MILWAUKIE, Ore.–Cutting Edge FCU here said it is using a $600,000 grant from Treasury’s Community Development Financial Institutions (CDFI) Fund to expand its affordable used-auto loan program for low-income members.
With many in its markets working in lower income jobs, the result is a population that often turns to non-traditional lenders, such as “Buy Here, Pay Here” auto dealers and check-cashing outlets. Approximately 80% of consumers in CEFCU’s area rely on a car to drive to work, the credit union said.
“It’s no secret that reliable transportation provides access to jobs, and allows families to work extra shifts,” said CEFCU CEO Brady Howe in a statement to CUNA. “Unfortunately, many families are disadvantaged because of limited public transportation and the unwillingness of some financial institutions to serve the lower-income, credit-challenged, and unbanked. This damages the community, considering many families here are minimum-wage workers more likely to fall victim to predatory auto-loan programs.”
The $46.4-million CEFCU is projecting the grant funds will allow it to provide better auto lending options to 921 consumers through 2022.
In addition to the enhanced lending program for low-income members, CEFCU also reports it is launching a new program aimed at improving overall financial wellness. The credit union’s outreach will be performed in conjunction with its community partner, Exceed Enterprises, an organization that works with people of diverse abilities, it said.
“CEFCU is honored to have been selected to receive this important source of funding,” said Howe in a statement. “We’re beyond excited for the opportunity to continue to live the credit union mission to serve the underserved.”