Hoping to build good will, a Kansas bank is offering low-interest loans to help laid-off workers make ends meet.
Union National Bank in Wichita made its offer after some of the area's biggest employers, including the Boeing Co. and Sears, Roebuck and Co., said they would be trimming their work forces.
"We have seen these kinds of situations happen before in our market area, and we felt that if we could assist people in getting through temporary tough times, they would remember that we were there when they needed somebody," said Stephen P. Kammerer, head of retail lending at the $550 million-asset bank.
"We would like to think that those folks would come and bank with us in the future."
To make people aware of the program, the bank took out a full page advertisement in The Wichita Eagle the day before it began.
Those who recently have become unemployed are eligible for unsecured loans of up to $2,500 at a 9.9% fixed interest rate. Borrowers have six months before they must make the first payment, and are required to pay the rest over a 24 month period.
The bank earmarked $1 million for the program, which began in April. Mr. Kammerer said that $375,000 of that total was dispersed the first month, in 150 loans.
To qualify, borrowers must prove they have been laid off from one of the area's companies. Usually the bank accepts a notice of termination as proof, although it sometimes makes calls to previous employers.
In addition, borrowers' credit histories must pass muster. The bank uses local credit bureau reports to determine eligibility. The bank's approval ratio has hovered between 60% and 70%, Mr. Kammerer said.
"It is not a handout program by any means," he said. The program will also help the bank's rating under the Community Reinvestment Act.
While the program is not a money maker, it has garnered considerable - and favorable - press.
Articles about the loans also appeared in the Eagle and the Wichita Business Journal and on three local radio stations.
"We were trying to make a statement that, if necessary, we will lead the charge; that everybody has to band together to get through these down times," said Mr. Kammerer.
Boeing Cutting 6,000 Jobs
Wichita's economy is heavily reliant on the aerospace and energy industries.
Just this year, Boeing - the largest employer in Kansas - announced that it would trim up to 6,000 workers in Wichita alone.
Sears' decision to fold its catalogue will result in 1,700 layoffs at the Wichita Telecatalog Center, and the closing of a Coastal Corp. oil refinery will cost the city more than 200 jobs.