Our Salary Advance Loan is the most profitable loan that SECU makes. More importantly, it is like an IDA on steroids. Each month our members save $70 compared to what they would pay to a typical payday lender. We extend 50,000 loans per month – this translates into monthly “savings” of $3.5 million leaving more than $42 million more in the pockets of NC residents each year.
-- Jim Blaine, NCSECU
NCSECU views its Salary Advance Loan like an IDA on steroids for NC residents
North Carolina State Employee’s Credit Union (SECU) has become the biggest "payday" lender in the state. More importantly, it is like an IDA on steroids - each month SECU members save $70 compared to what they would pay to a typical payday lender. SECU originates 50,000 loans per month – translating into monthly “savings” of $3.5 million leaving more than $42 million more in the pockets of NC residents each year.
Loan Amount: Up to $500 Interest Rate: 12% Fees: None Term: 31 days Collateral: Unsecured
Requirements:
1) Members must already have their paycheck on Direct Deposit into a SECU checking account
2) Balance plus accrued interest must be repaid via Funds Transfer from the SECU deposit account on the next pay date.
3) Not under bankruptcy
Target: SECU members
While it certainly was not their mission, with the ban of payday lending in North Carolina, the State Employees Credit Union (SECU) has now become the largest "payday lender" in North Carolina. Fortunately for their members, NCSECU’s Payday Advance Loan is one of the most affordable and safest of its kind in the country.
SECU realizes it happens to just about everyone -- an emergency comes up and their members need a quick loan until the next payday. SECU decided to offer an alternative for their members trapped in wealth-depleting relationships with a growing number of predatory payday lenders in the state. SECU now offers a Salary Advance Loan. The program includes an inexpensive, convenient loan along with the mandatory set-up of a Salary Advance Cash Account to assist members in saving for the future.
Each time a loan advance is processed, five percent of the advance is placed into a "Cash Account" and pledged as collateral for the Salary Advance Loan. The Salary Advance Cash Account belongs to the member and earns interest. However, access is restricted. A Credit Union Lending Official must approve all withdrawals from the Salary Advance Cash Account. If a withdrawal is approved, borrowing privileges on the Salary Advance Loan may be suspended for a period of time.
“For many, this is the first savings account they’ve ever had in their life! In total, SECU members have over $15 million in savings on deposit.”
In addition to the "Cash Account," SECU makes information and advice on topics such as money management and credit available through a partnership with BALANCE, a financial counseling service free to SECU members. Their partnership with BALANCE is part of a larger National Federation of Community Development Credit Union partnership.
