Loan center receives grant - Brownsville Herald: Local News

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Loan center receives grant

Low-income borrowers will benefit, says CDCB

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Posted: Monday, November 30, 2015 10:24 pm

A $826,667 grant from JP Morgan Chase Bank to the Community Loan Center of the Rio Grande Valley will help many low-income Brownsville residents avoid having to borrow from payday and car title loan companies.

That’s according to Nick Mitchell-Bennett, executive director of the Community Development Corporation of Brownsville, who was instrumental in launching the small-dollar loan program in 2011 as an alternative to payday lenders, which often trap borrowers in a cycle of debt via excessively high interest and fees.

The grant, scheduled to be officially announced this morning at CDCB headquarters, is part of a $5.1 million grant to the Community Loan Center Coalition in Texas and Indiana.

The seed of that coalition was the RGVCommunityLoanCenter, which is managed by CDCB. In its first year, the center made a little over 725 loans. The number has grown between 30 and 40 percent since then, with the biggest growth happening in 2014, when the center signed up its first two franchisees, Mitchell-Bennett said.

As of a week ago, the statewide coalition had done 8,250 loans worth about $7.2 million, he said.

The Chase grant will be a huge boon, allowing the RGV center to capitalize loans for perhaps 10,000 more borrowers over five years — potentially saving each borrower $700 in fees and interest on a $1,000 loan compared to the same loan from a payday lender, Mitchell-Bennett said.

“That’s money that will stay here,” he said. “This is an economic development issue for us. That much cash is leaving Brownsville, leaving the Valley.”

 

sclark@brownsvilleherald.com

A more complete version of this story is available on www.myBrownsvilleHerald.com.

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