Need an Alternative to Payday Loans? Consider Credit Unions
By J.J. CameronPayday Loan Writer
North Carolina is often prasied for its strict treatment of various kinds of payday loans; such resources are basically eliminated from the state. How come?
"You get in a cycle of debt where you can't get that repaid,” said David Elliott, the President and CEO of Fort Bragg Federal Credit Union.
Just a couple years ago, cash loan providers were found near major cities such as Raleigh and Charlotte. studies have shown that companies target areas with a military presence, as well. In 2005, Wayne County, which is home to Seymour Johnson Air Force Base, had the state’s highest concentration of lenders.
A concern for those that backed this industry, however, was what troubled consumers would do without the chance to apply for faxless online payday loans. That's where credit unions come into play.
“If you're going to try to do away with something, you have to have a product out there to take its place,” Elliott said.
Fort Bragg Federal and Pentagon Federal Credit Union offer ARK loans, which stands for Asset Recovery Kit. It’s a no-interest personal loan of up to $500, and there’s a one-time $6 fee. If someone takes out more than one loan, they have to go to credit counseling.
"99% of the people who come see us, the primary reason for their problem is a lack of having a spending plan or a budget," said Tom Luzon, who works with Consumer Credit Counseling Services, which has partnered with the credit unions.
Luzon said no one has defaulted on a loan since the program started in February. It's good news for those that feared an increase in debt once payday advance loans were taken off the table.
