New Zealand Credit Unions Face Payday Advance Dilemma: To Offer or Not?
The practice of pay day loan lending is exploding inside and outside the United States.
To compete, many credit unions feel pressure to join the trend for ultra-short, ultra-high interest loans, said Pete Crear, chief executive of the World Council of Credit Unions.
Creaer was in the New Zealand last week to address the nation's credit unions, which have about 185,000 members. A lot of these companies are beginning to offer resources similar to same day payday loans are making payday loans, though hopefully at reduced rates.
In New Zealand, Credit Union Waikato admits making such loans, while others say they're contemplating the same. But such businesses are meant to protect the consumer and, therefore, are reluctant to join a practice which traps borrowers in a cycle of perpetual, high-cost debt.
In the country, there are three online payday loan lenders - Cantwait. com, Paydayloans.co.nz and Chequers Finance. They all have websites showing smart, hip, young people partying thanks to the use of cash advances. They make loans to anyone, anywhere in New Zealand through their phone, fax and web-based operations.
Chequers Finance, which lends for a minimum of four working weeks, charges $8.50 a week for a $100 loan, a real annual interest rate of 442%. The others follow suit.
Individuals - in any country - are always likely to look into cash loans online due to the ease of acquiring them. You never need to leave your home or fax in any documents to secure the money.