Long term payday loan

CUNA helps design national payday loan research

Why do borrowers use high-- priced payday lenders when there are lower-cost alternatives?

CUNA is helping to design a new national survey and focus groups that will explore the demand for payday loans.

The goal: Help mainstream institutions meet these borrowers' needs with more reasonable costs.

CUNA was the credit union movement's representative in an intensive two-day payday loan forum of 16 consumer advocates, researchers, educators, and policy experts. Participants planned questions for the national survey and focus groups to be administered by the Consumer Federation of America (CFA).

The forum was co-sponsored by the National Endowment for Financial Education (NEFE), CUNA's partner in providing a financial planning curriculum for high school seniors.

Both CFA and NEFE, like CUNA, want to stamp out abusive payday lending practices - such as triple-- digit interest rates, and loan rollovers that extend short-term borrowers into long cycles of debt.

CUNA's Colleen Kelly was selected to participate in the forum based on her work with state credit union leagues in researching policy issues related to payday loan laws and regulations.

CUNA's State Issues Subcommittee, chaired by credit union CEO Lee Williams, will continue to monitor the issues along with Kelly and the leagues.

NEFE plans to post a report from the forum on its Web site (www.nefe.org).

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