MCUL CEO Suggests CUs Can Help BET Founder Robert L. Johnson End Payday Lending (Misc News: May 30, 2013)
MACKINAC ISLAND – The founder of Black Entertainment Television said he wants to offer an alternative to chronic short-term borrowing – more commonly known as payday lending – and MCUL & Affiliates’ CEO says credit unions can help.
“There’s absolutely no reason why this country should allow that kind of lending process to take place if there are alternatives, and there are alternatives to this type of lending,” said BET founder Robert L. Johnson, according to Mlive.com. Johnson spoke at Detroit Regional Chamber’s Mackinac Policy Conference on Wednesday. “And we’re working on a plan to end payday lending as we know it today.”
While Johnson is working with a Texas-based finance company, MCUL & Affiliates CEO David Adams told Mlive that credit unions would be a great partner for the program.
“I think credit unions would be a fabulous partner with him and his organization to provide these alternatives to consumers,” Adams said. “Alternatives to payday lenders who – not in all cases, but in many cases – take advantage of people.”
Many credit unions have programs aimed at replacing payday lenders. In fact, the recently opened Community Promise FCU in Kalamazoo was set up specifically to put an end payday lenders in its neighborhood.
Johnson said this summer he’ll announce a new program that offers wage advance lending in partnership with employers. The loans would come with “significantly lower” rates and longer terms than payday lenders, he said. His program would offer rate discounts for consumers who pass a financial literacy test, set up savings accounts and pay on time.
“What we believe is that people who know they have access to a safety net of borrowing will not become chronic borrowers of payday lending,” he said.