For generations bank in seneca falls, N.Y., a promising new program to help low-income residents of the Finger Lakes region buy cars to get to and from work began at a coffee counter.
That's where Menzo Case, CEO of the $265 million-asset bank, got to talking in January with Renee Hance, who works at the Seneca Falls Downtown Deli, a spot across from the bank where Case stops in frequently to eat.
"We were warming up over a cup of coffee and I was freezing and Menzo asked me why I was so cold," Hance says.
The single mother of three told Case that she had been taking the bus to work because she had been without a car since her last one caught fire last year. On mornings when Hance had to be at work before public transportation service started up for the day, she walked the mile from her home, pushing her 2-year-old in his stroller.
Hance's hardship spurred Case to talk with county officials, who told him they had been looking for a way to make cars affordable for low-income residents since the state stopped funding a similar program several years earlier.
Back at the bank, Case asked Shannon Clements, a credit analyst, to assemble financial information for a program that could make auto loans to borrowers who took part in a county-sponsored workforce training initiative but whose credit histories made getting a loan difficult. "She did the analysis, made the business case and we put it into place," Case says.
Generations dubbed the initiative the Affordable Transportation Program, which launched in February with Hance as its first borrower.
"I said, 'Show me where to sign, I'll do it,'" says Hance, who borrowed roughly $6,000 through the program in February to buy a tan 2006 Ford Taurus.
As part of the program, the county's workforce development office screens applicants, whose incomes cannot be more than twice the cut-off for the federal poverty line. Last year the benchmark was $23,050 for a family of four. The county helps borrowers prepare a budget to make sure they can afford to repay the debt. "If they meet the qualifications, we'll do the loan," Case says.
Loans typically run for up to 48 months and carry an 8 percent rate of interest. That works out to about $153 a month for Hance, who, as part of the program, reviews her budget and career goals in regular meetings with Mary Kinsky, an employment and training counselor for the county. "So far things seem to be running smoothly," Kinsky says.
Generations also teamed up with Eagle Auto Center, a local dealer. Eagle offers a two-year warranty on the vehicles, although borrowers can buy a car from the dealer of their choice.
Case says he anticipates the program, which has made only one loan so far and has an application for another pending, will attract about 20 borrowers a year. He says Generations aims to make the program financially self-sustaining. "We're hoping that other counties will glom onto it and work with us on it," Case says.
Local officials credit the bank for more than just helping borrowers find a way to afford wheels for work. "We're looking at the financial stability of families," says Peg Birmingham, Seneca County's deputy commissioner of human services. "So when this car dies, they have a credit rating for the next one—or even a credit rating as their income improves to buy a home."
Case, a certified public account, says he and Hance used her loan application as an opportunity to go through her tax returns and get her financial plans in shape. After some figuring, they realized Hance could boost her take-home pay by adjusting her withholding for taxes.
"Having that extra $45 a week in my check is phenomenal," Hance says.
It was Case who called Eagle to help her find the four-door sedan she needed. "It's a used car, which is why you want a reputable dealer and that two-year warranty," he says.
Now Hance drives her Taurus to and from work each day. Having a car enabled her to extend her hours and ease her life. "I can stay later at work or arrive early without having to wait for a bus, to take my child to a doctor's appointment, to just go to Wal-Mart and do all my shopping instead of a bag at a time here and a bag at a time there," Hance says.
Case reports that other car dealers in the area have since asked Generations Bank how they can join the program, too. "Just give me a two-year warranty, and you get into it," Case says he tells them.