Adoption is expensive.  Ohio wants banks and credit unions to help.  |  Credit Union Journal
Adoption is expensive.  Ohio wants banks and credit unions to help.  |  Credit Union Journal

Brent Fisher and his wife Magan want to adopt a child, but the process is long and the costs can be prohibitive.

The couple were considering taking out a home equity loan. “It’s really the only option available to a family that might not have $50,000 lying around,” he said.

Until recently.

The state of Ohio launched a new program in the fall that will allow credit unions to accept public deposits if they make loans for expenses related to adopting a child.

The new “Family Forward” program encourages credit unions to lend up to $50,000 for adoption expenses by allowing institutions to accept deposits from municipalities and school districts where they operate if they offer such loans. In addition, credit unions are prohibited from holding deposits for public institutions. Banks can also enroll in the program, although they can already accept public deposits without participating.

The state gives all lenders in the program a deposit equal to the value of the loans they make at below-market interest rates. “As a result, they’re offering their potential client a lower interest rate on a loan, giving them an edge over a competitor who isn’t participating in the program,” said Brittany Halpin, Treasurer’s Press Secretary. of Ohio, Robert Sprague.

“This program is literally a lifesaver,” said Brent Fisher (left), who with his wife Magan is trying to adopt a child. The couple had already considered taking out a home equity loan before discovering Ohio’s Family Forward program.

Pathways Financial Credit Union, a $588 million Columbus asset lender, was the first credit union to take advantage of the Family Forward program, President Greg Kidwell said. Pathways Financial now has two such loans on its books, one for $45,000 and the other for $1,500. Both loans were closed on March 31.

Fisher, who is assistant vice president of marketing for Pathways Financial, said he and his wife registered to adopt about a year ago and are still in the process of being matched with a child, but once that happens , a large part of the bill is due. . Fishermen have already had to spend on things like travel, home renovations and fire safety.

“This program is literally a lifesaver,” he said. “It will open the door to possibilities for families who are worthy but may not have the budget to meet a lot of these expenses.”

Adoption is often much more expensive than people realize, Kidwell said. And the problem hits him directly because Fisher and another Pathways Financial employee are going through the adoption process.

Loans can cover home inspections, certifications, travel to meet potential adoptees, and other costs. Pathways typically doubles the base program terms on these five- to 10-year loans because expenses can reach $50,000 to $75,000, Kidwell said.

Ohio credit unions have historically been excluded from the section of Ohio’s revised code that governs public filings made by state and local political subdivisions. Until recently, only banks could receive these deposits.

Credit unions are flush with deposits now, but Kidwell said there may soon come a time when that isn’t the case. “And it’s not just that,” he said. “That’s another thing we can do for the community.”

The program, which the state treasurer’s office launched in November, would also increase competition for these public filings.

The idea for Family Forward actually came from a personal story an employee of the state treasurer’s office overheard from a friend who was trying to fund an adoption, Halpin said.

“From there, our team got to work finding a way to support Ohio families through the process,” she said. To date, two credit unions and one bank have registered to participate in the Family Forward program.

Twenty-five states have laws that expressly authorize state-chartered credit unions to accept public funds and allow government entities to deposit public funds in state-chartered credit unions, according to Ohio Credit. Union League. Additionally, 17 other states do not have laws that explicitly allow or prohibit credit unions holding public funds.

A decision to allow credit unions in Colorado to accept public deposits was filed at the end of March.

But Ohio is more open to the concept – within limits.

Halpin said it is the responsibility of the General Assembly and state decision makers to write laws and establish rules regarding financial institutions as public depositories, and that the office of the treasurer will continue to uphold the law. state and to help ensure the security of public repositories.

In 2017, the General Assembly added credit unions as eligible participants in certain linked deposit programs administered by the Office of the Treasurer, such as the Family Forward program. Since then, the treasurer’s office has worked closely with state financial institutions to implement the new statute and facilitate the inclusion of credit unions as authorized and directed by law, she said. .

Emily Leite, advocacy manager for the Ohio Credit Union League, said the group has eliminated the omission over the years, with linked deposits being a newer and more important introductory step in the deposit partnership with credit unions. public entities.

“Ohio Credit Unions are already committed to serving a community holistically, and we believe this should also include local townships, villages, cities, and counties that need deposit choice, especially when there is no locally available financial institution,” she said.

The state sets the deposit rate based on market conditions, Kidwell said. So even if the deposits for the first two loans made by Pathways Financial were at an annual percentage rate of 0.00%, this will not always be the case.

“And obviously our lending rates will also vary depending on market conditions. In our case, as a lender, we will reduce our unsecured loan rate by 2% for Family Forward adoption loans,” he said.

Pathways’ Fisher said he and his wife are trying to adopt a child in the United States, but the overseas adoption fee can easily be double the cost of doing it domestically. But either way, he said, the Family Forward program will ease a lot of the burden on expectant parents.

“It’s the state that throws a rope to a lot of worthy families who want to do one of the most selfless things you can do,” Fisher said.


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