When Brent asked me to be a guest blogger, I initially was writing a post on my love of NPS. But in the past week have had the opportunity to spar with Ron Shevlin again on the subject, so you can go there for that.

Then I read Doug True’s guest post. What’s on his amazing mind. It got me thinking. I just celebrated my 28th year in the credit union movement. If you told me 28 years ago that I’d be a guest blogger on Open Source CU—huh? There are about four words in that sentence that didn’t exist 28 years ago.

So, what’s on my mind?

I’m in Oshkosh this morning. Watching the news.

I just heard my copy of USA Today drop in front of my door.

Open it.

Front Page: How Rising Home Values Placed your Finances at Risk.

Hmmmmmm…you mean all of the VISA Home Equity cards weren’t a good idea?

It goes on to say….”Banks urged owners to borrow more, based on ‘phantom equity’ that has vanished.”

Flooding Threatens Outdated Levees

I am seeing tons of evidence of last week’s flood in Oshkosh. Very sad.

Sports: Hmm. Celtics won. Probably not the best choice for the announcement:

“Celtics Reign, End Drought.”

Money section: Banks Raise Penalty Fees for Clients’ Overdrafts.

Too depressing.

Let’s see what my google alerts give me. Ahhhhh…...Grace.

What a beautiful word. Grace.

Rita Haynes, CEO of Faith Community United Credit Union appeared in the Dallas Morning News yesterday. “Give Credit Unions the Credit They Deserve ” was the title of the article.

They have created the “Grace Loan” – a small, short-term loan that requires the borrower save a portion of what they would have given to the payday lender in fees, thus teaching them good financial habits and helping build a credit history for their goals.

It got me thinking about the history of credit unions. Our purpose in society. Our cause.

Grace: Pay day lenders are charging interest rates that can reach 400 percent and cripple those who are least able to bear the consequences of debt.

History: The first credit union in North America, the Caisse populaire de Lévis in Quebec, Canada, began operations on Jan. 23rd, 1901 with a ten cent deposit. Founder Alphonse Desjardins, a reporter in the Canadian parliament, was moved to take up his mission in 1897 when he learned of a Montrealer who had been ordered by the court to pay nearly $5,000 in interest on a loan of $150 from a moneylender.

Grace: While payday lenders are geared to take advantage of the poor, credit unions – with investment pools of money formed by members themselves – are geared to help the working class or low-income families establish good credit.

We counsel folks to take loans that are appropriate for their circumstances and in this way protect their members from crushing debt and encourage a habit of savings.

History: Credit Unions were chartered to make loans for provident and productive purposes only.

Grace: We teach someone how to plan and save and become a good credit risk.

History: Credit unions were chartered to promote thrift.

Thank you Rita.

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Denise is a rambunctious Culture Consultant. Her goal is to help credit unions question everything and to renew their faith and their commitment to the credit union brand. Read more from Denise on her blog Cult-ivation .

This week I’m at the CUNA Governmental Affairs Conference. It is enormous.

I’m here working with the NCUF’s REAL Solutions to hunt down CU industry thought leaders and record their thoughts on the conference, and, in particular, gather insights on serving low-income consumers.

We’re documenting the conference through video interviews, podcasts, and photos which are all viewable (with more to come) at realsolutions.coop.

One of our chats was with Doug Fecher, CEO of Wright-Patt CU. In this video, he unpacks the story of a vocal low-income member and how it lead to their payday lending alternative StretchPay:

Also, CU Communicator Jeff Hardin and Boardcaster Ginny Brady have been covering the conference on their blogs as well. Definitely check them out.

And if you’re in town, come hang tonight at the TwittaBloggerSocial Meetup – going down at Capital City Brewing Company.

The Wall Street Journal published an article titled “Beyond Payday Loans” last week, written cooperatively by political cartoons Bill Clinton and Arnold Schwarzenegger.

In the article, they discuss the $8 billion problem of payday lending.

Here’s a snippet:

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the “unbanked” enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won’t cost taxpayers a dime.

Is it just me, or do Bill and Arnold seem to be channeling the credit union philosophy?

Two credit unions tackling the problem are Wright-Patt CU with their StretchPay loan and Prospera CU, with GoodMoney.

StretchPay is a short-term loan of either $250 or $500 available to Wright-Patt members. The loan comes with a low 18% APR, and is payable over 30 days.

GoodMoney, with branches located in Goodwill stores, offers short term loans at half the rate of the average payday lender, lower-fee check-cashing, bill payment options, wire transferring, and financial education through Goodwill’s Financial Information and Service Center.

Check out this video on GoodMoney from the 2007 Herb Wegner Awards:

Both initiatives stem out of the National Credit Union Foundation’s program REAL Solutions. Full disclosure, REAL Solutions is a client of ours – it’s how I’ve been exposed to some of the awesome things they’re doing for the movement. REAL Solutions is helping credit unions develop products to serve low-income and unbanked consumers.

When we were discussing this, Charlie asked this question:

Are CUs really helping people by making it easier and the rates lower, rather than helping people get into a better financial habit?

I think offering attractive alternatives to predatory lending is step one in the process, but it is kind of a band-aid on the greater question – How do you truly effect people’s financial behavior? Can it be done?

(Also, hat tip to Payment News for highlighting the WSJ article.)