Beginning with the first large waves of immigration from Eastern Europe in the late 19th century, the Jewish community has banded together to help its members. In 1887, that mutual support took the form of the first Hebrew Free Loan Association in Pittsburgh, Penn., providing small cash loans at no interest. In 1914, Seattle’s small Jewish community formed their own local Free Loan Association. As immigration slowed in the 1940s, so did awareness of the free loan movement. Yet, even after 125 years, the HFLA is still around.
“It’s been in continuous operation for all those years,” said Jack Altabef, the group’s past president. By the 1990s, there were more than 70 Hebrew Free Loan Associations in the United States, Canada and Israel.
“It really is a very intriguing concept,” he said. “It is rooted in the Torah, which instructs us not to charge interest for loans granted to people in need.” In Seattle, virtually everyone in the group volunteers his or her time, and they have term limits, which they usually follow (though Altabef admits that some people “are just too valuable to let go of”). While volunteers serve as officers, and contributions cover the ongoing expenses and add to the fund, he said the organization has preferred to maintain a low profile.
“I call it ‘the quiet organization.’ It operates almost without a sound. Nobody hears about it, nobody knows very much about it,” Altabef said. “I knew nothing about [the organization] until about four years ago when a friend of mine told me he was going to become the president, and would I be interested in becoming a member of the board? That’s really when I found out a lot about it — what it does, how it works, some of the historical information.” He said the group does its recruitment and most of its fund-raising on a direct, personal level, rather than seek publicity.
Altabef explained that the group recognizes that some people in the community have needs beyond their ability to help, but that they “fill a very important niche.”
“The real thrust of our effort is to help relatively local Jews who ... are not destitute to the point where a loan of this kind will have no impact on their recovery, but where they have a temporary financial need,” he said. “It has been doing that all these years, and I really think it has done a tremendous thing for the people it has helped.”
He said a number of fairly affluent donors have come forward in the years he has been a part of the group and talked about how much the HFLA’s assistance mattered to them at the time, often making sizable contributions in turn because of that. “All the funds we have are the result of dues, donations and bequests,” he added. “That’s the only way we have a capital fund to operate, but it works.”
Some things have changed over time: Originally the Seattle HFLA made loans of up to $10. Today the Seattle HFLA provides loans of up to $2,500 for any number of purposes with as much as two years to pay it off, and has established a separate category for student loans. At the start, membership dues were 50 cents a month, and they had an initial membership of 60 people. Today members pay $25 annually and number more than 700.
The way they operate has also evolved over the years. Until relatively recently, said Louis Isquith, a long-time board member, the group took requests on post cards and simply mailed out the checks, relying on the strength of the community connections to encourage people to pay back the loans. Currently, they have a somewhat more formal procedure, meeting with the applicants to review their needs, setting up a repayment schedule and asking for co-signers to help make sure the money comes back to be loaned out again. At present they have approximately 100 loans outstanding. In 2000 they granted 75 new loans and 99 new loans in 1999.
Someone needing a loan from the HFLA starts by getting in touch with any of the officers or 15 board members to talk informally about their need. The request is then passed along to the group’s financial secretary, who interviews the person by telephone to gather some basic information on their needs, and the availability of co-signers to help insure the loan before sending out a formal application package. Once the application, which contains information on both the person asking for the loan and their co-signers, the financial secretary reviews it and verifies as much of the information as possible before passing it along to a team of two board members who will meet with the person.
“That gives the applicant a face ... to see whom he or she is dealing with and gives the board members a chance to ask questions that are not on the application form,” Altabef said. “Very, very few loans have been turned down, but the interview procedure is very important to let the applicant know us better and get a feeling that this is not just a grant.”
Among the member groups of the International Association of Hebrew Free Loans, those in larger cities like New York and San Francisco have offices with paid full-time staffs and a much wider variety of loan categories and amounts they can provide. “They’re much more bank-like or formalized in their repayment methods,” Altabef said. In smaller cities many associations operate on a volunteer basis with their own sets of rules, much like Seattle. He said that even though they have remained in the background, involving the larger community could help by allowing them to increase the amounts of the loans and expand the categories of loans they make.
“No matter how good times get, there will always be people who fall through the cracks and need help, and that’s what the Hebrew Free Loan Association is dedicated to,” he added. “It’s really very gratifying to be a part of this organization.”