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photo, Rob Givens
With nary a bank in sight and a large population of low-income residents in need of cash, payday lenders in midtown Kansas City, Missouri, have the upper hand.
On average, they charge between 15% and 18% per $100 borrowed and roll that over every two weeks on any loan that still has a balance due.
"By the time these loans get paid off, they've collected anywhere from 200 to 400% interest," said Rob Givens, CEO of Mazuma CU, Kansas City. Those types of lending practices made Givens angry enough to take action. Unfortunately, he said, state regulatory guidelines are holding him back. In March, his community credit union with $240-million in assets and 50,000 members opened a branch in midtown Kansas City. It's within a five-mile radius of 24 check cashing and payday lending operations. Givens said his board approved $1-million...