Credit Unions can’t compete
May 10, 2010 | alternatives, industry, positive media coverage, research | Comments (0)From a new study from the University of California-Davis:
Prof. Stango compared credit union short-term loans to payday loans in terms of both fees and convenience. His research — compiled from data from credit unions, the National Credit Union Administration and payday loan customer surveys — found that credit union rates are generally equal to or higher than those of traditional payday lenders, particularly on a risk-adjusted basis, and that the loans are less convenient for borrowers.
Nor, Prof. Stango noted, do credit unions compete effectively with payday lenders on non-price terms, such as hours of operation or protection against damage to a borrower’s credit score from default.
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