Evan Ramstad
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CASS LAKE, Minn. — People love time off from work. They love it so much they'll do almost anything for it.

The community development financial institution of the Leech Lake Band of Ojibwe has learned they'll even repay loans to keep it.

For nearly a decade, Leech Lake Financial Services, known as LLFS, has let customers use the vacation time they've built up at work as collateral for loans. As they repay their loans, they get back their vacation hours, or PTO (paid time off) as a lot of companies say.

It's an obvious idea, but neither I nor Rob Aitken, the executive director at LLFS, have been able to find anyone else who is doing it. The closest I could find were banks that make emergency short-term loans to longtime customers when that person pledges to sign over their next paycheck.

I wanted to learn more about what LLFS calls its "credit builder" program because it's the kind of thing that brings people off the margins of the economy and onto a solid path to building wealth.

It's small at about $6 million. But it is available to everyone, not just members of the tribe, and it's made a difference for hundreds of people in the community.

"We get people qualified for homes and mortgages and car loans," Aitken said. "We want to get people into banking."

About half the people in the Leech Lake Band don't use banks, he said. And for cars especially, many will turn to no-credit-required lenders who charge ultra-high interest rates.

In 2017, LLFS hired a consultant to do a market study and learned that borrowers within the Leech Lake Reservation and for the 25 miles around it borrow from predatory lenders at five times the national rate.

Aitken is eager to lower that. He knows the credit builder program has lifted the overall credit score of Leech Lake Band members from 550 to around 600. But he thinks the impact goes deeper and is looking for ways to measure it.

The program evolved from a paycheck advance system that the Leech Lake government began for its workers around 2008 or so, then asked LLFS to administer when it opened in 2014.

LLFS turned it into a formal loan program, with low rates. It also automated the repayment process with a dozen or so employers around Cass Lake and Bemidji, most significantly the Leech Lake tribal government and the three casinos the band owns.

"They'll deduct that [repayment] amount out of the client's paycheck and send it to us," Aitken said. "It's easy for the client and for us."

Most significantly, any borrower has to participate in personal-finance classes that Aitken and his two colleagues teach. He and Vanessa Schocko, a 25-year-old employee at the band's opiate clinic, let me sit in on one of the lessons.

Schocko had her finances under control until about a year ago when she ran up her credit cards on a trip to Michigan, where she grew up. Her credit score had tumbled, and she asked to consolidate all her debt with one of LLFS's credit builder loans.

"Now everything has piled up," she told Aitken.

She needed less than $2,000, the average loan size in the LLFS credit builder program, and had vacation time that she could use as collateral.

Like a personal-finance guru you'd find in a bookstore or on YouTube, Aitken laid out a plan with a memorable acronym — TATS, for track, assess, take action and save. After the hourlong session, Schocko set up another appointment with Aitken to turn in a report for the "assess" stage.

"She's going to be fine," Aitken said after Schocko left. "We're just trying to remove obstacles and then get her saving."

Ernie Robinson, who works in fleet management for the tribal government, turned to a credit builder loan at LLFS after a divorce pushed him into debt. With 240 hours of annual paid time off, Robinson could negotiate a relatively large loan.

He consolidated the debt and said he became used to seeing the loan payments deducted from his paycheck. "I knew it was going to help me in the long run," he said.

And it has. Over three years, Robinson took his credit score up more than 100 points to around 750. He now has a car loan from a regular bank, but he's still on the roster in the LLFS credit builder program.

He said he uses it when he needs some extra cash for, yes, vacation.

"I can send 60 [PTO] hours over, get some cash and then repay it," he said. "I don't want a bunch of credit card debt again."