Credit Unions: Lots Better Than Payday Loans

26 Jul Credit Unions: Lots Better Than Payday Loans

Payday loans are horrible.

  • Interest rates as high as 1,500% per year (that’s One Thousand Five Hundred percent per year, and yes, we’ve seen them this high).
  • Wage withholding.
  • Repayment terms that lock you into an endless cycle of borrow and pay that you can never get out of.
  • Abusive collection practices.

So why do people borrow money from people like this on such outrageous terms? Because, as one blogger put it, “When the landlord is pounding on the door demanding rent, the kids are crying because the kitchen is empty, and the electric company is hauling the meter out of the house for non-payment, what would you do?”

Well, what can you do other than using a payday lender? The answer? Check with a credit union.

When the District of Columbia capped interest rates at 24%, the payday lenders closed up shop. Who stepped in to fill the void? Credit Unions. As The Washington Post reported in the article, “Credit Unions Slowly Fill Void as Payday Lenders Leave D.C.,” and USA Today in, “Breaking the Cycle of Payday Loan ‘Trap’,” credit unions are offering low income people small, short-term loans at interest rates that you don’t think are a misprint.

As Leslie Parrish, a senior researcher for the Center for Responsible Lending noted in The Washington Post article, “Credit unions were created to offer credit to people with modest means. So, historically, it’s very much in keeping with their mission.” Not to mention that a 24% loan is a whole lot better than a 300% loan.

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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