The cost of a payday loan is somewhere around 400% annual percentage rate. OUCH! Supply and demand is in favor of the payday lender because the consumer has an immediate need. As a result, they stick it to the consumer. There tends to be minimum regulation on these types of lenders, and when an unsuspecting consumer needs a “quick fix” to their personal finances…boom…you are now beholden to a very expensive short-term solution.
Imagine if gasoline for your car worked like this. If your tank is over 1/8 full, there would be a price of $3.50 per gallon (using today’s cost) to fill up. But if your tank was on fumes and the needle on the gas gauge was buried below 1/8 full, you would have to go to a special pump where there was a 400% increase. So you would pay $14 per gallon. HOLY COW!!! Your need for gas wouldn’t allow you much room for negotiation. After all, you’re on empty and you can’t move forward. My guess is that would only happen once, and you would make a strong mental note to never again let your tank get that low.
You should never let your finances get that low either. No more “quick fixes” should be your personal goal. Have an emergency fund. Save for a “rainy day.” Pay yourself first. Stop spending money you don’t have. Have a plan. Create a budget. Be smart and borrow smart. Who can afford a 400% payback on anything?
Our Dellwood facility has been open now for a little over a month. Our location is surrounded by payday lenders. We say that our new branch site is located in the “belly of the beast.” We are working hard to get people to change their direction and walk in our office to learn about a much better solution. In the first month of operations, we opened up 71 new accounts. That’s 71 people who are making a choice to put money back in their own pocket – not the payday lenders. Please tell everyone you know.
By the sheer nature of our “not-for-profit financial cooperative” status, St. Louis Community Credit Union has a laser-like focus on our members and what is right for them. Not much time is spent on discussing whether or not our next branch office should have marble floors, granite tops or pillars in front. We tend to leave that grandiose display of insatiable abundance to our friends in the banking industry. The Credit Union, on the other hand, focuses on transferring our earnings to you – not to fancy floors.
Who’s popular in the retail world today? McDonald’s over Starbucks. Wal-Mart over Nordstroms. TJ Maxx and Marshalls over JC Penney. See a pattern here? Folks are looking for value. Gas and groceries have placed an inordinate amount of pressure on our discretionary spending, and large groups of consumers are “trading down” for increased value. “Trading down?” It almost sounds like a bad thing. We happen to think it’s pretty smart.
We represent the best in value as it relates to financial services. We take what we like to call a “utilitarian” approach to providing you with retail banking services. It’s about utility with us – “function over form” is another way of saying it. We’d much rather charge you less on your box of checks…ATM fees…loan rates…and money orders instead of having the finest in furniture in the middle of a rotund lobby surrounded by stained glass windows.
With no immediate end in sight to our current tough economic times, seeking St. Louis Community Credit Union’s value is a good play. While it’s called “trading down” on Wall Street, we prefer to think of it as being a prudent consumer on Main Street.
Let’s take a trip back in time…to the year 1996. What was going on 12 years ago? Well, according to MSN Money columnist, Liz Pulliam Weston, bank fees were a heck of a lot less than they are today. In her article, “Bank Fees Are More Outrageous Than Ever,” she draws some parallels between then and now. Stop pays on checks used to cost $10, and now they typically run in the $30 range. Cashier’s checks and money orders that used to cost $1 now cost $10 and up. Seems obvious to me that banks aren’t what one would call “consumer friendly.”
St. Louis Community Credit Union remains “consumer friendly.” As an example, the money orders that now cost ridiculous amounts in the banking world are either free or 49 cents at the Credit Union. How is that possible? Well, it’s pretty simple: because of a bank’s “for profit” status, they have to make a profit for their shareholders. Charging consumers fees are a means to rake in the profit. St. Louis Community Credit Union (on the other hand) is a not-for-profit financial cooperative that only exists to make our members’ lives better. Pretty simple as to why our fees are less, don’t you think?
One more example is the cost of returned checks. In 1996, the Credit Union’s cost for a check that attempted to clear a member’s account with insufficient funds was $15. Today, 12 years later, the cost remains $15. Folks make mistakes…why further penalize a member in need with a $35 fee? Ouch!!!
Ironically, 1996 was designated as “The International Year For The Eradication Of Poverty.” It was also the “Chinese New Year Of The Rat.” I’m guessing St. Louis Community Credit Union took the ending of poverty very seriously…banks on the other hand apparently remain beholden to the rat.
Nobel Peace Prize winner Albert Schweitzer is quoted as saying…“One thing I know: the only ones among you who will be really happy are those who will have sought and found how to serve.”
If “really happy” is a by-product of serving people, then there’s no happier place on earth than St. Louis Community Credit Union. Your credit union is jam packed with the joy of serving others.
St. Louis Community Credit Union employees are a diverse group of people drawn together by this appreciation for serving. We are a racial and ethnic melting pot. We are young in age, mature in years, and every age in between – all with a young and energized heart for serving. We are diverse in our socio-economic backgrounds and equally different in our respective educational backgrounds. We are single, married, parents, grandparents – heck, there may even be some great grandparents sprinkled in along the way. We live in the city, the county, even a different state. Some rent homes, others own their homes, and some live with parents. We are far from homogenous, yet ideologically we are all exactly the same.
We love to serve our members. We appreciate the responsibility members afford us to help manage their money. To serve our communities with a heartfelt, loving sincerity is what brings us together. Yes, we’re a diverse group (and we love it) until you start talking servant hood, then we’re pretty much the same. It makes for a great place to work, a great place to serve, and a great place to be happy.
Mr. Schweitzer apparently knew exactly what he was talking about.