'Borrow and Save' provides a clear alternative to get consumers on the right track to financial health through a product that encourages positive behavior while building assets.
Bronx, New York (PRWEB) August 28, 2014
To help New Yorkers bridge the occasional gap between their income and the cost of living, Spring Bank, an FDIC insured, U.S. Treasury certified community development bank based in the Bronx, is launching “Borrow and Save,” a responsible credit building product, on Wednesday, September 3rd, 2014.
As of August 26, 2014, the program is also the recipient of a $700,000 supporting grant from the Community Development Financial Institutions (CDFI) Fund of the U.S. Treasury.
For many in New York City, weathering an emergency or covering basic costs can be difficult. In the fall, the costs of schools supplies and uniforms present a particular challenge. To make ends meet or cover a large one-time expense, many people turn to high-cost, often predatory lenders— a practice that makes it difficult to build savings, negatively impacts credit scores and can start a cycle of debt.
Spring Bank’s staff has designed the product with input from community advisers and national policy experts. The goal is to help borrowers break the cycle of unsustainable borrowing, improve their credit scores and move towards healthier savings habits in a free, linked savings account.
To further bolster the impact of "Borrow and Save," Spring Bank is partnering with Green Path, a nationally recognized, non-profit credit counseling agency, who will provide free access to money management and financial education services to any Spring Bank customer.
"Borrow and Save" is a 6 to 12 month loan of up to $1,500 with no minimum required credit score. The loan is underwritten on the basis of an individual’s demonstrated ability to cover payments. One quarter (25%) of the Spring Bank loan is placed in a free savings account that is available when the loan is repaid. Successful borrowers can develop a meaningful pool of savings and see their credit scores improve.
Melanie Stern, Director of Consumer Lending at Spring Bank, explains that "Borrow and Save" will launch at the start of the school term “to help New York City parents who are worried about how to afford this year’s school supplies and uniforms. We believe parents will find in 'Borrow and Save' an affordable loan which can also help them on a path to savings for future needs.”
Spring Bank President and CEO, Eric Pallas, notes that, “It is a common misconception that our low and moderate income neighbors can’t save. Given the right opportunities and tools, Spring Bank customers can put aside a nest egg. Through this product we will offer a much-needed product that supports positive behavior and helps our customers meet their goals for financial security.”
According to Ms. Stern, “The cost of school uniforms is frequently cited to justify the expansion of high-cost small dollar loans in New York State. We also see online payday lenders promoting their loans as a product for parents who cannot afford new school uniforms and supplies. Predatory lenders often take advantage of emergency needs and income shortfalls by offering immediate access to short-term loans, but at a cost that can exceed 400% per annum.”
“The goal of 'Borrow and Save' is to provide a clear alternative, and to get consumers on the right track to financial health through a responsible product that encourages positive financial behavior while building assets. 'Borrow and Save' demonstrates that responsible lenders in New York City can offer alternatives to the predatory products available in person or online, that have become so pervasive in low-income communities across the nation,” explained Mr. Pallas.
Date: Wednesday, September 3, 2014
Time: 10:00 AM
Location: Spring Bank, 69 E 167th Street, Bronx, NY 10452
Attendees: Assemblywoman Annette Robinson, Chair of the State Banking Committee, and others.
About Spring Bank
Founded in 2007 to serve New York City’s underbanked, Spring Bank is an FDIC-insured, independently owned, community development bank headquartered in the Bronx, New York. In December 2012, the Bank’s second branch opened in the Harlem community of Manhattan. Since its founding, a primary mission of the Bank has been to provide the products, services and education that enable low-wealth customers to benefit from mainstream banking.
Spring Bank is equally committed to stimulating and supporting small business growth The majority of Spring Bank lending currently goes to businesses in the five boroughs, with a significant portion designated for low and moderate income census tracts. Spring Bank’s dedicated small business and commercial loan division is one of the busiest in NYC, with the Bank recently being rated among the 100 most active SBA 7(a) lenders in the country. In 2013 Spring Bank became only the third New York State Bank to be certified as a Community Development Financial Institution by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund).