The Treasury’s Community Development Financial Institutions (CDFI) Fund awarded Cutting Edge FCU (CEFCU) a $600,000 in grant funding to expand the credit union’s affordable used-auto loan program for low-income members. CEFCU has branch offices in Milwaukie, Oregon and Lewiston, Idaho.
“It’s no secret that reliable transportation provides access to jobs, and allows families to work extra shifts,” said CEFCU CEO Brady Howe. “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.”
Because many in the community have lower earnings, tighter cash flow and challenged credit, they’re currently forced to use non-traditional financial service providers – such as “Buy Here, Pay Here” auto dealers, check-cashers, and payday lenders – when they need credit.
Approximately 80% of consumers in CEFCU’s area rely on a car to drive to work.
CEFCU will impact a projected 921 consumers with its enhanced used auto program through 2022, ultimately allowing participants to keep or gain work and help the community, and bringing money into the local economy through increased workforce.
Alongside its increased capacity to lend to its low-income members, CEFCU continues to move forward on 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.
“CEFCU is honored to have been selected to receive this important source of funding,” said Howe. “We’re beyond excited for the opportunity to continue to live the credit union mission to serve the underserved.”
The Treasury’s CDFI Fund makes capital grants, equity investments and awards for technical assistance to certified CDFIs. It was funded at $250 million for fiscal year 2018, which CUNA successfully fought for earlier this year.