Credit Unions and Payday Lending

Wayne told me about an NPR story about credit unions getting into the payday loan alternative business. My only comment is: Why didn’t they do this sooner?

If one looks at the history of credit unions, it is clear that most early credit union loans provided exactly the sort of quick cash that payday loans do today. (My ancestors relied on credit union loans to finance vacations.) As credit scoring replaced personal networks as the means of enforcing debt repayment for credit unions, credit unions developed business practices that made them far more similar to banks. This new trend represents a welcome and positive return to the roots of the credit union movement.