FALL RIVER, Mass. -
The $230-million Fall River Municipal Credit Union rolled out a unique program last November that offers members loans of up to $1,000 to meet energy costs. The Home Energy Assistance Ten-Month Loan (HEAT) must be repaid within 10 months and is capped at a 5.5% interest rate. Members in good standing as of Nov. 1, 2007 are eligible to apply.
The 10-month repayment period is designed to ensure members are debt-free by the time the next cold season arrives, according to Fall River Municipal Credit Union Consumer Lending Manager Lisa Reid.
The loans are available only during the months of December and January and so far, applications have been light.
“We’ve had several good snowfalls even before the official start of winter, but we’ve only made a few [loans] this year including a couple of requests in the last few days,” Reid said.
Heating costs in the Northeast will average $1,879 this season, a 25% increase over last season according to the U.S. Department of Energy. Heating oil prices in Massachusetts currently average about $3.27 a gallon, a 35% increase over last year.
Although the number of applications for HEAT loans has been relatively light, it’s still early in the 2007-08 winter season. FRMCU has been actively promoting the loan program since it began last fall. “We’ve been sending out flyers in the mail. The newsletter we send to members also outlines the program,” Reid added. “We’ve also had several articles in the local newspapers, so we’ve been getting the word out.”
The state of Massachusetts offers many energy assistance programs that are usually offered to low-income residents. In 2006, the last year data was available, over 173,000 households received energy assistance help according to the Massachusetts Department of Housing and Community Development.
FRMCU’s HEAT loan program is not income-based, but Reid said the CU realized that a need existed to help members who fall into the gray area of income guidelines where they make too much money for state assistance but too little to keep up with the rising costs of fuel oil.
She offered that the HEAT program was conceived during casual conversation among CU employees who wanted to find ways to better help members get through the oftentimes brutal New England winters.
“With the rising price of fuel, we thought a home heating loan would be a perfect fit, a perfect thing to do for our members,” she said. “As far as I know, there are no other credit unions offering it.”
So far, Reid hasn’t seen a noticeable uptick in the number of loans applications and remains cautious about the program’s future. “I really can’t say if we will offer the loan next season,” she said. “The loan program is new and we are taking a wait-and-see approach–we want to see what happens this season first.”
