What a great idea!
Affordable Small Dollar Loans
Keeps borrowers from the grief of loan sharks making exorbitant, short-term loans to desperate individuals
By William Keltner –
“Come into my parlor said the spider to the fly” goes the ages-old, innocent-sounding invitation to the unsuspecting little fly. This familiar object lesson always ends the same way with the spider fat and sassy, and the hapless bug enmeshed in a hopeless spiral of misfortune. Why relate this fanciful tale? Because there is a modern day corollary springing up in the Rio Grande Valley like mushrooms popping up after a drenching rain. The spiders are opening their parlors to borrowers of small dollar Pay Day Loans and Automobile Title Loans. The customers are usually desperate and at their wits-end.
Seeing what is happening, a growing league of banks, school districts and corporations has banded together to help citizens who need a financial friend in a tight pinch. And here is why:
Everybody knows that when the would-be borrower has no credit line or bank account for collateral, it is hard to get a small dollar loan at a financial institution to save the mortgage or pay for a doctor bill. At this point, the purveyors of quick “no-questions-asked” Pay Day and Automobile Title people enter the picture. They readily loan the desperate borrower a few hundred dollars, however, at exorbitantly confiscatory rates. How about 400% interest on a 2-week Pay Check loan? And, if they can’t pay when the next 2-week pay period comes around, and they extend the loan another 2-weeks, it’s also another 400% interest added-on ad infinitum. Hello, bankruptcy.
Now enter the Consumer Financial Protection Bureau. This watchdog agency began supervising payday lenders in 2012. The Director, Richard Cordray said earlier this year that the bureau would work with states on enforcement actions against lenders who operate online to avoid state payday lending rules.
Now, the good news for the Rio Grande Valley: An affordable small dollar loan program known as the Community Loan Center of the Rio Grande Valley was created to present an alternative to high-cost, small-dollar Pay Day loans. “Pay Day loans have created concerns that they are trapping consumers who can least afford them in a destructive cycle of debt according to Nadia Erosa, Customer Relationship Manager at the Brownsville Central headquarters for the Valley-wide program.
“It works like this,” she explained. “The Affordable CLC Small Dollar Loan Program is here to help individuals and families struggling to make ends meet. Through this Multi-Bank program, assistance is now available for low and moderate income individuals and families.” The RGV multi-bank program includes: Chase Bank, Wells-Fargo Bank, Bank of America, IBC Bank, Frost Bank, Lone Star Bank, BBV-Compass Bank and National Community Impact Corporation of Washington, D.C.
It strengthens financial stability, stabilizes income, and allows free access to cash debt management solutions to help with credit repair and budget counseling.” She added, “All our services are free, and we invite questions about the program and the latest list of participating banks, employers and corporations–And best of all, it keeps borrowers from the grief of loan sharks making exorbitant, short-term loans to desperate individuals.”
Gisela Cardenas, Business Relationship Manager, added: “To make this work, there are some basic requirements to qualify for a low-interest, small dollar loan:
(1) It is only available through approved, participating partners.
(2) You need evidence of at least 3 months of employment with the employer
(3) You need a bank checking account in your name.
(4) All applications are made on-line.
(5) The repayments will be by payroll deduction.
Cardenas added, “This program allows people with no credit history to establish one for future use, we also do individual and group counseling for financial matters. As you can see, it is tied into an Employer Payroll Deduction plan and there are no credit history requirements.”
“Currently, the CLC Small Dollar Loan Program has over 30 employers participating, and it’s growing every day,” Erosa said. Below is the current list of employers at press time: La Feria I.S.D., Keppel Amfels, ESCO Marine, Lopez Supermarket, AD Welding, TempControl, Community Development Corp., Catholic Diocese of Brownsville/San Juan, Cameron County Housing Authority, San Juan Nursing Home, City of Los Fresnos, and City of Raymondville,
“We invite interested employers to participate and become part of helping your employees succeed financially,” Cardenas said, and welcomes calls at her number (956) 407 7836.
These banks are participating in this project that benefits the community
Chase Bank, Wells-Fargo Bank, Bank of America, IBC Bank, Frost Bank, Lone Star National Bank, BBVA-Compass Bank and National Community Impact Corporation of Washington, D.C.
