Just a few comments on this Associated Press story about a new “payday loan alternative” in New Hampshire.

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.