The article fails to mention a few key points:

1- St. Mary’s Bank is  a credit union, not a bank

2- The MyPay product is offered in two loan amounts: $250 and $500.  There is an 18% APR, along with a $15 fee for the $250 loan and a $25 fee for a $500 loan. 

So, yes, it is a bit cheaper than a traditional payday loan, but keep in mind that credit unions are exempt from federal and state income taxes due to their status as not-for-profit financial institutions. They do not have to pursue a profit. And the majority of Americans do not have access to a credit union, as their membership is restricted to defined segments of the population.

We welcome St. Mary’s Bank into the payday lending market and believe competition is good for our customers. But while credit unions can provide another choice for consumers, they cannot be considered a replacement for payday lenders in New Hampshire.

“The 1999 law {the Check Cashers Act} declared that income earned by payday lenders was a fee and not interest, avoiding the 17 percent limit on interest set out in the Arkansas Constitution. The Supreme Court in 2001 ruled that the Legislature had no power to determine what is or isn’t interest, but the court didn’t rule on the constitutionality of the act.”   

The article goes on to say that the Arkansas State Board of Collection Agencies will continue to issue licenses to payday lenders. 

Money quote:  “Once the payday lenders are in check, they vow to go after car title lenders.”  

That sentiment reflects perfectly the nature of these movements.  The movement must always attack, always find new enemies because keeping the movement alive is the real goal; attacking private enterprise is just the method for getting money and media attention.