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Quickcash - Langley FCU
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Quickcash - Langley FCU

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Overview of Langley\'s Quickcash - A Smart Alternative to Payday Lenders.

Overview of Langley\'s Quickcash - A Smart Alternative to Payday Lenders.

Published in: Technology, Economy & Finance

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  • Transcript

    • 1. Brett T. Noll Senior Vice President / CMO
    • 2.
      • Customer uses post dated check as collateral
      • Employment is verified
      • Subprime credit bureaus contacted
      • Loan usually for 15 to 30 days
      • Fees up to 15% in VA
      • Very convenient
      • Very costly
      What is a payday loan?
    • 3. Payday Loan Locations
      • Payday Lending Stores
      • Check Cashing Outlets
      • Pawn Shops
      • Call Centers
      • Internet
    • 4. Payday Users
      • 2/3 under 45 years old
      • 62% female with children under 18 living at home
      • Employed (50% in job less than 3 years, 23% in current job over 5 years)
    • 5. Payday Loan Customer Profile
      • Single parent families with low income
      • Young adults
      • Minorities/immigrants
      • People lacking money management skills
      • Anybody!
    • 6. Astounding Statistics
      • 22,000 payday lenders nationwide
      • Estimated $6 to $8 billion dollars in fees last year
      • Estimated 17% of military use payday loans (225,000 personnel)
    • 7. Astounding Statistics
      • In 2003, more than 250,000 Virginia consumers received more than one payday loan.*
      • In 2003, 124 payday lending stores opened in Hampton Roads.**
        • 40 Virginia Beach
        • 36 Norfolk
        • 26 Newport News
        • 20 Hampton
      • The VA Bureau of Financial Institutions reports that 1/3 of the total statewide payday lenders reside in the Hampton Roads area.***
      Sources: *Better Business Bureau Serving Western Virginia Consumer Alert: Virginia Data Proves Payday Loans Equal Costly Cash. June, 2004. **Flagship News. It’s Hard To Break Free From Payday Lending Trap. http://www.flagshipnews.com. June 19, 2003 ***The Virginia Pilot. Payday Lenders Expect Booming Business Here Military Presence, Tight Incomes And A New State Law Help Draw Short-term Loan Firms to Hampton Roads. October, 2002.
    • 8. Why are Payday Lenders popular?
      • Better hours
      • Better locations
      • Provide what people need, fast
      • No hassle
      • Sometimes better than bouncing checks???
      • Sometimes better than late payments???
      • No alternatives???
    • 9. Developing A Solution – A Six-Step Process
      • Identify The Need
      • Benchmark
      • Shop The Competition
      • Develop Differentiated Product
      • Brand The Product
      • Get The Word Out (July, 2004)
    • 10. Payday Lending Comparison 18% - $1.73 $500, 7 day term N/A LFCU QuickCash 780% - $75 $500, 7 day term $15 per $100 PAYDAY LENDER APR 7 DAYS Term Fee Lender
    • 11. Approval Criteria
      • Borrower must have been an LFCU member for at least 180 days at time of application
      • Borrower must have had direct deposit of their payroll
      • Or, has had a QuickCash loan with LFCU in the past and repaid as agreed
    • 12. Branding Your Product
      • Naming Your Baby
      • Playing Tag With Taglines
      • The Color of Money
    • 13.  
    • 14. Newspaper Advertisement
    • 15. Mass Transit Advertising Full Bus Wrap Large Bus Poster
    • 16. Additional Advertisement Teller Handout Air Force Base Educational Handout Press Release
    • 17. Weekly Loan Activity
    • 18. Factors In Building Your Payday Loan Alternative Model
      • Annual Fee
      • Pricing
      • Direct Deposit Requirement
      • Forced savings
      • System Notification for Repeat Borrowers
      • Financial Counseling
      • Staff Training
      • Go back to what people like in payday lenders - does your program fit the bill?
    • 19. Setting up products to complement your alternative
      • Starter Platinum
      • Line of Credit
      • Share Secured Loans
      • Financial Counseling
      • CreditBuilder
      • Langley Saves
    • 20. LFCU Product Success
      • Guess how many loans per month we average today
    • 21. Product Success
      • To date LFCU has processed almost 16,000 loans & disbursed over 9 million dollars
    • 22. Product Success
      • Since July, 2004, we’ve saved our members over $1.2 million in fees they would have otherwise incurred had they borrowed at Payday Lenders
    • 23. Proposed legislative ideas in Virginia
      • Capping interest rates
      • Limiting the number of payday loans a person can have to 3
      • Allowing a day to pass before a consumer can take out another
      • payday loan after paying off the first
    • 24. The Payday Lending Industry fights state legislation.
    • 25.  
    • 26.  
    • 27. What happens when you call an internet lender?
    • 28. Thanks largely to payday lenders, the 2007 John Warner Department of Defense Authorization Act contains language that could ultimately have an adverse affect on any financial institution serving the military.
    • 29. Defense Authorization Act:
      • Identifying active duty military and immediate family (includes Reserves and National Guard)
      • A 36% rate cap on loans inclusive of optional fees, charges for services, and late charges
      • 2 separate APRs??
      • Excludes refinancing
      • Requirement of oral disclosures
      • Prevents Car Title Loans
      • As worded, could prevent payroll deduction as means of payment
      • Severe sanctions of imprisonment for rule violation
    • 30. You might have a Payday Lending problem if…
      • Your member’s average APR is higher than Derek Jeter’s batting average
      • There are more payday lenders popping up in your community than Starbucks
      • Results of your annual member survey show that Cash Advance America is your members’ Primary Financial Institution
      • Payday lenders ask to lease space in your buildings
      • You start seeing Board members’ cars in payday lender parking lots!!!
    • 31. Thank You