Texas Community Capital
FOR IMMEDIATE RELEASE
August 17, 2016
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.
About the Awards
The Wells Fargo NEXT Awards for Opportunity Finance celebrate the CDFI industry—its creativity, accomplishments, and enduring importance.
This year marks the 10th anniversary of the NEXT Awards. Launched in 2007, the NEXT Awards celebrate the innovation of the nation’s most promising CDFIs by awarding more than $76 million through a competitive awards process. Each year the NEXT Awards culminates in a ceremony at OFN’s Annual Conference to spotlight Awardees and the entire CDFI industry.
About the Groups behind the Awards
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries and territories to support customers who conduct business in the global economy. With approximately 268,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with over $1 trillion of assets under management as of June 30, 2016, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.
The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions, and influential networks building a more just, verdant, and peaceful world. MacArthur is placing a few big bets that truly significant progress is possible on some of the world’s most pressing social challenges, including over-incarceration, global climate change, nuclear risk, and significantly increasing financial capital for the social sector. MacArthur has been a leading supporter of the Opportunity Finance field since the early 1980s, investing nearly $250 million in approximately 100 groups nationwide. More information is available at: www.macfound.org.
The Kresge Foundation is a $3.6 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and social investing in arts and culture, education, environment, health, human services, and community development in Detroit. In 2015, the Board of Trustees approved 371 grants totaling $125.2 million, and nine social investment commitments totaling $20.3 million. For more information, visit kresge.org.
Opportunity Finance Network (OFN) is the leading national network of community development financial institutions (CDFIs) investing in opportunities that benefit disinvested communities across America. Through 2014, OFN's network originated over $42 billion in financing in urban, rural, and Native communities, with a net charge-off rate of less than one percent. For more information, visit ofn.org.