Belzoni, Miss.-based BankPlus decided four years ago to compete with payday lenders in the state by introducing a small-dollar loan that carries significantly better terms and conditions than those provided by traditional payday lenders. "The idea was to create a program to assist anyone caught in the payday lending cycle, but also to serve the underbanked who seek to enter the commercial banking system," said BankPlus President and CEO Bill Ray. CreditPlus is marketed to underbanked and unbanked payday lender customers, offering loans of up to $1,000 for terms of one or two years, with an annual percentage rate of just 5 percent. Borrowers must complete a three-hour course on financial literacy before they can even apply for a CreditPlus loan, which Ray said has steered consumers away from payday loans and helped many resolve existing debts. However, Paheadra Robinson of the Mississippi Center for Justice said the state's massive payday lending machine -- which charges the highest rates nationwide -- has not been hurt by BankPlus. "Unfortunately, payday lending is huge in Mississippi," she concedes. "And I have found there are still plenty of people resistant to banks, so there is still a huge consumer education piece to really have an impact."
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