The CU Community Credit Union has announced the roll out of an assistance program intended to help those who may fall victim to high interest, short-term loans.
Springfield City Manager Greg Burris, who also co-chairs the Impacting Poverty Commission, says these so-called payday loans can come at a high cost to Missourians.
“Department of Finance for the state of Missouri recently did a study of the payday loan interest rates, the annual interest rates that are charged in Missouri, the average is 451 percent,” he says.
This is especially impactful in Springfield, where Burris says approximately 26 percent of residents are living at or below the federal poverty level. These individuals may have few monetary options and can be prime targets for payday loans.
Missouri House Representative Kevin Austin of Springfield, who joined Burris during a Tuesday press conference, says the Fresh Start Loan Program may give these individuals an alternative path.
“I know in the legislature we have had bills proposed and debated about payday loans and payday lenders, quality bills, but some people will argue on behalf of this 26 percent ‘well there is no other place for them to go.’ Well now there is somewhere else for them to go,” Austin says.
In September, CU Community Credit Union received nearly $1,988,750 in grant funding from the U.S. Treasury. According to President and CEO Judy Hadsall, that funding will be used to roll out the Fresh Start Loan Program, which will also offer help consolidating short term loans for lower interest rates, and provide basic financial services.
“We will also help those that have blemishes on their record by allowing them to have a checking account,” Hadsall said. “You cannot imagine how many people do not even have the ability to get a checking account these days. That will give them access to other financial services we all take for granted.”
Participants will be able to enter the program without a credit check and will have access to title loan alternatives, credit building loans, and ATM services. For more information, visit the CU Community Credit Union's website.