Texas Community Capital Wins $100,000 Wells Fargo NEXT Award for Innovative Strategy to Improve Consumer Finance
Texas Community Capital noted for expansion of Employer Based, Affordable Small-Dollar Loan Program
(Austin, Texas, August 17, 2016) – Texas Community Capital (TCC) won a $100,000 Wells Fargo NEXT Seed Capital Award to implement its strategy to expand its innovative consumer finance program, the Community Loan Center, into new markets throughout Texas.
TCC serves as the network administrator of Rio Grande Valley Multibank Corporation’s innovative Community Loan Center Small-Dollar Loan Program. Seed capital will allow TCC to expand this online employer-based loan program to borrowers needing access to credit as an alternative to high-cost payday and auto title loans by signing on and providing support to new mission-based affiliates in and outside of Texas.
TCC is a nonprofit, community loan fund started by Texas Association of Community Development Corporations in 2004. The mission of TCC is to promote economic and community development in low-income Texas communities.
In 2014, TCC partnered with the Rio Grande Valley MultiBank, a federally certified Community Development Financial Institution based in Brownsville, Texas to bring the Community Loan Center (CLC) to other communities after their successful pilot program in the Rio Grande Valley.
The primary role of TCC is to build and support a nationwide network of local lenders through outreach, training, collaboration, financing and technical assistance. Local lenders provide CLC loans which are designed to be affordable to borrowers, requires no loan collateral nor prepayment penalties. CLC borrowers are also offered free, no obligation financial empowerment sessions.
The CLC program is designed to be a sustainable social enterprise. The CLC network has now grown to include 10 local lenders in three states, with several other lenders in the process of getting started. The CLC network has made over 13,000 affordable loans for $11,000,000. Compared to the cost of expensive payday loans, TCC estimates that the CLC program has already saved borrowers $8 million in fees and interest.
“We’re extremely grateful to the NEXT Award funders and OFN for the 2016 Seed Capital Award,” said Matthew Hull, Administrator of TCC. We’ve created a ‘turnkey’ approach to providing an alternative to payday lending that can be easily implemented locally through a growing network of community lenders. The CLC program has the potential to change the design of consumer financial products in our service areas by offering a safe product with a competitive advantage over the prevailing prices of nontraditional consumer finance products. Over the next two years, NEXT Award support will help TCC expand small-dollar lending and empower 8 new CLC community lenders to become sustainable social enterprises-doubling the loan production of the CLC network.”
“Never before has it been more necessary for community lenders to embrace fintech, explore new distribution models, and develop leading-edge, responsible financial products. CLC’s innovative consumer finance strategy proves that community lenders are the next frontier for innovation in responsible consumer finance,” said Fran Lutz, interim CEO of Opportunity Finance Network (OFN), the nation’s premier CDFI network.
OFN presents the NEXT Awards in partnership with Wells Fargo and Prudential and support from the John D. and Catherine T. MacArthur Foundation and the Kresge Foundation.
For more information visit NEXTawards.org.