Roughly ten years ago Santa Clara County faced a problem. We don’t hear about it as much these days, though it remains an issue in some places, and in 2012 this was major – the problem was predatory lending. But why is a problem from 10 years ago relevant now? Because of how Santa Clara, and more specifically Gilroy, chose to deal with the issue, and the hope it continues to give David Cox, Executive Director of St. Joseph’s Family Center, for addressing current and emerging barriers for Gilroy’s largely Latin/e community.
If you’re not familiar with payday loan centers, they are known for trapping clients in a re-loan cycle at an average annual percentage rate (APR) that typically exceeds 360 percent. Studies have shown these businesses specifically target Black and Latin/e communities and low-income areas with little to no local access to banking.
“We found out that we had more payday loan centers or predatory lending spots all very near our very low-income communities and communities of color than any other cities per capita,” says David. “We predominantly serve the homeless and unhoused, but also a much larger portion is the economically challenged person of color population – predominantly Latinx.”
For a more in-depth explanation of the payday lending problem, read this primer shared by the Silicon Valley Community Foundation, and this article by the Silicon Valley Business Journal.
According to David, when it comes to progress, “the community wants to remain like it was and it hinders our ability to be responsive to some of the needs that we’re seeing on a daily basis… [there] is a fear that we are going to become an even larger, less identifiable community.”
He points to a historical identity the city is worried about losing; an identity that for the longest time was centered on agriculture. “The canneries are gone. The fields where crops were grown are now gone,” he says. “We’ve got the outlets, we’ve got service industry jobs, but there’s not a lot of middle-class wage-earning opportunities here.”
“Even though you’re working 40 or 50 hours a week, or you’ve got two people in your household working, that is not enough to keep you from an imminent threat of one emergency.”
St. Joseph’s Family Center has been officially operating for over 40 years, serving as one of three lighthouse organizations in Santa Clara County along with Sunnyvale Community Center and Sacred Heart in San Jose. Together they are part of United Way Bay Area’s Emergency Assistance Network (EAN), working to offer direct food and shelter services.
Today, St. Joseph’s operates one the largest food pantries in Santa Clara County, as well as two permanent housing programs funded by the Department of Housing and Urban Development (HUD), with additional seasonal shelter and interim housing initiatives in South County, which includes Gilroy and the unincorporated areas of San Martin and Morgan Hill.
“We’ve always been very strong and kind of driven by that mission,” he says. “We’ve strengthened some of our collaborations to make a greater impact… And then on top of that, it’s really about housing and shelter.”
“The assistance and supports that are needed to keep people housed are a lot easier [to access and administer] than if they become homeless or unhoused and start that downward spiral.”
David’s background is in community development and finding ways to empower people by giving them opportunities to become self-sufficient. But he was not seeing that happen. Rather than families thriving, he was watching them survive – a distinction he points out purposely.
“There are so many barriers and so many obstacles for [these] hardworking families,” he says. “They’re not able to thrive in this area because 60% of their income is going to rent or utilities right now. And the margins of being at risk [of], or threatened with, homelessness is a very, very thin line.”
In recent years, St. Joseph’s has found itself positioned at the center of a community that strongly supports its efforts – advocating to the local administration, city council, first responders, police, and fire departments on behalf of the population they serve because they are trusted to do so.
“For the most part, [they] feel comfortable coming to us because of our history [of service]. The gateway a lot of times is something like food. So, it allows us to explore a little deeper into some of the ongoing needs that the family may have.”
Exploring deeper allowed David and St. Joesph’s to see firsthand there was an issue severely impacting the community that they did not fully understand. It prompted him to educate himself and his team on payday and predatory lending, and then pass that education on to clients and elected officials. They joined coalitions to advocate and push for county-wide restrictions.
Because Gilroy is its own place with its challenges, solutions needed to come from within and they did, which is what keeps David optimistic.
Once it was understood what was happening, how payday loan centers were taking advantage of those that were struggling and cyphering money that should be circling within the community, Gilroy rallied and took action. They pushed for ordinances banning new payday loan centers from coming in and placing heavy restrictions on centers already in operation within Gilroy, and other cities across South County followed. According to the primer, Santa Clara is the only Bay Area County to prohibit payday lenders in unincorporated areas.
“It’s hard to change some minds. But this particular thing resonated with folks. Loan centers are predatory lenders because [people] are in a tough spot, but then they’re preyed upon. So, it seems like there was more of a willingness to say, ‘let’s stop that because these people are victims of a crime.’”
David believes the lessons learned, and the heart and spirit shown by the community to deal with predatory lending will translate to other challenges the city is facing – specifically housing.
“That’s what gives me hope. Because there are things that can change quickly if you educate and create awareness. [If we] minimize the racism and the lack of equity and inclusion when it comes to some of these [safety net services], and make sure it becomes part of our routine, part of our fabric.”