More people in Brazos and nine area counties can take advantage of a year-old program to borrow money without the fees and interest expense of payday and auto title loans.
That’s after the Community Loan Center of Brazos Valley (CLC) received a $826,667 grant from JPMorgan Chase.
Paul Turney of Brazos Valley Community Development Corporation says employees of participating employers are eligible to apply for CLC loans from $400 to $1,000.
The center’s service area includes Brazos, Robertson, Burleson, Washington, Grimes, Madison, Leon, Walker, and Houston counties.
Employers agree to administer the program by allowing employees to make loan payments through payroll deductions.
Turney says more than 300 loans have already been issued, which have an interest rate capped at 18 percent. That compares with payday and title loan rollover rates Turney says ranges from 400 to 800 percent.
Initial funding was provided by The Bank and Trust, Citizens State Bank, and the Brazos Valley Affordable Housing Corporation.
Wednesday’s announcement, which you can hear below, included representatives of local employers participating in the program, an employee who received a loan, and a representative of JP Morgan Chase Bank.
Click HERE to listen to the program announcing the grant and an explanation of the loan program:
120215 Community Loan Center ribbon cutting program
News release from the Community Loan Center of the Brazos Valley
The Community Loan Center of the Brazos Valley announces it has been awarded $826,667 in grant funding through a collaborative application to JPMorgan Chase & Co.’s PRO Neighborhoods program. A press conference to announce the program and this award will be held in the Board Room of the Center for Regional Services Wednesday December 2nd immediately following a Ribbon Cutting ceremony in front of the Brazos Valley CDC Inc. office located at 4001 E. 29th St., Ste. 180, Bryan Texas.
The grant will fund loans of $400 to $1,000 through an employer based small dollar loan program to local residents so they can avoid the excess fees and cycle of debt that traps many who use payday and auto title loans in their efforts to make ends meet. All loans are made to employees of participating employers, who opt to participate in this program. This generous grant from JPMorgan Chase allows the program to enroll more employers and increase the number of employees who will be able to access affordable small-dollar loans. “This substantial increase in to our loan fund will go a long way in making this program sustainable for the long term and allow us to help more families at the same time as we remain good stewards of the resources entrusted to us locally” said Paul Turney, President and CEO of Brazos Valley CDC, Inc.
This award is part of a $5,000,000 award to a collaborative application filed by BCL of Texas as the lead applicant and includes funding for Community Loan Centers operated by BCL of Texas, Rio Grande Valley Multi-bank, Texas Community Capital as well as Brazos Valley CDC, Inc., plus two Community Loan Centers preparing to open in Indiana.
Since launching in December 2014, the Community Loan Center of Brazos Valley has made 300+ loans to area employees, for a total in excess of $320,000.00. By having the option of quickly accessing low-cost capital for personal needs, borrowers can avoid the excess fees and cycle of debt that traps many payday and auto title loan borrowers.
“This exciting initiative by the Community Loan Center will help hard-working people of participating employers in the Brazos valley and beyond gain control of their financial lives and begin the rewarding work of building a better future for themselves and their families,” said Brad Neimer, Head of Chase Business Banking in the Brazos Valley.
JPMorgan Chase’s PRO Neighborhoods (Partnerships for Raising Opportunity in Neighborhoods), is a competitive grant program designed to give CDFIs the flexibility to work together on community challenges in their city or region and develop innovative financing options for projects that are unable to qualify for traditional loans.
The Community Loan Center of Brazos Valley is a d.b.a. of the Brazos Valley CDC, Inc., a U.S. Treasury certified Community Development Financial Institution (CDFI) and a 501 (c) (3) nonprofit. BVCDC has served the 7 County Brazos Valley Region for 15 years and is a founding member of this statewide coordinated effort, initiated by Texas Community Capital, to organize the Community Loan Centers of Texas as a model that can be easily replicated in other markets and realistically obtain sustainability. Through this collaborative, JPMorgan Chase has also awarded funds to Community Loan Centers operating in Dallas, Austin and Brownsville, as well as to two nonprofits in Indiana set to launch in 2016 as a pilot to prove that the model can be replicated in other states. The nonprofit Business & Community Lenders (BCL) in Austin was the lead applicant and will act as the fiscal agent for the funds.
The Community Loan Center program was created to provide a sustainable alternative to high-cost, short-term consumer loans provided by private lenders. The State of Texas regulation of payday and auto title lenders remains lax compared to other states, though cities continue to create their own ordinances to protect borrowers. The profitability of these short-term loans, a nearly $6 billion dollar industry in Texas, clearly indicates a need for underserved borrowers to access short-term loans quickly for the unexpected financial situations that arise in everyday life.
In addition to the loan, borrowers are encouraged to take advantage of free financial counseling to help ensure their long-term financial stability. The affordability for borrowers stems from the fact that these small dollar loans are offered with the ability to repay over a 12 month period, an interest rate capped at 18%, and no fees charged outside of a one-time $20 application fee. The model requires borrowers to work for an enrolled employer, which allows the program to remain sustainable and keep costs low. There is never a fee for employers who enroll in the program. All that is asked of employers is they verify employment via an automated online system and, with the borrowers approval, make payroll deductions of the borrowers regular payments and transfer these funds to a collection account. Employers already signed up include: City of Bryan, City of College Station, Bryan ISD, Bryan Texas Utilities, City of Franklin, City of Navasota, City of Somerville, Brazos Valley Council of Governments, Bryan Housing Authority, Kent Moore Cabinets, Neutral Posture and Project Unity.
The Community Loan Center of Brazos Valley is actively seeking employers who are interested in offering the CLC program to their employees. This program offers an attractive & innovative benefit to employees with no direct cost to the employer, reduces employee financial stress, is simple to administer and comes with the offer of free financial counseling and coaching for employees. Less time spent worrying about personal finances leads to increased workplace morale and retention. Employers in the ten (10) counties including Brazos, Burleson, Grimes, Houston, Leon, Madison, Robertson, Walker and Washington counties are eligible to participate in the CLC of the Brazos Valley. For more information employers can contact Sandra Arellano-Rivers at (979) 595-2809 X 2 or via email at sandra.rivers@bvahc.org. Information is also available at www.clcbv.org.
