Community embraces debt education course
Free to Choo$e classes filling fast
Last week, a local payday loan company blanketed federally subsidized apartment complexes in Kalispell with decorative door hangers, free trinkets and tempting offers of cash before Christmas.
Marketing payday loans to low-income people isn't illegal, but it's exactly the kind of snare Lil Dupree hopes Northwest Montana Human Resources' new Free to Choo$e program will teach residents to avoid.
"This friendly marketing can trap people in a cycle of debt," said Dupree, development director and program manager for the Free to Choo$e initiative. A company offering $300 payday advances "strikes me as a little more than predatory, especially the second week in December."
Dupree contacted the loan firm, which apologized for targeting the subsidized housing, and the human-resources agency is having bigger "no soliciting" signs posted at the housing complexes.
The response to Free to Choo$e has been overwhelming, indicating a real need for consumer credit education, she said. The program is designed specifically to empower people to take charge of their economic future and lead financial lives of choice, not necessity.
The 10-session course set to begin Jan. 24 is already full, and a class planned for April 2008 is filling fast. It is a low-barrier course, with dinner and child care provided, a youth class and a teen/adult class. The cost is $5 per week for a single person or $10 per week for a family.
As participants complete the course, families will each be matched with a volunteer financial mentor to provide support for at least one year as the family puts theory into practice and addresses the problems or barriers that are keeping them in poverty.
Their mentors, financial professionals in the community, will be available to help them build a better future, whether it starts with a plan to buy a car, pay off debt, build credit or save for a personal goal. Mentors can answer questions, help with budgeting and strategize on goals, providing whatever support that family needs.
"This is economic development at its most fundamental level," Dupree said.
The education and support of Free to Choo$e will be supplemented with critical tools for financial success. Through a partnership with Park Side Federal Credit Union, adults participating in the program will be able to open checking accounts regardless of their past banking history, and will be given access to $300 lines of credit, the same amount that payday lenders offer in Montana, but at normal market interest rates.
The idea, Dupree said, is to
provide an affordable alternative to high-interest loans and help clients build a credit history as they use and pay on their lines of credit.
"I was off in my prediction of why people would want to come to this course," she said, adding that she had thought it would be driven by the $300 line of credit or by referrals from financial institutions. "It's entirely about the education component. People can't figure out how to get out of debt. And they can't do a darn thing unless you provide them with the tools."
Jeremy Presta, president and chief executive officer of Park Side Federal Credit Union, said the credit union's partnership in Free to Choo$e fulfills its social mission "of people helping people and truly getting involved in our communities at a grassroots level.
"By helping these participants feel more confident in their ability to make sound financial decisions, we hope that this effect will carry over into their everyday lives and in the end make our communities that much better," he said.
Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com