High interest rates that many Memphians pay for car loans help keep them in poverty.
Tom Bailey / The Commercial Appeal
Half the city’s banks, which normally battle each other for customers, will do something rare Saturday: Join forces to host a money fair to help Memphians improve their credit scores and address any other financial issues they may have.
The free “Better Credit, Better Communities” event will be 10 a.m. to 1 p.m. in Fellowship Hall at Mississippi Boulevard Christian Church, 70 N. Bellevue.
It’s not unusual for a bank or nonprofit organization to host a free fair on such topics as financial literacy, credit counseling or home ownership. But Saturday’s event will be unusually large with its resources and staffing because 13 of the city’s 25 banks are working together to host it.
“Where someone can come and probably get just about any question answered or direction on where to find the type of information they need for their specific issue,” IBERIABANK’s William Stemmler said.
“Whether it’s credit repair or trying to buy a house … looking at their situation to let them know how long it may take before they can buy a house,” said Stemmler, who is IBERIABANK’s vice president for business development and Community Reinvestment Act liaison.
The event will be different in another way: The financial experts and counselors are not going to tout home ownership for folks whose financial stresses make owning a home unrealistic.
“We’re not going to cram housing down your throat,” said Gerre Currie, community development officer for Financial Federal Bank. “… Everybody doesn’t necessarily want a house, and everybody doesn’t necessarily need a house…
“Let’s move the needle on your credit to get you to the point when you’re ready to buy a house and you have the necessary tools and the necessary education and the credit score to buy a house.”
A more pressing issue for many Memphians involves their car: Either lacking a vehicle to get to work or being saddled with a high-interest auto loan.
Currie described an example of what banks often see. “Someone has gone to buy a car that probably has a value of $15,000 that they paid $20,000 for at an interest rate of 18.99 percent for six years,” she said. “I’m saying they paid too much.
“Please understand, I’m not slighting anyone,” she said. “… They go in with a desire to purchase a car. In their mind, their credit is not where it needs to be, but the end game is if they leave with a car they are a happy camper.”
Competitors working together
The participating banks came together last year by forming the Memphis Area Community Reinvestment Act (CRA) Association. The 1977 law requires all banks to try to meet the credit needs of low- and moderate-income residents.
So far, member banks are: BancorpSouth, Financial Federal Bank, First Tennessee, IBERIABANK, Pinnacle Financial Partners, Paragon Bank, Patriot Bank, Renasant Bank, Regions Bank, Simmons Bank, SunTrust Bank, Trustmark Bank and Tri-State Bank.
“We’re all competitors,” said Keith Turbett, First Tennessee’s CRA officer. “But in this investment space, we try to work together to discuss what are the issues out there.”
The Memphis CRA Association last year hosted a “Shark Tank”-like event in which leaders of nonfprofits could tell a dozen banks at once about their programs and loan needs.
In October, association members will take a bus tour of low- and moderate-income neighborhoods.
“It’s not enough to say we’re doing lending in low- and moderate-income areas,” said Currie, who is secretary of the Memphis CRA Association. “You need to know where they are and what they look like and see those spaces and give flesh to what it is.”
The mission of Saturday’s event — to help Memphians improve their credit — is in the best interest of both the low- and moderate-income families who choose to take advantage and of the financial institutions.
Twenty-seven percent of Memphians live below the poverty line. That essentially limits the potential customers with loan-worthy credit scores to 77 percent of the city’s population.
“You are just cutting up the pie into smaller pieces when you remove the 27 percent who live below the poverty rate,” Stemmler of IBERIABANK said of the status quo for Memphis banks. “Chances are they will have a hard time qualifying for a loan.”
Hillis Schild, president of the Memphis CRA Association and Regions Bank community affairs specialist, said in a prepared statement, “We want to support our customers’ dreams, whether a car, a home, a savings account, or simply reduced financial stress.
“It is our job to introduce tools and frameworks to make these dreams possible.”
For more information about Saturday’s event, search eventbrite.com for “Better Credit, Building Communities.”
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