Baltimore Looks for Payday Loan Alternatives

Posted On: July 25, 2010 at 3:10 p.m.

Filed Under: borrow and save payday loans

In Baltimore, nonprofit and other state organizations are looking for ways to help individuals stay out of as much debt as possible. Their current efforts are to reduce the number of payday loans taken out and to look for more alternatives: “A program that offers East Baltimore residents an alternative to payday loans has more cash to lend and has expanded to include more ZIP codes.

The “Borrow and Save” program, which makes low-interest loans, has extended its one-year pilot to encourage residents to pay down debt and save money. [[ads]]

The mission of the program is to improve the economic well-being of low- to moderate-income families and individuals by providing them access to small loans to break the high-cost, short-term borrowing cycle.

Seven banks and one credit union in the Baltimore Alliance for Economic Inclusion contributed the first $70,000 to the program’s loan pool when it launched in September. Several nonprofit grants increased that total to $142,500, said Joan Lok, a community affairs specialist in the Federal Deposit Insurance Corp.’s division of supervision and consumer protection” (http://www.baltimoresun.com/news/maryland/bs-md-payday-loan-alternative-20100701,0,5985758.story). I wonder how well this is working. Payday loans serve an important function to those in emergency situations. The nice thing about payday loans is that they are almost immediate. I wonder if the same can be said of these alternatives?

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