State Credit Unions will Now Offer Payday Loans

In an effort to create an alternative to payday loans from what it calls predatory lenders, the Credit Union Association of Oregon ? along with Oregon?s Governor, Ted Kulongoski ? announced a campaign late last week to offer short-term loans through a network of credit unions.

A spokesman for the governor told Salem?s Statesman Journal that the loans being offered would cost consumers about $3 for a $200 loan over 30 days. “They will be considerably better for the consumer than these predatory lenders,” said spokesman Charlie Burr. A similar loan through a payday lender would typically cost borrowers anywhere from $60 to $85, Burr noted.

Laura Wieking, communications manager for the Credit Union Association of Oregon, said that terms of the loans would vary by credit union.

Oregon already has consumer protections in place for payday loans, but the changes are not expected to take effect until the middle of next year. The new plan is seen as a way to protect consumers immediately.