TUCSON, Ariz. — In a novel twist to payday lending, a Phoenix credit union, the $1.1 billion Arizona State, has agreed to a partnering pact with a Tucson health care employer to help its workers "break the debt cycle" to payday shops.
The "FlexCash" package with a $750 maximum line is slated for launch next week at the University Medical Center Foundation, a nonprofit with close ties to the University of Arizona and a health care complex employing 3,300.
"We're very glad the credit union was willing to take on the risk and work with us to take on these kinds of loans," explained Kent Rollins, foundation president, citing serious problems of employees overextending an existing "Emergency Assistance" loan program offered by the foundation.
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Under FlexCash, Arizona State has agreed to help foundation employees pay off the high debt payday credits under a 60-day repayment plan with a $35 fee plus required financial counseling through Balance, the San Francisco agency. Arizona State will accept only those employees referred by the foundation.
Rollins said there are currently 260 users of the foundation's "Emergency Assistance" program and of these "about 60 found themselves in financial trouble trying to pay off the payday loans" a group to be directed to FlexCash.
"We've worked with the foundation for several months now to develop a workable program in response to a specific request for assistance," said Paul Stull, senior vice president–marketing.
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