Affinity Plus Goes All The Way For A Midway Neighborhood

COVID-19 might have emptied offices at Affinity Plus Federal Credit Union ($4.2B, Saint Paul, MN), but it also opened the door to supporting a nearby underserved community.

State employees founded Affinity Plus during the Great Depression, and the cooperative was known as State Capitol Credit Union until 1999. Twenty years later, the pandemic forced the credit union to shutter state offices; it then closed a branch near the capitol building in Saint Paul in 2022. A year later, it opened a new branch four miles to the west, closer to Minneapolis, in the Midway neighborhood.

The credit union still maintains a high-volume ATM at the capitol-area location, which state employees and downtown Saint Paul workers continue to patronize. The bustling new Midway branch, meanwhile, is filling a void in financial services that exists in the vibrant, diverse neighborhood nestled midway between the two downtowns.

Here, Affinity Plus president and CEO Dave Larson provides insight behind moving a branch a few blocks away from the seat of government and into a neighborhood ripe for community impact.

What motivated Affinity Plus to open a branch in Midway?

Dave Larson: We saw an opportunity to work with underserved and underbanked populations in Midway — which some on our team called a desert in terms of access to culturally appropriate financial products and services. We opened the branch in early 2023 with a lot of local support.

What was your overall strategy, in terms of business and putting credit union principles into practice?

DL: Financial inclusion is the heart of the credit union model, and Affinity Plus constantly evaluates where there are gaps in financial access in the communities we serve. As a community-focused financial institution, we are committed to bringing exceptional financial resources to people in our community, especially those who don’t have a bank account or rely on alternative products outside of the traditional banking system.

The Midway neighborhood has historically lacked banking options. By connecting with the members of this community, we can help remove barriers and provide access to high-quality financial services. Our reach in the community around the capitol was strong, and the new location continues to serve them as well.

Midway neighborhood populations didn’t have many options. We saw an opportunity to offer our community-focused banking products to folks who could benefit from them, and we took it.

Is this a story of moving into a troubled area rather than fleeing from it? How would you address that point?

DL: Opening the Midway branch was about Affinity Plus putting our values and our mission into action. One of our foundational values as a credit union is a commitment to building stronger communities across Minnesota. Access to financial services is a key part in that growth, and Midway neighborhood populations didn’t have many options. We saw an opportunity to offer our community-focused banking products to folks who could benefit from them, and we took it.

One example: Karen was an existing member who visited the new branch. In the course of her interactions with our staff, we discovered she had an auto loan with a bank that was charging her a predatory rate. We refinanced it at a fraction of the rate and decreased her loan payments significantly. And our interactions were all in her preferred language of Spanish.

Why did you decide to go this route instead of simply opening a new branch?

DL: The pandemic changed how people live, work, and do their banking. We as a credit union had to take new patterns and needs into account when allocating our resources, and with fewer workers headed into downtown Saint Paul than before COVID-19, it made more sense to move the branch.

How is the Midway market different from other areas you serve, including the one you moved from?

DL: Midway is one of the most populous, diverse neighborhoods in the Twin Cities. It tends to be younger, family-oriented, low-to-moderate income households. It’s on the light rail route, and a lot of members who walk in don’t have their own car. The most significant difference might be the language opportunity — our member advisors there speak Spanish.

Why did you decide to plant a footprint there? How did you choose this specific area?

DL: When we were looking at alternatives to the Capitol branch, we made a conscious choice to seek out underserved and underbanked locations in Saint Paul — those with no or few bank and credit union locations in walking distance. The Midway neighborhood met those criteria and better bridged the gap between our Saint Paul and Minneapolis locations.

How did your approach to service change at this new branch?

DL: One major difference between the branches is that employees at the Midway branch are bilingual in Spanish. We want our members to feel comfortable and confident in their banking decisions, and offering language services helps with that. The Midway branch offers the same full suite of banking services that we offer at all our locations.

Treating people with care and empathy is the right thing to do, and a byproduct of that is creating a credit union member for life. Our members respond to actions like opening the Midway branch, and our continued member growth shows others do as well.

Is the new branch profitable? Does that matter as much compared to branches in more affluent areas?

DL: The Midway branch is very successful. New member growth has exceeded expectations and is comparable with similar-sized branches in other locations. It has shifted some of the lending from other locations as we are physically closer to these members. The branch is profitable, and although we don’t expect the same number of mortgages or auto loans as some branches, these members are loyal and refer others.

We believe in putting people over profit. We saw an opportunity to offer our community-focused banking to the underserved populations in the Midway neighborhood, and we took that opportunity because it aligns with the core reason we exist as a credit union.

What kind of neighborhood impact is Affinity Plus having? How does building its reputation as a community partner benefit the cooperative?

DL: We hope to continue building trust with our neighbors in the Midway community and continue working with individuals on their financial goals and dreams. We’ve seen some great success stories with people opening their first accounts and learning that banking is accessible and meant for them, too. More individuals with stable finances means a stronger community as whole.

What tips can you share from Affinity Plus’s experience at the intersection of branching and financial inclusion?

DL: People need access to banking services, but we often find they also need someone to listen to them and understand where they’re coming from. Money is emotional, and we’re not judgmental when our members and potential members come to us with questions.

Treating people with care and empathy is the right thing to do, and a byproduct of that is creating a credit union member for life. Our members respond to actions like opening the Midway branch, and our continued member growth shows others do as well.

This article has been edited and condensed.