The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

RedDough Is an Investment in Change

On May 23rd, 2016, posted in: Uncategorized by

RedDough storefrontIs corporate greed giving way to social conscience? Probably not (for the most part), but there appears to be a much bigger push to do the right thing. Especially when the wrong thing is really wrong.

Dare I say that social justice is leading the charge, thus relegating the CFO’s obsession with the income statement to a lessened position of importance? Yeah, just a little, maybe, but let’s not get all sentimental and weepy here. Quarterly earnings continue to drive Wall Street analysts’ assessment of corporate performance — not the feel-good stuff.

That said, Google’s parent company, Alphabet, has thrown down the gauntlet on buying advertising from payday lenders. Keeping “bad ads out” is good news on two fronts: 1) People will not be influenced by advertising for a product that serves to greatly debilitate the ability to accumulate household wealth; and 2) one less ad on the border of an already overcrowded PC screen.

The indisputable fact is that payday lending in its current form is bad for Joe Six-Pack. Google even eliminated the payday lenders from sneaking in the side door by stating that any loan offer that has repayment within 60 days of the date of issue and/or carries an annual interest rate of over 36 percent will be banned as well.

Let’s not be naïve. Joe may very well find the payday lender du jour that will meet his need. It’s called demand. Payday lenders exist because there is a “hole” in the marketplace’s offerings for short-term, small-dollar lending of last resort. But an attempt to slow Joe’s efforts to jump into this financial firestorm is a good first step.

Adding to Google’s efforts to quell interest by yanking ads is the creation of the RedDough® Money Center, a non-profit small-dollar installment loan provider located right here in St. Louis. Specifically, Pagedale is the location of a new idea that we hope takes root. What they do (in part) is $500 loans that can be repaid over longer terms at 36 percent. And yes, good repayment histories are reported to the credit bureau. They also offer bill payment, prepaid debit cards, money orders, etc. — all at price points lower than the market. Finally, all the profits will be returned to the community to provide for social impact in a variety of services. You’re thinking, “Very cool.” You betcha.

Rather than take, RedDough gives. RedDough is an investment in change. Bettering a community by starting with the bedrock tenet of improving household wealth accumulation seems like the best possible investment one can make. Changing future generations happens with wealth accumulation. Not an opinion — a fact.

When financial stability exists, so does peace — starting now and for generations to come. Google and RedDough are onto something big here. Very cool.

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