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Toledo Urban Federal Credit Union Assists Members Seeking
Relief from Payday Lenders
Sojourner’s Truth Staff
“I was just about going
nuts,” says William (not his real name) of his ordeal with
pay day lenders. “I saw darkness all around me.”
William’s long journey
into darkness began when he stopped into a pay day lender
storefront to borrow just enough to pay off some gambling
debts. Retired, and living as he does on a fixed income, the
additional expense was burdensome. So he arranged for a $500
loan that, within a few short years, would balloon into
thousands of dollars in additional debt.
First there was the $500
loan, for which he was required to repay a total of $550
within 30 days. But that $500 was not quite enough to pay
off his original gambling debt. So after repaying the $500,
he was enticed into taking out a $1,000 loan, which required
a pay back of $1,200.
Entrapped, William decided
to go to several different pay-day shops and he was able to
continue borrowing. “I kept messing myself up,” he says.
Then, as time passed, he
messed up big time. William went online where he was able to
obtain a loan for $5,000. The downside? He would have to pay
back $10,000 at the rate of $580 per month. Never mind his
fixed income, the lenders continued to open up their
checkbooks and continued to drive him deeper into debt, into
more than $40,000 worth of debt.
“The system is set up so
you don’t get out of the system,” says Suzette Cowell,
president and CEO of Toledo Urban Federal Credit Union where
William is a member. In 2016 Cowell started working with
William to clear up his debts. She put him on a budget and
started working with the lenders to clear up the mess.
They didn’t make it easy
on her. If she tried to pay with a credit union cashier’s
check, for example, they would charge her a $75 fee.
To date, and in spite of
the road blacks, Cowell and William have cleared up about
half of his debt but the journey out of darkness has
surprised the long-time banker. As they clear up one loan
after another, the lenders keep trying to entice William to
take on more debt. “It’s the craziest thing to try to get
out of this,” she says. “I’m appalled by how they do
business. They don’t care if you have financial issues, they
just want to give you another loan.”
Cowell estimates that
William will be in the clear somewhere between another six
months to a year.
“I see a little light at
the end because of Suzette,” says William. “She’s watching
me like my mother,” adds the 72-year old with a chuckle.
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