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Credit unions are not-for-profit cooperatives with historical traditions of starting individuals on the road to economic empowerment through the accumulation of savings, assets and member services. Many low-income households in Michigan do not use main stream financial institutions for payment and lending services. Instead they turn to alternate financial services such as payday lenders.
Payday lenders were virtually nonexistent 15 years ago; payday lenders make uncollateralized, short-term loans for either the amount of a borrowers postdated check or for authorizations of an automatic withdrawal from a borrower's bank account, minus the lender's fee. For example, a typical $300 payday loan cost the borrower $45 in fees for $255 in cash. These loans are referred to as "payday loans" because they are marketed as a tool for cash-strapped consumers to meet their financial needs until their next payday. The amount most commonly advanced ranges from $200 to $500 with an average loan amount of $325.
 StretchPay loans are special line of credit loans designed to make it easy and less expensive for members to get short term credit. A StretchPay loan, which is a REAL Deal for members, will provide credit union members up to $250 without customary credit checks, at 18% interest and a small annual fee. Members must repay the loan in full within 30 days before they can access their line of credit again.
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