A new business coming to Delaware is looking to improve the financial literacy of low-income citizens, which will hopefully keep them away from predatory lenders.
Nonprofit Capital Good Fund, founded by Andy Posner, to open office in Wilmington to help residents gain financial independence and steer them away from payday loans, auto title loans and elective leasing programs purchase.
“Delaware is a state that has a particularly strong payday lending lobby and industry in 2018, 75,000 residents took out a payday loan or similar type of predatory product,” Posner said. “The average interest rate – and I had to check this – is over 500% over there. You can get a payday loan of up to 3,600% in the state of Delaware. “
Capital Good Fund provides loan services to those with less than perfect credit between $ 300 and $ 25,000 for a “variety of things,” from coverage for vehicle purchases to immigration expenses and emergencies. They also have relief loans in response to COVID-19.
“The Crisis Loan goes from $ 300 to $ 1,500, it only has a 5% interest rate, a three month deferral period upfront, then 12 monthly payments,” Posner said. “This is reported to the credit bureaus so that you can build your credit, and our borrowers can use it for the things they need … rent, utilities, security deposits, vehicle repairs, food, clothing, etc. . prepared to make hundreds, if not thousands of loans in Delaware for this. “
Delaware U.S. Senator Chris Coons was instrumental in moving the company to the first state following a chance meeting with Posner in 2015.
“We are currently in the midst of three different crises. [Capital Good Fund’s] work more relevant than ever. We are of course suffering from the biggest public health challenge in a century, ”Coons said Thursday. “The pandemic that has shut down so many states and so many of our economy and put millions of people out of work. We had over a million new jobless claims just over a week ago, and I was trying to figure that out. It is as if the entire state of Delaware filed for unemployment on the same day. This had a particularly strong impact on black and brown communities, on those on the fringes of our society. And there is a renewed national focus on equity, on the ways in which there is inequitable access to health care, education and capital. “
Of particular interest to Coons was Capital Good Funds’ work to fight payday loans, which Coons said he saw during his work at the Delaware County level.
“In my work with the I Have a Dream Foundation, during my tenure in county government, I – on several occasions – saw how Delaware workers were paying exorbitant rates for things like payday loans or renting with option to buy, or car title loans, “Coons said.” Before the pandemic, study after study showed that more than half of Americans had no effective cash, they had no real cash. savings for a crisis for a large burning appliance, or for an upcoming utility bill, family illness or unforeseen death where they had to pay for the funeral. Now, with 180,000 Americans dead from COVID-19, the number of working families who have had to pay unexpected burial fees has skyrocketed. Now, with 55 million Americans filing for unemployment at some point in the past six months due to a failed federal response to this pandemic, they have had these unexpected costs and it has thrown millions of dollars away. Americans in a debt trap from which they often cannot escape. “
Capital Good Fund currently operates in Rhode Island, Florida, Massachusetts, Delaware and Illinois. To verify eligibility, visit CapitalGoodFund.org.