Lindley Dupree spent most of this year planning a series of financial literacy classes for Flathead residents who have gotten into money troubles. So it confirmed for her that a need for the class existed when she learned some of her most vulnerable clients – many of whom were homeless not long ago – were being aggressively marketed by payday lenders for high interest, short-term loans two weeks before Christmas.
On Dec. 12, plastic bags filled with fliers advertising Advance America Cash Advance were hung on the doors of Courtyard Apartments, on Airport Road in Kalispell. Sixteen apartments there are transitional homes for people working out of homelessness. The other sixteen are permanent low-income housing. The yellow plastic bags contained balloons, pens, matches and coupons to a local pizza restaurant – along with a brochure encouraging the reader to visit Advance America for a loan of $100 or more. Advance America currently charges 521.4 percent annual percentage rate (APR), which works out to a $120 total payment after two weeks for a $100 loan.
Dupree is the development director for nonprofit Northwest Montana Human Resources, which owns half of Courtyard Apartments and manages them. She emphasized that Advance America’s offers are legal, but questioned whether it is appropriate to market such loans to disadvantaged people at this particular time of year.
“People tend to be a little short and listen to these kinds of offers,” she said. “It does bring home the need for people to know that there are choices.”
Dupree designed her “Free to Choose” classes as a way to help people with money woes, or those just starting out, learn how to navigate the financial world and make basic economic decisions. The ten-week evening courses provide childcare, dinner, and pair students with volunteer mentors from local financial institutions. Upon completion, students are eligible for a $300 line of credit from Park Side Credit Union to repair credit history or begin on the right foot.
“This is the first time anybody’s tried a program of educational support and credit access,” Dupree said, and she has been shocked by the number of people clamoring for a spot in the class. As of last week, the session beginning in January is full, and the second course beginning in April is filling up fast.
Dupree estimates half of the students, some of whom live in Courtyard Apartments, enrolled in her course have gotten into trouble with payday lenders and she has talked to several students who have had to get one payday loan to pay off another.
Alta Travassos, manager of Kalispell’s Advance America, declined to comment for this story, directing inquiries to Jamie Fulmer, director of investor relations. Fulmer said he could not comment on marketing payday loans to transitional housing in Kalispell.
“This is the first I’m hearing about it,” Fulmer said. “I don’t want to discuss the details of something I don’t really know the facts of.”
But Fulmer said the average Advance America borrower was not economically disadvantaged, describing them as “hard-working, middle-income folks.” Their borrowers’ average income is $41,000, he added, and 90 percent have a high school education. Half of Advance America’s borrowers have college educations, credit cards, and bank accounts elsewhere, Fulmer added. Advance America’s loans are intended to help people out of a tight spot, and the high interest rates often cost less than a bigger bank’s penalties for bouncing a check or overdrawing an account.
“Certainly our product is designed to bridge that gap,” he said, “Not to make their financial situation worse.”
For her part, Dupree hopes the people in her class learn the tools to become financially stable enough to not have to borrow from payday lenders, which are proliferating in Montana.
“They’re not going to miss the people I pull away from them,” she said.