Human resource managers are fully aware that when employees are stressed financially, their health and productivity may suffer. Employers are reporting more financial challenges among employees today than five years ago and are seeing these challenges reflected in the day-to-day operations of their workplace.
While the Legislature has debated issues of payday loans and new installment loans in bills like SB 613 over the past couple of years, a little-known entity is trying to make a difference in the financial lives of employees in a three-region area. Community Loan Centers (CLC) of northeast, northwest and west central Indiana, covering 30 counties, is providing small loans to employees whose employers have enrolled in the program.
When an employee at a participating employer needs a loan, they apply by going to the CLC web site for the servicing area where their employer is located. After the employer verifies employment, the employee signs the CLC loan documents online. CLC loans are transferred directly into the borrower’s bank account. Loan repayments begin on the employee’s next payday through a payroll deduction.
The non-collateralized loans are for up to a maximum amount of $1,000 for one year, with interest rates at 18% and a $20 origination fee. The loans have no prepayment penalties. There are no additional fees to the employer beyond the cost of administering the payroll deduction.
Participating employers are providing an employee benefit that may reduce financial stress. The program also provides free financial counseling to the employees that borrow from the program.
While the state is covered by three CLC service areas, those in central, east central and southern Indiana currently have no provider. As is stands, a not-for-profit entity must have two years of lending experience to recruit employers to participate and provide loans to employees.
Resource: Mike Ripley at (317) 264-6883 or email: [email protected]