Reinventing Your Lending Programs

By. Sherod Halliburton, Suncoast Community Capital Corporation

 Better Fit The Needs Of Low Income Consumers

Hardworking low-wage earners’ inability to secure reliable transportation is a growing reality in most communities across the United States. Before joining Manatee Community Federal Credit Union as executive vice president, I had the pleasure of serving as executive director of the Bradenton Community Redevelopment Agency (CCRA). The CCRA launched an initiative called CareerEdge to assist low-wage workers in improving their employment skills by bringing employees, employers, training organizations, and funding partners together. CareerEdge funds employee-training initiatives after an employer agrees to provide salary increases and/or promotions to its workers. The initiatives also provide job-readiness training to prepare unemployed individuals to go to work. CareerEdge serves as a lifeline for thousands of individuals that need to upgrade their workplace skills.

Comments such as “The bus stops running at 9 p.m.” and “The new job is not on the bus line” were common responses as to why training participants were unable to accept offered employment. It became crystal-clear that figuring out a way to solve the transportation issues for these individuals would be just as important as providing them with the training to improve their job prospects. For me, that started the mission of developing a program to give workers access to reliable transportation.

My team and I sought out solutions to solve this serious problem. We realized that there were limitations to the local mass-transit system that could not be resolved immediately. Our search then led us to review a myriad of car-buying programs. These programs all looked different and they all came along with major advantages and shortfalls. It became evident that we would have to develop our own local program. As we continued to focus on trying to solve this challenge, I coincidentally accepted an opportunity to join the credit union’s executive team. This turned out to be very fortuitous. Working at a community development credit union allowed me to continue to work toward solving the transportation issues experienced by low-income and credit-challenged workers. I started talking to individuals with transportation challenges and they shared their horror stories. These stories included the single mother who had to wake up early in the morning and get her kids ready for school while spending multiple hours getting back and forth to work utilizing public transportation. They included the parent who was unable to respond to a family emergency that required her to leave work to meet her kids at school because she did not have a reliable car.  Also we heard numerous stories about unreliable cars that were purchased at predatory car lots.  These cars were overpriced, with excessive interest rates, and always came with very strict repayment terms.

Our credit union is a proud member of the National Federation of Community Development Credit Unions (www.cdcu.coop), which provides expertise and resources to credit unions serving low income consumers and underserved communities, which is what we do at Manatee Community. Through the Federation we’ve received assistance to get our CDFI certification and work closely with them in a number of projects, in fact Cathie Mahon, the Federation’s CEO is helping us structure our newest initiative: a community resource center. More on that in another article.

From our advantage point, the Federation also facilitates connecting with credit unions throughout the country that are developing sustainable solutions to meet  the needs of LMI communities. We were very impressed with the work being done to solve the transportation issues of its members by Freedom First Credit Union.  Manatee Community settled on using a modified version of Freedom First’s Responsible Rides program to better serve our local community. CareerEdge was thrilled with the program and enthusiastically came onboard as a partner. Reliable Rides also includes a partnership with Enterprise Car Sales to provide an inventory of low-mileage cars. All cars are subject to a 109-point inspection. The member receives a 12-month, 12,000-mile limited warranty; 12-month roadside assistance; free Car Fax report; and a seven-day return agreement. Enterprise Car Sales has a no-haggle pricing policy that protects the interest of the member and the credit union by ensuring that the member buys at the right price.

Manatee Community formalized the Reliable Rides program in partnership with CareerEdge and Enterprise in the last quarter of 2012. The program includes a requirement that the members attend financial budgeting and credit-improvement classes. The member is also required to attend an auto maintenance class to familiarize themselves with basic information on how to properly maintain their car. All of this has to be completed prior to loan approval. The program has already proven to be very beneficial for a number of single mothers. Monique Rhodes was the first participant in the Reliable Rides program.

Monique stated, “I joined the credit union in August 2012 and I am pleased to have been given the opportunity to finance a nice, dependable 2011 Chevy Impala with affordable monthly payments. I now have the freedom to pick up my children, go to and from work, and get the family groceries without having to always depend on others. Thank you Manatee Community for helping me secure a reliable ride.”

Reliable Rides has also made a tremendous difference in the life of Maria Azcona, a single mother with two small boys.

“I have taken advantage of Manatee Community’s Financial Budgeting and Credit classes online.  Those classes have helped me to set up a budget and taught me how to manage my credit better,” she said. “I am very grateful for the opportunity to finally own reliable transportation. I would like to thank Manatee Community for its assistance, and today I am the proud owner of a 2011 Hyundai Accent, with monthly payments affordable to my new budget.”

For Manatee Community, Reliable Rides is much more than a car-financing program. We are thrilled to be on the forefront of solving our members’ transportation problems while building their financial capacity and future. Manatee Community sees this innovative and much-needed program as a community benefit that will grow our loan portfolio and also assist us in our efforts to attract new members. Stay tuned: it is a wonderful thing when a plan comes together.

Sherod Halliburton

Sherod Halliburton

Mr. Halliburton is founder of a very innovative economic development non-profit, Suncoast Community Capital Corporation (SCC). SCC is charged with the creation of human and financial capital for the underserved ... Web: www.suncoastcc.com Details