CLEVELAND — Small credit unions such as the $2 million NoteWorthy FCU in Ohio offer the basics in consumer lending such as car loans and Visa cards. But if members need a new tuba or sewing machine, they've got a loan for that, too.
With only 430 members and two full-time employees, NoteWorthy FCU president Henry Peyrebrune knows he can't compete with the larger credit unions or banks in the area when it comes to consumer lending. But he does have a secret weapon: artists.
An Unmet Need
The president, who is also a Cleveland Orchestra bassist, said his credit union is one of the only financial institutions in the area — and possibly the only credit union in the state of Ohio — to offer loans specifically to artists for musical instruments, recording equipment, movie cameras and pottery kilns.
"By far the most popular [consumer loans] are our Creative Arts Project (CAP) Loans and Musical Instrument Loans, because these products are specifically tailored to meet the needs of our membership — the arts and culture community of Northeast Ohio. There is an unmet need and a demand that we are filling," Peyrebrune said. "We serve a niche market requiring specialized knowledge from our staff and volunteer credit committee. It's a small market, but it's needed and that's exactly why credit unions such as NoteWorthy exist."
Once More, With Feeling
Founded in 1960 as the Local 4 Musicians' Credit Union, in 1996 the institution broadened membership to include the wider musical community and changed its name to NoteWorthy. In 2006, it began expanding membership to include people from the entire spectrum of northeast Ohio's arts and entertainment community.
Artists who need extra help in realizing their dreams of seeing their films on the big screen or their canvases in galleries can apply for loans of up to $50,000 with 50% collateralized (musical instruments can be offered as collateral) up to 48 months at 9.25% and 8.25% with 100% collateralized up to 48 months.
"We can't compete with banks on consumer loans," said Grammy-winning producer/songwriter and board member, Tony Nicholas from his recording studio in Ohio. "I understand why banks scoff at giving loans to musicians and artists because they don't know the value of what the artists are asking for. We're not stupid when it comes to giving loans to artists. We protect the assets of our members but we have found our niche and we are creative with our loan products."
This eclectic credit union is located in the lobby of a refurbished warehouse built in 1907, called the Tower Press Building, which also houses artists' lofts. Writers and musicians stop in to the credit union to discuss their accounts, consumer loans and their screenplay ideas with 30-year veteran credit union manager Kathy Klimko while picking up an espresso in the café.
"This CAP product we offer is specifically tailored for success for the artistic community of Cleveland," said Carolyn Jack, board member and former fine arts editor of Ohio's largest newspaper, the Cleveland Plain Dealer.
"It's unique in the way that we are all artists and we understand how passionate and disciplined our members are. They are not about to default on a loan where they are in jeopardy of losing their musical instrument that makes their careers possible. Artists are creative and we as a credit union are creative and innovative with our financial products."
