The National Credit Union Foundation is seeking state leagues or foundations to submit proposals to receive support and assistance in starting their own non-prime auto loan program.
The Foundation is looking to fund and provide technical support to assist up to 5 state leagues or foundations in starting their own non-prime auto loan programs. The Foundation will be granting $20,000 to each successful applicant, who will recruit 10 or more credit unions capable of generating a combined 10,000 of low-score auto loans within an 18-month period during the length of the program.
The deadline for leagues and state foundations to submit their applications is Feb. 15.
“We have already seen great success with non-prime auto lending through our pilot program and are now looking to grow that impact,” said Gigi Hyland, Foundation executive director. “Through these auto-loan programs, credit unions can add to their bottom lines, while also filling the social need of helping consumers improve their health and well-being through affordable credit for used cars. With the help of these grants, leagues and foundations will serve as a catalyst for change in low-score lending across the credit union movement.”
Non-prime refers to the practice of making loans to borrowers with weak or no credit histories or limited payment capacity. Low-score loans are defined as loans to borrowers with a credit score of less than average or 640. Research shows there is a tremendous opportunity for credit unions to reach out to this market that has been disserved by predatory lenders and under-served by traditional lenders.