MAY 25, 2007 | ISSUE NO. 020

Serving your Metropolis:
the StretchPay story

Welcome to everyone who is new to The Hero's Voice, our way of using the metaphor of our strategic brand process, The Hero's Quest, to explore how organizations can do more for their members or customers and stand out from the crowd.

In Issue 19, we talked about a credit union payday loan program called StretchPay, a truly heroic initiative by Wright-Patt Credit Union in Fairborn, Ohio, and the Ohio Credit Union League.

StretchPay serves a specific group of people, which we call a Metropolis, which in this case consists of people who are faced with an unexpected expense or are living paycheck to paycheck, hit a bump in the road, and are in need of a little extra cash for a short time.

Every hero legend includes one or more Forces of Evil, ably represented in today's story by commercial payday lenders, a particularly dastardly group who impose incredible finance charges of 400% and more to the good people of this Metropolis for small, short-term loans of two to four weeks. Worse, it's not uncommon for people to get trapped in a cycle where they keep extending their loan, incurring more and more finance charges and are unable to recover.

Wright-Patt Credit Union, several other credit unions and the Ohio League got together and realized they had the Special Powers to help the people of their Metropolis get the help they needed and avoid those commercial payday lenders. What Special Powers did these groups have? Locations, operational expertise...and a willingness to make a difference. How did they help?

They formed Credit Union Outreach Solutions, Inc., to operate StretchPay and offer it to credit unions throughout the state. A StretchPay loan charges just a fraction of the cost of commercial payday lenders for a short-term loan. Where people were oftentimes forced to pay more than $140 to borrow $500 for 28 days from a payday lender, StretchPay would charge them just $7.40, plus a once-per-year program fee. That's 18% from StretchPay, versus more than 370% from the other guys. In just two weeks, people who were short of cash already could save more than $130, which they could use to pay for things more important to their lives than finance charges...food, rent, fuel to name a few.

Which brings us to the concept of the Ultimate Benefit, that one overarching thing you bestow upon your Metropolis by your decision to use your Special Powers for good. The Ultimate Benefit of the StretchPay program is well summed up in this excerpt from a USA Today article which highlighted the good work StretchPay is doing:

Ora Houston, 50, of Trotwood, Ohio, was in such bad financial shape several years ago she was even turned down by a payday lender. She tried the Wright-Patt Credit Union, which has a payday alternative, and got the $250 she needed. "I was about to lose everything, totally everything. I went to a lot of financial institutions, and they turned me away," she says.

Doug Fecher, CEO of Wright-Patt, says Houston got a loan requiring little in the way of a credit check and carrying a $35 annual fee. By reporting her payments, Wright-Patt helped Houston build a credit score and secure a $1,000, no-fee line of credit.

The credit unions who participate in the StretchPay program aren't doing it for the money...they're making a very small amount on each loan. Their actions are based on helping people who need it...saving their Metropolis from a Force of Evil. Their actions are heroic.

Is your credit union or company clear about who you serve -- your Metropolis? Do you know what your Special Powers are, and how you can use them to be heroic? Are you passionate about your Ultimate Benefit, and why you provide it?

If not, or if you think it might be time for a little "fine-tuning," give Creative Abandon a call. We're here to help you "stretch" your resources in making sure your efforts "pay" off.

 

Lisa and the Creative Abandon team

© 2007 Creative Abandon, Inc., (503) 284-9621