How One Minority-Owned Bank Has Outsmarted Payday Lenders

OneUnited Bank is proof that some businesses still have heart.

It's impossible to meet Teri Williams, president and chief operating officer of OneUnited Bank, and not be impressed by her humble nature. Williams is not one to call attention to herself and does not particularly enjoy becoming the center of attention. That's one reason it came as a bit of a surprise to learn that Williams allowed a camera crew from NBCUniversal access to the inner workings of OneUnited for six months.

Cameras followed Williams and her husband, Kevin Cohee, Chairman and Chief Executive Officer of OneUnited, as they continued their mission to close the racial wealth gap in America. And one of the (many) technological innovations they've come up with to achieve that goal prevents predatory lenders from taking advantage of their customers.

CashPlease

OneUnited's revolutionary digital product, CashPlease, represents one small but vital way the bank seeks to help its customers find their financial footing.

Here's how it works:

• Customers have a need for more money than they have in their bank account. Perhaps they've had an emergency, or inflation makes it impossible to make it from one payday to the next.
• Rather than borrow money from a payday lender, OneUnited Bank customers can now borrow the funds they need from their bank.
• Loans are designed to be relatively small and short term.
• No credit check is required.
• Unlike the 400% plus interest rates offered by payday lenders, the APR is manageable (about the same as the average credit card).
• CashPlease loans cannot be rolled over into another loan, a practice employed by payday lenders that traps borrowers in a cycle of debt.

Born of heart

Leaders at OneUnited came up with CashPlease after sitting down to examine what Williams calls "pain points for our customers." As they worked to identify the types of issues standing in the way of wealth-building, one of the things they found was predatory lending.

Leaders recognized that some of their customers were visiting payday lenders for loans to get them through their usual expenses. It's no secret that interest rates north of 400% are the norm in states where payday lending is still legal and that payday lenders have created a system that makes it impossible for many to break the cycle and get out of debt. When two weeks pass and they don't have the money to pay off their loans, the borrower must take out another loan to cover the first.

The practice flies in the face of OneUnited's goal to help customers build generational wealth. And so, CashPlease was born.

Sure to attract attention

Whether Williams enjoys the limelight or not, it's natural that a major news organization found a story in what OneUnited has accomplished over the past quarter of a century.

Kevin Cohee explained, "This moment of social reckoning has created an unprecedented opportunity for our country to overcome the sustained damage from our history of systemic racism. Technology provides the opportunity to organize effectively to drive political, social, and economic change. It also creates the biggest opportunity to generate wealth in the history of mankind."

To achieve that goal, OneUnited provides a wealth of online financial education materials. The bank has sponsored seminars with some of the biggest stars in Hollywood as well as well-respected financial gurus. The bank also offers second-chance banking for those with a negative ChexSystems report and unlimited support from a dedicated staff.

Asked which of the bank's technological advances she believes has had the most significant impact, Williams answered, "It's not a specific service but a broad umbrella. After hundreds of years of distrusting banks in the Black community, we've started to chip away at that lack of trust."

It's natural that Black households distrust banks. Even today, it can be tougher to qualify for a loan or even receive a fair home appraisal if you're Black. But, according to Williams, it's "foundational" for their community to know they can trust those they choose to do business with. "We want them to know that we're not trying to offer a predatory service," she said.

As Williams points out, at the end of the day, "It's hard to build wealth without banking."

NBCUniversal's show The Shift will premiere with the OneUnited Bank episode on Saturday, Sept. 17, 2022, at 2:30 p.m. ET on CNBC. On Sept. 19, the program will also stream on CNBC.com and Salesforce+, and will make its debut on streaming service Peacock on Oct. 3.