Top-Level Takeaways

• GreenState Credit Union has a goal to fund $1 billion in home loans to people of color by 2030.
• The cooperative is partnering with non-profits and realtors to impact generational wealth disparities and encourage homeownership within marginalized communities.
• Internally, the credit union is working to recruit more diverse staff members and tackle unconscious bias.

GreenState Credit Union ($9.5B, North Liberty, IA) is taking steps to make an impact in the marginalized communities it serves. In 2020, the cooperative created a Community Investment Statement with an initial goal of funding $500 million in mortgage and home loans to help close the racial homeownership gap in Iowa. In 2021, it doubled its goal to $1 billion.

Here, Jeff Disterhoft, president and CEO of GreenState Credit Union, talks about the thinking behind this strategic initiative and challenges other cooperatives in Iowa and across the nation to join his credit union in making a real impact in communities where homeownership has been inaccessible.

Ryan Doehrmann, chief mortgage officer, and Lindsay Cannaday, vice president and business development director, also share details about how the initiative works and what is driving its success.

Why did GreenState decide to focus on homeownership? How did you settle on the $1 billion figure?

Jeff Disterhoft: From our perspective, there are three components to a healthy community: physical health, education, and income to support a reasonable standard of living. As credit unions, we might lack the forum to make a difference directly in people’s physical health or formal education, but we can make a meaningful difference in people’s income. Specifically, the impact owning a home has on generational income.

Housing prices nationwide are up 32% on average and if you’re in a marginalized community where homeownership hasn’t been a part of your family, you’ve missed out on that income. It is significant, and it moves the needle in areas such as educational attainment, personal wealth, and children’s health. If we do a better job of getting home loans in the hands of people of color and historically marginalized communities, we can reverse some of the damage that’s been done during the past several centuries.

The $1 billion is a stretch goal that also represents a little more than 10% of our total assets. Our initial goal a year-and-a-half ago was $500 million, but we’re capable of so much more. To date, we’ve made $178 million in home loans through this initiative.

How does the credit union intend to reach this goal?

JD: We started by tailoring our underwriting standards to people whose domicile is within low-income census tracks. There is also an educational component, which is helpful for those who might not qualify today, to enhance financial wellness so more individuals can qualify in the future. For those who do qualify now, the education helps to ensure they understand how to manage their finances, including maintenance and other expenses, and stay in their home long-term.

What other hurdles beyond underwriting guidelines and education is GreenState planning to address?

Lindsay Cannaday: We must build trust in marginalized communities, which will not happen overnight. We must continue asking questions and analyzing our processes and procedures to make sure we’re removing as many barriers as possible. Partnering with the communities we serve will be key.

We are partnering with credit counselors in each of our markets to deliver one-on-one credit counseling and repair assistance. GreenState is assuming the cost and will set up the borrower with our designated agencies. There are no strings attached.

How will you measure the overall impact this community-investment work will have on your community?

JD: We’re fixated on hitting that $1 billion target; however, I’m also challenging other credit union CEOs across the state of Iowa and hopefully across the nation to consider matching our commitment by investing 10% of their assets over the next 10 years in home loans to marginalized communities. We’re calling it the 10/10 program.

A single credit union in a single market is great, but imagine the combined impact all credit unions nationwide or across even one state could make. A grander collaboration like that would make a meaningful difference in the systemic oppression of people of color. Consider the industry’s total assets of $1.8 trillion. A commitment of $180 billion in home loans to marginalized communities could move the needle, not only for those served by GreenState but also for the country. That’s our long-term goal to encourage other credit unions to embrace and ultimately commit to this idea.

What lessons have you learned so far?

JD: It’s important we’re deliberate about the why behind this initiative particularly for our staff. It’s vital our teammates understand what we’re trying to achieve and how it benefits the community. By and large we’ve had nothing but positive support from the communities we serve, but if individuals do raise concerns or seem hesitant, I use those opportunities to speak to the why behind the initiative and how it benefits everyone involved.

The other lesson learned is that it’s OK to launch quickly and adjust later. We went live and announced our commitment before we had all our ducks in a row. We had the policy developed for the most part but not fine-tuned in the way we normally would. This created a sense of urgency and forced us to move quickly in a short timeframe. You can always modify small things, but if you delay you might miss an opportunity to make a difference in the lives of others.

RD: We are still early in the process on the underwriting side, but we are committed to adapting and learning from any mistakes we make along the way. We have partnered with NAMMBA (the National Association of Minority Mortgage Bankers Association) to become ASIL Certified (Accredited Social Impact Lender). NAMMBA will help us improve our plan and playbook on this program.

What advice do you have for other credit unions?

JD: Give the 10/10 commitment some serious thought. Here in Iowa, our population is expected to grow by 440,000 people over the next 18 years. Comparatively, the population of people of color in our state is expected to grow by 500,000. That means all our state’s population growth, and then some, over the next 18 years will come from people of color. This is an instance when doing good for our community will intersect with what’s good for business and that doesn’t happen often.

The second reason I encourage other CEOs to consider this is because it resonates with employees especially younger employees. Recruiting and retaining talent is a challenge for the entire industry, and I have been surprised by how much our staff has embraced this work. It’s become something positive to rally around and a reason they want to be a part of the credit union.

LC: Join us. Commit 10% of your total assets to homeownership initiatives that are targeted at marginalized communities. We will not be able to close the gap alone. We need our peers and competitors to step up and partner with us to make an impact.

This interview has been edited and condensed.

The post A Call For Cooperatives To Close The Racial Homeownership Gap appeared first on CreditUnions.com.

“Many members struggle to afford the down payment required to avoid private mortgage insurance,” says Stephanie Teubner, chief executive officer of Blue Federal Credit Union ($1.7B, Cheyenne, WY).

That’s why Blue is launching a solution to help members bridge the gap to a 20% down payment. The gap will be funded by fellow members via a crowdsource model that pays savers a higher interest rate on deposits dedicated to this program and then uses those funds to provide down payment loans for borrowers. The cooperative serves members in both Wyoming and Colorado, where in addition to general challenges associated with affordability and down payments first-time homebuyers are often forced to compete with cash offers from out-of-town investors.

“We knew this was a growing challenge for our members,” Teubner says. “So, we asked what we could do as a credit union to help.”

Guiding Blue’s effort to help was the credit union’s so-called “2030 plan,” a 20-year plan with a 10-year execution that looks out 20 years to consider where growth will occur and who the credit union wants to serve. A large cross-section of employees throughout the organization formed three independent teams to tackle strategic initiatives categorized as My Life, My Money, and My Community. The My Community team considered innovative solutions to down payment challenges as part of a broader push to create more opportunities for housing affordability.

“We were so excited by this idea as it went back to the original philosophy of credit unions people depositing their money so others could borrow,” Teubner says.

After initial research showed members were interested in participating in a crowdsourced down-payment solution, Blue vetted the idea, conducted more focus groups to fine-tune it, and created a new product that is currently in the pilot stage. Simply put, members invest in a special five-year certificate whose funds are specifically committed to help offset the down payment for members. Blue pays a higher yield on the certificate.

For the homebuyer, the mortgage underwriting follows the conventional process and covers 80% of the home’s value. However, fellow members’ willingness to crowdsource on the certificate side means homebuyers obtain the 20% needed for a down payment.

Crowdsourcing down payment assistance addresses one home ownership hurdle, but Blue partners with other first-time homebuyer programs to address other challenges as well, including closing costs and real estate agent commissions.

On the education side, Blue has offered homebuying programs for some time. However, the cooperative recently expanded its networking efforts to include local organizations that serve people pursuing homeownership whom the credit union might not have reached in the past.

“When we’re ready to fully launch, our hope is that these partnerships expand our outreach to those individuals who need the help,” Teubner says.

From understanding homeowner’s insurance options to explaining deductibles or how much it costs to replace a hot water heater, Blue wants to be a resource for members and non-members alike.

As far as advice for others, Teubner credits Blue’s success to its willingness to talk to people and use focus groups and surveys to understand what the needs of the community really are not just what the leadership team thinks problems are or should be. The CEO also encourages others to make connections and form partnerships with local organizations that are already doing good work in the community.

“You must be willing to put yourself out there with ideas that might or might not work,” Teubner says. “For us, it’s been an adventure. We weren’t always right on the spot, which is why asking questions of the members and non-members we’re trying to serve is key.”

The post Crowdsourcing For A Cause: How Blue FCU Plans To Ease The Down Payment Pinch appeared first on CreditUnions.com.

Founded in 1960, Carolina Foothills Federal Credit Union ($192.6M, Spartanburg, SC), launched its Financial Inclusion Mortgage for First-Time Homebuyers program in 2019. The program targets low-income borrowers mostly people of color and provides flexible underwriting practices, financial education, and partnerships with public, private and nonprofit groups.

“This is a program with special offers and incentives designed to help borrowers stop just dreaming and actually start living in their own homes,” says Chiannon Pauley, marketing strategist at CFFCU. “It is incentivized to help those of low to moderate income be able to qualify along with other higher-income borrowers. The program provides reasonable requirements for approval, and financial literacy is required to help the member understand the mortgage process, what to expect, how to plan for expenses, how to find a contractor, and more.”

Flexible Underwriting Practices

First-time homebuyers can qualify for a 30-year term with a 97% loan-to-value maximum. What’s more, the credit union does not require private mortgage insurance. Borrowers can get by with as little as a 3% down payment and receive an interest rate priced at just 50 basis points above the market rate. Underwriting guidelines require a maximum 30% housing ratio and 45% maximum debt-to-income ratio, a minimum credit score of 600, with compensating factors, and two years of verifiable income.

Borrowers are allowed to count gifted money and down payment assistance toward income. And when evaluating credit, loan officers can take into account 12 months of rental history from landlords; two to 12 months of satisfactorily paid utility bills; renters, auto, or life insurance premiums paid satisfactorily; and receipts for childcare, school tuition, or medical bills.

“We also allow completed financial homeownership instruction to mitigate less-than-stellar credit history,” Pauley says. “We have a flat-fee origination and lower closing costs than most other financial institutions.”

Secrets To Success

CFFCU, which has five branches to serve its more than 17,000 members, has been focusing on low-to-moderate income borrowers for years. But the credit union really began ramping up its efforts in 2015 when it became a certified Community Development Financial Institution (CDFI) and began applying for, and receiving, grants for loan loss and capital from the CDFI Fund.

This gave CFFCU more latitude to lend deeper into the community without fearing regulators clamp-down, Pauley says. “To date, we do not have any delinquency or charge-offs for first-time homeowners mortgages.”

Financial education is a key part of the credit union’s success. In addition to a required class on homeownership, the staff provides coaching and an in-house designed workbook that walks borrowers through the process and allows them to take notes as well as store receipts and paperwork. The workbook serves as a useful reference guide after the purchase.

The credit union also works with several partners that provide crucial down payment assistance the Federal Home Loan Bank of Atlanta, Northside Development Corporation, and the City of Spartanburg.

From April 2020 to April 2021, the credit union made 20 loans to first-time homebuyers for $3.2 million, with an average loan amount of $160,593. Approximately one-third of these members received a total of $34,917 in down payment assistance from the credit union’s partners, for an average of $5,819 per loan.

At CFFCU, approximately 74% of its loans have gone to low-income borrowers. At other local financial institutions, that number is closer to 25%.

‘Not Yet’ Instead Of ‘No’

In today’s housing market of soaring prices and short supply, it can be difficult for would-be homeowners to find the right home, at the right price point, in the right location.

“While we might not be able to approve every application we receive, we use a not yet’ approach to those who are not quite ready,” Pauley says. “We refer these members to one of the 22 certified financial coaches we have on staff.”

The coaches begin working with those members to help them make lifelong habitual changes that will improve their economic mobility and help them achieve an approval on their next application.

But mortgages are just one facet of the credit union’s financial inclusion initiatives.

CFFCU also offers second-chance checking accounts, vehicle loans with reasonable rates, small-dollar personal loans, free financial coaching, and seminars on topics such as understanding credit, basic budgeting, saving for the future, and avoiding predatory lending. Its first-time auto loan program has no requirement for a co-signer as long as members meet certain criteria and work with a financial coach to prepare for the purchase.

“Our core value is that everyone is treated with respect and dignity, and our efforts are handled the same way,” Pauley says. “Many of our products were developed to create opportunities for financial success for anyone who comes through our doors.”

The post Inclusive Lending For First-Time Homebuyers Turns Dreams Into Reality appeared first on CreditUnions.com.

Top-Level Takeaways

• A better understanding of data trends has helped Peoples Advantage get buy-in from staff at all levels when it comes to meeting lending and membership goals.
• Credit unions with low-income and CDFI certification can use data to ensure they’re fulfilling the mission that goes along with those designations.
• Analytics isn’t just for large credit unions even small shops can dig into their data to drive business objectives.

Peoples Advantage Federal Credit Union ($92.3M, Petersburg, VA) is more effectively meeting its mission as a community development financial institution thanks to a deeper dive into data analytics and taking steps to ensure all team members are on board.

The credit union completed a core conversion in October 2020, automating a data analysis process that was previously managed through manual extracts and separate uploads to an analytics platform. Although PAFCU still uses the same analytics platform, the core conversion automated the uploading process. The end result, says CEO Amanda Habansky, is that rather than focusing on a time-consuming process of pulling data, staff and management can focus on what that data tells them.

A key component of that has been maintaining CDFI certification by ensuring that membership and lending are targeting designated CDFI census tracts.

“For us, it was kind of like hope and pray that when the certification time comes we have the right strategy and the right target,” Habansky says of the old method. “Now we can look at our membership and our loan origination month over month and know exactly where they are. Not only to retain certification but to really assess if it’s a good strategy for us short-term, and, long-term, are we on the right track based on the ever-changing demographics of our market?”

From a practical perspective, a better data analysis process has allowed the credit union to gauge how it serves consumers in nearby CDFI census tracts to judge whether it needs to tweak its marketing to better reach potential members who haven’t joined. For existing members, staff at all levels can now see credit score migration patterns to better determine risk levels when underwriting loan applications.

“Prior to having this data across the organization and at our fingertips, setting loan goals and loan strategy was always isolated to the executive and management team areas,” Habansky says. “It was hard to communicate across the organization that we don’t just throw a dart at a bulletin board and say, ‘That’s your loan goal for the day.’ Being able to see the loan portfolio and how it shifts over the months and the calendar year empowers the team to understand member behavior so they buy into the culture it takes to be successful in this space.”

Loan growth at Peoples Advantage has fluctuated over the past several years, rising through much of 2017 and 2018 before falling substantially beginning in the first quarter of 2019. Lending has been on a rebound of source since bottoming out with -16.5% growth in the first quarter of last year, and by year-end 2021, contraction of the loan portfolio was limited to just -3.4%.

“COVID was brutal for us, just like everyone else,” Habanksy says. “We didn’t have great loan growth for the last two years, and part of that was conditions beyond our control. What we’ve been able to do is home in on what we can control and get buy-in by setting strategic membership goals or production goals from the loan side. It goes back to not throwing a random target up for the team to meet. It’s Hey, this is how we have to grow and continue serving the members who need us most. Then show that data in a way that [staff] can digest.”

Although loan growth remains in the red, some areas are growing. First mortgages, for example a relatively new offering for Peoples Advantage were up more than 60% in 2021, surpassing the $7 million mark. And even though the credit union closed out its auto loan portfolio with a double-digit decline, analytics tools have helped staff members better understand how quickly those loans roll off the books, Habansky says.

One of the biggest takeaways for Peoples Advantage has been that a successful data analytics program doesn’t have to be daunting.

“You can have a tremendous impact if you take the data you have and deploy it the right way,” Habansky says. Don’t let it scare you. “Get in there, roll your sleeves up, and go for it.”

Vendor partners have helped PAFCU make better use of its data, but the CEO notes that those partners are there exactly for that reason.

“You can lean on your resources and they can provide information to support things you’re already doing,” she says.

That’s particularly important for small credit unions, which might think they don’t have the resources to go all-in on data.

“I’m not going to pretend that we have mastered data analytics that’s not even close to the truth,” Habansky says. “But we’ve been able to leverage what’s important to us now to see what needs to be important to us in the future.”

The post How Data Analytics Helps Peoples Advantage Fulfill Its CDFI Mandate appeared first on CreditUnions.com.

Brother, Can You Spare A Dollar?

In 2004, North Carolinians witnessed the birth of a philanthropic organization that has had a profound impact on the lives of millions: the SECU Foundation from State Employees Credit Union ($53.1B, Raleigh, NC). During the course of the past 18 years, the foundation and its impact have grown, but it has remained laser-focused on four key areas: education, health care, housing, and human services.

“Credit unions have historically been the ones that are boots on the ground and making a positive difference in our communities in a big way,” says Leigh Brady, SECUs chief operating officer. “Our foundation formalizes our philanthropic efforts and our ability to make those big differences.”

Read more in What A Difference A Dollar Makes.

Diving Into Downtown

A partnership involvingLake Trust Credit Union ($2.5B, Brighton, MI) not only allows budding entrepreneurs to test new business ideas but also provides a retail space where those projects can thrive.

In late 2021, Lake Trust partnered with Downtown Lansing, Inc. an economic development group headquartered in the capital citys central business district to create the Downtown Lansing Middle Village Micro Market. The pairing makes sense. The credit union is certified as a Community Development Financial Institution and also was headquartered downtown until its 2015 move to nearby Brighton. It opened a new branch near the Lansing city center during the summer of 2021.

The roots of the partnership date back to early 2021, when Downtown Lansing leaders came up with the idea for an incubator space where new businesses can test their viability. The organization secured an 1,800-square-foot space during the fall, and the space now serves as an incubator atmosphere for startups as well as shop space for more seasoned retailers.

“We believe in community wellbeing and financial wellbeing,” says Theresa Dubiel, Lake Trusts senior vice president of member experience and business development. “The opportunity to have a space that is rent-free to provide an opportunity to explore and find your place is what this program is all about.”

Read more in Lake Trust Nurtures Local Entrepreneurs.

DC Credit Union Delivers On Youth Programming

Over the course of nearly a dozen years, a financial education program from DC Credit Union ($82.6M, Washington, DC) has impacted the lives of thousands of youngsters in the nations capital.

Launched in 2010, DC Credit Unions Summer Youth Employment Program was designed to provide banking services for teenagers holding down their first jobs primarily those between the ages of 16 and 18 but the initiative proved so popular that after its first year the credit union expanded the age range from 14 to 24.

The program is part of a partnership with Bank On DC, and organizers at the credit union envisioned it as a way to not only help DC teens and later young adults develop savings accounts and financial literacy but also expose them to the benefits of credit union membership.

“We needed to engage and keep the attention of our new young members,” says LaTesha Wheeler, the credit unions youth outreach coordinator. “We found that once you lose their attention and interest, its like starting all over again.”

Read more in DC Credit Unions Decade Of Changing Young Lives.

A Shift To Purpose

Credit unions wrapped up 2021 in historic fashion, reaching a series of milestones that reflect their focus on serving members. Among the many notable metrics, the industry recorded a 5.4 million annual increase in membership, opened a record 4.5 million share draft accounts, originated a record $795 billion in loans to members, and crossed $2 trillion in assets.

As 2022 nears the halfway point, the balance sheet is well positioned to build on that momentum with ample liquidity, asset quality at historically strong levels, an industrywide net worth ratio exceeding 10%, and the highest industry ROA in nearly 20 years.

Given the challenges the pandemic has presented during the past two years, these results are particularly outstanding. Credit union staff and members had to quickly adopt new ways of doing business when the pandemic emerged. Today, the country has navigated through the delta and omicron surges, and mask mandates are being lifted in areas that once had some of the tightest restrictions. A more normal way of life seems to be returning; however, the pandemic has taught us to be prepared for changing conditions.

Read more in this commentary from Jay Johnson, chief collaboration officer at Callahan Associates, Credit Unions Are Prioritizing Purpose As The Pandemic Wanes.

New Opportunities In A Post-COVID World

The COVID-19 pandemic was an unexpected catalyst for change at the SECU Foundation, allowing the nonprofit to expand its sphere of influence while also changing its operations model to gain some efficiencies.

“We’re forever changed because the grantees were here to support have had to do their work very differently and manage their nonprofits very differently,” says Jama Campbell, the foundations executive director.

Before COVID-19, the foundation had already started focusing more on programmatic funding, but the pandemic accelerated those efforts, says Scott Southern, vice president, director of grants administration. For example, the pandemic offered new opportunities for collaborations with groups the foundation hadn’t previously worked with, such as a $2.5 million grant for the North Carolina Healthcare Foundation that helped meet needs related to personal protective equipment, mental health services for healthcare employees, and more.

Read more in How COVID-19 Pushed The SECU Foundation Beyond Its Comfort Zone.

Beyond The Office Walls

AmeriCU Credit Union ($2.6B, Rome, NY) was founded on Griffiss Air Force Base in 1950. At that time, it served only civilian members. Today after two mergers, three name changes, and a charter conversion the credit union serves members of the armed forces, veterans, and their families as well as Department of Defense employees and retirees.

According to its website, AmeriCU strives to provide convenience, services, and value. As part of its Enhanced Military Benefits program, it offers one-day early advanced pay for direct deposits, ATM fee rebates, pre-approvals on credit cards or personal lines of credit, special loan programs and discounts, and fraud alerts. But thats not all. The cooperatives Fort Drum team also attends middle-of-the-night homecomings and shows up for military spouses and children in other ways as well.

Read more in Supporting The Military Is More Than A Job At AmeriCU.

Unlikely Allies In Los Angeles

An unlikely trio has teamed up in Los Angeles to help struggling retailers adapt to the ever-changing post-pandemic business environment. The triple combination of USC Credit Union, Ally Bank, and Citibank have provided more than $125,000 so far to help students with scholarships and aid struggling businesses evolve in a new and ever-changing environment. The combination of resources for a common good has given way to a new hybrid way of giving called the Allied Impact Fund.

In early 2020,USC Credit Union ($767.7M, Los Angeles, CA) began an internal conversation about establishing a foundation as a more efficient way to raise funds and contribute to community groups beyond providing scholarships. As the grips of the pandemic set in, however, the credit union rethought its intent and how it could serve its struggling community in a more meaningful way than simply doling out dollars.

“Covid or not, we are all in a time of rebuilding,” says Rocio Flores, chief social impact officer at USC and leader of the Allied Impact Fund. “The world of community-based organizations, helping people stand on their own, is where we can help.”

Read more in USC Credit Union Teams Up For Community Impact.

What Does The Data Say?

Peoples Advantage Federal Credit Union($92.3M, Petersburg, VA) is more effectively meeting its mission as a community development financial institution thanks to a deeper dive into data analytics.

The credit union completed a core conversion in October 2020, automating a data analysis process that was previously managed through manual extracts and separate uploads to an analytics platform. Although PAFCU still uses the same analytics platform, the core conversion automated the uploading process. The end result, says CEO Amanda Habansky, is that rather than focusing on a time-consuming process of pulling data, staff and management can focus on what that data tells them.

For example, to maintain CDFI certification, the credit union must ensure membership and lending are targeting designated CDFI census tracts. The data lets the team do this.

“For us, it was kind of like hope and pray that when the certification time comes we have the right strategy and the right target,” Habansky says of the old method. “Now we can look at our membership and our loan origination month over month and know exactly where they are.”

Read more in Data Analytics Delivers On A CDFI Mandate.

The post Impact Strategies From May 2022 appeared first on CreditUnions.com.

Top-Level Takeaways

• USC Credit Union enlisted the help of Ally Bank and Citibank to launch a fund aimed specifically at helping struggling organizations making a difference in Los Angeles.
• In its first year, the fund provided 18 $5,000 college scholarships as well as micro-grants to grassroots organizations.

An unlikely trio has teamed up in Los Angeles to help struggling retailers adapt to the ever-changing post-pandemic business environment. The triple combination of USC Credit Union, Ally Bank, and Citibank have provided more than $125,000 so far to help students with scholarships and aid struggling businesses evolve in a new and ever-changing environment. The combination of resources for a common good has given way to a new hybrid way of giving called the Allied Impact Fund.

In early 2020, USC Credit Union ($767.7M, Los Angeles, CA) began an internal conversation about establishing a foundation as a more efficient way to raise funds and contribute to community groups beyond providing scholarships. As the grip of the pandemic set in, however, the credit union rethought its intent and how it could serve its struggling community in a more meaningful way than simply doling out dollars.

“COVID or not, we are all in a time of rebuilding,” says Rocio Flores, chief social impact officer at USC and leader of the Allied Impact Fund. “The world of community-based organizations, helping people stand on their own, is where we can help.”

According to the Los Angeles Business Federation, roughly 90% of businesses in LA County stated their revenue had been severely impacted by the end of 2020. Nearly half of Los Angeles area businesses were on track to lose 50% or more of their projected revenue that year. And according to CalMatters, a non-profit organization for policy and politics in California, more than 2.4 million people fell through the cracks of local Los Angeles programs aimed at helping gig workers. Unfortunately, these numbers don’t even include the undocumented workers who qualify for neither unemployment nor Coronavirus stimulus checks.

USC realized it needed to help in an unconventional way, and it looked for some unconventional partners. The credit union reached out to other financial institutions, including Ally Bank the Sandy, UT-headquartered auto, mortgage, and credit card juggernaut as well as the $1.6 billion Citibank, which has 275 branches in California alone, 127 of those in the Los Angeles basin.

“They wanted to get funds into the community, and we had the vehicle to make it happen,” Flores says. “It was so hyper-local for LA, and it was perfect timing.”

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The Allied Impact Fund launched with money from the credit union as well as hefty contributions from Ally Bank and Citibank. The fund’s goal is to make long-term investments in East and South LA communities via financial tools, literacy, and accessibility.

Ally gave a $10,000 charitable contribution in 2020 to invest in USC Credit Union Foundation’s Allied Impact Fund, which provides micro-grants to low- and moderate-income individuals and entrepreneurs, says Jan Bergeson, Ally’s CRA officer.

Citibank made an initial donation of $25,000.

These donations combined with $90,000 of USC Credit Union’s own funds enabled the cooperative to not only provide 18 $5,000 college scholarships but also give money to grassroots organizations in the form of micro-grants.

The credit union wants to support organizations that struggled to stay afloat during the pandemic yet still are making a difference in LA. The Rightway Foundation is one such organization. It helps former foster youth obtain proper training for sustainable jobs. The organization also wants to help former foster youth secure temporary housing, and the funding it received from the Allied Impact Fund last year helped it begin that program and grow it into something that is now flourishing.

Other recipients last year include Street Vendors United, a collaborative organization that helps more than 100 local food vendors with sanitation training and regulatory guidance.

“All of these organizations were doing good work in our community,” Flores says. “They were already very bold in what they were doing to support others.”

For the Allied Impact Fund, this is just the beginning.

“There are so many organizations that align with what we believe in, and there’s a need for an alliance to bring community leaders together,” Flores says. “The power of collaboration is powerful. We want the credit union to be a partner they can count on.”

What began as a simple idea to funnel funds to those in need has grown into so much more. The fund has earned the respect of the partners , which set aside differences in business models to work toward a common good.

“The COVID-19 pandemic reinforced the need for financial institutions of all sizes to work together to support our communities,” says Vera Moore, a community relations leader at Citi. “I’m proud to see Citi’s support could help the Allied Impact Fund provide local nonprofits and the communities they serve with immediate relief as well as longer-term economic recovery.”

With a sharp focus and specific goals, plus the combined power of banks and credit unions working together, the Allied Impact Fund is reaching new heights.

“We want to keep this going,” Flores says. “We’re looking at other organizations that align with the mission of the credit union to support the community so we can work together to build a better future.”

The post USC Credit Union Teams Up For Community Impact appeared first on CreditUnions.com.

“We’re forever changed because the grantees we’re here to support have had to do their work very differently and manage their nonprofits very differently,” says Jama Campbell, the foundation’s executive director.

Before COVID-19, the foundation had already started focusing more on programmatic funding, but the pandemic accelerated those efforts, says Scott Southern, vice president, director of grants administration. For example, the pandemic offered new opportunities for collaborations with groups the foundation hadn’t previously worked with, such as a $2.5 million grant for the North Carolina Healthcare Foundation that helped meet needs related to personal protective equipment, mental health services for healthcare employees, and more.

According to Campbell, the crisis also increased the number of opportunities for the foundation to collaborate with other funders. Although that was already in the works prior to March 2020, the pandemic helped the SECU Foundation expand its footprint throughout North Carolina, partnering with other foundations it wouldn’t have historically had an opportunity to collaborate with.

Engaging with more partners and building relationships in communities that have been difficult for the SECU Foundation to reach is one silver lining that has come out of the pandemic, Campbell says.

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Throughout 2020, SECU Foundation staff focused heavily on collaboration with other statewide partners. Additionally, a statewide network of advisory boards ‘ composed of 12 members representing each branch ‘ helps with understanding local needs. Those groups generally meet quarterly but pivoted to virtual meetings in March 2020 at the onset of the pandemic.

The COVID crisis also brought about a new type of requests for the foundation. Normally, the foundation takes requests for funding related to its four focus areas: education, health care, housing, and human services. The coronavirus, however, forced staff to confront new needs, including requests for funding for personal protective equipment, supplies for medical providers and other first responders, and more.

The board also focused heavily on serving nonprofits that didn’t have access to government funding, in part because those organizations didn’t have the capacity to apply for those dollars. Through collaborations with the North Carolina Community Foundation and others, the SECU Foundation was able to meet the needs of nonprofits in rural and underserved communities.

According to Jamie Applequist, SECU’s executive vice president and chief property officer, who spent more than two decades in the branch network interacting with branches and advisory boards, two of the biggest lessons the foundation learned from the pandemic were the need for flexibility and speeding up processes.

Some of the flexibility the pandemic forced on the foundation, such as virtual meeting options for those who can’t attend in person, is expected to carry over into the new normal. What won’t change, however, is the focus on maximizing impact in all corners of the state. Communities will continue to need capital for brick-and-mortar projects, along with programmatic funding, all of which offers the foundation an opportunity to collaborate with new partners and stretch members; donations further.

“One of the things we have always focused on and will continue to drive home is, How can we multiply every one of those member dollars?” Campbell says. “We want to be good stewards of that funding and make sure the projects and programs we’re taking to our board of directors are sustainable and will be here for years to come.”

As the nonprofits the foundation works with continue to change their operations in the wake of the pandemic, Southern says he expects to see a continued increase in the need for organizational capacity building. Although the foundation had already begun providing some of that assistance before March 2020, those needs are likely to grow, and the foundation is working with regional universities to help identify communities with nonprofits that need that assistance.

If the SECU Foundation can identify those organizations ahead of time, it could have a foot in the door to assist with their future funding needs.

Like many organizations, foundation board members held virtual meetings during the pandemic, reviewing projects with a large-scale, statewide focus.

“We looked to see what type of funding was coming from the federal and state government, because we want to make sure our dollars are going to areas that aren’t covered by those,” says Campbell. The end result was $16 million in pandemic-related funding.

The post How COVID-19 Pushed The SECU Foundation Out Of Its Comfort Zone appeared first on CreditUnions.com.

Top-Level Takeaways

• A collaboration between DC Credit Union and Bank on DC has provided thousands of teens and young adults with savings accounts, financial literacy, and occupational success.
• The credit union’s Youth Advisory Council provides insight into what what’s working well and how the program could be improved.
• The initiative creates lasting relationships with young members and helps the credit union live its mission as a CDFI.

Over the course of nearly a dozen years, a financial education program from DC Credit Union ($82.6M, Washington, DC) has impacted the lives of thousands of youngsters in the nation’s capital.

Launched in 2010, DC Credit Union’s Summer Youth Employment Program was designed to provide banking services for teenagers holding down their first jobs primarily those between the ages of 16 and 18 but the initiative proved so popular that after its first year the credit union expanded the age range from 14 to 24.

The program is part of a partnership with Bank On DC, a collaboration between the Office of the Deputy Mayor for Planning and Economic Development, multiple financial institutions, and nonprofits focused on providing access to affordable financial services for un- and under-banked households in the region. Organizers at the credit union envisioned it as a way to not only help DC teens and later young adults develop savings accounts and financial literacy but also expose them to the benefits of credit union membership.

“We needed to engage and keep the attention of our new young members,” says LaTesha Wheeler, the credit union’s youth outreach coordinator. “We found that once you lose their attention and interest, it’s like starting all over again.”

Through its affiliation with the Department of Employment Services (DOES), the program offers a wide range of job opportunities, such as working for community-based organizations, along with district and federal agencies, including the Department of Parks and Recreation.

As the program was developed, certain rules were established, such as requiring participants to receive payment either through direct deposit or via a pre-loaded debit card. Accounts for each age group 14 through 17 and 18 through 24 are also in place to address risks that could result in losses to the credit union.

For example, youths from 14 to 17 years old have non-custodial accounts, which restricts their account access to ATM-only cards for cash withdrawal transactions up to $300. Program participants aged 18 and older have custodial accounts, which require a cosigner and include a checking account and debit card that offers point-of-sale transactions up to $300 a day and online banking access.

Regular, high-touch communication with participants via email and phone is also a key component, Wheeler says.

“If I speak to kids at an event, the youth present can put a face to the name of the person who calls or emails them,” she says. “It’s a matter of building trust. After all, we are a financial institution they need to trust with holding their money.”

The DOES built in an incentive for participants reach their summer savings goals. The Super Saver award provides $1,000 to a deserving summer saver who meets of exceeds their goals during the program. The more money saved, the better the chances of winning the drawing and having $1,000 deposited directly into their savings account.

A Lasting Legacy

Now in its eleventh year, the program has exceeded expectations and created a lasting legacy. Championed by three mayoral administrations including DC’s current mayor, Muriel Bowser, the program was renamed in 2014 in honor of former DC Mayor Marion Barry, who campaigned tirelessly on behalf of Bank on DC and the institutions that support it, including DC Credit Union.

Thousands of teens and young adults have found meaningful employment, built savings, and learned money management through the program, and many alumni have maintained their credit union membership, even referring family and friends to DC Credit Union.

We needed to engage and keep the attention of our new young members. Once you lose their attention and interest, it’s like starting all over again.

The program’s success also offers a blueprint for how other CDFI-certified credit unions can fulfill their mission of enhancing members’ lives. One of DC Credit Union’s loftier goals is to help young consumers in the region find long-term occupational and financial success, and Wheeler says helping them find ways to earn an income and save was a cornerstone of that effort.

Wheeler says marketing and communications efforts including engaging with participants via social media helps retain new members and keeps them engaged.

“Even if we don’t capture that young person in the summer program, they still tell their relatives and friends about the credit union,” she says. “Just having that one person in the house can engage and intrigue other family members to join.”

DC Credit Union supplements its email and retention strategies with a Youth Advisory Council that appoints a youth advisor in each DC ward to meet with residents and gauge interest from potential participants or would-be members. These leaders meet one Saturday per month to share insights and inform the credit union about new developments or concerns in the wards. All council members are volunteers serving one-year terms on the panel, and the credit union rewards their participation with an entrepreneurial award in the spring and the fall.

Wheeler is quick to note the impact the program has made on DC area youth.

“Many tell me, ‘DC Credit Union gave me my first account when I was 14, and I’ve been with them ever since,'” she says. “Now, those kids’ are young adults in their twenties and early thirties and applying for car loans and mortgages.”

Lead With Purpose

Rethink your credit union’s role and responsibility to members, employees, communities, and the environment with Sustainable Business Strategy, a virtual learning experience Callahan & Associates offers in collaboration with Harvard Business School Online.

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The post DC Credit Union’s Decade Of Changing Young Lives appeared first on CreditUnions.com.

The Great Resignation

A survey by The Society for Human Resource Management (SHRM) reveals more than 40% of U.S. workers are actively searching for a new job or plan to soon, which is twice the rate of 2019. In addition, desire to make a career change is ranked among the top five reasons workers are considering leaving their current jobs today. Many workers are becoming more aware of what they really want out of a job and in their lives due to the pandemic.

According to Anne Bahr Thompson, author of the SHRM survey, Purpose is why we exist. It is the impact we want to make in the world beyond profits and products.

Employees are more motivated when they find meaning in their work. Its an opportunity to assess what gaps might exist between your organizations stated and lived purpose. Its ideal timing to help employees understand theyre part of something much bigger than themselves.

KPMGs paper, Purpose Driven Work, tells us this view taps into the trend that employees are increasingly motivated to stay with a company if they believe the work they do contributes to a bigger purpose. Todays workforce is looking for more from their jobs; they want a way to make a mark on society.

Credit unions can leverage the drive for purpose-driven work. When employees joined your credit union, they joined a movement. Their work and individual contributions are significant and have the power to create a positive impact on your credit union, membership, and community.

The State Of Financial Health

The need for financial health is real. Millions of Americans are struggling to spend, save, borrow, or plan in ways that allow them to be resilient and seize opportunities over time.

Jennifer Tescher, president and CEO of the Financial Health Network, said The data is troubling, showing that millions of Americans are continuing to struggle financially with massive implications for their health and wellbeing.

In addition:

• More than two-thirds of Americans are financially coping or vulnerable.
• 44% of those financially coping report high or moderate levels of stress from their finances.
• The financially coping struggle to find a balance between addressing daily needs and saving for the future citing financial management challenges and lack of clarity on how much is safe to spend.
• 80% of accountholders expect their primary financial institution to help them improve their financial health, yet only 14% strongly agree that their financial institution delivered.

Consumers who believe their financial institution cares about their financial health are:

• 3X more likely to be very satisfied with their primary financial institution.
• 3X more likely to recommend their primary financial institution.
• 5X more likely to be interested in purchasing additional products and services.

While improving financial health is a complex problem, when credit unions, financial health organizations, partners like Symitar, and others come together to leverage relationships and use fintech innovations to drive change the result is a positive financial outcome for millions of Americans.

The Purpose Narrative And Mission To Serve

Many digital challenger banks are focused on financial health-centric services such as no-fee accounts, early wage access, and automatic savings tools. These challenger banks also evangelize their purpose and mission on prime digital real estate not buried deep in their website or app. Here are a few examples:

• Chime ~13.1M Users. Chime is a financial technology company founded on the premise that basic banking services should be helpful, easy, and free.
• Stash ~6M Users. Stash is a personal finance app that simplifies investing, making it easy and affordable for everyday Americans to build wealth and achieve their financial goals.
• Varo ~2.7M Users. Varo is all-digital, mission-driven, and designed for the way you live. They believe banks should be a force for good and help accountholders live better lives.

Your credit union can communicate its mission and purpose by assessing what you are communicating on your home page, digital banking login, and when members click Join, Open, or Apply.

Many new challenger banks and fintech apps are on a mission to serve the unique and unmet needs of ignored market segments. A few examples of niche market segments include kids and teens couples people of color immigrants small-business owners, musicians, and the LGBTQ+ community. These inspirational examples of thinking big, but acting niche demonstrate exciting possibilities for the industry.

The Path Forward

Credit unions demonstrate their cooperative principles best when they dont dilute their impact. An institution cant be all things to all people. Defining purpose and mission requires strategic intent and choice. Choose your members, narrow and align organizational focus, and win your market by serving it well and improving financial health.

The future of banking is fast becoming a battle of ecosystems and experience that extends far beyond financial products. While challenging in its complexity, the opportunities are endless. Banking is constantly evolving to serve the Modern Member℠, so we must continually adapt to satisfy those seeking experiences that are empathetic, authentic, relevant, seamless, appropriately simple, and personal.

Symitar believes in the power of partnership and openness to help your credit union level the playing field with larger banks, big tech, and neobanks. Ben Metz, head of Digital at Jack Henry^SM, explained:

We want to ensure that community financial institutions are prepared for the future, so weve delivered a platform that attracts modern fintechs with services that financial institutions can use to build their own unique ecosystems and better serve their accountholders.

We value the opportunity to empower our clients to improve financial outcomes for individuals, businesses, communities, and the credit union movement. In the age of digital, the people-helping-people philosophy is needed now more than ever.

From leading core, digital, lending, security, and payments capabilities to a truly open approach of working with credit unions, Symitar is your human-centered, tech-forward partner. We offer a comprehensive, integrated platform to help you achieve your goals. Together we serve the Modern Member^SM and advance the value and importance of credit union membership.

The post A Mission-Forward Path To Pandemic Recovery appeared first on CreditUnions.com.

Ok, I admit it. I am biased and (slightly) jaded about attacks from the banks. That aside, I do believe credit unions need to do more to show members and potential members that such smooth messaging is the result of fancy lobbyists trying to earn their money. Perhaps that’s why this year’s attack makes me particularly angry.

The ABA claims the credit union federal tax exemption is a detriment to taxpayers, but I see an emerging trend in which credit unions across the country are steadfastly working to improve the lives of their members and communities. Movement leaders are embracing even tighter the founding virtues of member-owned nonprofit financial cooperatives.

The ABA is calling to Reform Credit Unions. If the credit union movement was to counter that argument, we could call the website Rekindle Credit Unions.

In the beginning of the credit union movement, groups of people came to together to address a need. They had the drive and a shoebox, there is almost always a shoebox to create something new, something different to serve the needs of their community. As one group proved the model a success, others formed to address the needs of their community, and the movement exploded as the flame sparked a fire.

Today, a new generation of cooperative leaders are doubling down on purpose. They believe their credit union can be the catalyst for improving the lives of the members and communities they serve. These sparks are popping up all over the country in the largest and smallest credit unions, and although having a shared purpose isn’t new, using it as a competitive advantage might be.

How can shared purpose be a competitive advantage? Well, most credit unions don’t have the scale to compete solely on price, convenience, or technology big banks and fintechs generally win here. But when it comes to showing members and communities that their financial institution cares? That it is looking out for them? That their interests align? Well, credit unions can win that game.

Unfortunately, this value proposition won’t resonate with everyone. Some consumers will want only the best rate or the shiniest technology. That’s OK. Likewise, credit unions need to be OK with telling those consumers they would be better served somewhere else. This won’t be easy, but it’s easier and ultimately better than trying to be all things to all members.

So, what’s next?

First, leaders need to clarify the purpose of the credit union. That purpose should be something that inspires employees to come to work, something that employees are proud of and strive to live.

As you frame the credit union and all it does around that purpose, new people with whom that purpose resonates will join and participate, thus transforming the organization from one that competes on price and product into one that competes on emotion and connection.

This might be a lofty, abstract concept, but it is critical for the sustainability of credit unions. You are playing a game you are uniquely positioned to win. The markets need cooperatives, credit unions need to connect the dots.

Don’t believe me that credit unions need to do more? Nearly every credit union leader I talk with says, If our members would call us, we can help them navigate almost anything. This might be true, but how often do members call? Why don’t they call? Do they know calling is an option? If they did call, would the credit union be able to help them? Would they feel judged or shamed?

During the pandemic, several credit unions told Callahan they started reaching out to members proactively, checking in on them, identifying their fears, offering empathy, and explaining what tools and programs were available to help. These efforts paid off through higher ratings on trust, pride, and loyalty.

So, members know their credit union cared about them during the pandemic. Now how can the movement take that further?

Every year around Thanksgiving, Butterball sets up a hotline for baking questions. It’s designed for people who mess up their turkey, even if they didn’t buy a Butterball. Has your credit union thought about establishing a Butterball helpline for members who are in a financial jam?

The ABA is calling to reform credit unions. If our movement was to counter that argument, we could call our website Rekindle Credit Unions. That rekindling lies in asking questions such as, Should we host a holiday hotline? or Do members feel judged? and sharing what they’ve learned with other leaders on a similar journey. How did they make a hotline work? How do they encourage members to reach out?

Different credit unions might have distinct purposes and diverging goals, but the more they can connect and share with one another, the better their chances of turning small sparks of greatness into a firestorm for positive change.

The post Reform Credit Unions? No, Rekindle Them! appeared first on CreditUnions.com.