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Low Wealth Education

Credit Union :Mid Oregon
Assets :$122,000,000
Address :Po Box 6749 | Bend, OR 97708

Details :

Participant Qualifications :

Mid Oregon CU has a partnership with COLINK (Central Oregon Lower Income Network Kooperative) which refers clients to the credit union for financial services. COLINK provides a financial education forum and mentorship program for clients, generally those near or below the poverty level who have problems managing their finances but have the capacity and commitment to make a change. Clients must be willing to attend five financial education classes and keep in touch at least monthly with a mentor. COLINK guarantees approved loans through Mid Oregon for its clients.

Details :

As a not-for-profit agency, COLINK works with consumers who are having difficulty making ends meet. It also seeks to help “clients who are interested in obtaining guidance and support regarding financial matters and possibly qualifying for a reasonably priced loan,” as stated in its Client Application.

The partnership between COLINK and Mid Oregon CU was formed approximately four years ago, according to Kyle Frick, VP Marketing & Community Relations at the credit union. COLINK investigated starting a credit union, but then realized Mid Oregon already provided the products and services needed by COLINK’s clients. The partnership enabled COLINK to focus on finding people who could benefit from its program, letting Mid Oregon provide the back office, underwriting and service support for COLINK’s clients.

The partnership has worked well, says Frick. COLINK clients must agree to attend at least five consecutive Money Matters classes that are taught by a 15-year veteran of Money Management International, a consumer credit counseling service, as well as other mentors and staff personnel. Clients are taught how to take control of their finances. Child care and a free dinner meal are provided for class participants. Upon completion of the five week class, participants can continue with COLINK by agreeing to meet monthly with a mentor to monitor progress for help with any new financial struggles. “The purpose is to keep the person engaged, on track, and committed to the program,” says Frick.

Although many of COLINK’s clients have an account with a financial institution, they are encouraged to start one with Mid Oregon, notes Frick. Someone from COLINK will often bring the person into the credit union to acquaint them with processes. COLINK often helps with a share-secured loan for the client. COLINK leverages its deposits with Mid Oregon as security for loans. Mid Oregon underwrites the loan, but COLINK guarantees the loan.

The partner relationship benefits both organizations, states Frick. The credit union can refer members to COLINK if employees feel they could benefit from the program and financial education. Some of Mid Oregon’s staff members serve as mentors or help train mentors. “Our primary underwriter and a loan officer participate as mentors and as mentor coaches,” notes Frick.

Program Results/Statistics :

As of April 2010, six loans have been made through the COLINK partnership with Mid Oregon totaling $67,790. Many of the loans are for debt consolidations at much lower interest rate, notes Rick Negus of COLINK. Negus adds that COLINK has the capacity to make more loans, but it is very careful to whom it lends. Individuals must have completed the five week class, have a reliable source of income, obtain the recommendation of their mentor, and have a clear idea of how a loan fits into their larger financial picture, says Negus.

Frick provides the following example of a single, divorced mom who was at loose ends about how to get her money matters under control. She was referred to COLINK where she went through the classes. She was able to borrow money for a car and has subsequently saved money for a down payment on a house and is about to purchase that home. “COLINK works with people who are upside down in their financial affairs and don’t know where to start to right themselves,” concludes Frick. “COLINK teaches them how to go through the process. It’s a great partnership.”