily to look for a part credit union to produce options in Texas included in a $400,000 grant announced by the lender earlier in the day this current year. Complete results and analysis are anticipated within the springtime of 2006.