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AROUND OREGON: A financial lifeline during Covid

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The economic downturn caused by the pandemic has hit Indian Country particularly hard. Entrepreneurs are turning to small, local lending institutions in a region that’s often outside the reach of traditional banks.

Clients of Roxanne Best take part in one of her paddleboard yoga classes on the Okanogan River. (Courtesy/ Underscore)

Roxanne Best was preparing to relaunch her photography business when Covid made its way to the U.S. A serial entrepreneur and member of the Confederated Tribes of the Colville Reservation, Best teaches paddleboard yoga classes and artist-in-business workshops. She also taught “Indianpreneur” classes, the term used by an Oregon nonprofit for its business workshops. To put the photo enterprise back on its feet, she purchased marketing materials and scheduled events to showcase her product to clients.

“Then the pandemic hit and all the gigs I was scheduled for were canceled,” Best said in a telephone interview from her home 40 miles south of the Canadian border. “The income I was expecting was gone.”

Best went from helping other entrepreneurs get started to needing assistance herself. So she turned to the Northwest Native Development Fund, a community development financial institution based in Coulee Dam in north-central Washington state. Known as a CDFI, the fund is a private financial institution that delivers affordable lending to help low-income, low-wealth, and other disadvantaged people and communities. CDFIs mostly focus on specific communities or regions and provide funding and other services to encourage economic development and economic security.

The funds are nothing new — the Northwest Native Development Fund has been around for more than a decade. But the funds have been a lifeline to entrepreneurs who don’t have access to connections with traditional lines of credit during the economic downturn caused by the pandemic. Indian Country, and businesses in the arts, entertainment, and recreation, have taken a hard hit during the pandemic, according to a report by the Federal Reserve Bank of Minneapolis’ Center for Indian Country Development.

Many reservation residents in the Pacific Northwest “don’t have an ATM on their land, let alone a full-service bank,” said Amber Shulz-Oliver, a Yakama-Wasco descendant who is the executive director at the Affiliated Tribes of Northwest Indians – Economic Development Corporation. “Many don’t have collateral like a house or a rich uncle to borrow $10,000. CDFIs can be an institution that is trusted to get that kind of capital to build businesses.”

The battle to end predatory lending

Ted Piccolo, executive director and creator of the Northwest Native Development Fund based on the Colville Indian Reservation, is considered the region’s CDFI guru.

NNDF, which Piccolo founded 13 years ago, has lending capital of about $5 million. He would like to double that war chest by the end of the year.

“If we had to, if people came to the door, we could deploy close to $8 million tomorrow with the money on hand,” he said, noting that total would include loans already out.

The fund opened its doors in 2009 with classes, workshops, and small business planning.

“I was looking for ways to get some of our Native-owned businesses financing who couldn’t get traditional financing,” said Piccolo, a member of the Colville Tribe. “They were stuck in the water, on the sidelines.”

NNDF became a quasi-business consultant, educating business owners about the financing process and the need for good credit. Toward that credit goal, NNDF initiated an “anti-payday loan” program.

“One of the reasons for bad credit was people getting into all this high-risk stuff, super expensive predatory sinkholes that they couldn’t get out of,” Piccolo said.

People were trapped in a system that operated to keep borrowers in debt. Piccolo said predatory lending practices that include the principle, interest, and fees, can reach 200 or 300 percent, and create an exponential and unending debt.

Instead, NNDF offers a loan product that allows an individual to pay off a hypothetical $1,500 loan over 12 months with an interest rate of 15%, building new credit as he or she pays off the loan.

Borrowers are incentivized to pay off their advances with the promise of better interest — as low as 10 percent — on ensuing loans.

As envisioned, borrowers will pay off their NNDF loans and build enough beginning credit to obtain further credit through more traditional banks or credit unions. On top of providing loans, the fund offers counseling to help clients build business and marketing plans. Staffers hold family budget workshops, and in 2019 the fund financed the construction of a house to address a shortage of homes in the region.

Economic development means a robust private sector

CDFIs serving Native American communities give an economic boost for the entire region, Shulz-Oliver said.

“One of the big tools of economic development is a robust private sector, but small businesses need capital,” she said.

Piccolo said the biggest challenge for CDFIs in Indian Country is “human capacity” to operate the financial institutions.

“Out here on the reservation there just are not a lot of loan officers, accountants or controllers,” Piccolo said. “We need to train them and pay them, and still operate at the same time. We’re all learning on the fly, learning how to train while raising money to train and lend.”

And while CDFIs aren’t new — there are at least 1,000 of them, 70 of which serve Native communities, across the country — they’re growing. A 15-member Northwest Native Lending Network of developing or operating CDFIs was organized in 2019 at the Economic Summit for the Affiliated Tribes of Northwest Indians – Economic Development Corporation. The Northwest’s newest CDFI is the Nixyaawii Community Financial Services serving the Confederated Tribes of the Umatilla Indian Reservation in northeastern Oregon.

In the Northwest region, many Native CDFIs’ business portfolios consist primarily of natural resource-based ventures, with loans for logging equipment and fishing boats. However, CDFIs work with all kinds of clients, including a software company trying to get off the ground with help from ATNI’s Economic Development Corporation. The goal of these institutions is to help clients reach financial stability so they no longer need the CDFIs’ services.

“We’re trying to put ourselves out of business, to make individuals credit worthy enough” to access more traditional funding sources, Shulz-Oliver said.

Loan provided needed boost

Best provides training and teaches her yoga classes, but her bread-and-butter is portrait photography, especially photos for high school seniors.

More than a year after the pandemic hit the U.S., Best is still in business, eying senior portraits and the paddleboard yoga season. Best said the NNDF loan provided cash flow that carried her through the initial shock of the economic slump.

“That $5,000 is all it took to get out of the stressed-out mindset,” she said. “Now the bills are paid. You’ve got a good month or two to figure out how to make things work. That one little loan transformed the direction I was able to grow with my businesses.”

This story published with permission as part of the AP Storyshare system. Salem Reporter is a contributor to this network of Oregon news outlets.

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How Do I Sell My Vehicle With Joint Ownership?

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A joint auto loan is when two borrowers have rights and responsibility to the same vehicle and loan. If you have a cosigner, then you, the primary borrower, have all the rights to the vehicle. Here’s what you need to know when you need to sell your car with two people responsible for the loan.

Selling a Joint-Owned Vehicle

Joint owners are typically spouses or life partners who combine their income to meet income requirements or get a larger loan amount. Both co-borrowers are responsible for paying the car loan and have 50/50 rights to the vehicle, so both their names are listed on the title.

Since your co-borrower has the same rights and obligations to the vehicle as you, you must get their permission to sell the car. In most cases, they also need to be present for the sale to sign the title. This may not always be the case, though, so it’s important to know how to read your car’s title.

If you have it, take a look at your vehicle’s title for the names listed on the back where you sign to transfer ownership. For example: let’s say your name is Jane and your co-borrower’s name is Joe. You’re likely to see either:

  • “Jane and Joe”
  • “Jane or Joe”
  • “Jane and/or Joe”

If you see “and/or” or the connector “or”, this typically means only one person needs to be present for the sale of the car. But if you see “and” this means both of you need to be present to transfer ownership – this is usually the case with joint ownership.

In all three cases, you still need the permission of the co-borrower to sell the vehicle even if they don’t have to be physically present to sign the title. If you sell it without the co-borrowers consent, it may be considered a crime because it’s their property, too. Moving forward, discuss the sale with your co-borrower to avoid potential legal trouble.

Selling a Car With a Cosigner

How Do I Sell My Car With Joint Ownership?If you have a cosigner on your car loan, then things become easier. A cosigner doesn’t have any rights to the vehicle and their name isn’t on the title. Their purpose is to help you get approved for the auto loan with their credit score, and by promising the lender to repay the loan if you’re unable to. A cosigner can’t take your vehicle, sell it, or stop you from selling it yourself.

However, it’s nice to let them know if you do decide to sell the car because the auto loan is listed on their credit reports. If you can, reach out to them about your plans to sell the vehicle. The car loan’s status impacts them and could affect their ability to take on new credit when it’s active.

If you sell the vehicle and the lien is successfully removed from the title, then you’re both in the clear.

Removing the Lien From a Vehicle’s Title

If you still have a loan on your car, then your number one priority is paying off your lender. Your lender is the lienholder, and you can’t sell a vehicle without removing them from the title – they own the car until you complete the loan. This typically means paying off the loan balance until naturally during the loan term, or getting enough cash to pay it all off at once from a sale.

When you’re selling a car with a loan, you want to get an offer for your vehicle that’s large enough to cover your loan balance and to remove the lien. If you don’t get a large enough offer, then you need to pay that difference out of pocket before you can sell the vehicle. Or, you may be able to roll over the remaining loan balance onto your next car loan if you’re trading it in for something else.

Looking to Upgrade Your Ride?

Many borrowers ask for help to get the car they need. If you need more income on your loan application to meet requirements, asking a spouse or life partner to chip in can do the trick. If you have a lower credit score, then a cosigner with good credit could help you meet credit score requirements.

But what if you want to go it alone on your next auto loan and your credit isn’t great? A subprime lender could be the answer. Here at Auto Credit Express, we’ve been connecting credit-challenged consumers to dealerships with bad credit resources for over two decades, and we want to help you too.

Fill out our free auto loan request form and we’ll look for a dealer in your local area that’s signed up with subprime lenders. These lenders assist borrowers with many unique credit circumstances to help them get the vehicle they need. Get started today!

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Fixed-rate student loan refinancing rates sink to new record low for the second straight week

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The latest trends in interest rates for student loan refinancing from the Credible marketplace, updated weekly. (iStock)

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans hit another new record low during the week of May 3, 2021.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during the week of May 3:

  • Rates on 10-year fixed-rate loans averaged 3.60%, down from 3.69% the week before and 4.32% a year ago. This marks another record low for 10-year fixed rate loans, besting the previous record of 3.69%, set last week.
  • Rates on 5-year variable-rate loans averaged 3.19%, down from 3.23% the week before and up from 3.04% a year ago. Variable-rate loans recorded a record low of 2.63% during the week of June 29, 2020.

Student loan refinancing weekly rate trends

If you’re curious about what kind of student loan refinance rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates won’t affect your credit score.

Current student loan refinancing rates by FICO score

To provide relief from the economic impacts of the COVID-19 pandemic, interest and payments on federal student loans have been suspended through at least Sept. 30, 2021. As long as that relief is in place, there’s little incentive to refinance federal student loans. But many borrowers with private student loans are taking advantage of the low interest rate environment to refinance their education debt at lower rates.

If you qualify to refinance your student loans, the interest rate you may be offered can depend on factors like your FICO score, the type of loan you’re seeking (fixed or variable rate), and the loan repayment term. 

The chart above shows that good credit can help you get a lower rate, and that rates tend to be higher on loans with fixed interest rates and longer repayment terms. Because each lender has its own method of evaluating borrowers, it’s a good idea to request rates from multiple lenders so you can compare your options. A student loan refinancing calculator can help you estimate how much you might save. 

If you want to refinance with bad credit, you may need to apply with a cosigner. Or, you can work on improving your credit before applying. Many lenders will allow children to refinance parent PLUS loans in their own name after graduation.

You can use Credible to compare rates from multiple private lenders at once without affecting your credit score.

How rates for student loan refinancing are determined

The rates private lenders charge to refinance student loans depend in part on the economy and interest rate environment, but also the loan term, the type of loan (fixed- or variable-rate), the borrower’s credit worthiness, and the lender’s operating costs and profit margin. 

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.

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Provident Financial calls time on doorstep lending business

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Provident Financial has confirmed plans to shut its 141-year-old doorstep lending arm, as its full-year results highlighted the strain the coronavirus pandemic and growing customer complaints have put on subprime lenders.

The Bradford-based company reported a pre-tax loss of £113.5m for 2020, compared with a £119m profit the previous year. The biggest drag was a £75m loss in its consumer credit division, which includes home credit.

Malcolm Le May, Provident chief executive, said: “In light of the changing industry and regulatory dynamics in the home credit sector, as well as shifting customer preferences, it is with deepest regret that we have decided to withdraw from the home credit market.”

Jason Wassell, chief executive of the Consumer Credit Trade Association, which represents alternative and high-cost lenders, said the decision showed that “the current regulatory framework does not work for the market, or its customers”.

“The result in this case is that access to credit will be reduced for hundreds of thousands of people.”

Provident built its name as a provider of home credit, or doorstep lending, which involves a team of local agents who regularly visit borrowers to collect repayments and discuss their products.

Proponents believed agents’ local expertise and personal relationships with borrowers allowed them to achieve better results than traditional bank lending to people with bad credit scores, but the approach has increasingly been superseded by digital models in recent years.

Provident’s business has also been affected by a series of self-inflicted and external difficulties. Its consumer credit division has been lossmaking since a botched effort to modernise the unit in 2017, which led to a pair of profit warnings and an emergency rights issue. More recently, its recovery has been hampered by an increase in customer complaints that prompted an investigation by the Financial Conduct Authority.

The complaints rise has been driven by professional claims management companies, echoing a broader trend across the subprime lending industry which has also affected companies such as Amigo, the guarantor lender. Executives also accuse the Financial Ombudsman Service, which adjudicates on customer complaints, of overstepping its mandate and encouraging huge volumes of complaints.

Provident said it would wind down or sell the consumer credit division, with either option expected to cost it about £100m. 

The move will see Provident exit the most controversial areas of high-cost credit to focus on what it describes as “mid-cost” lending through its Vanquis credit card business and Moneybarn vehicle finance arm. Vanquis and Moneybarn both remained profitable during 2020, despite more than a quarter of Moneybarn customers requesting payment holidays at the height of the pandemic.

The results were slightly better than average analyst forecasts, and the company said Vanquis and Moneybarn had both reported “improving trends” during the first quarter of 2021. Shares in Provident nonetheless dropped more than 10 per cent in early trading.

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