Tremont Credit Union is keeping the faith by opening what is touted to be the first faith-based community credit union in Dudley Square here.
The $164-million Tremont CU, headquartered in Braintree, joined forces with the Boston Community Development Collaborative to open what they called a "model" credit union in the newly renovated Dartmouth Hotel at 41 Warren Street.
The BCDC's stated mission is to promote the development of personal wealth and community economic development to break the cycle of poverty for residents of low and moderate-income areas of Suffolk County. But make no mistake about such high-sounding, if well-intentioned rhetoric, cautioned Len Broderick, a Boston native and president of Tremont Credit Union, "This is not for charity, it's good business. This is a sound business decision and I think it's about our future. This will be a profitable branch."
Ten Years Of Hard Work
The Community Financial Partnership (CFP) was formed with the 29,000-member Tremont CU to develop economic self-sufficiency programs for low-income residents, and was the culmination of 10 years of hard work," said Broderick. The branch will be a full-service operation, and will run a check-cashing operation of its own that combines that service with a savings component. The accrued savings will serve as collateral for possible loans to stimulate small business in the area.
"We'll be working with local churches and groups to help people who need credit repair and financial literacy programs to bring them back to the mainstream financial market," added Broderick. As he describes it, most of the target audience is kept two-steps away from access to credit, and thus, from any realized financial independence. Counselors from the Homeowners Protection for the Massachusetts Elderly will be available to see that predatory lenders are prevented from scheming people out of their homes.
But it's the church connection that's the link to making a difference from opening a credit union and hoping the members will "just come" like that movie about building the baseball diamond in a corn field.
The BCDC is composed of several faith based organizations and community development corporations, including the Financial Investment Initiative Group (FIIG), Codman Square NDC, Dorchester Bay EDC, Mattapan CDC, Faith Partnership, Morning Star Baptist Church and the Jubilee Christian Church
Daryl A. Elow, President of BCDC was instrumental in carving out the collaboration, and he's applied lessons learned from other attempts to work with community groups, churches and not-for-profits, including credit unions. "This started about 10 years ago from another project with ministers that got back-burnered. We looked at community development credit unions and got help from (The National Federation of Community Development Credit Unions)," Elow explained.
Doing The Research
"We did the research, we went to see Central Brooklyn. We saw many just open and close and we asked ourselves: how can we prevent that?" Looking for success in the model brought the group to Tampa, to see Florida Central Credit Union's branches in Hillsborough, an inner city neighborhood and a trailblazing program started by FCCU's president Ed Galagly, the Tampa Hillsborough Action Plan (THAP) and the city of Tampa. It was Jane Melchionda, president of EasCorp, in Woburn, Mass., and officials from the Massachusetts Credit Union League that put Elow in touch with Galagly and suggested Tremont CU as a possible partner, he said.
Diane Shaw, the Federation's former director of faith-based programs helped Elow bring all the players to the table and with the right working model for success in hand things began to move quickly. The BCDC Collaborative organizations provide the products and services that complement the credit union's services, including financial education, credit counseling, coaching on home improvements, small business technical assistance and business education," said Elow.
Financial Education Is Key To Success
But it's the financial education that is the key to success said Elow. "It's critical because so many people distrust banks. But the churches will play a big part in that, getting people to take a vested interest in their own financial well being. That comes with home ownership, self-employment, wise investment and all of that has to start with an understanding of economics."
Generating economically self-sufficient residents in the area suits both the philosophical pursuits of the credit union and its business interest as well, noted Broderick. "We were a SEG credit union before the Division of Banking gave us all of Suffolk, so now we're converting to a community CU, and Boston is unique in that there aren't many of those, so the opportunity for us is wide open." Massachusetts is also the only state with Community Reinvestment Act requirements for credit unions, Broderick allowed. "It's why the commissioner supported us."
Plans call for the CU to spin off the branch into an independent CU in five years if all goes well and that's what the groups want. The branch will have a 24-hour ATM and be open Monday through Saturday with a full-time staff of five.
"This type of partnership is exactly what the Federation's Community Development Partners program is all about," said the Federation's Executive Director Cliff Rosenthal. "By working with community groups and faith-based institutions, credit unions like Tremont are bringing affordable financial alternatives to communities that have been red-lined by banks. This is another vivid example of how credit unions continue to forge innovative partnerships to serve people of modest means."
