by Ben Morales, CEO, QCash Financial
As every American knows, our nation is fighting a battle against COVID-19 on a number of fronts: socially, spiritually, and certainly economically. One thing we know for sure is that credit union members need access to financial relief now.
In June 2020, the unemployment rate fell to 11.1% leaving the total number of unemployed to 17.75 million people. To put this into perspective, the unemployment rate peaked at 10% during the 2008 recession. While the stimulus payout may have provided some short-term, financial relief to many individuals, it is likely not going to be enough as the infection rates continue to surge throughout the country.
Unfortunately, many Americans will turn to those who engage in the lucrative, predatory lending practices and find themselves in the precarious situation of getting trapped in a vicious and expensive cycle of astronomical interest rates (300% is the national average). It’s also unfortunate, the Consumer Financial Protection Bureau (CFPB) recently chose to revoke the “ability to re-pay” provision in their recent July 7 ruling that would have required payday lenders to check to see if the people who borrow money are able to pay them back while being able to meet “basic living expenses and major financial obligations.”
But the difference, the solve, begins right where it’s always been; not in response or reaction to any particular agency’s actions. It begins and ends in the capable and nurturing hands of credit union executives and the stabilizing financial relief tools within that have seen this nation through so many challenging times. And we can do it again by asking ourselves one question: “What are we going to do about it?”
How Will We Regain Financial Wellness?
What are we going to do — what are we WILLING to do — to help our nation’s borrowers meet their short-term financial obligations while providing the bridge they need to achieve financial wellness and recovery following this crisis? In the midst of a then-record 3.28 million Americans filing for unemployment in late March, a joint letter was released by five financial regulatory agencies that came together to urge all U.S. credit unions to offer affordable small-dollar loan programs. “Responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries,” the agencies wrote. A month and a half later, such words are more important than ever.
The journey on which credit unions will lead borrowers will be a long one, but it’s a journey for which they were built, promoting offerings our nation’s struggling workers urgently need to regain financial wellness. QCash Financial believes in this ideal so much, we’re offering credit unions our Saas-based, automated small-dollar lending platform for FREE until the end of 2020* through our COVID-19 Financial Relief Program.
Access to affordable credit is what millions of individuals and families need right now in this precarious time in American history. Learn more by attending Part 3 in our webinar series on July 22 at 1pm EST hosted by the Financial Health Network where we’ll hear from industry experts on the impact COVID-19 is having on American households today and what you can do about it. Join us!