Military Borrowers

1. Military Borrowers Problems & Solutions Presented By: Bobby Hoxworth Executive Vice President Fort Hood National Bank

2. The Solution Framework • Identify The Need • What type of loan can meet the specific need of the soldier. • Develop Products To Meet The Needs • In response to the identified need, develop a product that resolves it for the soldier. • Communicate The Solution • Ensure soldiers know that a solution exists to their need and augment with financial literacy programs.

3. Solutions In Action

4. Housing Assistance Loan • Need Identified: Since June 8, 2004, a soldier eligible for on-post housing at Fort Hood is required to pay the pro-rata rent for the move-in month until his or her allotment begins. The soldier has 24 hours to pay the pro-rata rent or the quarters will be released to the next eligible soldier.

5. Housing Assistance Loan • Solution: A “Housing Assistance Loan” to assist the soldier in paying the pro-rata rent to obtain on-post housing. • Loan amounts up to $1,000 • Affordable repayment terms • (12 months or less) • Quick response time to application • (less than 24 hours) • Builds credit bureau history

6. Housing Assistance Loan • Communicate: Provide all on-post housing advisors with information about the Housing Assistance Loan program so that soldiers that need assistance can be made aware of the availability.

7. Overdraft Repayment Loan • Need Identified: Soldier’s checking accounts may become overdrawn to address a temporary financial need or as a result of poor record keeping. The soldier is then unable to repay the overdraft from his next paycheck thus having to go back into the overdraft. This cycle if left unbroken creates a feeling of helplessness and costs the soldier unnecessary overdraft fees.

8. Overdraft Repayment Loan • Solution: An overdraft repayment loan can help the soldier repay the overdraft in affordable monthly payments at a reasonable rate of interest. • Helps the soldier avoid overdraft fees. • Helps build his or her credit record. • Provides educational checking account counseling and assistance as part of the process.

9. Overdraft Repayment Loan • Communicate: Once the soldier is in the overdraft over a minimum amount, telephone and written communication is initiated by the bank to create program awareness.

10. Small Loan Product • Need Identified: Most banks have minimum loan amounts (i.e. $2,500) that exceed what many soldiers need or can qualify to borrow. • This barrier to bank loans creates the need for soldiers to use alternative financing options to obtain smaller dollar short-term loans: • Pawn Shops • Payday Lenders

11. Small Loan Product • Solution: A small dollar bank loan product (i.e. $50-$500). • This loan may have a higher APR than larger dollar bank loans (to cover the bank’s costs: issuance, servicing, cost of funds and losses) but will still be more affordable than the alternatives. • This loan product saves the soldier from having to spend more money borrowing from other available sources (i.e. Pawn Shops and Payday lenders). • Helps the soldier build credit history. • The soldier doesn’t have to renegotiate the loan monthly. • The soldier doesn’t have to surrender personal property.

12. Small Loan Product • Communicate: • Media advertising is essential to get the word out along with existing customer communication. • Education is also important so that soldiers know that this is only a temporary solution and should not be relied upon as a way of life due to the higher cost of borrowing. Soldiers applying for this loan should be encouraged to save for these types of needs in the future.

13. Financial Literacy Programs

14. Financial Literacy • Rear Detachment Officer (RDO) & Family Readiness Group (FRG) Leader Courses • Bank representatives provide newly-assigned RDOs and FRG leaders with information about services available to assist military dependents when they experience financial difficulties during deployment.

15. Financial Literacy • Pre-Deployment Briefings • As part of Fort Hood’s pre-deployment program, bank representatives provide non-bank specific counseling and assistance designed to ease the transition including such topics as: • Advantages of online banking • Preparing budgets and deployment accounts • Coping with unforeseen financial situations • Power-of-Attorney uses and issues

16. Financial Literacy • Primary Leadership Development Course (PLDC) • Bank representatives conduct a one-hour class on the FDIC Money SmartTM Adult Education Program for all NCO’s that includes information on: • Credit Scores • Correcting Mistakes On Credit Reports • Maintaining Good Credit

17. Financial Literacy • Command Financial Specialist (CFS) • Bank representatives host classes with each unit’s CFS to provide financial readiness information and tools. • Banking professionals host a liaison department providing account reconciliation and budget counseling for soldiers (customers and non-customers).

18. Financial Literacy • Consumer Affairs Briefings • Bank representatives conduct consumer affairs briefings to in-processing and out-processing soldiers to ease transition. Items covered include: • The automobile purchasing process • Automotive repairs • Door-to-door sales, telemarketing and scams • State and federal consumer protection laws • Budgeting and account reconciliation • Establishing and protecting credit

19. Military Borrowers Presented By: Bobby Hoxworth Executive Vice President Fort Hood National Bank bobby.hoxworth@fhnb.com Phone: 254.554.4224