Northwest Community Credit Union Helps Members When Financial Emergencies Strike
The credit union launched two new short-term loan solutions based on membership history, rather than credit history.
Credit unions have historically focused on helping members save, borrow, and receive affordable financial services in good times and bad. When the unexpected happens and the member is caught in a financial emergency, credit unions are there to help.
Rather than charge high–interest rates commonly found with payday lenders, credit unions provide members with solutions that bring financial relief and helps them avoid the payday loan cycle. One Northwest credit union recently launched two new products for this purpose.
After a study showed a portion of Oregon-based Northwest Community Credit Union’s members used payday loans, the credit union decided to act. By working with QCash Financial, a credit union service organization owned by Washington-based WSECU, the credit union created two new payday loan alternative products, Northwest Cash and Northwest Cash Plus, to help.
Both products feature automated digital lending platforms that base lending decisions off the member’s history with the credit union, rather than their credit history.
“Northwest Cash provides short-term, instant liquidity to members. It’s immediate cash with a lower cost [than payday loans], and allows the credit union to approve more members on the basis of their relationship with us, rather than traditional credit reporting and scoring,” said Northwest Community’s Business Intelligence Manager, Sam Stratton.
Northwest Cash offers loans from $150 to $700, and Northwest Cash Plus loans range from $701 to $4,000. Both products offer an easy application process. Members immediately learn how much they qualify for and can receive funds deposited to their account the same day upon approval, without huge payday loan rates or fees.
Within the first month of offering the products, several member stories underscoring the critical need for these lending solutions emerged:
- One member had a critical need for an unexpected expenseand was extremely worried that she would be unable to get a traditional loan because of her credit. She was overjoyed to find that she could qualify for a small $200 loan and repay it quickly within the 60–day term with minimal impact to her monthly budget.
- Paternity leave created special needs for another member, who took out two Northwest Cash loans to help make ends meet during this time for his family.
- Another member had been out of work for the past couple of weeksand was struggling to pay bills. When a credit union phone center agent recommended that he apply, he cried tears of joy when he got approved.
Delivering cash quickly to members through payday loan alternative programs such as Northwest Cash can be a powerful step in moving members toward improved financial health. To learn more about QCash Financial, visit them online.
Editor’s note: Does your credit union offer an innovative payday alternative loan you’d like to share with Anthem? Contact us.