In response to a personal request from Illinois Gov. Rod Blagojevich, Credit Union 1 is planning to open a branch office for residents in one of the poorest communities in the state.
Set to open in April, the office in Hopkins Park town hall will provide minimal or no fees, low, fixed-rate loans and financial education classes for residents whose only access to financial services has been payday and predatory lenders in a nearby town.
"We know it's not going to be a profitable venture for us," said Margaret Westlove, SVP of marketing and sales at the $400-million CU1. "These people are getting taken advantage of. We're doing it for the good of the people."
The newest CU will be called Pembroke Township Financial Services, a division of CU1.
"Our hope is that we can help this community have [it's] own financial institution," she said. "We want them to develop it into their own credit union."
She said CU1 participated in a similar venture a few years ago when it merged with a CU in a Chicago neighborhood, whose members are predominantly Puerto Rican. Paul Simons, CEO of CUI, said the newest branch would provide residents with a much needed alternative to currency exchanges and payday loan stores.
CU1 serves state employees along with more than 100 other SEGS across the state of Illinois. It has 26 offices in Illinois and two in Indianapolis.
Westlove said CU1's participation is part of a state initiative called Team Illinois. Launched by Blagojevich and his administration, Team Illinois has identified four of the state's most underdeveloped and poverty stricken communities to receive the combined support of state resources, citizens and local businesses.
Pembroke Township was chosen as part of the initiative because it has poor plumbing, few paved streets, no grocery stores or gas stations and no access to financial services such as ATMs.
"The closest town to them is Kankakee for payday lenders and currency exchange services," she said. "And, that's a lot of work and effort because most don't even have transportation."
Pembroke Township, which includes the community of Hopkins Park, is about 60 miles south of Chicago. Its population is about 3,000 people, mostly African-American. Median household income is $17,778, Westlove said.
While unemployment is high-about 27.4% - residents there are part of the Pembroke Farmers Cooperative that produces and sells goods from their organic and specialty crops. "The residents are excited because they know they can come in and get free checking accounts, make deposits and get cash back without being charged high fees," Westlove said.
