All credit unions face challenges, but community development credit unions face unique hurdles due to their size and mission. On top of that, while the number of CDCUs continues to rise, it's happening at a much slower pace than in previous years. At this week's Inclusiv Annual Conference in Los Angeles, Credit Union Journal asked attendees to discuss the biggest issues facing their institutions. Answers ranged from dealing with budget shortfalls to marketing on a shoestring to finding the right risk balance with low-income members. Read on for more.
Our biggest issue is access to grants. We apply for so many grants – little one, big ones – and sometimes we get lucky. We are trying to be self-sufficient, but we need the funds for our programs.
The second issue we face is keeping up with technology. We do not have the budget, so when we come to conferences such as this one we ask other credit unions how they keep up. Inclusiv helps us, and we are getting assistance from Citi’s Community Development program.
Rosa Franco, director of lending, $12 million-asset Neighborhood Trust FCU, New York City
Keeping up with regulations can be very burdensome. Also, Visa charges us significant fees to use their plastic. They charge us as if we were a big bank. Community development credit unions are competing in the same field with the big banks, so marketing is a challenge. All of the people who come to us do so by word of mouth. We have a good referral network, but it could be bigger.
Gary Perez, president and CEO, $570 million-asset USC Credit Union, Los Angeles
We have always served [the University of Southern California], but just in the last year we expanded our charter to serve the underserved community nearby. It is a very Hispanic neighborhood. Our primary objective right now is to develop the digital tools necessary to appeal to the Hispanic market. With LA real estate prices, we do not have the capacity to build a network of branches. The consensus is Hispanics prefer to bank face-to-face, to which I say malarkey. There is no way they want to get in a car, or get on our public transportation system and go find a branch. We are creating the same web presence and lending systems we now have in English into Spanish. We are going big time for this new segment.
Our biggest issue is being able to handle the risk of serving the low-income community. Typically, these people do not have assets to put up for collateral, so we have to adjust our policies to serve them. We take on more risk for the members that have been with us for a long time and have been loyal. It is almost a case-by-case effort.
James Hunter, CU development educator, $178 million-asset New Orleans Firemen’s FCU, Metairie, La.
Sharing the impact. There or a lot of community development credit unions out there in the community, but there is a disconnect between what we do and what we say about it. More awareness is needed. Credit unions do not do a good enough job of letting the community know what we are doing.
Renee Sattiewhite, president and CEO of the African-American CU Coalition
All credit unions need to be better at providing diversity because of the change the country is going through as the majority changes. Conferences such as this help spread information that helps credit unions to handle their diversity challenges and opportunities to fill the gaps with diverse talent. Credit unions need to hire people who look like their members.
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