How Has Challenge of Serving the Underserved Changed?
HOLLYWOOD, Calif.-Credit Union Journal asked attendees at the National Federation of CDCUs' 37th Annual Conference here, "How has the challenge of serving underserved communities changed over the years, and what is your credit union doing?"
JoAnn Yee, board member, Northeast Community CU, San Francisco
It has gotten harder. When you look at what has been happening with the mortgage problem and the employment problem, things are worse. The country needs to deal with income producing and housing. We have to stop accepting foreclosure as a "normal" thing.
Our credit union has a program to help people re-establish their credit and get a checking account. Members must take financial counseling to qualify. We also do emergency loans, which have to be paid back at the next direct deposit.
Sandra Lumbley, president and CEO, Kerr County FCU, Kerrville, Texas
The challenges have increased due to the failures in the banks and the problems with the economy. Examiners want "i's" dotted and "t's" crossed more now, which is more difficult at a community development credit union. What we do does not fit in with what goes on at bigger credit unions. At least NCUA is doing a good job of training the new examiners about CDCUs and how we are different.
Helen Godfrey Smith, president and CEO, Shreveport FCU, Shreveport, La.
What is different is the availability of resources and tools, and the awareness of the niche we are filling in the marketplace. The economic downturn has shed light on the need for credit unions that help people with lower credit scores. Previously, there might have been a negative view of what we do, even by other credit unions. But now, people value what we do and value the expertise we bring to the process. Mainstream credit unions suddenly are having to serve the people we have been serving all these years-those with low credit scores or other distress circumstances.
We are doing more microlending for people who have been bypassed by the economy. So many people cannot find jobs and are opening their own businesses. If we can lend them $10,000 or $20,000, that can make a big difference to a small business. Many of our members are starting simple businesses such as yardwork or house cleaning, and other service industries. We are using technology more to help these small businesses.
Gregg Brown, president and CEO, South Side Community CU, Chicago
The challenge continues to evolve with the changes in the economy. We remain adaptable to serve our members. That means collaboration and working together, which has been the theme of this conference.
Joe Thomas, president and CEO, Fairfax County FCU, Fairfax, Va.
In our case, when the credit union was chartered for county employees, the big banks were not interested in serving those people. As their needs changed and they became more affluent, banks competed for them more. We dressed them up, then the banks wanted them-and that meant we had to change.
We also are a low-income credit union, so we see a lot of people who are asset rich and income poor. Fairfax County is thought of as well off, but many people who bought their houses 30 years ago and raised kids could not afford to buy that same house today. We help these older members by finding tools to help them get loans despite low credit scores. Everyone needs something different, so we work one-on-one to find solutions that will fix their circumstances.