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BankPlus program offers alternative to payday loan

CreditPlus gains praise from experts as way to serve struggling borrowers

BankPlus is winning applause across the state for its CreditPlus small-dollar loan program designed an alternative to payday loans.

The loans are also designed to help borrowers pay off existing payday loans at a 5 percent interest rate, far lower than rates of the 985 licensed payday lenders in Mississippi.

Under terms of the loan, the borrower puts half the loan amount in a cost-free BankPlus checking account and the remaining in an interest-bearing saving account, which cannot be drawn upon until the full amount of the loan is repaid.

Borrowers with credit scores of 550 or higher can get loans of up to $1,000; those below 550 in their credit scores qualify for a $500 loan.

The loan is for 12 to 24 months at 5 percent interest.

Carol Penick, director of the Jackson-based Women’s Fund, said BankPlus’ CreditPlus initiative shows banks in the state can serve as alternatives to payday lenders. “What we’d like other banks to do is what BankPlus is doing. I think they are heroes. They help the people who need help. They aren’t making any money off these loans,” said Penick, whose organization is part of Mississippians for Fair Lending, a coalition of 60 groups seeking to ban payday lending in the state.

In October, BankPlus CEO Bill Ray received the “Champion of Justice” award from the Mississippi Center for Justice for the bank’s commitment to community development, particularly through its CreditPlus program.

“BankPlus is pioneering a pathway to financial literacy and a wealth of new opportunities for low-income Mississippians,” said Martha Bergmark, founder and president of the Center for Justice.

The $2-billion BankPlus has 60 locations in 33 Mississippi communities.

The $80 million it received in low-cost capital from the Treasury Department’s Community Development Capital Initiative to serve under-served markets marked the largest allocation in the state and the second largest in the nation.

BankPlus is to use the money to provide essential banking products and services in underserved areas, as well as fund the bank’s community development products and services such as CreditPlus and the BankPlus Affordable Housing Program.

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