Are credit unions helping combat payday lenders or contributing to the problem?

drowningA whitepaper discussing payday lending and what credit unions are doing to combat this problem has been published by the Southeast Regional Credit Union Schools (SRCUS). The paper was authored by a team of third-year students in the SE CUNA Management School program comprised of Lisa Jo Cody, TruNorth Federal Credit Union (Ishpeming, MI); Lisa Spearman, Peach State Federal Credit Union (Lawrenceville, GA); Jennifer Christopher, BayPort Credit Union (Newport News, VA); and Becky Dawsey, Ferguson Federal Credit Union (Monticello, MS). Completion of the written project and an oral presentation of the research report is a prerequisite for graduation from the program. This team of students received recognition at the 2017 SE CUNA Management School graduation ceremonies last month for their exceptional work on this project.

In a society where many families are living paycheck to paycheck, it’s no shock that our nation is struggling with a predatory lending epidemic.  An amazing 12 million Americans used payday lending services in 2010. Forty-seven percent of Americans say they do not have enough money saved to cover a small emergency such as car repairs and medical bills. For someone with low income and imperfect or limited credit, turning to a payday lender may seem the best available option. Because this is something that so many credit union members are personally impacted by, many credit unions have begun offering cost-saving alternatives and financial education.

In the paper, the team researches what credit unions are doing to combat the problem and seek to determine if credit unions are helping or contributing to the problem.  The history of payday predatory lending is discussed, as well as the growth of this industry over the years. Current and possible solutions are analyzed to help determine how credit unions are responding. The authors also provide a review of past and current regulations surrounding payday lending to determine if they have had positive or negative implications on the payday lending industry. A thorough analysis is included, as well as an appendix containing recommendations and solutions.

To access a complimentary copy of the white paper, please visit

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