BISD: REVISITING DISTRICT EMPLOYEE LOAN SCHEME

By Juan Montoya
Word is going around the Brownsville Independent School District that new legal counsel Baltazar Salazar has advised board members that perhaps they should not have gotten entangled with a loan company that is soliciting business with district employees.
And although the district did not sign the Memorandum Of Understanding with the Community Loan Center, it did allow the outfit access to solicit its employees over the objections of at least two board members who were not allowed to speak after they questioned the district's involvement with allowing local banks to make  loans to district employees.
The so-called small-dollar loans are backed by nine local banks in the Brownsville area and  are administered by an outfit under the auspices of the Rio Grande Multibank headed by Eva Arambula Woodfin, sister of Martin Arambula, the district's record manager director and now a candidate for the Democratic nomination for Cameron County Judge in 2014.
Under their plan, the CLC – approved by a 4-3 majority of the board: Enrique Ecobedo, Otis Powers, Minerva Peña, and Hector Chirinos – its agents will be able to solicit business from employees for loans at an 18 percent interest rate.

Those voting against it were Catalina Presas-Garcia, Lucy Longoria and Dr. Christina Saavedra.
Before Escobedo cut off discussion on the item by making a motion to approve, Presas-Garcia had questioned BISD employee benefits/ risk-management administrator Judy Cuellar whether any other lender had been allowed to make a bid to provide BISD employees the service.
Trustees are now learning that in order for the district to make payroll deductions from its employees for the company, it must acquire a consumer credit certification from the federal government, a move that is now being resisted by some of those who voted to approve the measure.
"Eva Arambula said that if the BISD did not make the payroll deductions they did not want to do business with the district," said a BISD administrator. "That may not happen now."
Before the Escobedo-Presas-Garcia exchange culminated in Escobedo closing the discussion, Tony Juarez, Asst. Superintendent for Human Resources, dissuaded the board from entering into a Memorandum of Understanding proposed by the company and suggested the lender simply issue a bank draft that would  remove any responsibility from the district for the commercial transaction.
The upshot of the proposal was that it would protect BISD employees from rapacious pay-day loan outfits that have proliferated in South Texas. They argued that of the 20,000 or so pay-day loan companies in the region, 4,700 are car title loan companies that have repossessed at least 87 cars as a result of nonpayment of their one-month loans.
They also said that there were already 29 small businesses in the city whose employees were "on board" with the CLC.
But now, with the new counsel advising the members that the district could incur liabilities for approving the company's access to it s employees, the issue might well be revisited in the near future.