New Member Feature: Daryl Brooks of Stellar Building & Construction

Daryl Brooks, owner of Stellar Building & Construction, has been a carpenter/ carpenter contractor for the past 25 years, and he’s been involved in the rough carpentry of over 30,000 units. He has worked on many Low-Income Housing Tax Credit (LIHTC) projects, but was never involved in putting the deals together himself.

In order to do just that, Brooks became a CEDAM member and attended the Building Michigan Communities Conference (BMCC) this past May, where he was able to network and build a foundation of affordable housing knowledge.

One month later, CEDAM’s Real Estate Development Boot Camp proved to be another important catalyst for action. The four-day training, which covered site selection, legal structures, development teams, proformas, financing and more, ended with attendees pitching realistic project proposals to a funding panel comprised of people who review and fund affordable housing development projects. 

“It would be nearly impossible to put together a deal that would have a chance of being approved without this [bootcamp] training,” Brooks said. “To have had so many people from the industry there, who look at projects everyday, it was invaluable. The feedback that we received and the interaction with all of the panel as well as the others attending was priceless.” 

Daryl and the rest of his team present to the funding panel at Real Estate Development Boot Camp on June 8, 2018

Daryl and the rest of his team present to the funding panel at Real Estate Development Boot Camp on June 8, 2017

Brooks has worked hard this summer to network and gain more knowledge about the process, much of which has come from actually pursuing development projects in Flint, where his revitalization efforts are targeted. He’s making headway, closing on a new building sometime next week, and is currently working on an office space. When it comes to housing development, he is facing a few roadblocks, but he refuses to be discouraged.

“We’re not the kind of people that take no for an answer very easily,” he said.

At the end of the day, he’s pursuing the developer route because he’s determined to focus on the community. It’s important to him that projects aren’t profit driven. He wants to give weight to the community, and think about how one can impact it positively by creating jobs. He wants to create good, decent living spaces, and a nice community that will integrate well within the existing area.  

In addition to pursuing development projects, Brooks and his daughter Alexandra are in the process of starting a nonprofit organization in Flint as well.

A main focus of the new organization will be a training program that leads to jobs in the Skilled Trades industry — and he’ll be pushing to get more women and minority groups that are often excluded from the trades to be a part of the program.

It’s clear to Brooks that he needs more workers, not more work, and the best way to go about that is to streamline the process and train people himself.

He wants service to be a focus of the nonprofit as well, hoping to help neighborhoods through garbage clean-up, overgrowth maintenance and sidewalk improvements.

“We’re going to try to see what we can do with partnering with the nonprofits up there to help reclaim the city, to renovate, to revive it,” Brooks said. “It’s a lot on the plate. We’re still trying to get people on our board who can see this vision of what it’s going to be and then we obviously want to meet with the community groups and we’d like people from the community… We’d like people in the community to have a voice to say you know, ‘we think that would be best’. It’s their neighborhood, we’re the new guy on the block — we just bought a place, we just moved in.”

Brooks is continuously trying to prove himself, to show people that he’s the guy to work with.

“We’re not bringing this one and done thing. We’re bringing jobs that people can have for an extended period of time. We’re bringing a totally different game that nobody has seen yet.”

It’s a busy and hard road ahead but, as Brooks said: “If it was easy, everybody would be doing it.”

Storytelling: Crafting Your Message for Digital Platforms (A DVC Session Preview)

If you’re an organization working in community development or financial capability, it might feel like you’re constantly being reminded of the importance of storytelling. You know our industry should be talking about its work — specifically about the communities and people you serve. People enjoy reading about people after all, and the benefits are often practical: from securing grants to increasing your number of donors, telling a compelling story has the power to help you meet your goals.storytelling_pexels

With an influx of resources like blogs and webinars helping you to craft the perfect message, why is it then that integrating storytelling into your marketing or content strategy is so difficult to put into action?

It is likely difficult for numerous reasons, and all of them can seem like unwavering barriers. Time, money and people may all be limited resources. Your organization’s energy may be entrenched in ground work — it’s easy to forget or not have time to share what you’ve accomplished.

But for every challenge you face, CEDAM’s job is to find you a solution.

This year at Destination: Vibrant Communities and Financial Empowerment Summit, Troy Anderson, Communications Associate at CDAD, will address these issues and provide you with practical solutions in his session Storytelling: Crafting Your Message for Digital Platforms.

Anderson graduated from Michigan State University with a degree in Urban & Regional Planning (with a focus in Community Development) in 2014. Video production, however, had always been a hobby, and his interest further materialized during his time in college. He saw how powerful the medium could be after watching a documentary produced by his roommate, and he started to bring both photography and video production into his work at his community development internships. He and his college roommate started an LLC through The Hatch, a student business incubator, that they still own today, and have produced work for clients like Ford, Fox Sports Detroit, distilleries and breweries, musicians and more.

Photo Credit: cdad-online.org

Troy Anderson, Communications Associate at CDAD. Photo Credit: cdad-online.org

Anderson has the unique opportunity to continue with both community development and photography and video production work at CDAD.

“There are compelling and important stories to tell in community development in Detroit,” Anderson said. “Community Development in Detroit, from a larger scale, tells the story of the state of the neighborhoods, the issues that residents are dealing with and the solutions that community development corporations, nonprofits, residents and block clubs are coming up with to meet those challenges.”

In his DVC session, the goal is to give conference attendees concrete, practical, low-cost ways to tell their own important stories.

“Being able to effectively tell your story and get your message out there is not necessarily tied to a big budget marketing strategy or engagement with an outside consultant,” Anderson said. “There are steps that organizations with smaller capacities can take to get their story and their message out there.”

You won’t want to miss this session that will look at Anderson’s own production process which will then get broken down into how you can use the same principles and messages on a scale that works for your organization. You’ll walk away from this hands-on session with the confidence to shoot compelling photos and videos, a better understanding of how to tap into your audience and the tools needed to tell your message.

Learn more about Destination: Vibrant Communities & Financial Empowerment Summit

Passing the Baton: VISTA Leaders Reflect on the Past Year and Look Forward to the Next

Before Stevie Chilcote started her year of Service as a VISTA Leader, CEDAM’s sole AmeriCorps program was the Michigan Financial Opportunity Corps (MFOC), run by Rachel Diskin.

From running the MFOC and working closely with the Michigan Rural Council, it was realized that there was a need for capacity building in rural nonprofit organizations. In an effort to support nonprofits serving rural communities, CEDAM applied and was awarded to host the Rural Opportunity VISTA program.

That’s when Chilcote, CEDAM’s first VISTA Leader, came in to support Diskin’s work and manage CEDAM’s new VISTA program.

Diskin asked Chilcote to revamp many of CEDAM’s processes, such as the member and supervisor handbooks, monthly report and timesheet tracking and to improve CEDAM’s recruitment and retention skills. Where Chilcote really excelled this past year, Diskin noted, was in her relationships with VISTA Members.

“It can be difficult to build relationships across the state, but I could tell that the VISTA Members relied on Stevie and trusted her to support them when needed,” said Diskin.


Stevie Chilcote on her last day of service

This year Chilcote oversaw seven members, all of whom were placed in Main Street communities or community foundations across the state of Michigan. Her goal? To ensure that her members had whatever they needed to have a successful VISTA year.

Members themselves can be successful at their host-sites in many ways. An easy, measurable metric we can look at is the amount of money raised for their communities and organizations over the past year. Host-sites pay a fee of $6,000 to have a VISTA member, and in return they get to onboard a full-time VISTA volunteer. Between the seven VISTAs, over $90,000 was raised in grants and contributions for their sites.

“For every site, for a $6,000 investment, our VISTAs raised that much,” said Chilcote. “And that’s not including in-kind donations or volunteer hours they managed. It was just grants and contributions. That was exciting to see.”

Prior to being a VISTA Leader, Chilcote’s experience in the nonprofit world focused on direct service and programming. Professionally, being a VISTA leader allowed her to develop a different set of skills.  

“As a VISTA Leader I got to see what happens behind the scenes. I got to plan conferences, apply for grants, see what compliance grant work looks like, [oversee] recruitment and hiring processes and see the process that goes into running a nonprofit,” said Chilcote.

Being a VISTA Leader was both a professional and practical decision. Stevie knew Lansing was where she wanted to be, but after serving in the Peace Corps for two years and then working in Detroit, she was looking for the best way to make the move. It turns out, she said “VISTA is a great way to transition into a new town if you don’t have a lot of contacts there.”

While she doesn’t quite know yet where she’s headed next, Chilcote does know that she would like to stay in the nonprofit world.

“I really enjoy the people I get to work with and I enjoy knowing that my work is making a difference.”

And now, Ryan Verstraete has the opportunity to continue to build the Rural Opportunity VISTA program at CEDAM. Verstraete has two years of serving through the AmeriCorps National Civilian Community Corps (NCCC) under their belt, and they’ve previously interned at CEDAM.

“We’re only a week in, and I’m already impressed with Ryan’s ability to ask questions that I didn’t think to ask,” said Diskin. “I think that will transfer into a lot of tightening up of our policies and procedures throughout the year. That’s exactly what I was looking for in year two of the program!”

Verstraete’s high school interest in biology and life sciences was reinforced when they served their first AmeriCorps year in California and had the opportunity to work on environment-based projects.

At the end of that year they realized how important having an approach that focused on human-based needs is. In their second year of service through NCCC, the stars aligned and they happened to be placed on projects that focused on just that. Verstraete worked in schools, disaster recovery, economic development in rural Arizona and worked for an organization fighting generational poverty in Houston.

“My two gap years were super beneficial. I gained a lot of direction and opportunities and I’m confident in my ability to go back to school,” said Verstraete. “Jumping right into college and getting invested in that part of your life right off the bat out of high school, when you’re already tired of school — I feel like that is enough of a selling point to take a gap. But doing a gap year with AmeriCorps — I mean you’re traveling, seeing other parts of the country, you’re being paid to help our country’s communities and meeting other people who are interested in that — it’s  incredible.” 

Ryan Verstraete (Left) and Stevie Chilcote (Right)

Ryan Verstraete (Left) and Stevie Chilcote (Right)

Much like Chilcote, being a VISTA Leader is as much practical as it is driven by passion. “I’ve got an Associate’s degree, no debt, and more than $10,000 to use for school,” said Verstrate.

As a VISTA Leader Verstraete is excited to continue working in the community economic development field.

“In the support position of being a VISTA Leader I am very dedicated and excited to work in this field and I am hoping I can share that with my VISTA Members, and then they can go on to do the same,” said Verstraete.

In addition to igniting positive energy around service, Verstraete is keen on learning how different organizations and areas meet needs that they have through administration and not direct service. Gaining insight on strategies for addressing these issues is an important piece they hope to take out of their service as a VISTA Leader.

At the end of the day, serving as a VISTA Leader is about the members.

“When you’re a VISTA Member you get so into it you don’t realize the impact you’re having,” said Chilcote. “For them to go in and choose to either serve the community they live in or come in from an outside world is amazing. You have to constantly tell the VISTAs that their work is amazing.”

Learn more about CEDAM’s AmeriCorps programs here.

Foreclosure Intervention Specialist Jael Cain Shares Client Story

Written by Jael Cain

Hello, my name is Jael Cain and I am an AmeriCorps Foreclosure Intervention Specialist at Wayne Metro Community Action Agency! In this position my focus is to help people who are at risk of losing their homes. This is my second year as an AmeriCorps member and it has been especially rewarding for one key reason: I have really grown to understand my role and the clients’ positions in the foreclosure crisis.  

Being on the verge of foreclosure is stressful and frightening, so our goal is to empower residents who have faced financial hardship. I would like to share a story with you — a story about a specific client whom I had the pleasure of assisting.

One day a gentleman called in desperately seeking assistance, and he noted that a previous Step Forward client of mine had recommended that he give me a try.

In order to qualify for Step Forward, you must have experienced a hardship that resulted in getting behind on your taxes — and the hardship must line up with the delinquency. It must also show that if given the help, you can successfully make payments going forward. (You can learn more about the Step Forward program in this CEDAM blog post.)

After discussing his situation and triaging him over the phone, I found that he would be a great candidate for the Step Forward program himself. My client was a victim of a critical motorcycle accident that left him partially disabled, and he had been behind on taxes for a couple of years — he owed around $23,000 in back taxes.

While he had heard of the program from his friend, he was unsure of how the program worked. I made him an appointment so we could meet, get his questions answered and ease his nervousness about applying. 

Jael Cain has been an AmeriCorps for the past two years

Jael Cain has been an AmeriCorps member for the past two years

My client worked diligently to get everything in order as quickly as possible so I could send in his application. Seven days after I sent his application, Step Forward reached out to my client and asked for another piece of documentation. Again, he was on top of it: he contacted me immediately and asked where he would he need to go to get what was needed. That same day I was able to send in the form.  

Good news from Step Forward came a couple of days later. His application was in the final stage, and his case looked good.  

A week later, he received a voicemail stating he needed to contact them and it was “urgent”. This message made him extremely nervous; he called me and asked if I had heard any information. I hadn’t, so I called on his behalf.

The urgent information, it turned out, was that he had been approved and the paperwork was on the way to his house to be signed in front of a notary. When my client got the paperwork, he called me and scheduled an appointment that same day to get his paperwork notarized via my site.

I will never forget the smile he came in with that day. When we were going over the paperwork, he thanked me and the tears began to flow.  At Wayne Metro, we believe our coaching and assistance is 80/20 — meaning the client puts in 80% and we are their guide for the additional 20%. He was a client that went even further beyond that, and I am happy to have helped him save his home.

Learn more about AmeriCorps

MFOC Members Reflect on their Year of Service

Twenty dedicated Michiganders are coming to the end of their service year with the Michigan Financial Opportunity Corps (MFOC) AmeriCorps program, a program hosted by CEDAM. Even though their service terms are only a year, the impacts the members have made on Michigan communities, the organizations at which they serve and the individuals they’ve assisted, will last a lifetime.

Such is the case for MFOC member Lily Fossel, who noticed potential areas of improvement during the 2017 VITA tax season. Serving at New Development Corps in Grand Rapids, Fossel wasn’t happy to sit by and let identified issues crop up again next year. Instead, she created a survey that found areas of opportunity within volunteer training and support, and created an improved volunteer training program for the 2018 tax season.

“Our small program works to grow, learn and adapt, and it has become increasingly clear that the frontline of that growth must be in the knowledge and confidence of our volunteers,” Fossel said. “As we move together toward an annual 1000 returns, I am thrilled to be able to continue my service in VITA training by honing a new program for next tax year, having learned so much myself from this extraordinary, committed, compassionate VITA team.”

MFOC member Kristi Hart, who serves in St. Ignace at H.O.M.E. of Mackinac County, has learned the importance of accessing resources during her service year. While there are a variety of ways that a homeowner can fall through the cracks and face foreclosure, Hart found that many of her clients weren’t accessing the homestead tax credit. The homestead credit is focused on helping low- to moderate- income homeowners save during tax time on their primary residence. However, in order to be eligible, paperwork must be completed prior to filing for taxes. Hart has spent time making sure everyone who walks through the door of her organization knows about this opportunity.

On August 1, 2017, MFOC members spent the evening watching a Lansing Lugnuts game to celebrate their year of service and their accomplishments

On August 1, 2017, MFOC members spent the evening watching a Lansing Lugnuts game to celebrate their year of service and their accomplishments

“I am happy to go the extra mile to find all the resources possible for those who are struggling to make ends meet,” Hart said.

For Kim Yost, going above and beyond of what was expected of her paid off — literally. All MFOC members are required to track clients who attend financial education classes through a database management system. However, Yost’s host site encouraged her to go further to prove the impact of her service. By tracking the knowledge gain of her students through the results of pre- and post-tests, Wayne Metropolitan Community Action Agency had the ability to include valuable data for grants and secure additional funding sources.

These stories are just three of thousands of ways that AmeriCorps members get things done in Michigan. As the 2017-18 Michigan Financial Opportunity Corps program year comes to a close, CEDAM would like to say thank you to the members for the tremendous impact they’ve made in the communities for which they served.

National Housing Week of Action: How Housing Changed My Life Rally & Storytelling Event Recap

“Housing matters. We contend that if we don’t get housing right, nothing else works,” said Habitat for Humanity Michigan Executive Director, Sandy Pearson, in her opening speech for the How Housing Changed My Life rally and storytelling event.

Habitat for Humanity Michigan Executive Director Sandy Pearson opens the How Housing Changed My Life rally & storytelling event on July 26, 2017

Habitat for Humanity Michigan Executive Director Sandy Pearson opened the How Housing Changed My Life rally & storytelling event on July 26, 2017

The event, held on July 26, 2017, brought organizations, community members and those who have experienced homelessness together on the Michigan State Capitol steps to tell Congress to increase federal spending for HUD programs and invest in affordable housing.

The event was a part of the National Housing Week of Action (July 22-29). Over thirty events took place across the country, including rallies, teach-ins, press conferences, site visits and more. At the How Housing Changed My Life event, ten individuals shared their personal stories of homelessness and how federal programs changed their lives.

“All people deserve quality housing that they can afford. Food, clothing, shelter — it’s basic, it’s biblical,” Pearson went on to say. “In Michigan last year we had more than 66,000 men, women and children experience homelessness. At any given moment tens of thousands of people and families are one emergency bill away from losing their home and being evicted.”

The following numbers Pearson cited further speak to the importance of HUD programs — in 2016 approximately 61,000 Michigan households had federally funded rent subsidies, and approximately 24,000 people lived in public housing.

“And these numbers don’t capture the daily struggle to budget expenses between groceries, childcare and rent that these families face all over our state. And these numbers only count those that can be counted,” Pearson said. “Countless more move from house to house, unit to unit, and are in a cycle of eviction. Housing is simply unaffordable for too many and we together must have the will to make change happen and put housing at the forefront of our minds.”

It is estimated that Michigan would lose $222,081,806 as a result of the administration’s proposed HUD budget cuts. That would affect the 24,142 Michigan families living in public housing, and remove vouchers from 7,061 families.

How Housing Changed My Life speakers

How Housing Changed My Life speakers

While the National Housing Week of Action has concluded, our work is far from over. It is imperative that we keep calling our members of Congress to tell them that we need to remove spending caps and invest in affordable housing. For talking points and phone numbers for Congress, you can use these resources:

For more information on what HUD is, how housing intersects with healthcare and how homelessness affects people across different stages of life, head to bit.ly/housingweekofaction.

Milan’s Third Thursday Events: A Farmers’ Market and more

Milan, pronounced MY-lan (not like Italy’s Mi-LAN) is a small town in Southeast Michigan with a lot of charm, and as it was quickly found, a lot of spirit.

In 2015 the Michigan Rural Council (MRC), a CEDAM program, went to Milan and conducted a community assessment. These assessments allow rural communities to affordably identify both their challenges and their assets, and then implement long-term planning based on their goals for the community. The key to these assessments is that they are community led, and all residents have the opportunity to have their voice heard.

It was identified in Milan that they should become a Main Street program, which is a nation-wide movement “helping communities revitalize their downtowns and commercial districts.” They also established that they should start a farmers’ market.

Over the next year, programs formulated and people came on board to help Milan meet their new goals. In February 2016 Milan officially became a Main Street program. They then applied to CEDAM to host an AmeriCorps VISTA member. By summer they were holding weekly farmers’ markets. In August their AmeriCorps VISTA member, Tori Dillinger, started her year of service.

Photo taken by Maxine Tewsley

Photo taken by Maxine Tewsley

Dillinger studied international political economy at Carthage College and developed an interest in economic development, with a specific interest in small, midwestern towns. She’s from a small town in Indiana herself, and when she found Milan’s AmeriCorps VISTA post she said it seemed like a perfect fit.

As winter approached, an idea formulated to showcase one of Milan’s recently renovated vacant buildings. They started a pop-up marketplace where local artisans could sell their wares and take home most of the profits, a small portion going toward the program.

“There was a lot of interest generated,” Dillinger said. “There aren’t a lot of retail options currently downtown, so people noticed it.”

Fast forward to summer 2017 and it was time for the outdoor farmers’ market to start back up. However, it was realized that their weekly market had struggled to compete with the ones in surrounding areas, so they decided to do something different. They implemented their “Third Thursday” events which — you guessed it — are less frequent, themed events that happen every third Thursday of the month. Their first event with the theme “Celebrate Michigan” took place on June 20.

Photo taken by Maxine Tewsley

Photo taken by Maxine Tewsley

“It still has the basic artisan and farmers’ market component in the city square, but there was an addition of food trucks; businesses were encouraged to participate, and a good number of them offered deals or specials; we had games out for the kids; one of the churches got involved and we had music,” Dillinger said.

The idea of having events less frequently was intended to create a bigger, more exciting experience.

“Having these larger events once a month definitely brings out more people. It’s more of an ‘event’ to go to. During the first Third Thursday people were out and about, just everywhere, and I know some of the businesses got increased foot traffic,” Dillinger said. “After the events closed down the town was way more lively than it would usually be on a Thursday night — people stuck around after the event to hang out or go to local restaurants.”

July’s event “Summer BBQ” added on to June’s components to include a beer garden and a local Milan food truck specializing in BBQ. Future themes include “Maker’s Market” (August), “Swing September (September) and “Harvest Festival” (October).

Photo taken by Tori Dillinger

Photo taken by Tori Dillinger

“One thing that impressed me when I came to Milan was the energy in the community and the momentum it had to move forward,” Dillinger said. “Being able to be a part of that and kind of keep the ball rolling and help the community grow and come together has been a really cool part of the experience.”

To learn more about the Milan’s Third Thursday events and the Main Street program head to their Facebook page.


Finance Can Be Fun — Host a 2018 Show Me the Money Day Event

If you’re an organization helping residents in Michigan further their financial capability, you know that combining finances and fun can be tricky. However, it doesn’t have to be! Let CEDAM help you host an engaging Show Me the Money Day event in your community.

Flint Show Me the Money Day 2017

Flint Show Me the Money Day 2017

What is Show Me the Money Day?

Show Me The Money Day is a statewide, annual and FREE financial resource fair that kicks off tax season. Banks, credit unions, educators, community based organizations and others gather to ensure free or low-cost education and access to mainstream financial services for participants. The events also feature various games, prizes, food and children’s activities centered around financial capability. Show Me the Money Day participants leave with a better understanding of the financial resources in their communities and feel more hopeful about their financial futures. In 2017, thirty-two events took place throughout January and February across the state, helping over 2,300 individuals and families improve their financial capability. 

Should my organization host an event?

There is no set criteria for an organization to host a Show Me the Money Day event. If you’re an organization that serves low- and moderate-income people, then hosting an event would be a great way to continue and expand your outreach. If your organization provides financial capability services, hosting an event is a great way to ensure residents in your community know about your programs. If you don’t offer financial capability services, hosting a Show Me the Money Day event is a great stepping stone to do so, or to make other services in your area more accessible. 

What type of support will we receive from CEDAM if we host an event?

CEDAM trains, organizes, provides mini-grants and supports all Show Me the Money Day events from the beginning of the planning process through post-event follow-up. Host site applications, including the grant application portion, will be approved on a rolling basis and are due by by 5pm on Friday, October 6. 

Host Site Training guides organizations on how to customize the perfect event for their community. The training focuses on explaining the basics of Show Me the Money Day events, the numerous CEDAM technical assistance supports, event planning and community outreach. Training is also valuable because it gives host sites the opportunity to connect and share best practices with each other.

Grand Rapids Show Me the Money Day 2017

Grand Rapids Show Me the Money Day 2017

Show Me the Money Day Host Site Training will take place on Friday September 22 from 9:30am-4pm at the Allen Neighborhood Center. At least one representative from each prospective host site must attend and register prior to the training. Training is FREE for CEDAM members and nonmembers. It includes breakfast, lunch and one mileage reimbursement per organization (up to $150.)

How do we get started?

Download the host site application and register for host site training. You may attend training prior to completion of a host site application.

Questions? Contact Allyson Brooks or head to ShowMeTheMoneyDay.org

Meet CEDAM’s New Manager of Financial Empowerment Initiatives

We are excited to welcome Brian Rakovitis, our new manager of financial empowerment initiatives, to the Community Economic Development Association of Michigan (CEDAM) team!

Rakovitis has made his way back to CEDAM after starting as an AmeriCorps member through us. He served at United Way of Washtenaw County on the previously active Michigan Foreclosure Prevention Corps. 

Brian Rakovitis, Manager of Financial Empowerment Initiatives

Brian Rakovitis, Manager of Financial Empowerment Initiatives

After his service with AmeriCorps, Rakovitis stayed on at United Way as the financial empowerment specialist. In this role he focused on economic mobility, managed their VITA tax program and was a part of the mobile financial resource team which provided education, coaching and technical assistance and training to nonprofits who were interested in taking on financial stability work.

“I really enjoy financial empowerment and economic mobility work,” Rakovitis said. “I was looking for a position that would move me from direct service to the capacity building and policy side of things. I was very excited when the opportunity to do just that came along at CEDAM.”

In his new role here, Rakovitis will be developing children’s savings account programs throughout the state, aiming to get more low- and moderate-income youth to strive toward post-secondary education, whether it be college, vocational training or other options. He’ll also be helping develop financial stability throughout the state of Michigan and the midwest, and aligning policies and best practices around financial stability work.  

“Financial stability and economic mobility is more than simply balancing a budget,” Rakovitis said. “It’s helping families become more sustainable so that they have the ability to progress. Helping families make ends meet is essential, but we also want to look at the next step — asking what dreams and goals families have, and help makes those become a reality.”

Contact and Connect

Email: rakovitis@cedam.info

Phone: 517.485.3043 X 1942

LinkedIn: https://www.linkedin.com/in/brian-rakovitis-9641b062/

Legislation Introduced to Expand Payday Lending Products in MI

Identification, an open bank account and a steady source of income are the only three items you need to take out a payday loan. Regardless of your credit score, payday lenders give out these loans (meant to be paid by the borrower’s next paycheck) that are small, but are accompanied with mountainous interest rates.

Screen Shot 2017-07-07 at 3.28.36 PMIn Michigan, payday lending is largely unregulated. On a $300, two-week loan, payday lenders typically charge 369 percent APR. According to the Center for Responsible Lending, more than 560 storefronts in the state drain more than $103 million in fees annually, a significant loss to both borrowers and to the overall state economy.

The Michigan Coalition for Financial Empowerment (MCFE), a CEDAM organized program working with its members to help Michigan residents find financial stability, has found that these loans are keeping many Michigan residents in debt traps. Take Perry Green, for example.

“Perry Green, 30, said he ended up spending $1,000 in fees and interest after taking out a $300 payday loan at a storefront in Detroit,” reported Susan Tompor of the Detroit Free Press. “. . . [Green] said his first loan turned into a three-year debt trap after he kept taking one loan out after another to cover bills and fees. He took out the loan to cover his rent because he thought it was his only option.”

And now, legislation was recently introduced in the Michigan Senate to expand these payday lending products in Michigan.

The bills (SB 430-432) would create a new small dollar loan product that would allow loans of up to $2,500 for up to 48 months, with fees equaling approximately 150-180 percent APR. As an example, someone who takes out a $1,500, 12 month loan under this new act would end up paying back a total of $3,208.

This is not the first time companies have tried to expand predatory lending in Michigan. In 2014 legislation was introduced during lame duck which would have allowed auto title lending in Michigan. That legislation was discharged from committee without a hearing, but was never voted on by the full Senate.

The most recent attempt to expand predatory lending was during the 2016 legislative session when bills were introduced to allow payday lenders to operate as Credit Service Organizations. That legislation would have allowed longer term loans with fees equivalent to triple-digit interest rates, with no limits on the amount of the loan or the fees charged. The bills had one committee hearing but were not taken up again and died at the end of the session.

These predatory loans are marketed as a quick financial fix, but are instead a long-term debt trap for borrowers. At its core, loans authorized under SB 430-432 are loans with excessive rates that will last months, or even years. Lenders will still get access to the borrower’s bank account and have no regard as to whether the loan is affordable or not. In addition to charging triple-digit interest rates, a typical payday loan requires no credit check, and lenders do not generally ask about monthly expenses or debts. paydaylender

These loans are associated with increased likelihood of delinquency on other bills, such as medical bills and utilities, increased overdraft fees, involuntary bank account closures and even bankruptcy. Both payday and car title loans put current assets at risk, and erect barriers to building assets for the future.

While these loans are said to provide access to credit for those who can’t use a credit card or have no access to traditional loans, the reality is that borrowers consistently report a range of options in dealing with a financial shortfall if these high-interest loans aren’t available. While working with financial counselors to get out of their debt traps, clients have reported cutting back on expenses, borrowing from friends or family, waiting for tax refunds, or waiting until their payday as options they have used to cover expenses.

CEDAM has witnessed a strong shift in the community economic development field toward a greater focus on household financial security. If families are not successful in managing their monthly income and expenses, saving for emergencies and eventually securing assets like homeownership or small business ownership, then our efforts to improve our physical infrastructure and build local economies have far less impact. The longer-term, high interest loans proposed in SB 430-432 present harm to our communities and prey on our state’s hard working families.