A product of Credit Union Outreach Solutions, Inc.

What is StretchPay? What is StretchPay? A reasonable ‘payday lending’ alternative … Outreach … to those with greatest need Lower fees & interest rates Financial education & counseling Members rebuild credit, escape payday debt treadmill

Why StretchPay? Why Now? Ohio: 391% APR … payday lenders licensed in Ohio can charge borrowers (prior to June 2) 1,562 … payday lending shops 368,000 … payday borrowers $200+ million … fees Ohioans pay annually to payday lenders Source: Ohio Coalition for Responsible Lending

StretchPay Benefits … for your Credit Union: A turnkey payday loan alternative at a low cost, without significant financial risk An opportunity to educate members about budgeting and other personal financial management skills Interest income at 18% with a minimum of credit risk Shows your support of the community and your members, particularly working people and those of modest means.

Who uses payday loans? 66% … 45 years old or younger 62% … female $25,000 - $50,000 … average household income 20% … are credit union members Source: National Endowment for Financial Education, National Credit Union Foundation

Who uses payday loans? Most are … Married Have some college education 40% have children Take out an average of 12.6 loans annually Source: Ohio Coalition for Responsible Lending

Turnkey Outreach Products 1.StretchPay CUOSI A cooperative organization to fuel outreach and community commitment initiatives, including StretchPay Credit Union Outreach Solutions, Inc.

CUOSI Membership Growth Data through June 30, 2008

46 credit unions – Ohio (35), Michigan (4), Maryland (2), Colorado (1), Wisconsin (2), North Carolina (1), Washington, D.C. (1) and 3 Leagues – Ohio, Wisconsin, and Maryland/DC Offered at 137 Branch Locations Nationwide

Asset Size of Participating Credit Unions* Asset Size of Participating Credit Unions* *Data is based on the 46 credit unions and does not include the 3 participating leagues.

2008 CUOSI Board of Managers 1. Bill Burke, DayAir CU, Chair 2. Dick Maslyk, MidState Educators CU, Vice Chair 3. Catherine Herring, Communicating Arts CU, Secretary/Treasurer 4. Doug Fecher, Wright-Patt CU 5. Tom Griffiths, Atomic Employees CU 6. Dorothy Lester, First General CU (Michigan) 7. Barry Shaner, Directions CU Ex Officio Paul Mercer, President, Ohio Credit Union League Brett Thompson, President/CEO, Wisconsin Credit Union League Mike Beall, President, Maryland & DC Credit Union Asso ciation

StretchPay now in 5 states & D.C., Two more expected Colorado is the latest state to join the credit union salary advance alternative StretchPay, which was conceived and piloted in Ohio. A total of 40 credit unions in Ohio, Indiana, Maryland, Indiana, Maryland, Michigan, Colorado, and Washington, D.C. are offering StretchPay to their members, at 129 branch locations. Payday loan business is booming Dayton, OH (3/19/08) … Ohio's credit unions offer a cheaper alternative to payday lenders under a program called StretchPay. The interest rate is 18 percent on 30-day loans of $250 or $500. … Ohio credit unions banding together to offer payday loans, education StretchPay covers consumers not served by banks WASHINGTON (7/14/06)--The payday- loan alternative offered by 11 Ohio credit unions is being noticed by the business trades. In Thursday's American Banker, the Consumer Federation of America weighed in on StretchPay as a "good alternative" to payday loans.

StretchPay Details Credit limits  $250 ($35 annual fee)  $500 ($70 annual fee) 30-day term 18% APR (or the max. permitted by applicable law) Re-paid in full prior to additional advances Payroll deduction & financial education encouraged, but not required

The Numbers* StretchPay advances (2007):  64,407 totaling $25 million $3+ million … saved by StretchPay users in interest & fees StretchPay loans per credit union:  from 6 to 34,323  from $2,000 to almost $14 million * Data is for calendar year 2007

Minimal Underwriting Criteria An applicant must be … CU member for 60 days Not delinquent on existing loans or negative in any share account 18 or older Have verifiable income Not in the process of filing for bankruptcy

Reimbursement for Charge-off Loans CUOSI minimizes credit union loan losses Credit union has some exposure … to create risk-sharing and make reasonable efforts to collect losses Up to 90% of loan losses may be reimbursed by CUOSI

Common Questions Is a credit union required to offer both the $250 and $500 lines of credit? No. You may offer one or both. Is there a minimum income requirement for a member to obtain a StretchPay loan? No. But the member must verify that they have some income.

Common Questions Are members required to have a checking account in order to obtain a StretchPay loan? The program does not require it, but every CU has the choice of requiring one as part of its policies and procedures.

Common Questions Will our CU really be reimbursed for any StretchPay losses we experience? You can apply to CUOSI for reimbursement for up to 90% of the principal loss. The $35/$70 paid by CU members is forwarded to CUOSI and deposited in a Loan Loss Reserve to be used to defer losses incurred by CUs.

Common Questions How do participating credit unions provide input about the operation of CUOSI, or the StretchPay product? An Advisory Council comprised of every StretchPay participant and the participating leagues meet regularly via conference call.

Common Questions Is there a fee to join CUOSI? Yes. CUs pay $25/$1,000,000 in assets per your most recent 5300 Report $15,000). Currently, this is a one-time fee.

Common Questions When can I begin offering StretchPay? Once contracts have been executed by your credit union and the Chairman of CUOSI, and your membership fee has been received, you can begin offering StretchPay to your members.

Quotes “Countless Ohioans are caught up in the payday lending trap. We’re changing that. With StretchPay, we are sending people down the path of asset accumulation and better financial well-being, rather than the hand-to-mouth situation they currently find themselves in. This segment of members can generate tremendous loyalty to the credit union. They will say, ‘I love my credit union. They helped me in my time of need.’” - Bill Burke, CEO, DayAir Credit Union Chair, Credit Union Outreach Solutions, Inc.

Quotes “[Predatory lending] is an evil practice. Credit unions are working collaboratively to be part of the solution. It’s incumbent upon us to come to the aid of the consumer. If credit unions can’t solve this problem, no one can.” - Doug Fecher, CEO, Wright-Patt Credit Union Member, CUOSI Board of Directors

Quotes “[The StretchPay loan was] affordable and reasonable.… Trust is a real issue for me. We could trust the credit union a lot more.” -Paulette Strolia-Davis, Member, DayAir CU

Quotes “I was about to lose everything, totally everything. I went to a lot of financial institutions, and they turned me away. I feel like the credit union rescued me.” - Ora Houston, Member, Wright-Patt CU

For more information: Becky Hart Ohio Credit Union League (800)