Loan Zone: CUSO Bridges ‘Justice Gap’ for Texas CU Members

Mary, a single mom and disabled veteran, always had the dream of home ownership.  But the excitement of receiving approval for her first mortgage was quickly squashed when she learned she could not close on her loan, as she was still legally married to a man she had been separated from for three years. Although the separation was amicable, and even though they both had good jobs, neither Mary nor her estranged husband had the $2,500 to put down as a retainer to hire an attorney, and divorce had never seemed urgent. Now it was, with Mary’s dream of a home for her and her children hanging in the balance.

Mary’s story is all too common. As Chief Justice Nathan L. Hecht of the Supreme Court of Texas stated in his presentation to the 84th Texas Legislature:

“Access to justice is a struggle, not only for the poor, but for many in the middle class and small businesses who need the legal system but find the costs prohibitive and are forced to try to represent themselves. There are lawyers looking for work, and clients who need lawyers, but the cost of legal services keeps them apart. This has been called ‘the justice gap,’ and it’s growing.” 

That’s why we formed Justice For Me Inc., a new credit union service organization headquartered in the Austin-San Antonio corridor. Justice For Me bridges the “justice gap” that Mary and millions of other Americans fall into by working with attorneys and their clients to facilitate manageable payment plans and eliminate the need for large, upfront retainers. 

We do this by putting in place agreements and processes for attorneys and their clients whereby we pay the attorney’s invoices directly, minus a service fee, and then set up a payment plan for clients to pay their invoices over time. Our standard payment plan is an 18-month term at 10 percent interest. This arrangement gets the attorney out of the credit and collections business. Uniquely, if the client makes all their payments on time and pays off the invoice in less than 12 months, we refund the interest paid.

Justice For Me was formed in late 2017 by a team of experienced startup professionals. My own experience founding an internet security provider startup that has a large presence in the credit union space prompted us to explore partnering with CUs to facilitate lending and enabling access to justice for their members. This activity culminated in $3.2 billion TDECU, a large credit union based in Houston, investing in Justice For Me’s seed round as well as providing a line of credit for Justice For Me to support the payment plans extended to clients.

Justice For Me began formal operations in October 2018, and the growth has been exponential. As of January 2019, 25 attorneys have joined the network, and we have helped 45 clients get the legal representation they needed. 

Initially, we began decisioning and servicing the loans ourselves, leveraging our line of credit with TDECU. However, given our growth—which has outpaced any forecast—and a market size of $200 billion, it made sense to take advantage of TDECU’s indirect lending solutions. As such, we have begun working with TDECU to integrate our proprietary attorney and client dashboard and online application technology. Through this integration with its loan origination system, TDECU can decision, hold and service the loans we facilitate. With an average loan size of $4,500, TDECU is able to grow its loan portfolio based on its own lending criteria. Justice For Me is able to focus on building and managing our attorney network. Most importantly, our organizations are working together to help members access the justice system. We anticipate full integration and automation later in 2019.

While other offerings—such  as legal insurance or pre-paid legal—have been tried in the past, none have really worked. With legal insurance, the insurance provider sets the rates, which are sometimes half or a tenth of what an attorney would normally charge. This limits the available pool of attorneys and is not a sustainable way of growing a business. As for clients, even though they have paid monthly fees, legal insurance often offers limited coverage and choices. For instance, with most plans, divorce and family law help are excluded. Clients may not realize their purchased insurance is so limited that they’ll still have to pay out of pocket in more complex legal situations.

At Justice For Me, we provide solutions that avoid these pitfalls by providing choice. For attorneys, there are no upfront fees or fee restrictions. As such, they can concentrate on growing their practice while focusing on representation, not collections. Clients gain access to quality legal representation and can use any attorney in the network or have their attorney join Justice For Me.

The credit union mission of “people helping people” goes hand in hand with Justice For Me’s mission to provide easier access for Americans seeking legal representation. As such, becoming a CUSO only made sense. By partnering with credit unions, we hope to serve people around the U.S. while helping CUs build their loan portfolios and membership.

As for Mary, she found Justice For Me online. She looked through our directory of attorneys, found one she liked and made an appointment. After a little bit of paperwork, she was approved for a credit line with manageable payments, the attorney began work and her divorce was finalized in fewer than 90 days. She closed on her mortgage. Today, Mary and her boys are living in their first home, and her dream of home ownership is a reality. cues icon

Joseph A. Cooper is CEO of Justice For Me. Cooper is the founder of multiple technology startups, including Digital Defense, an internet security provider with a large presence in the credit union industry. Justice for Me is a financial technology company dedicated to financing attorney fees for those clients who would rather make their attorney payments over time than tying up their cash with an up-front retainer. Headquartered in the Austin-San Antonio corridor, the CUSO pays attorney bills quickly at a discount and provides clients with 18-month payment terms. More information is available at www.JusticeForMe.com.