Bronx, New York (PRWEB) June 11, 2015
To help New York City workers bridge the occasional gap between their income and the cost of living, and alleviate financial stress, Spring Bank has launched the Employee Opportunity Loan with partner BOOM!Health. Spring Bank is an innovative community development bank based in the South Bronx, with a mission to serve underbanked neighborhoods in New York City.
BOOM!Health is a nonprofit with 140 employees that delivers a full range of health coordination, housing, legal, advocacy and wellness services to over 12,000 of the hardest to reach communities in the Bronx.With the Employee Opportunity Loan, BOOM!Health has connected their employees to a new voluntary benefit.
Spring Bank designed the Employee Opportunity Loan to provide access to affordable small dollar loans through partnerships with local employers. Now, employees can access responsible small credit securely and conveniently as part of their voluntary benefit package with automatic payroll deductions. Loan amounts range from $1,000-$2,500 and have no minimum credit score requirement.
According to Melanie Stern, Director of Consumer Lending at Spring Bank, “Many New York City workers have trouble weathering emergencies or even fluctuations in their day-to-day cost of living. Individuals turn to high-cost, often predatory lenders or may dip into a 401K, which is- a costly way to borrow. These practices make it difficult to build savings, and can damage credit scores, even start a cycle of debt.”
An Employee Opportunity Loan (repaid over a year’s 24 pay periods) will cost employees an average of $7 a pay period – less than the cost of a movie ticket. For a typical two-week payday loan the same borrower will pay at least fifteen dollars for every $100 borrowed and borrowers typically pay more in fees and interest than the original loan amount or $1,500.
Low and moderate-wage employees are facing increased financial stress, a problem for both the employee and their employers. According to the MetLife 2015 U.S. Employee Benefit Trends Study: “51% of employers strongly agree that employees are less productive while at work at our company when they are worried about personal financial problems. Given that 54% of employees report that they are very concerned about their financial security, it is likely that productivity is being impacted by financial insecurity at many companies. This is especially so for younger workers who are, the study reveals, more likely to be distracted or absent due to personal financial issues.” In addition the report indicates that: “As job security concerns rise, the number of employees with a three-month savings cushion has dwindled – down to 34% in 2014 compared to 46% in 2013.”
According to Jose M Davila, President & Chief Executive Officer of BOOM! Health, “We are committed to paying all our employees more than a living wage. However, we recognize that there are times when an unexpected emergency or unusual expense can create the need for access to an affordable loan. In working with Spring Bank we are ensuring that our employees will borrow responsibly while provided an opportunity to be better prepared for future financial needs. We know that employees who have somewhere to go in these unexpected moments will be less stressed on their jobs. BOOM! Health’s already exceptional employee retention rate will only be enhanced by providing this service.”.
BOOM! Health employee Denise Ortiz said, “When I inquired for financial assistance from Spring Bank, I found that the service was outstanding. The representatives made everything very convenient and the process was expedited. I have never experienced such a quick response and willingness to help a customer.”
Spring Bank President, Eric Pallas, notes that given the right opportunities and tools, Spring Bank and local employers can help New York City workers borrow responsibly and begin saving., “The goal of the Employee Opportunity Loan is to provide a clear alternative and to get employees on the right track to financial health. The product 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.”
About Spring Bank
Founded in 2007 to serve New York City’s underbanked, Spring Bank is an independent, FDIC-insured, 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).