For Generations Bank in Seneca Falls, N.Y., a promising 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, the $265 million-asset bank's chief executive, got to talking in January with Renee Hance, who works at Seneca Falls Downtown Deli, a spot across from the bank where Case stops 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 recalled. The single mother of three told Case 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 started, she walked the mile from her home, pushing her two-year-old in his stroller.

Hance's hardship spurred Case to talk with the 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 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 told American Banker.

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,'" recalled 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 federal poverty level. 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 said.

Loans typically run between 48 months and carry an 8% rate of interest. That works out to about $153 a month for Hance, who meets regularly with Mary Kinsky, an employment and training counselor in the county's workforce program, to review her budget and career goals. "So far things seem to be running smoothly," Kinsky said.

Generations also teamed up with Eagle Auto Center, a local dealer, which 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 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 said.

Local officials credit the bank with taking an imaginative approach to helping borrowers find a way to afford wheels for work. The officials add that the loan represents more than transportation. "We're looking at the financial stability of families," Peg Birmingham, Seneca County's deputy commissioner of human services said. "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 or whatever the issues are."

Case, a certified public account, says he and Hance used her loan application as an opportunity to get her financial plans into shape. "We went through her tax returns and improved her situation," Case recalled. 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 said.

While talking, Hance detailed for Case her transportation needs. "I called Eagle and asked them for a four-door sedan," Case says. "It's a used car, which is why you want a reputable dealer and that two-year warranty." Other dealers have asked Generations how they can join the program. "Just give me a two-year warranty, and you get into it," Case said he tells them.

Hance drives her Taurus to and from work. Having a car enabled Hance to extend her hours and to 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 Walmart and do all my shopping instead of a bag at a time here and a bag at a time there," Hance said. She recently drove all three of her children to the mall for an Easter egg hunt.

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