Capital Good Fund to Launch Micro-Branch in Woonsocket
Saturday, November 02, 2013
The Capital Good Fund and the United Way of RI have teamed up to offer competitive loan options to families in need in Woonsocket.
"United Way and CGF began discussing this project last April. United Way and many other community based organizations were working at the legislature to lower the rate that payday lenders can charge from 260% APR to something more reasonable. One of the objections we heard was that there were no alternatives for people who needed short term loans," said Tony Maione, President and CEO of the United Way of Rhode Island.
Maione continued, "So we decided to work with CGF to bring their product to Woonsocket to see if people would use a better and cheaper alternative."
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The Capital Good Fund, "seeks to be the best financial empowerment organization in America by providing high-quality, innovative and transformational financial services to underserved families."
"One of the arguments against payday loan reform is that there are no alternatives, so creating this program in Woonsocket is designed to refute that notion," said Andy Posner with the Capital Good Fund. "United Way of RI generously agreed to fund this program with a $57,000 grant. In addition, Navigant Credit Union is providing us with a line of credit that we'll use to make loans for the program, and Amica Mutual Insurance is helping to guarantee the loan from Navigant."
The CGF loans can be between $300-500, and can be repaid over one year at a 36% APR. The loans come with financial literacy assistance in things like budgeting to help families stay on track and not need short term loans in the future.
The Woonsocket location of the lending micro-branch will be at 719 Front Street, Suite 109. Hours are Monday, Wednesday, Thursday & Friday, 9am-5pm; and Tuesday: 9am-12pm. Members of the community are encouraged to call in advance to make an appointment where possible.
Cllients seeking more information and to apply for loans may do so by calling Jane McIntyre, loan officer, toll free at 866-584-3651 ext. 300 or by email at: [email protected]. Information will also be available online at: www.capitalgoodfund.org/ourservices
Rhode Island, National Perspective
"All lower income workers should be aware of this project. United Way’s role is to support the pilot project in Woonsocket and analyze the data that we get in the first year to determine if the model will work in other parts of the state," said Maione
"Most importantly, we want the residents of Woonsocket to know that there is an affordable alternative to payday loans in the city," added Posner. "What's more, residents will have access to free financial coaching so that they can learn to avoid the need for the loans moving forward."
"There are many communities in Rhode Island that could benefit from a similar program", said Posner. "There are definitely interesting models being piloted around the country, although ours is unique."
Related Slideshow: New England States’ Grades for Debt Protection
A new report by the National Consumer Law Center shows how states rank for debt protection laws for consumers, to preserve basic items of property from seizure by creditors -- and Rhode Island received a "C" grade overall, which the NCLC qualifies has having "many gaps and weaknesses."
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