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Wescom’s New Quick Assist Loan Program

by on August 13, 2019

An alternative to high-interest loans to support members in ne

According to a 2018 Federal
Reserve Survey, 40 percent of Americans cannot financially withstand an
unexpected $400 cash emergency such as car trouble or a broken appliance. In
fact, a whopping 78 percent of U.S. employees live paycheck to paycheck (2017
CareerBuilder Report). The result is an ever-growing dependence on high-cost,
short-term payday loans to cover unexpected expenses — often coming from
lenders with predatory interest rates.

Meanwhile, during one of our
monthly member experience surveys at Wescom – a Southern California institution
since 1934 – we received a request from a long-term member who had an
unexpected appliance repair need that was bound to set their financial balance
into disarray. This member needed less than $500 to cover the cost of the
repair and was hoping Wescom could offer a solution to meet her financial
needs. Traditionally, a loan request – irrespective of the amount – requires a
member to submit a comprehensive application and have the loan underwritten. We
recognized immediately that there needs to be an easier way for members to
borrow small amounts without going through the rigors of the traditional loan
application process.

We suspected that her situation
was not isolated, either. To determine if there was wider-spread need for this
program, we assessed our membership transaction history. In doing so we
identified approximately 1,300 members who had auto clearing house payments
from their Wescom checking account to payday lenders. This affirmed the
critical need for a quicker, less cumbersome solution for members who – with
their backs against the financial wall – turn to payday lenders for
unanticipated expenses or financial emergencies.

This soon led to the creation
of our Quick Assist Loan program. This new personal loan offering provides
Wescom members with short-term, small-dollar loans with no credit checks
required. The program serves the important need of keeping our members’
accounts stable in times of financial strain. It also provides a more wholesome
alternative to high-interest rate payday loans from outside vendors that often
trap employees in cycles of financial instability. 

Specifically, the Wescom Quick
Assist Loan provides members with:

–       
Loan amounts ranging from $200 – $500

–        A
loan term of six months

–        0%
interest rate

The Quick Assist Loan program
is available to those age 18 and older who have been a Wescom member for three full calendar months (ranging from 90 to 120 days), have a direct deposit
account for at least 90 days with a minimum average monthly deposit of $400,
and who have submitted a $19 application fee for processing. Their account must
be in good standing and they cannot have more than one Quick Assist Loan at a
given time nor three Quick Assist Loans in a six-month rolling period. 

Since its inception in May
2019, this program has already funded more than four dozen loans totaling
nearly $23,500. Our goal is to help as many Wescom members as possible who are
eligible for this program, so during everyday member conversations, our service
representatives identify members in need and proactively offer the short-term
loan program. 

Because this program directly addresses the stress associated with borrowing from payday lenders at high interest rates, the Quick Assist Loan program is the latest manifestation of Wescom’s Purpose Statement, “To help Southern Californians build better lives,” and of our Mission Statement, “To exceed expectations in everything we do.”

Adriana Welch, Senior Vice President Branch Operations, Wescom Credit Union

This content is for CU BUSINESS eMagazine + WEB ACESS and THE TEAM BUILDER (GROUP SUBSCRIPTION) members only.
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