The Northwest Credit Union Foundation is partnering with Philanthropy Northwest to prototype a fast, zero-interest emergency loan program that will reach low-income and undocumented workers across the Northwest. While COVID-19 is only beginning to impact the financial health of our Northwest communities, the pandemic will most likely have long-lasting implications. As these displaced workers wait for stimulus funds or unemployment insurance, they are working on household budgets – and many may come to the conclusion that despite the assistance, it won’t make ends meet. That’s why NWCUF has devised this program in concert with not-for-profit, cooperatively owned credit unions to help finance this gap in income. Without access to this type of capital, we know many families will either turn to predatory payday lenders that will entrench them in crippling debt, or they’ll go without critically important daily essentials like food, housing, medication, or utilities.
With grant support, NWCUF projects its network of credit unions can guarantee loans to displaced workers across the Northwest, getting capital quickly out to people who are in the greatest need. The program can be initiated with partial funding and rolled out iteratively from region to region. Borrowers don’t need to be current credit union members. It’s critical we provide an opportunity to reach those who are currently unbanked/underbanked and introduce them into people-first financial services.
Basic loan program details:
• NWCUF raises funds in grants and PRI support for a guarantee pool.
• Guarantee amounts are allocated to participating credit unions.
• Credit unions make loans of $2,500, with a 24-month term, 0% interest, initial payment that’s deferred for 90 days.
• For high-risk borrowers, loan portfolios are guaranteed at 75%. Borrowers include those who are undocumented, underbanked, have poor credit, or high debt-to-income ratios.
• For less credit-challenged borrowers, loan portfolios are guaranteed at 25%.
If you are interested in partnering with the Northwest Credit Union Foundation to provide the hardest-hit workers with safe and affordable credit during this time of need, please reach out to Sharee Adkins, NWCUF Executive Director, who can be reached by email at [email protected] or by phone at 206.265.0313.