When a financial institution has a poor Community Reinvestment Act (CRA) standing, it may be due to difficulty connecting with low-to-moderate income (LMI) borrowers.
CRA evaluations encourage financial institutions to meet the credit needs of all communities in which they operate. This includes loaning credit to LMI communities. Yet financial institutions often don’t have time to plan for new ways to find LMI borrowers.
With medical lending, financial institutions have the chance to connect with LMIs and improve CRA standing. Want to know how? Keep reading.
LMIs Have Similar Healthcare Needs but Less Money to Pay
LMI individuals and families have similar healthcare needs to the rest of the population. Some may even have more needs due to non-nutritious food and living conditions. Yet LMIs have limited financial resources for competing costs like food, housing, and transportation.
LMIs are also less likely to have health insurance. Many LMI individuals are part-time employees and don’t have access to health insurance. Meanwhile, high deductibles for those with employer health insurance leads to increased prices on healthcare services.
With no insurance or expensive insurance, LMIs are forced to pay high out of pocket costs. High out of pocket costs combined with limited financial resources leads to a need for alternate payment options like patient lending.
LMIs are more likely to take advantage of medical financing, which ultimately connects them with financial institutions.
LMI Patients are Approved for Medical Lending Programs
Many LMI individuals and families may not apply for lines of credit at financial institutions because they don’t know they’re qualified. Most loans require creditworthiness and many LMIs have poor credit or none at all.
Good patient financing programs offer healthcare loans without the need for a credit check so even those with no credit are approved. With medical lending, LMIs build or improve credit safely while paying fair interest rates that don’t vary over time.
LMIs can even choose the repayment plan that fits their budgets, helping them keep more of the income they earn.
This is another reason LMI patients are more likely to take advantage of medical financing for out of pocket healthcare costs.
With Epic River’s patient lending program, financial institutions can easily connect with LMIs in need of credit and improve CRA compliance rating.
Epic River doesn't just help financial institutions improve CRA standing. We also give you new loan opportunities and help you establish relationships with healthcare providers in your community.
https://www.ncua.gov/files/publications/resources-expansion/maximizing-low-income-designation.pdf