Although we often hear talk about the current state of our economy—the recession, unemployment, foreclosures, and bankruptcies, the tangible ways in which families are affected seems to be the single best yardstick to measure the losses. Recently a woman came into our branch looking for an auto loan. Because of the economic downturn she and husband declared bankruptcy three years prior. Before their financial struggles began, this family earned a higher income and enjoyed what they thought was a secure and stable lifestyle. This woman came to us in very humbled state and expressed two simple needs: first was her need to buy a used family car, and second, perhaps most important, was her need to rebuild her credit.
When financing auto loans we review what we call the 5 C’s: character, capacity (debt to income ratio) capital, collateral and condition. Although it was clear her biggest challenge in getting approved would be her credit, I was also able to weigh other things as a highly influential factor. It quickly became evident that she was a person of character, integrity, and that the loan to value of the vehicle presented little risk in the loan. Ultimately, we were able to approve her for the loan she needed, her first approval since filing for bankruptcy. Having a reliable vehicle for herself and for her family was important; it was a tangible need; however; getting the opportunity to rebuild her credit meant a lot more to her, and the benefits of that, would surely outlast any vehicle.
I am happy to say that she is now a member of our credit union. Not only did she open a checking and a savings account for herself, but her positive experience and excitement impelled her to refer her 19 year old son, who also opened a checking and savings account with us; her brother, who refinanced his vehicle; and most surprisingly, the salesman who sold her the used vehicle has begun the process of applying for an auto loan at UCCU as well.
Despite the sometimes bleak talk about the economy and financial institutions’ inability to lend money, we were able to find a way to meet our member’s need. We helped to restore her confidence and regain some control over her now optimistic financial future—in the process we gained a satisfied new member.
Story by: Kyle Brinkerhoff,
Assistant Branch Manager
American Fork Branch