Sources: CreditSnap research, 2016 MDRC Payday Lending Whitepaper, 2017 CFSI Underbanked Consumer Study, CFPB Payday Lending Report

When I recently came across an NCUA proposal to expand its alternative lending policy, it was evident there is an increasing interest among credit unions to expand into payday loan alternatives. That interest is not just driven by higher margins, but by an increasing awareness about making financing affordable for a segment that has historically relied entirely on storefront payday lenders.

I have been researching this segment for more than three months now to determine how we can bring transparency and choice to this segment, and the stats surprised even an experienced consumer lending professional like me. This article is an attempt to help you understand these borrowers better, and shed some light on what credit unions should think about before making a foray. Let's begin with some stats so you can understand this segment of borrowers.

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