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St. Vincent de Paul Society’s alternative to payday loans

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It’s your money and you should have it now. That’s what many quick loan companies want their customers to believe. But those who take out a loan often have a much different experience.


During her years in the St. Vincent de Paul Society, Laurie Trainer and her fellow volunteers have assisted many families in need of food, clothes and emergency funds. But occasionally, before someone turns to charity, they go to a payday or car title loan company.


“It doesn't happen daily but it’s some of the saddest cases we see,” said Trainer. Occasionally the borrower’s inability to pay off the original debt coupled with the high interest rates leaves them unexpectedly owing much more than they borrowed.


“They feel like they have no choice. They’ve got to get their car fixed so they take out a payday loan and then because they have no safety net, the already high-interest rate goes up more and it just spirals,” said Trainer, a parishioner of Our Lady of Good Counsel Church in Vienna who heads the parish’s St. Vincent de Paul outreach. “They have to put food on the table so eventually (the company) repossesses their car or they lose their next paycheck.”


In 2014, the Arlington District Council of St. Vincent de Paul Society began looking into the issue. In February, the group launched the Alternative Loan Program. People who qualify will be eligible for a loan of up to $1,000 to escape debt due to a payday loan. For people who need help with housing utilities, or medical bills, “we’ll still administer our assistance program,” said George Degnon, chairman of the loan committee.


Loans also will be available for people who will put the capital toward a business opportunity. “For people who have a dream, we want to give them a hand up,” said Degnon.


Eight St. Vincent de Paul conferences, typically parish-based groups of volunteers, are participating in the program: Our Lady of Angels Church in Woodbridge; All Saints Church in Manassas; Holy Spirit Church in Annandale; Our Lady of Good Counsel Church in Vienna; St. Louis Church in Alexandria; the Basilica of St. Mary in Alexandria; St. John the Evangelist Church in Warrenton; and St. Timothy Church in Chantilly.


To help run the program, the council partnered with Apple Federal Credit Union, which has several branches around Northern Virginia. “(The society) will maintain deposits at Apple Federal to serve as security for loans to borrowers whom the society recommends,” the group said in a press release. An interest rate of 3.1 percent will be retained by Apple Federal to cover administrative costs of the program.


Borrowers are required to take a budgeting class before qualifying for a loan, and can repay at a rate of just $25 a month, said Degnon. “We think that's doable and we want them to succeed,” he said. The council is soliciting donations to increase its loan budget, but is hopeful that the money they loan out will be recycled back into the fund. “These dollars ideally will live on many years into the future,” he said.


Degnon is excited to help the working poor so they won’t choose payday loans. “There's a stereotype that the poor are lazy, but so many of the people we help are working three jobs — a full-time, part-time and another part-time job for weekends. It's just amazing,” he said. “When you have that level of income you can’t get ahead and it's very tragic.”


Trainer is grateful volunteers will continue meeting immediate needs while providing a route to long-term financial security for many. “The loan program could take a family always in poverty to a position where they can survive and thrive,” she said. “We believe systemic change is so important.”


Learn more


To make a donation to the Alternative Loan Program, send a check to St. Vincent de Paul Society, 6728 Old McLean Village Dr., McLean, Va. 22101. To apply for a loan, contact the St. Vincent de Paul Society at a participating parish. 


© Arlington Catholic Herald 2018