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December 13, 2002/Tevet 8 5763, Vol. 55, No. 16
Innovative program responds to local needs
BARRY COHEN
Editor
Harry Adler, board member of the Greater Phoenix Jewish Free Loan Association, meets with a group applying for a loan.
Photo by Barry Cohen
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The Greater Phoenix Jewish Free Loan Association, in response to an economy in recession, has developed an innovative loan program for a new group of people seeking assistance.
Many are average wage earners, living a modest lifestyle from paycheck to paycheck. As the local economy feels the effects of a nationwide recession, their wages have been reduced and their hours cut back. But the bills have remained the same. Others at one time earned a good living from jobs in the "dot-com" industry. But as these information technology businesses continue to go bankrupt, they now find themselves unemployed.
In the past, to avoid going into debt, they could turn to the JFLA for help and fill out the forms to receive a loan - provided they had at least one co-signer, someone who could pay back the loan if they balked.
What these two groups of people have in common is that they have no family in the Valley and have no close friends to stand financially by their side.
Rebecca Rosenthal (name changed to preserve anonymity) used to work as a cashier at a retail store in Paradise Valley.
"Several months ago, there were not enough sales, and my hours got cut back from 40 to 28 per week," she says. "That put me in debt. I had to file for bankruptcy."
During her initial interview with the JFLA committee, Rosenthal told them up front she had no one who could guarantee her loan.
"They were more concerned with my health and state of mind" than whether or not there was a loan guarantor, says Rosenthal."
In response to Rosenthal's circumstance and to others like her in need in assistance but alone in the Valley, JFLA has devised a new "Guarantors Program" to provide financial assistance.
"Our goal is to put together a pool of guarantors ... to give us the opportunity to lend money to those who do not have people to guarantee their loans," says Harry Adler, JFLA board member.
Each guarantor pledges a maximum of $500. Those needing assistance and those pledging funds do not know each other.
"This effort taps into the Maimoni-dean concept of those who give tzedakah and those who receive tzedakah do not know one another," explains Adler.
According to local JFLA leaders, this "Guarantors Program" is the only of its kind. Providing assistance in this manner "is not done at any other free loan association in the country, to the best of my knowledge," says Selma Fiel, JFLA executive director.
Typically, minimal requirements exist to receive a loan.
Those applying have to be Jewish and of legal age and are required to sign a promissory note to repay the loan; however, to receive a loan, applicants have to have one to three co-signers to guarantee the loan, depending upon circumstance and the amount of funds requested.
In other communities like Los Angeles and San Francisco, people who request loans but do not have guarantors are only given funds if they are established in the community and have a good credit rating, says Al Honig, JFLA president. If they do not meet those criteria, they may be given funds anyway, but it is often more secretive and "below the table."
In response to a group of people requiring financial assistance, alone in the Valley, but able and willing to pay back the loans, JFLA leaders decided to create the "Guarantors Program."
"These are very fine people who have lost their way in the debacle of the economy," notes Adler. "They came here, bought homes, settled down, and then the jobs petered out."
In the past five years, there have been 10,000 new Jewish households in the Valley, according to the 2002 Greater Phoenix Jewish Community Study. These newcomers comprise 23 percent of the total Jewish population of 44,000 Jewish households in the Valley.
Since receiving a loan, Rosenthal is now working at Osco in Central Phoenix 40 hours a week and is looking for additional work to get out of bankruptcy.
"I do not know what I would have done without (the JFLA)," she says. "God bless those people."
Others dependent upon loans from the "Guarantors Program" are those who came out to the Valley with "dot- com" jobs.
"They had good jobs and based their standard of living on this income," says Fiel. "These people were new to facing financial hardship," explains Fiel. "On top of that, when they had no family or support in the Valley, it must be a terrifying experience."
JFLA has made thousands of interest free loans to individuals and families in the Valley since it was founded in the 1940s. According to a JFLA statement, "these loans are geared to provide people with help to retain their dignity during times of need."
JFLA is privately supported an receives no funding from the Jewish Federation of Greater Phoenix.
Just recently, the Phoenix Jewish Free Loan Association changed its name to the Greater Phoenix Jewish Free Loan Association. "We do not want to sound provincial," notes Honig.
An initial request has been mailed, asking previous donors for help in funding the "Guarantors Program." According to Adler, the response has been good. "Already there are people saying, 'I want to help' " and are backing their words with financial pledges.
Contact the writer at barry_cohen@jewishaz.com.
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