Wisconsin CU Forges `Unique" Link with Goodwill Industries to Combat Payday Lending

APPLETON, Wis. – In a linkup with a well-known non-profit, Goodwill Industries International, Prospera Credit Union here has opened a limited service branch in a large Goodwill store to handle low-cost payday loans. Management of the CU and of Goodwill, headquartered in Rockwell, Md., said the collaboration-which also involves use of a Goodwill-run credit counseling agency – could set a pattern for similar CU-Goodwill branch facilities across the country. With local fanfare, the $157 million Prospera opened its limited service branch called “Goodmoney” June 16 in a newly-built, 35,000 square foot “superstore” located in Darboy, Wis. “It’s a little early yet, but we’re already seeing a fair amount of transactions,” declared Kenneth Eiden, president/CEO of the $157 million Prospera and also a director of Goodwill Industries of North Central Wisconsin. Through his position on the Goodwill board and discussions with its management, Eiden said he became interested in exploring the branch idea as a way to help solve the payday/check cashers problem in the Appleton-Menasha market. The 15,000-member Prospera is offering payday-type loans at $9.50 per $100 which Eiden described as “not inexpensive” but still less than half of what is currently charged by payday lenders in his area. For its part, Goodwill of North Central Wisconsin said it “seeks to break even” on the Prospera facility and if it is successful would be expanded to the 18 other Goodwill outlets in its territory covering 35 counties of north and central Wisconsin. A spokesman for Goodwill in Maryland said the idea is being watched by the 173 Goodwill members across the U.S. and Canada and follows a tour and discussion of the Prospera facility during Goodwill’s annual Goodwill International Delegate Assembly conference held coincidentally June 25-29 in Appleton. Some 400 Goodwill executives were in Appleton for the conference and a number “who have credit union officers on their boards” came away with the idea of trying it elsewhere, said the spokesman for Goodwill of NCW. “This was sort of unusual to have two non-profits collaborating on a project like this,” said the spokesman. A key element of the Darboy facility is the offering of credit counseling services provided off-site at Goodwill-owned Financial Information & Service Center of Menasha. Goodwill said FISC, an accredited consumer credit counseling agency bought by Goodwill two years ago, is one of 23 programs it offers to its clientele in such areas as job coaching and skill building for individuals with disabilities. In line with CU programs on financial literacy, FISC also offers financial workshops and money/budget counseling services, said the Goodwill NBW spokesman. As a consumer credit counseling service, Prospera noted that FISC is prohibited from conducting its business in the same physical facility where loans are being extended. “So, the FISC educational, money management and debt planning services will all be delivered through its main location at 921 Midway Road, Menasha or its satellite facilities in other communities,” said a Prospera statement. “GoodMoney staff will offer brochures, workshop flyers and other FISC information to its customers, and will proactively connect the services of FISC to people whose frequent use of GoodMoney services would suggest that financial counseling would be helpful,” said Prospera. Eiden, the Prospera CEO, said his CU is eager to be cooperating with Goodwill “with a real goal to help individuals make a better choice” than the payday outlets proliferating in Wisconsin, as they have elsewhere. Loans at the Darboy branch will be limited to $250 and members can be signed up with $5 to open an account. In pursuing its link with Goodwill, Eiden noted also that Prospera has been part of the Real Solutions project of the Filene Research Institute in Madison. That’s a program adopted by the Wisconsin Credit Union League as well as the Ohio and Maryland Leagues which reaches out to the underserved with CU products including payday alternatives. [email protected]