![]() The program was founded by the Rio Grande Valley Multibank, or RGVMB, a “for-profit stockholder held organization owned by twelve banks and organizations,” the website states. In the lending program’s first eight years of operation, the Community Loan Center lent more than $25 million over 28,000 transactions, the website states. “It’s employee deduction, so they can take up to 12 months to pay her back,” Vasquez said, adding that the arrangement does not put the city at risk “in any way, shape or form.”īorrowers will pay 18% interest on the loan, plus an additional $120 fee, according to an informational page on the CLC’s website.īorrowers don’t need to have a credit history or collateral to take out a loan however, they do need four personal references and at least a three-month employment history with the employer who will be facilitating the payroll deductions. Now, city employees will be able to borrow between $400-$1,000 - money that will then be repaid straight from their paychecks. Vasquez said it didn’t, but that he had an idea - one that would need the city council’s approval first.Īnd so, on Tuesday, the Donna City Council unanimously approved the partnership with the Community Loan Center. The employee asked Vasquez if the city had a lending program. “With all due respect, those are lower-level income employees,” Vasquez said. The final tipping point for the finance director came when a public works employee approached him recently to ask for help. It’s not unheard of for a payday loan company to charge in excess of 500% interest.īut, as Vasquez learned from CLC representative, Rose Jaramillo, the Community Loan Center was envisioned as an affordable - and non-predatory - alternative to such loans when it was first established in 2011. Such ventures charge astronomical interest rates for ultra-short-term loans - loans that must be repaid in about a month. Initially, he was wary of supporting such a partnership because he feared the kinds of issues that can arise from taking out small-dollar loans from check cashing, payday or title loan companies. Representatives from the lender had been attempting to partner with the city of Donna for years, Vasquez said. “It is a option (sic) for employees to borrow funds at a moderate interest rate that is a better option than your payday loan type, because their interest rates are through the roof,” Donna Finance Director David Vasquez said after a city council meeting here Tuesday evening. DONNA - Officials here approved a partnership with the Community Loan Center, a Brownsville-based organization that offers short-term loans which city employees can repay via payroll deduction. ![]()
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