MARLBOROUGH, Mass. - The New Hampshire Credit Union League is reporting credit unions in the state have more than doubled projections for the amount of loans made in a special program for underserved communities–and did so a year early, to boot.
In October of 2003, credit unions in New Hampshire announced a five-year Credit Union Community Outreach Initiative to serve underserved low- and moderate-income New Hampshire families. Together the credit unions, working through the New Hampshire CU League’s Community Outreach Committee, committed to lend $35 million through programs designed to offer fair and reasonable loan alternatives, which centered on consumer education.
The result? Some $70 million in loans were made, and in four years rather than five.
Number of Lessons Learned
“When we first developed the Credit Union Community Outreach Program in 2003, we held lengthy discussions concerning our ability to achieve a goal of this size,” explained Peter Kavalauskas, president of Northeast Credit Union and chairman of the league’s Community Outreach Committee. “We went ahead anyway because we saw the need for consumer friendly financial products that focused squarely on the need of lower and moderate income people.”
There have been a number of lessons learned in the process. “We found that even the best ideas might not be applicable in every area of the state; programs that were terrifically successful in helping people finance the purchase of multi-family, owner-occupied homes were very successful in the cities, but other solutions were needed in the less densely populated areas of the state,” added Rob Kimmett, SVP PR and marketing with the league.
The Credit Union Community Outreach Initiative had four main components, with loans accounted for 85% of the total dollars. The two largest mortgage lending initiatives were the Homeownership Loan Program and the Home Loan Payment Relief (HLPR) Program (led by CUNA). The Homeownership Loan Program concentrated on helping low-income individuals purchase a multi-family home after extensive financial education efforts and classes in being a landlord. This particular loan, pioneered by St. Mary’s Bank in Manchester, N.H., offered attractive market rates and flexible qualification standards.
Family Emergency Loans
Family emergency loans were another component of this program. Those loans were small personal loans made to families or individuals for amounts up to $1,000 for periods of 12 months or less. In many cases, borrowers are referred by social service or community agencies, according to the league. Ordinary credit standards are relaxed, as the borrowers using these loans would not typically qualify for a personal loan. “These loans are designed to help the borrower address a financial challenge, such as paying an extremely high heating bill in order to keep the house warm or fix an automobile in order to ensure that he or she can commute to work,” the league said. Woodlands Credit Union, headquartered in Berlin, reported that they were able to help a number of their members with this kind of loan.
The Credit Union Community Hope Initiative also encouraged and tracked donations and grants to community programs. The league said it is studying new ways that it can bring additional value to the state’s working families.
For More Information
www.nhcul.org
