There Is an Alternative to Payday Lenders

By Paul Woodruff, Executive Director of Prosperity Connection

Paul Old North Street 2_cropped 3.jpg

Everyone in St. Louis seems to have an opinion on payday lending. Politicians decry the industry asusurious. Consumer advocates demand that ‘predatory lenders’ be shut down. Middle- and higher-income people don’t understand why the loans cost so much, or why anyone would take one out.

Meanwhile, the consumers who use these services just want access to a short-term loan so they can pay rent, repair their car, keep the lights on, and more. Payday lenders fill that need and are accessible.

People everywhere are struggling to get by. According to the 2018 Prosperity Now Scorecard, despite low nationwide unemployment rates, nearly a quarter of all jobs in America are low-wage. For those living on a fixed income, primarily seniors and the disabled, the picture is increasingly bleak as their benefits remain flat and the underpinnings of state and federal safety nets continue to fray.

Throwing stones at the payday lending industry is easy. Building something with those stones requires thought leadership, investment, and awareness. Thankfully, St. Louis has an opportunity to turn the tide against payday lenders through existing market-based solutions.

Community Development Financial Institutions (CDFIs) and nonprofit loan funds operate in our area to offer consumers small-dollar loans ($100 – $1,000) at more affordable rates and the opportunity to engage with financial experts who can provide free guidance on how to build credit, eliminate debt, and manage household finances. CDFIs like Justine PETERSEN and St. Louis Community Credit Union (SLCCU) give consumers a pathway to financial wellbeing through a host of affordable opportunities. Prosperity Connection, a nonprofit, established RedDough Money Center to compete directly against payday lenders by offering small-dollar loans, check cashing services, and more.

Not only have these organizations developed the right tools to help economically vulnerable people, they’ve deployed facilities and staff in areas devoid of financial services. Take for example Prosperity Connection’s Wealth Accumulation Center in Pagedale. Through their partnership with SLCCU, the 24:1 Community Land Trust, and Beyond Housing, they have opened a multi-use financial service/education center that offers the community the chance to get a lower-cost, small-dollar loan through RedDough Money Center; open a mainstream checking account with SLCCU; and connect with a financial coach through Prosperity Connection’s Excel Center.

By meeting underserved people where they live and work, as well as aligning with policies and interventions derived from the community (see, for example, the Ferguson Commission Report’s discussion of Financial Empowerment Centers in their Opportunity to Thrive section), payday lenders and other predatory organizations can be diminished over time. Families need access to affordable loans, pathways to better paying jobs, and the support of their community to get ahead.

Your opinion matters. Your actions matter more. Consider supporting CDFIs and nonprofit loan funds with your deposits, your loan needs (car, house, etc.), and your donations so that they can do more for families facing tough times. Together, we might go beyond ‘talk’ and have real impact.


Paul Woodruff serves as the Vice President of Community Development for St. Louis Community Credit Union (SLCCU) and Executive Director of SLCCU’s affiliate non-profit, Prosperity Connection. In these capacities, he is charged with developing and overseeing the strategic direction for numerous community outreach initiatives supported by both organizations. He began his career at SLCCU in 2009 after completing his master’s in Public Administration from Saint Louis University.


Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

We invite readers to contribute to the civic conversation about community development in St. Louis by writing an op-ed for the Community Builders Exchange. Op-eds should be short (400-700 words) and provocative. If you have an idea for an op-ed, contact Todd Swanstrom at