Program information

 

Marketing Materials

 

Contact Information

 

Current StretchPay CUs



 

 

StretchPay
A credit union salary advance alternative
What is StretchPay?
StretchPay, the credit union salary advance alternative, is a special loan program designed to help members who need a small-dollar loan to carry them over until they receive their next regularly-scheduled income check. StretchPay is designed to be an alternative to expensive for-profit payday lenders that often charge $15 per $100 up to $800 for two to four weeks.

StretchPay is a special open end loan designed to make it easy and less expensive for members to obtain affordable short-term credit. StretchPay is set up with one important difference to traditional open end loans:  a borrower must repay their entire outstanding balance (plus interest) before subsequent advances are permitted. Thus, if a borrower takes a $250 advance on their StretchPay loan they must pay off the entire balance before borrowing again.
Why offer StretchPay loans?
StretchPay is significantly less expensive than a traditional payday loan. Borrowers pay a $35 annual fee (for a $250 loan) and an interest rate of around 18% APR on their advances.  The annual fee may be taken out of their first advance during a 12-month period.

A borrower who uses StretchPay for 12 advances on a $250 open end loan during a 12-month period will pay approximately $77 for 12-months’ access to the loan.  A borrower who uses a traditional payday lender may pay more than $400 for the same amount of credit.
How does it work?
A credit union offers the StretchPay credit union salary advance alternative in association with a not-for-profit organization called Credit Union Outreach Solutions, Inc. (CUOSI). CUOSI, headquartered in Ohio, is a non-profit cooperative organization formed to fuel credit union outreach and community commitment initiatives.  Each time your credit union collects an annual fee from a StretchPay borrower, you forward the fee to CUOSI.  In turn, CUOSI helps your credit union offset any credit losses sustained under the program. This way, you are able to offer members an alternative to expensive payday lenders without incurring

the credit risk sometimes associated with small-dollar, minimally-underwritten loans.

StretchPay is offered to your members using minimal underwriting criteria. Members must be 18 years old, an established member of your credit union for at least 120 days, and not delinquent on existing loans or negative in any share account. Members must have verifiable income, not be in the process of filing for bankruptcy under any chapter of the bankruptcy codes, and must not have caused a loss to the credit union. Twelve months’ productive use of the $250 line is required in order to qualify for the larger line (presently $500).

Important Notice

 

Effective immediately, all CUOSI administrative services, including those for the StretchPay program, are being provided by the Ohio Credit Union League (OCUL).

Mailing address and phone numbers:

CUOSI

c/o Ohio Credit Union League

10 W Broad Street, Suite 1100

Columbus, OH 43215

(800) 486-2917

(614) 336-2894 local

(614) 336-2895 fax

 

E-mail address for StretchPay reporting:

StretchPay@ohiocul.org

 

 

 

Staff contacts:

Jill Cottone -- Business Consultant

Ext. 217

Direct: (614) 923-9717

Cell: (614) 581-8419
jcottone@ohiocul.org

General program, implementation, advisory council coordination, and reporting questions

Dave Fearing -- VP, CU Solutions

Ext. 243

Direct: (614) 923-9743

Cell: (614) 581-6496

dfearing@ohiocul.org

General program questions, promotional presentations

Chris Predieri -- Senior Accountant

Ext. 210

Direct: (614) 923-9710

Cell: (614) 581-0214
cpredieri@ohiocul.org

Reporting and financial statement questions

Shawn Kessinger -- VP, Finance

Ext. 272

Direct: (614) 923-9772

Cell: 614) 581-2316
skessinger@ohiocul.org

Administrative support, reporting and financial statement questions

How is it structured?
  • Advances of $250 (with an annual fee of $35) or $500 (with an annual fee of $70);
  • Monthly revolving credit cycle;
  • A savings component encourages thrift: $25 on a $250 loan and  $50 on $500 loan;
  • Monthly revolving credit cycle;
 
  • Advances must be paid in full prior to new/additional advances;
  • No more than 18% APR (or the state usury rate, whichever is applicable);
  • Payroll deduction is encouraged, but not required;
  • Borrowers must be at least 18 years old and a member of your credit union for at least 120 days.
Benefits of StretchPay
For Your Member:
  • StretchPay is significantly less expensive than for-profit payday lenders.
  • StretchPay helps build a positive credit history when a borrower repays their loan on time.
  • StretchPay keeps your members aligned with their credit union, giving you the chance to offer financial education and counseling – breaking them free of the payday loan debt treadmill.
  • The annual participation fee may be taken from the first StretchPay loan advance during a 12-month period.


For Your Credit Union:

  • Allows you to offer a credit union payday loan alternative at low cost and without significant financial risk.

  • Gives you the opportunity to work with and educate members regarding budgeting and other personal financial management skills.

  • Provides interest income at up to 18% APR with a minimum of credit risk.

  • Demonstrates how credit unions make credit and other financial services affordable and accessible to the nation’s consumers.

See the difference
Stretch Pay is designed with consumers' needs in mind. On a $500 loan for 30 days (28 days for the commercial payday lender),
borrowers will save more than $142 with StretchPay.

 

  $250 loan

Interest & Fees

Loan Amount

Annual Percentage Rate

Term

Total Finance Charges

Sample Commercial
Payday Lender

$15 per $100 borrowed for each 14-day term

$250

391.07%

28 days

$75.00

StretchPay

18% APR, plus a $35 per year enrollment fee

$250

18.00%

30 days

$3.70

Members save
with a $250 StretchPay loan
(not including once-yearly enrollment fee of $35)

$71.30

 

  $500 loan

Interest & Fees

Loan Amount

Annual Percentage Rate

Term

Total Finance Charges

Sample Commercial
Payday Lender

$15 fee per $100 borrowed for each 14-day term

$500

391.07%

28 days

$150.00

StretchPay

18% APR, plus a $70 per-year enrollment fee

$500

18.00%

30 days

$7.40

Members save
with a $500 StretchPay loan
(not including once-yearly enrollment fee of $70)

$142.60

© 2010 the Ohio Credit Union League
The trade association for Ohio credit unions. 
10 W. Broad St., Suite 1100, Columbus, Ohio 43215 • Phone: (800) 486-2917 • Fax: (614) 336-2895
 
E-mail us

Hit Counter