Innovative STL Pilot Program Puts Workers Behind the Wheel Affordably
Date Posted: March 1, 2022
Posted In: Discussion, Ideas, Organizations, Workforce,
At Construction Forum’s Dec. 2 working session on creating systems to build a diverse construction workforce, attendees identified the lack of transportation as one of the primary barriers to workforce entry. A new pilot program promises to help address that issue.
Non-profit Justine PETERSEN and NISA Charitable Fund are partnering to address the impact of high-interest car loans for drivers in Greater St. Louis with challenging personal credit scores.
Steve Faust, director of diversity and business development for icon Mechanical and a member of Construction Forum’s board of directors, praised the Justine PETERSEN/NISA project. “Affordable, reliable transportation is just one of the barriers to gaining access to opportunities,” he said.
“Without transportation needs being met, the number of employment options are severely limited and in turn the potential to build economic equity in our region,” Faust stated.
DRIVE Program
As one of the nation’s leading credit building organizations and community development financial institutions (“CDFIs”), Justine PETERSEN launched a pilot, auto loan refinancing program called DRIVE with wrap-around financial credit counseling with the collaborative support and a $250,000 investment from NISA Charitable Fund.
“Research (from the St. Louis Federal Reserve) shows that those with subprime credit in St. Louis are paying an annual interest rate of approximately 20% for their auto loan, which consumes a disproportionate share of their monthly income,” said Robert Boyle, founder and CEO of Justine PETERSEN.
“Low- to moderate-income households can stretch their dollars if they work with a CDFI to rein in their high-interest auto loans and participate in a comprehensive credit counseling program. With NISA Charitable Fund’s vital financial and operational support, the initial results of our pilot program are encouraging, and we hope to expand our partnership base and participant pool during the second half of the year.”
The DRIVE pilot program enables selected participants to refinance their auto loan at an attractive annual interest rate of six percent, representing significant monthly savings. Individuals also receive a personalized credit action plan to help repair their credit score.
More Money to Meet Expenses
Recently, Katherine Faulkner, a DRIVE participant, refinanced her car note with a DRIVE loan, lowering her annual interest rate from 20.35% to 6%, saving over $120 per month. “It was a great change for the better,” stated Ms. Faulkner, “I have the joy of knowing that I am no longer paying all of that interest on my loan, and now I have more money in my pocket to meet my other monthly expenses.”
“This is precisely the type of meaningful impact we want to achieve in our collaborations with community organizations in St. Louis,” said David Eichhorn, CFA, NISA’s CEO and head of investment strategies. “Our work with Justine PETERSEN is about yielding tangible, scalable results and remaining true to NISA Charitable Fund’s mission to support organizations that are improving access to capital among traditionally underserved groups in St. Louis.”
Justine PETERSEN is a nationally recognized financial asset-building non-profit organization based in St. Louis, MO. As a leading community development financial institution (“CDFI”), HUD-certified housing counseling organization, and US Small Business Administration (“SBA”) microlender, Justine PETERSEN offers financial products and services that build assets and change lives. Learn more at www.justinepetersen.org.
NISA Charitable Fund’s mission is to promote equity in St. Louis among underserved populations by supporting organizations focused on creating systematic change in education, access to capital, and workforce development. Its strategy is founded on the belief that improvement in critical foundational areas can lead individuals toward greater financial independence with a multiplier effect that can change the trajectory of the next generation. The fund is a donor-advised fund established in April 2020 and funded by NISA Investment Advisors, LLC, with operational support by St. Louis Community Foundation.