'Core Purpose' Helps Drive Site For New Branch

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While Congressional leaders are questioning some credit unions' motives for expanding into low-income markets, one CU that recently made such a move said "heartfelt desire to serve" was just what drove its decision.

"Our badge of honor is that we could have chosen to open that first (low-income designated) branch anywhere, but we chose the Henson Ridge area of Washington D.C. because it had the greatest need," said Michael Hale, CEO of Andrews Federal Credit Union, referring to the recent branch opening in one of that area's most notoriously underserved communities.

"AFCU's core purpose has always been to help people of modest means improve the quality of their financial lives," he said, explaining that its core members since opening its doors in 1948 to Andrews Air Force Base have been underpaid military personnel living in an expensive community.

"We already have a level of expertise for these types of issues," he said.

Where The Challenge Lies

While Congress certainly has the right to question motives, Hale said, he thinks most credit unions have good intentions to serve the underserved.

"The real challenge is the commitment," he said. "You have to be engaged in the process, you have to have the right members on your team, and you have to have the right connections in the community."

For AFCU, it helped to have some financial security as well, he said, noting that his credit union has $784 million in assets, more than 92,000 members, and a net worth in excess of 14%.

"We can get out and try things on behalf of our membership."

It's no secret that financial gain is part of the game plan, Hale said. In fact, he expects the Henson Ridge branch to become even more profitable than other branches due in part to higher loan-to-share ratios and risk-based pricing.

Located only seven miles from AFCU's headquarters and amid payday lenders and grocery store check-cashing outlets, it was deemed the perfect spot for AFCU's first low-income designation branch.

"We did not want to start where the community was more affluent," Hale said. "We wanted our message to be crystal clear."

He said officials followed a carefully planned strategy to build ties with community members for several years prior to a brick-and-mortar presence.

"There's always early skepticism," he said. "I would never recommend that you roll into town and open up for business... Trust is developed by your actions."

For AFCU, that meant attending community meetings, participating in church and school events, donating supplies and computer equipment to area schools and offering financial literacy courses to community members.

When the credit union finally opened its doors on Nov. 18, the community was already familiar with them, he said.

Not only were these potential members pleased to have financial services close to home, they were happy that the new branch manager and employees were also residents of their neighborhoods.

"We were embraced by the community because we're sincere about what we're doing," Hale said. "We did all of the soul searching first to make sure it was something we wanted."

Nine Days, 100 New Accounts

By all indications thus far, Henson Ridge residents have said it's something they want, too.

"In its first nine days, the branch opened in excess of 100 accounts," Hale said, pointing out that the timeframe included the Thanksgiving holiday. "And that pace is continuing today."

While AFCU plans to tailor its product and service line to its newest members, he's confident with the line presently being offered.

"Actually since these members are so much like the members we already have, we already have a wide array of services and products to help them," Hale said. Still, CU leaders plan to work closely with a focus group made up of community members and leaders to determine specific needs, he said.

"Rather than go in with preconceived notions, we are going to listen to what they have to say," Hale said. "Our No. 1 goal in the Henson Ridge area is to become an integral part of the community as we educate our members about the importance of financial literacy, and provide them with the tools to improve their lives."

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