APPLETON, Wis. -
The effort began with the opening of a limited branch facility at the new Goodwill Training Center in Darboy that offered products and services such as check cashing, bill payment, wire transfers, loans and money orders at affordable and reasonable rates.
Nearly two years later, GoodMoney has expanded to all five of Prospera's branches and has made 2,700 loans totaling more than $1 million, and in the process it is estimated consumers have saved more than $150,000 in fees, thus far. In addition, it has referred 450 families to a consumer credit counseling agency partner.
GoodMoney's success has earned Prospera Credit Union the 2007 Herb Wegner Award for Outstanding Program. Ken Eiden, CEO of the $155-million Prospera CU, said he will proudly accept the industry's highest honor during a special awards presentation in Washington D.C., Feb. 25.
"You know I have been in the credit union movement long enough to know who Herb Wegner was," joked Eiden. "So I know how prestigious this award is and am delighted that they chose our program to highlight this year."
Eiden said he hopes the recognition of GoodMoney will inspire other CU leaders to launch similar efforts.
Eiden said he and Goodwill CEO Bob Pedersen initially combined ideas to create a program that would to steer individuals away from payday lenders and into traditional or mainstream financial institutions.
The Filene Research Institute and the Wisconsin Credit Union League joined them in creating the GoodMoney financial alternative. The National Credit Union Foundation later pitched in a $75,000 grant to support efforts.
"GoodMoney has captured the attention of the local marketplace, state and national consumer researchers, consumer advocacy groups, legislators, and Goodwill Industries nationwide, Eiden said, noting that it was founded on the principles that reflect those also held by the credit union.
"Prospera's mission is to help people prosper financially to enhance their quality of life," Eiden told the Credit Union Journal. "This applies to everyone who enters our doors, regardless of their financial resources."
Simply put, he said, "GoodMoney gives people a less expensive credit union option."
Keeping People From Going Deeper Into Debt
Pedersen called the program a good opportunity for non-profits with similar missions to collaborate toward common goals. In this case, it's to provide people with lifelong economic planning skills.
"Over the last decade, Wisconsin has seen almost exponential growth of non-bank and non-credit union financial institutions as a result of the State of Wisconsin removing any restriction on the amount of interest that could be charged as loans," Pedersen said. "This decision opened the door for for-profit payday lending/cash advance operations to proliferate-some of which charge more than 500% interest for such loans. People using these services can easily result in their spiraling deeper and deeper into debt."
Pedersen said he thinks Prospera's efforts represent what credit unions have always been about, "Groups of caring people joining together to help themselves and others.
"By providing service to those who need cash today, providing a gateway to credit union membership, and showing people how to make good money choices going forward, GoodMoney sets the stage to help people realize their dreams" Pedersen said.
Peter C. Kelly, CEO of United Way Fox Cities, was among many non-profit leaders, state and federal legislators who wrote letters supporting GoodMoney's Wegner nomination.
"GoodMoney addresses the unconscionable usury practices of payday lenders by offering individuals a lower cost alternative through a nonprofit credit union," Kelly wrote. "More importantly, this collaboration takes the important step of educating prospective borrowers about making wise, informed decisions on the use of money."
Representative Has Praise
In her support letter to the NCUF, Wisconsin Rep. Jean Hundertmark, 40th Assembly District, and chairman of the state's Financial Institutions Committee, commended Prospera for its efforts to serve and protect the underserved from predatory lenders.
"While safeguards can be placed on this industry to protect consumers, I believe the best way to combat the high interest rates from these loan providers is through competition," she wrote. "Prospera Credit Union is creating this competitive model that can be duplicated throughout the state. This is the only true way to bring current interest rates down."
Ideally, Eiden said, he would like the program to serve as the seed of innovation that continues to spread throughout the credit union industry and has created a password-protected website, www.goodmoneystore.com, for anyone considering similar partnerships in their communities.
The website includes an introduction to GoodMoney, planning session documents, legal documents, and examples of how to promote it.
"Prospera Credit Union's efforts demonstrate visionary leadership, personal commitment and innovation beyond the ordinary," wrote Lois Kitsch, Director of REAL Solutions, NCUF, and formerly Director of Field Projects, Filene Research Institute. "Prospera Credit Union has and will continue to change the lives of countless members and their community and will serve as an example of how credit unions can truly make a difference."
Prospera's program has since been combined with REAL Solutions, first launched in 2004 by Filene to increase credit unions' ability to make an impact on low wealth households by aligning products and services that meet their needs.
Emerging As A Leader
"Prospera has emerged as one of the leaders of more than 40 Wisconsin credit unions that are pioneering an initiative called REAL Solutions," wrote Brett Thompson, President of the Wisconsin Credit Union League.
The Wisconsin league was among three leagues that piloted the REAL Solutions program.
"Prospera's work in developing this program has encouraged more Wisconsin credit unions to participate in REAL Solutions by showing what can be accomplished by fully using resources within credit unions and the community to solve lingering social problems."
