CSL Acquires Next Step KC to Grow Small-Dollar Lending Initiative

If you've followed CSL closely in the last five years, you know our commitment to helping families access credit at reasonable rates. In 2014, we partnered with Holy Rosary Credit Union to develop our Small-Dollar Lending Program. Here's a quick recap of some of the more notable program statistics (as of April 30, 2019):

- 300+ loans

- $750,000+ in original loan values

- Those seeking refinancing of a toxic loan came with an existing average APR of 275%

- The average credit score at loan origination was 490

- We've been able to reduce APRs to an average of 14%

- We opened two state-licensed micro-branches of Holy Rosary Credit Union inside CSL offices, and hired a full-time loan officer to provide the staffing

- Our loan charge-off rate is only 7.8%

- We secured philanthropy to back the loans so the Credit Union's risk was mitigated

- We opened more than 500 traditional banking accounts/products (savings/checking account, direct deposit, debit card, secured credit card, etc.)

Along the way, we've had a similar relationship with Next Step KC, another program designed to provide short-term access to credit, but at a fraction of the rate of a predatory payday loan. CSL was a referral partner in the Next Step KC network, and could refer neighbors to access a loan of $300, $500, or $1,000. If approved, the borrower could access the loan at an approved lending institution. Next Step KC, in addition to facilitating the loan by connecting borrower and lender, also guarantees the loan and keeps a reserve account at the lending institution. Philanthropy provides the funds for the loan loss accounts.

Next Step KC, and its network of referral partners have been serving the Kansas City area for the last decade. It was an organization with limited staffing resources, and an active board of directors. CSL has acquired Next Step KC and its assets, which include loan loss accounts, a referral partner network, and the name, logo, and likeness of Next Step KC, including its website and social media pages. Next Step KC, Inc. is in the process of dissolving its corporate status.

What does this mean for CSL, and why did we make this acquisition? To be very clear, I believe that CSL is in the proverbial driver's seat as the regional leader in small-dollar lending efforts. We do this work because it improves a family's household income and steers them clear of toxic loans that can lead to bankruptcy. Similar work is happening in small pockets in our region, but CSL is leading the way in bringing philanthropy-supported lending to scale in our area. We appreciate the board of directors of Next Step KC placing their confidence in CSL to steward this community asset, and to have us integrate it into our work.

Are you feeling motivated to help? Here's some ways you can move this work forward:

- Invite us to come speak at your event or gathering by contacting Vice President of Financial Coaching, Rachel Barker, at barkerr@cslcares.org or (816) 254-4101

- Contact me at cowand@cslcares.org or (816) 912-4484 if your bank or credit union would like to be a lending partner

- Contact Rachel Barker, at barkerr@cslcares.org or (816) 254-4101 if you know someone that needs help with access to credit, or if your church or organization would like to be an official Next Step KC referral partner

- Contact Cindy Isabel to make a charitable gift that supports this work. She can be reached at isabelc@cslcares.org or (816) 491-2011.

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