One Detroit Credit Union said it is expanding its Auto Bailout Program, which refinances high-interest auto loans for members. It will now offer the program to all qualified local borrowers.
Since the program launched in 2012, it has saved members more than $2 million and helped nearly 600 people reduce their auto rates by least 50%, the credit union said, adding it has invested $10.3 million in the program.
Headquartered in Detroit, the credit union has assets of almost $33.4 million.
In its current round of refinances, which started a little over a year ago, One Detroit refinanced more than 300 loans with an average annual percentage rate of 14.1%. The average new rate after refinancing was 6.46%.
"To put that in perspective, nearly two-thirds of the loans we've refinanced had rates of more than 10%," One Detroit Credit Union President/CEO Hank Hubbard said. "About a third had original rates of more than 18% and 10 loans had rates higher than 24%."
The program has helped members keep their vehicles – an essential possession in Detroit, Hubbard said.
"Public transportation in the neighborhoods is almost non-existent," Hubbard said. "The need for access to a reliable car is critical to bridge all of the most basic market gaps we see –unemployment, healthy food, education, affordable financial services and more."
The program will be expanded to assist local borrowers with extraordinarily high interest rates.
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