‘Serious money’: Community lending center hits 100,000 mark

A view of the Community Development Corporation of Brownsville (CDCB) main office in downtown Brownsville, Thursday, Nov. 3, 2022, as the Community Loan Center, a small-dollar loan program launched by CDCB, reached the milestone of his 100,000th loan in October of 2022. (Miguel Roberts/The Brownsville Herald via AP)

The Community loan centerwhich offers low-interest, low-cost personal loans through employers as an alternative to predatory payday and auto-title lenders, last month issued its 100,000th loan since the program’s inception in 2011 .

The CLC was created by the Community Development Corporation of Brownsville (now Come Dream Come Build) and the Rio Grande MultiBank. CDCB administers CLC RGV as well as the multibank, founded by six lenders in 1994 to support affordable housing and small business development. Today, the CLC program has grown into a network of 23 local lenders in 11 states.

CDCB executive director Nick Mitchell Bennett said the 100,000 loans represented “serious money” – some $94 million lent out and saving borrowers more than $77 million in fees and interest .

“About 40,000 of them were made here in the Rio Grande Valley and another 60,000 in the other 19 franchises (CLCs) we’ve launched across the country,” he said.

Mitchell Bennett described CLC’s lending program, which uses an online lending model, as a national franchise building relationships with local community lenders. Franchisees use their own loan capital and recruit local employers to participate.

“We created something that had a real impact that has yet to be replicated across the country,” he said.

CLC, though local employers, offers eligible employees the ability to borrow up to $1,000 at “reasonable interest rates” compared to payday loans or auto-securities, according to CLC. Borrowers have a loan term of 12 months with no prepayment penalties. Borrowers repay payroll loans based on their payroll schedules, with payments not to exceed $23 per week for an unsecured personal loan.

Potential borrowers, meanwhile, can take advantage of free, no-obligation financial education offering advice on topics such as getting out of debt, managing student loans, building a retirement savings plan, home ownership and access to traditional forms of credit.

All franchisees use the same CLC brand, the same loan software and a set of loan services such as loan processing and documentation, loan financing and loan servicing. Franchisees receive training and technical assistance through Texas Community Capital, which does business as the Community Loan Center of America and serves as the coordinator for the CLC franchise network.

A view of the Community Loan Center’s official website Thursday, Nov. 3, 2022 in Brownsville, as the small-dollar loan program launched by CDCB reached its 100,000th loan in October 2022. (Miguel Roberts/The Brownsville Herald via AP )

Public and private employers who participate frequently are making CLC loans part of their benefits package, while some employers report that the loan program has helped reduce employee turnover, according to CLC RGV spokesperson Marcela Saenz. , who said borrowing employees tend to like it. because of the ease of getting a loan when they need it and the convenience of repaying it automatically through payroll deductions.

The payroll aspect also keeps default rates low, allowing CLC lenders to charge a relatively low interest rate of 18% plus a $20 loan origination fee, she said. declared.

Employees/borrowers give CTC high approval ratings because of the ease of getting a loan when they need it and the convenience of automatic loan repayment through payroll deduction, Saenz said. Social investors, meanwhile, support the program because it shows that loans to low-income workers “can be reasonably priced”, she said.

Rio Grande MultiBank board member Wendy Hanson said CLC was “established to provide needed and affordable cash assistance to working families in our community” and that the 100,000 loan milestone is a milestone. “celebration not only for our community but for the other 19 communities that have a CLC franchise.

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