Article in the Columbia Tribune today talks about a national trend of banks and credit unions starting to offer much lower-cost payday loans. These would be an alternative to the traditional payday loan and check-cashing stores we see all over the place. There are examples of these alternatives here in Missouri.

Credit unions across the state are starting to offer payday loans at a fraction of the cost. Usually, you have to open an account at the credit union. They also may require you put some money in savings and get credit counseling. The counseling is offered because many of the folks who take out payday loans are having trouble managing their monthly finances.

To be a customer at a credit union, you have a either work for a certain organization or live in a certain area. Some CUs are employer-based and others are geographically based. The finance terms for the loans offered by credit unions in Missouri are more in line with what AG Nixon has repeatedly called for in Missouri: 36% annual percentage rate and no renewals. Currently in Missouri the average payday loan carries more than 400% APR and our law allows six renewals. That's much more industry friendly than most other states. Thus we are a hotbed for payday lenders.