Wednesday, October 25, 2006

The movement is coming to Arizona. Credit unions around the nation are beginning to offer lower interest rate alternatives to payday cash advances. Soon, this state will be included among those.

Pat Gilbert, who runs the Mesa Community Action Network, an organization that provides services to the poor, has been hearing numerous clients tell him NOT to abolish bad credit payday loan services because they needed the quick cash.

Therefore, Gilbert and Robin Romano, chief executive officer of MariSol Federal Credit Union, decided to offer another way. A local MariSol branch is scheduled to open next month within the MesaCAN building at 635 East Broadway Road.

Borrowers may obtain loans there with a maximum interest rate of 18 percent, a limit set by federal law.

“The cleaner your credit, the lower the interest rate,” Romano said. “Your credit score will not determine whether you get a loan, just the rate. We’ll look at the whole package: Do you have a job? How much do you earn? How do you owe?”

Different from payday loans: Gilbert said the credit union would serve as an alternative to the payday cash loan operations that litter Mesa’s intersections.

The city is home to 111 such outlets, according to Gordon Sheffield, a Mesa zoning administrator. The number has almost doubled in two years. Many abhor the businesses, attacking them for preying on the poor, who don’t know where else to go to obtain cash quickly.

City Councilman Mike Whalen lauded Gilbert and Romano, though he said state and federal legislation still is needed to halt the ability of regular and no fax cash advance stores to exploit the ignorant.
“Anything they can do to make it easier for people to survive is wonderful,” he said.

Payday loan ordinance rejtected: Whalen provided the swing vote last week in a 4-3 City Council decision that rejected an ordinance that would have prohibited new payday loan operations from being built within 1,200 feet of another one. Simply restricting the distance between those businesses would not have solved the problem, he said.

Others who voted against the ordinance, such as Tom Rawles and Scott Somers, said government has no right to regulate the free market.

Vice Mayor Claudia Walters championed the proposal, though. Residents in her district say the payday loan shops seem to be overwhelming everything else in the neighborhood. In fact, one intersection, Alma School Road and University Drive, hosts payday advance loan stores on each corner.

“I wonder if people really understood the ordinance,” Walters said. “It would’ve limited the numbers (of payday loan businesses) that could exist.”

But she supports the MesaCAN MariSol credit union.

“It’s definitely a way we can begin to address (the problem),” she said. “I’m hopeful.”

This entry was posted on Wednesday, October 25th, 2006 at 2:29 pm and is filed under Arizona.