An announcement from the Credit Union National Association (CUNA) detailed how buy-here, pay-here dealers in two states might see more competition from a specific credit union.
The organization indicated the Community Development Financial Institutions (CDFI) Fund orchestrated by the U.S. Department of the Treasury awarded Cutting Edge FCU (CEFCU) a $600,000 in grant funding to expand the credit union’s affordable used-vehicle program for low-income members.
CEFCU has branch offices in Milwaukie, Ore., and Lewiston, Idaho.
Officials indicated CEFCU could impact a projected 921 consumers with its enhanced used-vehicle program through 2022.
Approximately 80 percent of consumers in CEFCU’s area rely on a car to drive to work, according to a news release.
Because many individuals in these particular communities have lower earnings, tighter cash flow and challenged credit, CEFCU indicated these individuals often use BHPH dealers, check cashers and payday lenders when they need credit.
“It’s no secret that reliable transportation provides access to jobs, and allows families to work extra shifts,” CEFCU chief executive officer Brady Howe said. “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,” Howe continued.
“CEFCU is honored to have been selected to receive this important source of funding,” he went on to say. “We’re beyond excited for the opportunity to continue to live the credit union mission to serve the underserved.”
Alongside its increased capacity to serve its low-income members, CEFCU added that it 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.
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.