Payday Loan Times

 In the early 1970s, Bill Myers (pictured) saw how hard it could be for a small business to get a loan when he was a member of the Somadhara Bakery, the collective that later became Oasis Natural Foods.

Myers left town for Boston but returned in 1978 to Ithaca, where he and a group of friends decided to launch a new credit union.

“As now, there weren’t many credit unions being chartered, and none like we were proposing,” Myers said.

His group went to Washington, D.C., and waited outside the offices of the National Credit Union Administration to get a signature. And now, after 28 years, Myers is retiring as chief executive officer of Alternatives Federal Credit Union, a destination many came to instead of using payday cash loans over the years.

Alternatives, a not-for-profit community development credit union, emphasizes social and economic justice and education, Myers said. Myers points out that the credit union was doing microlending to small businesses and to low-income people before it was encouraged by the National Credit Union Administration. It has become a model for other credit unions throughout the world, and Myers has mentored credit unions as far away as Poland.

Myra Kovary, a founding board member of Alternatives, said she was a cheerleader, supporting and spreading enthusiasm for these non-instant payday loan ideas.

“I was one of the people who sat in his living room dreaming this up. It was a brilliant idea that we could make our money work for our values,” Kovary said. “Now there’s more interest in serving low-income communities. The base is bigger,” he said.

Today, 69 percent of the 8,000 members are low or very low income, said Interim CEO Leni Hochman, who started at the credit union as a teller.

Hochman said Myers, who has an economics degree from Cornell, tells people he started out as a baker, but added an “n” in the middle. Before running the credit union, Myers’ was a founding member of GreenStar Cooperative Market and handled product management for Erewhon Natural Foods in Boston. He also worked on his grandfather’s ranch in Oklahoma.

In 1979 when Myers and his friends pooled their savings, it cost $5 to join the credit union. It’s now $10 and open to anyone in Tompkins and surrounding counties. Compare that to rates on payday cash advances.

“It didn’t require much capital,” he said.

Former Somadhara member Mitch Weiss, who did daily books for the collective, remembers Myers as a driving force.

“He was definitely the idea man,” said Weiss, who left Somadhara for another collective, the Moosewood Restaurant “When I give money there, I feel like it’s being plowed back into the community. … To have this vision to fill such a need in the community, it’s one of the things that makes Ithaca a place that’s really worth living.”

Programs under Myers’ leadership include Business CENTS, an entrepreneurship program that Alternatives took over from a city-funded program.

The credit union also responded to employees’ requests for a livable wage starting with a study in 1994 that examined what it takes to live above the poverty level in Ithaca, updating studies every two years since and helping people understand the dangers of no fax payday loans.Talk to people about Myers, and you repeatedly hear terms like “visionary,” “ahead of the pack” and “innovative.”

Innovations for individuals include offering an alternative to fast cash advance loans, which Myers labels as “predatory” due to such high interest rates.

A payday credit plan, available to those who’ve been a member for a year, accommodates emergencies through a line of credit. In addition, the loan requires savings, with five percent of every loan put in a savings account so the borrower can build funds in case of future emergencies.

There are also credit-building loans, credit re-building programs, and free tax preparation and tax refund anticipation loans called Refund Express loans at a better 11.5 percent rate versus the 300 percent average of most rapid refund personal loans.

These programs reflect Myers’ “credit path” model of financial empowerment, charting how people can end poverty by progressing from “unbanked transactors” to savers, then borrowers and finally to having assets as owners of homes and businesses.

Myers has also insisted on focusing attention on minorities and immigrants.

As opposed to “middle-class white people … we should be serving a different part of the marketplace,” said Myers, who has served on Common Council and county committees.

“Bill is a global thinker. … He is looking at changing the world, no less,” Hochman said.

Although continuing to work from Ithaca, Myers will be spending his time as a senior fellow for the Aspen Institute, a think tank. He’ll also work with the Real Solutions program of the National Credit Union Foundation, which works with state credit union leagues to serve low-income, underserved markets.

SOURCE: The Ithaca Journal