Michigan Credit Unions Pay Off $2.5 Million in Medical Debt
The credit unions’ collaborative donation will help more than 3,000 needy people and their families.
Nine Michigan credit unions donated $25,500 that will wipe out $2.5 million in medical debt for 3,182 needy people and their families.
The Southern Michigan Chapter of Credit Unions presented the donation last week to the RIP Medical Debt, a non-profit organization based in Rye, N.Y., that will use the funds to purchase medical collection accounts at a greatly reduced cost and pay off that debt for the neediest people who live in five Michigan counties, Jackson, Hillsdale, Calhoun, Lenawee and Washtenaw.
“Each of our credit unions recognizes that medical debt doesn’t happen by choice. We don’t view medical collections as an indicator of financial irresponsibility,” President/CEO Martha Fuerstenau of the $398 million American 1 Credit Union in Jackson, said. “However, because loan rates are based on credit scores, the impact of a medical collection reaches into the wallet of our neighbors month after month. It’s a vicious financial cycle that also burdens the emotional health of those underneath its weight. Through collaborative giving, we are creating a new virtuous cycle for more than 3,000 individuals and families.”
Per person, the average amount of debt was more than $800.
Fuerstenau expressed the hope that the gift of debt abolishment will serve as a step toward restored financial wellness for the recipients. She noted the credit unions involved in this project provide financial counseling in various forms for anyone in their communities.
The individuals selected for debt abolishment are truly in need, according to RIP Medical Debt.
“We find people who earn less than two times the federal poverty level or are in hardship by paying 5% of their annual income out of pocket for medical expenses, or who face insolvency due to their medical debt being greater than their assets.” Jerry Ashton, founder of RIP Medical Debt, explained. “I cannot tell you how thrilled RIP Medical Debt is to partner with this amazing collection of Southern Michigan credit unions that do not simply talk about community involvement but live it daily. In this case, it consists of a wonderful donation on their part which has enabled our non-profit to go out into the debt market to locate debt in their communities, buy it for pennies on the dollar, and then forgive that debt along with removing any credit blemish it may have created.”
During the gift presentation, Chrissy Siders president/CEO of the $462 million CP Federal Credit Union in Jackson announced that the Michigan Credit Union Foundation added to the gift given by the nine local credit unions, making the impact even larger.
In addition to American 1 CU and CP FCU, the Southern Michigan Chapter of Credit Unions includes the $44.9 million Aeroquip Credit Union in Jackson, the $181 million Blue Ox Credit Union in Battle Creek, the $1.1 billion Community Choice Credit Union in Farmington Hills, the $84.5 million Lenco Credit Union in Adrian, the $76.9 million South Central Credit Union in Jackson, the $515 million TLC Community Credit Union in Adrian and the $43.7 million Washtenaw Federal Credit Union in Ypsilanti.
The Southern Michigan Chapter of Credit Unions is led by Terri Paperisky, president/CEO of South Central CU.