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.
This last week ending May 2, another 3.8 million workers filed for unemployment benefits, bringing the total to 33.5 million claims since mid-March. That means one in five workers have filed in the last six weeks, and as much as we appreciate the recent $1,200 “stimulus” payout, such programs are akin to plugging a gaping water leak with a flimsy bandage. While the stimulus payout might give short-term financial relief to many individuals, it is still not enough.
A lot of working individuals and families need access to liquidity in order to get through this near-unprecedented period in American history. Too many of them, however, are running out of what savings they had and walking through predatory lenders’ doors, blind to the financially painful and ill-fated journey on which they’re about to embark. Some nefarious lenders already have begun marketing “COVID-19 Financial Relief” programs or “Emergency Funding Relief” loans at a repulsive 800 percent annual percentage rate (APR). Experts know this pandemic is fertile ground for such predatory lenders to seek out and exploit our country’s most financially vulnerable, Americans who are already fighting to get food on their tables after being laid off or furloughed. They need urgent financial relief in the form of low-interest short-term loans, and this is not it.
The Reversal of CFPB Ruling Does Not Offer Financial Relief
It was with a heavy heart when we read the questionable machinations behind the Consumer Financial Protection Bureau’s (CFPB) reversal of their own 2017 ruling that would have sharply limited such predatory, high-interest payday loans.
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 unions 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. We urge all credit union executives to meet with your leadership teams and consider your path forward in giving hope to members who need it. At QCash Financial, we are creating movement around small dollar lending. Join us!