Comcast Offers Payday Loan Alternative to Employees
Inside Subprime: Aug 8, 2018
By Ben Moore
Employers are now moving towards providing more financial solutions for their employees beyond standard retirement seminars and 401(k) offerings, and Comcast Corporation joined the ranks. The company has announced they will now be creating emergency funds for their more than 160,000 employees. The Philadelphia based mega-company will now offer short term loans through a firm based out of San Diego. The loans will not require a credit check and will be paid through direct deductions from Comcast employees paychecks, with interest rates around 25 percent. The solution is a direct response to the growing number of employees using payday loans to deal with immediate financial stressors. Shawn Leavitt, a Comcast executive who oversees employee benefits, wants Comcast “employees to have a more affordable option” when dealing with financial hardships than “taking a costly payday loan or a hardship withdrawal from the 401(k) plan.”
Financial wellness benefits have been a staple in corporate benefit packages for years, but with a primary focus on retirement preparedness. Companies typically only offer retirement seminars and financial advice on 401(k) investment options. Now, benefit packages are seeing an increase in offerings that assist employees in making sound financial decisions so as to avoid common pitfalls like bank overdraft fees or high-interest payday loans.
Last year the state of California alone borrowed more than $1.1 billion in loans with interest rates exceeding 100 percent, which is double the amount borrowed back in 2012.
As Capitol Hill continues to focus on the payday lending industry, nationwide, companies are recognizing the need to provide short-term financial relief options to their employees. Walmart recently announced their partnership with PayActiv, a service that allowed employees to get paid instantly up to 8 times a year, and just last week ADP signed on with PayActiv as well. As founder and CEO of PayActiv, Safwan Shah recognizes the need for employees to have “timely access to… earned wages” without needing to resort to payday loans. With Comcast now taking the lead on providing short-term loan alternatives to their employees, it seems likely that other major companies will follow suit.