In its nearly 20-year history, Hope Credit Union ($186.7M, Jackson, MS) has provided nearly $2 billion in financial investments for the various communities it serves, improving hundreds of thousands of lives along the way.
As a United States Department of Housing and Urban Development (HUD)-approved regional intermediary, Hope was particularly active on the forefront of the post-Katrina recovery. But today, its efforts have expanded in multiple directions, targeting partnerships with pillars of the community such as schools and colleges, as well as offering day-to-day, retail-level counseling and support that is truly having a transformative effect on people's lives.
Choosing to put these funds towards mutually beneficial projects and community philanthropy does mean making some sacrifices in other areas. But as the following examples demonstrate, thinking "we" instead of "me" can do more than generate good karma … it can be good business as well.
"We don't have the budget to be on TV and radio in Jackson, New Orleans, Memphis, Little Rock, the Gulf Coast, Lafayette, Lake Charles, and all the other markets we serve," says Richard Campbell, Hope's CFO. "So we've got to invest differently and be smarter about how we reach out."
Shaping Mindsets, Saving Lives
Say what you will about the timing, but Hope's 2004 decision to open a branch in the small neighborhood of Central City in New Orleans quickly proved a godsend for its residents, as well as other members throughout the state, who were affected by Hurricane Katrina just a year later.
In the aftermath, more than 10,000 residents were in need of federal or state assistance. Yet even something as simple as getting people qualified for and set up with checking accounts so they could receive those funds proved a challenge.
A 2004 expansion into New Orleans provided residents with vital financial support post-Katrina.
Typically, distressed individuals who had been denied by other lenders or who had abused these accounts in the past had to start with basic share accounts, before graduating into checking or even rewards checking as the level of comfort and trust between both parties continued to evolve, says Pearl Wicks, Hope's senior vice president of retail administration.
"The first few years after Katrina were a particularly intense time for everyone," agrees Laura Howe Repp, the senior vice president of community development, who was hired by Hope in 2007 to run its ongoing financial counseling and education efforts in the region. In partnership with the state of Mississippi, Hope was able to use more than $850M in grants to organize counseling for more than 9,000 homeowners with damage caused by Katrina.
"Everyone who was receiving a check from the Mississippi Development Authority was required to attend mandatory counseling, but through Hope, we were also able to offer them around 20 different forms of additional voluntary counseling and support," Repp says.
These sessions touched on everything from the prevention of contractual fraud, to familiarizing people with the home construction process so they were not taken advantage of, and even providing referrals to mental health specialists for those severely impacted by the stress and trauma of the recent events. "Even if we couldn't provide the needed service directly, we made sure they had whatever resources they needed before they left our sessions," Repp says.
Young residents head to Hope to establish their Mississippi College Savings Accounts.
Immediate recovery efforts at Hope lasted several years after the storm, but this department also expanded in a more permanent direction, eventually becoming rebranded as the community and economic development team.
For example, one campaign focused on providing small rental property owners with credit counseling and assistance with securing Mississippi Development Authority — Small Rental Assistance Program funding so that they could get their rental units repaired and back on the market.
At the same time, the credit union also began looking at smaller, branch-level programs that could be delivered effectively throughout its rapidly growing footprint. These included several electronic options – such as counseling by telephone or even WebEx sessions — to connect with those in more rural areas, many of whom actually have a greater amount of credit challenges than members in the cooperative's more centralized markets.
Hope also started creating free podcasts on a number of topics and began offering a self-guided program from the Housing Partnership Network and Minnesota Homeownership Center called FRAMEWORK, which helps familiarize first-time homebuyers with each component and individual (lender, inspector, realtor, etc.) involved in the buying process.
A groundbreaking ceremony at McDonogh 42 Charter School.
"These electronic offerings are convenient, as the member can do them at their own pace and on their own schedule, but we still view them as more of supporting resource than a replacement for counseling," Repp says. "That's because our members may have more than that one need which caused them to reach out, and until we actually talk to them, it's tough to get at the foundation of what is really causing these issues."
The community and economic development team currently employs three full-time counseling staff as well as a handful of programs officers spread throughout the branch footprint. Individual cases and member progress are tracked through Fannie Mae's Home Counselor Online system as well as other internal resources.
"At this point in time, we're not funded by any specific grants, so it's a huge upfront commitment for us to take all this on, but we stand behind that investment because of what we know this counseling does for our members," Repp says. "We've helped save people's homes on the last day and assisted people who felt like they were beyond the point of no return."
And it's not just those in trouble who benefit from Hope's counseling services.
Through its Black Farmers Wealth & Heritage Initiative, Hope provided individualized counseling for people who had received $50,000 settlements as part of the class action Pigford lawsuits, which arose out of racial discrimination by federal agriculture officials.
In these and other cases where members received large lump sums of money, the credit union encouraged a dialogue to help these individuals create a game plan that could connect this immediate windfall to their long-term goals.
"No two individuals had the same plan for their funds, so we were able to help them with individual plans, but our primary goal was education to ensure that they didn't become victims of a scam after receiving settlement funds," Repp says. "Some participants needed intensive credit repair and counseling, so in those cases we worked on settlements with any collections agencies that were after them, walked them through the process of beginning to rebuild their credit, and provided an action plan to guide the continuing process."
A Partner In Opportunity
While individual support is crucial, Hope is also learning how to effectively identify and enhance important consumer hubs in its footprint and, ultimately, leverage these connections to lift up entire communities together.
"We know that there are many historically black schools, community colleges, and universities in our region where the alumni, students, and faculty are more likely to be underserved than the general population," says Bill Bynum, Hope's CEO. "We see that as a natural partnership, taking the traditional SEG approach and applying it to these institutions."
One example is the credit union's partnership with the University of Arkansas at Pine Bluff (UAPB). In the early years, interaction with this and other universities primarily revolved around financing for commercial housing developments. But at UAPB, this relationship took on a new form through the introduction of a credit union-backed business curriculum called Fast Track.
"The idea was that we could help teach entrepreneurs how to better develop their business plans, which would allow us to make better lending decisions and help more of them get a loan when that time came," Bynum says.
While UAPB already had a small credit union on its campus, in 2013, Hope was able to secure a physical presence at the institution's offsite business incubator. Today, this location serves as both a way to provide core financial services and teach key skill sets in the community, as well as a way to funnel in new retail and MBL business for the credit union.
Hope visits with the East Arkansas Enterprise Community organization and gets a hands-on look at its farmers initiative.
"This location is cashless, staffed by students, and has a leased ATM for cash access," Bynum says. "This more efficient approach has allowed us to enter the market at a very small cost, and that's important since the location is secured through a partnership."
Another key educational alliance came when the credit union and several other organizations were able to finance the renovation of the McDonogh 42 Elementary Charter School, which had been badly damaged and in need of repair ever since Katrina hit.
"Over 90% of the kids there were on a free or reduced lunch, so we knew there was a lot of opportunity to connect both the students and their families to good banking services and additional financial opportunities," says Ed Sivak, the credit union's chief policy and communications officer. "After closing that deal, we were right back down there meeting with leadership of the school and the students' families."
At the same time, the credit union's Mississippi College Savings Account Program, for which Hope serves as the depository, has allowed youth in Head Start centers in Jackson to start saving for college or vocational training. Children participating in the program received donations for their initial deposit, and their saving can continue to grow with any deposits that they, their friends, or their family make, says Scot Slay, Hope's vice president of marketing and communications.
In this way, the credit union is directly helping young members toward their college dreams or the start of their first business. And seeing their children's progress can even convince parents to change their own saving behaviors.
Some residents may not have the opportunity to attend a certain school or university with which Hope partners, but everyone has to eat. That's why the credit union is also doubling down on its investment in grocery stores as part of the New Orleans Fresh Food Retailer Initiative.
For example, Hope has a long-standing history of dual promotions and membership events with Rainbow Co-Op after providing the commercial loan for this organic food store's building. It also takes advantage of the natural foot traffic available in this space for the placement of an ATM.
Likewise, providing financial support for the 2014 reopening of Circle Food Store, the first African-American owned grocery store in the Big Easy's 7th ward, has allowed this business to become a focal point of the community once more. And Hope plans to further build on the value of this site as a one-stop shop by opening its first in-store branch there sometime within the coming months.
"People in these communities need access to fresh food, but they also need a place to get fresh, affordable financial products and services," Wicks says.
Even for businesses where a physical presence just wouldn't make sense, Hope still sees some potential for partnerships. One of its main goals for 2014 and beyond is to increase what it calls "The Friends of Hope" — a group of organizations that will help the credit union cover the costs of going deeper into these communities.
"We don't want partners who will just allow us to come in and then stand back," Sivak says. "We want people who will actively bring us their customers to become members because they know it's a good thing for them. These are the opportunities and investments that we've found to be the most fruitful and successful in the long run."