BROCKTON, Mass. -- The $1.4 billion HarborOne Credit Union has inaugurated what it calls a "Multicultural Banking Center" to fight predatory lending among lower income and immigrant communities.
Credit Union President and CEO James Blake said HarborOne created the center and that the growing foreclosure crisis in the country gave the measure increased impetus. Nationally, there were 1.2 million foreclosure filings in 2006, a 42% increase over 2005. That represented a rate of one foreclosure for every 92 U.S. households, the CU said.
The center, believed to be one of the first of its kind in the nation, will help people avoid mortgage gimmicks that have helped fuel the foreclosure crisis, which has severely impacted the Brockton area. The center is also designed to help move people into mainstream banking products and away from payday lending, expensive check cashing services, unscrupulous pawnshop owners and rent-to-own vendors.
"We are very concerned about the reliance of these individuals upon highly expensive, abusive and often predatory practices," Blake said in announcing the effort. "Low-income residents, minorities and immigrants have fallen prey to these predators because of lack of information and lack of trust in the traditional financial system."
The center will offer courses in the basics of personal finance, credit counseling, first-time home ownership, foreclosure prevention, and other subjects. Because many of the victims of predatory financial practices have a limited understanding of English, these courses will be taught in Spanish, Portuguese and French in addition to English. English as a second language courses will also be offered.
"You see advertising all the time for mortgages with ridiculously low monthly payments," Blake added. "The teaser rates are tied to indices that re-price after two years. Many people who take these loans don't fully understand what they are purchasing. They are destined for foreclosure the moment they sign the loan documents."
The center's opening was attended by Massachusetts Commissioner of Banks Steven Antonakes and Brockton Mayor James Harrington. Both of whom put the opening of the new center in the context of the struggling Massachusetts communities.
HarborOne will use its former executive offices in downtown Brockton. Former offices in this location will be converted into classrooms and meeting space. A hands-on computer lab will provide basics in technological literacy and local nonprofit agencies will also have access to the center to offer programs outside of the financial classes offered by HarborOne. The center will be renovated over the summer and is expected to open in September. The branch will remain open with newer hours to better serve the community and will not be affected by the construction.
The classes at the center will also be coupled with special loan and checking products. Those who complete the courses will have access to a checking account, a guaranteed $500 line of credit, and specialized loans and other products.