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CUNA's Nussle Cites CU Help in Restoring Members' Credit
Wednesday, October 29, 2014 6:35 AM

Credit union programs that help members avoid predatory payday lenders were in the spotlight in The New York Times Monday, thanks to a letter to the editor by Credit Union National Association President/CEO Jim Nussle.

Noting a recent Times editorial that raised questions about how to protect the best interest of consumers who need help restoring credit, Nussle told the Times' extensive readership that credit union programs build experience in saving, not just borrowing. "Unlike predatory payday lenders," Nussle wrote, "credit unions have programs that actually help members out of a hole instead of keeping them trapped in one."

To illustrate the credit union difference, Nussle cited two programs used by credit unions. One program directs loan payments into savings accounts once a loan is repaid. A second program links credit unions with employers, and repayments are made by payroll deduction, and again, once the loan is repaid, payments continue as deposits to the member's savings account.

"These and other lending programs for members with troubled credit have interest rates significantly below what predatory lenders charge," Nussle said. "It's unfortunate that quick, short-term access to money is needed today by some people, but they shouldn't be ripped off in the process. Credit unions demonstrate that access to this credit doesn't have to be predatory."