Top-Level Takeaways

• SLCCU offers affordable financial products, an extensive branch network, and connections to essential non-financial services through partnerships with community providers.

• The credit union ramped up its commitment to community after the unrest in Ferguson, helping rebuild that suburb’s social and financial fabric.

• SLCCU released its first impact report in 2016. The 20-page document included data as well as stories about members and the community.

CU QUICK FACTS

St. Louis Community Credit Union
Data as of 06.30.19

HQ: St. Louis, MO
ASSETS: $299.5M
MEMBERS: 61,284
BRANCHES: 17
12-MO SHARE GROWTH: 5.1%
12-MO LOAN GROWTH: 8.0%
ROA: 1.17%

In August 2014, St. Louis Community Credit Union ($299.5M, St. Louis, MO) announced plans to open a new branch in economically hard-pressed Ferguson. A week later, the St. Louis suburb exploded after the shooting death of unarmed 18-year-old Michael Brown during an altercation with a local policeman.

Looting and arrests occurred in the days and weeks after the shooting, and legal recriminations continued for months, yet SLCCU kept its commitment to the community and opened the branch that October.

In its first year, SLCCU’s Ferguson branch opened more than 1,230 accounts and conducted nearly 66,000 transactions.

And through its Ferguson Strong initiative, the community development credit union has expanded beyond banking to offer financial education, internships, and funding to agencies engaged in improving housing conditions, just for starters, building on its record of similar work throughout its service area.

Much of that work around the St. Louis area is based in its branches. SLCCU has 17 of them, twice as many as average for a credit union its size. Some also are in non-traditional locations, such as social service agencies, where the cooperative feels it can further follow through on its commitment to meet need where it exists.

Indeed, SLCCU is committed to making a positive impact in the six counties it serves in Missouri and Illinois, and like many credit unions, also has taken on the challenge of getting that message out. A major tool for that is its impact report. The credit union issued its first report, which ran 20 pages, in 2016.

St. Louis Community Credit Union released its first impact report in 2016. Click here to download the 20-page report SLCCU issued three years ago. Work is underway on a new edition.

Here, vice president of community development Paul Woodruff explains his credit union’s strategies and commitments to creating a positive impact for social change in its service area, and about how to tell that story.

Paul Woodruff, Vice President of Community Development, St. Louis Community Credit Union

The first page of SLCCU’s impact report says, We are a leader and voice for social justice in the financial services world. How does that inform your activities and speak to your role as a member-owned financial cooperative?

Paul Woodruff: We’ve specially tailored our approach to community development banking to meet the needs of those who have been overlooked by mainstream financial institutions as well as those who just need easier access to the things in life that folks who are middle and higher income can take for granted. In short, we are a voice for social justice.

What about your field of membership makes your approach so necessary?

PW: The national median household income for white households was $61,000 in 2016. Median household income for black and Hispanic households was $35,000 and $39,000 respectively. This dramatically impacts the ability of non-white households to acquire a car, home, or small business. It also limits the amount of credit non-white households can borrow and leverage to purchase these assets, meaning the opportunity for economic mobility is limited.

We estimate that more than 80% of our account holders are African American. About the same percentage are low-income households. These financial constraints make it harder for our members to deal with financial emergencies or income shortfalls.

Recognizing this, over the past 10-plus years, SLCCU has reoriented itself drastically to offer members products and services that meet their needs, including second chance checking accounts, credit builder loans, payday loan alternatives, specially designed used auto loans, and more.

How do you go beyond banking?

PW: SLCCU connects resources with members and community members that experience some kind of need. For example, we have a growing partnership with a regional organization called Operation Food Search. OFS is a leader in stocking food pantries, operating temporary pop-up food pantries and summer meal programs for children, and more.

We also partner with local health providers to bring mobile mammography vans to our branches to provide free screenings to women who either lack insurance or access to this resource.

Recently, we’ve started to work with partner groups to register people to vote and created a workforce development program providing skills training for individuals looking for better employment opportunities.

Where there is an opportunity to enhance our members’ lives that aligns with our ability to deliver both financial and non-financial services, we work to fill the gaps. The less stressed our members are, the better able they are to navigate their lives and manage personal finances.

SLCCU held a grand opening for its new Ferguson, MO, branch on April 22, 2015. At the podium is Dorothy Bell, the credit union’s senior vice president for communications.

Talk more about SLCCU’s work and impact in Ferguson, including your branch there.

PW: Prior to the death of Michael Brown five years ago, SLCCU had purchased a former bank branch and was actively remodeling it to be opened later in 2014. When protests erupted and a wider movement arose to address systemic racism and other barriers to communities of color, we kept moving forward to deploy the branch and serve people living in and around Ferguson.

Our then-CEO Patrick Adams and I also participated in the Economic Inequity and Opportunity sub-committee of the Ferguson Commission. We were among many people who worked to shape calls to action in the wake of protests. Ultimately, we were successful in getting several calls to action in the final report. Some of these included calls for support to CDFIs, increased community banking presence in financially underserved areas, support for financial education, and more.

Today, aside from offering our full range of services to the community, we bring a mobile mammography van to the branch on an annual basis, offer internships for students at the branch, connect members with supplemental food resources, and more.

Our members are amazing people who face a range of challenges. By grounding our report in numbers and compelling narrative, we get to tell the story of St. Louis Community Credit Union to a wide audience.

SLCCU has 17 branches. A typical credit union your size has eight. What role does the branch play in your service strategy?

PW: Just as there are food deserts throughout the country, so, too, are there financial services deserts. Banks and credit unions have disinvested in the urban core of St. Louis and other low-income communities. This service gap has allowed for the rise of payday lenders and check cashers who provide alternative, high-cost financial services.

The majority of SLCCU’S branches are in economically distressed U.S. Census tracts. In fact, 98% of St. Louis City residents live within two miles of one of our branches. Many of our members distrust the financial services industry. Either they or someone they know has been negatively impacted through an account closure, a foreclosure or repossession, negative reporting on their credit bureau, fees, and more.

People who face financial distress need to access their money in a manner that they trust. We have invested enormous amounts of our resources into a large branch network because, by and large, our members expect to be served in-person.

How do you price products to help members while generating enough income to keep the credit union sustainable and thriving?

PW: We use risk-adjusted pricing to manage a portfolio that is one-third prime, one-third non-prime, and one-third sub-prime. We have a number of products- including credit builder, payday lender alternative, and some used auto loans that we underwrite without using a credit score. Instead, we look to cash flow and how the member has managed their account with SLCCU.

In addition to using a non-traditional underwriting method for many of our loan products, we work proactively with NCUA and state regulators to help them understand our mission, the need of the community, and our ability to effectively manage risk.

The average yield on our loans is typically higher than that of our peers because members with less healthy credit pay a little higher rate. However, the rates we charge are much lower than what they could expect to pay at payday lenders, check cashers, and buy here-pay here auto lots.

How Do You Compare?

SLCCU reports 3,570 members per branch, according to data from Callahan Associates. The national average for all credit unions nationally is 5,632 per branch. How do you compare? Find out with Callahan Analytics.

Your report says SLCCU hires from the communities you serve. How do you do that?

PW: We source staff from employment agencies, community employment fairs, and existing staff. Many staff came to know us by being members and then applying for a job. We’ve also sourced employees through a workforce training program known as the Gateway to a Banking Career, which we created in conjunction with two bank partners [Carrollton Bank and Enterprise Bank Trust].

The report also says your membership is majority female. How do you know that? What else do you know about your membership that helps you create services?

PW: We’ve run analysis that shows the majority of our members are women. Additionally, many of our female members are single-parent head of household.

How do you decide what issues to address?

PW: Think of kitchen table conversations that our members have on a regular basis. How are we going to keep food on the table? How are we going to pay rent? How will we pay gas and electric? We’ve gone back to the basics in thinking about how we can play a positive role in the lives of members who have needs beyond financial services.

We help struggling members meet basic needs and get to a more sustainable path by connecting them with opportunities to thrive that don’t involve a savings or checking account, loan, or other financial service.

Meet Them Where They Are

St. Louis Community Credit Union continues to build on a long record of broad and deep service to its community that goes beyond banking. Here, vice president of community development Paul Woodruff shares a few best practices they’ve learned along the way.

• First, meet people where they are and treat them with respect. Don’t expect the community to come to you or adapt to your desired way to serve them. They might surprise you with their loyalty and lifelong business.
• Don’t trick yourself into believing your institution must be everything to everyone. Develop a few simple products that can meet the needs of low- to moderate-income households and do them well.
• Believe in the capacity of low- and moderate-income households to manage their finances when given a chance. These families have financial needs and can be good members who sustain your operations through loans and service income.
• Embrace risk-adjusted pricing with prudent underwriting, appropriate pricing for non-prime and sub-prime borrowers, and a willingness to work with members who fall behind.
• Finally, fill the donut hole. Go where others will not go. That’s how SLCCU has doubled its membership and asset base in the past 12 years.

What certifications do you hold?

PW: We’ve been a certified community development financial institution for more than 10 years. We’re also a low-income designated credit union and minority depository institution.

We submit annual recertification documentation to the CDFI fund to maintain that designation and are assessed infrequently by NCUA for the LIDCU and MDI designations.

What’s the story behind your impact report?

PW: We took the lead of peer CDFIs like Hope Credit Union that do an outstanding job for their members and tell the story of their institution and produced our first impact report in 2016.

We’re planning to have a new version by the end of this year and aim to do them every other year.

Our members are amazing people who face a range of challenges. As they work to overcome barriers and strive to thrive in their financial lives, they accomplish some amazing feats. Additionally, we have some outstanding partners that come from a variety of sectors to assist our members or augment things we don’t do.

By grounding our report in numbers and compelling narrative, we get to tell the story of St. Louis Community Credit Union to a wide audience.

How do you distribute the report?

PW: It is available at special events, and we mail it to partners, legislators, and community leaders. We also use it as a lead when meeting with existing and new partners. Additionally, we have the report on our website for people to access digitally.

Who creates the report?

PW: All the data and writing is completed by the Community Development Team, specifically our assistant vice president of community development, Maria Langston, and me.

How do you decide who to feature?

PW: It depends on who’s willing to participate, but we strive to have diverse members and partners who illustrate the best of what we do. Additionally, we look for partners to join us in this story telling. We most recently worked with Humans of St. Louis (HOSTL), which is one of hundreds of Humans Of affiliates nationally. The organization takes a humanistic approach to telling the story of people and their lives. We hired HOSTL to conduct interviews with members, staff, and partners, which we’ve used in a social media awareness campaign.

This interview has been edited and condensed.