KANSAS CITY, Mo. — The large amount of members that have checking accounts and use payday lenders was one of the motivators behind the launch of XtraCash, LLC as an alternative for the credit union industry.

The payday lending CUSO made its debut in March 2007 at two Mazuma CU branches and has since expanded to 11 branches. Central Star CU in Wichita, Kan. has also signed on with XtraCash, said Lisa Renner, CEO of CU Holding Company, LLC, a wholly-owned subsidiary of Mazuma CU.

From March through the end of 2007, XtraCash processed more than 2,500 loans totaling more than $920,000. XtraCash provides a Web-based system software, underwriting, collections, servicing, training, and incurs all loan loss.

At least 15% and up to 30% of members and CU employees use payday lenders, Renner said. Of that amount, 100% have checking accounts.

“Payday lenders are smart,” Renner said. “How long will it be before they start offering [their clients] checking accounts? We've got that many people at risk of walking out the door [of a credit union].”

As an incentive, XtraCash offers several discounts to CUs if they offer a payday lending educational component and to those who have a checking or savings account at a CU.

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