Billings, MT — Family Services Inc, of Billings, Montana, unveiled a new program yesterday to help families who have suffered from debt due to predatory lending, such as payday loans and title loans.
The program has two main elements. First, participating families must take a six-week "financial fitness" course that teaches participants about managing personal finances, dealing with loans and repairing bad credit. Family Service will then give them a loan to pay off their lenders. The families repay Family Service at no interest.
The "rescue loan" program, the first of its kind in Montana, received $4,000 in startup money from First Interstate Bank and a $4,000 match from E Z Money Check Cashing.
Linda Robbins, executive director of Family Service Inc., said her agency is seeing more and more people caught up in "predatory lending." Of 51 people who visited Family Service on Monday, 15 were having difficulty with loans, including title loans. Many are low-income clients with poor credit who find it hard to get loans at traditional lending institutions and often turn to payday loans.
irst Interstate Bank officials agreed to kick in $4,000 for the program if they could find matching funds. Robbins approached Bernie Harrington, president of E Z Money Check Cashing, a local "deferred deposit" lender. He didn't hesitate, Robbins said.
"He said, 'I'll do it,' " Robbins said. "It was just that easy."
"The thing that really sold me on the program was the financial literacy course requirement," Harrington said. "Borrowers get in over their head when they abuse any type of loan product, and if we can prevent that from happening through education, both the borrowers and lenders will be happier."