ST. PAUL, Minn. -
Bill Raker, CEO of US Federal said each of the partners-U.S. Federal, Lutheran Social Services of Minnesota, and Thrivent Financial for Lutherans-have made a five-year commitment to the project that could open as early as August. It includes the establishment of a full-service branch, counseling and financial education services and a special savings incentive program.
"We hope the center will become the financial institution of choice for residents on the East Side," Raker said. "We are confident that credit union services will appeal equally to those having little or no bank interactions, to middle income customers and to neighborhood business owners."
US Federal and Lutheran Social Services will share the space inside the historic Old Swedish Bank Building in St. Paul, vacant since 2002. The building was once the hub of a bustling neighborhood that suffered the impact of a shrinking economy in the 1970s. It is now home to many immigrants and low-income families, many who are starting small businesses such as restaurants and bakeries.
US Federal will provide both traditional and non-traditional products and services. The latter will be designed to meet the needs of the local neighborhood, he said, explaining that a consultant hired by Thrivent is in the process of reviewing information gathered from neighborhood focus groups to determine exactly what those products should be.
Thrivent will contribute $2.1 million to help cover start-up and operational costs. This will include a $600,000 grant it hopes to get from the government for IDAs.
US Federal will establish and operate the branch, leasing 3,000 square feet from the East Side Neighborhood Development Co. LSS will sublease a portion of the space and will be a managing partner in the center.
Raker said this branch, the 13th for US Federal, would differ slightly from the others.
"As an example, none of our 12 other branches have any neon signs in the windows that advertise 'Check Cashing Here'", he said, explaining that this type of introductory signage will at least get residents through the door where they can gradually be introduced to more traditional opportunities. He also expects to hire employees who speak languages common to this diverse population.
Among the services that this new center hopes to offer is individual development accounts, or IDAs, that will match savings funds on a three-for-one basis for qualifying participants.
Brad Hewitt, senior vice president of fraternal operations said, Thrivent is in the process of preparing a grant application to the Office of Community Service, U.S. Department of Health and Human Services, to support the program.
"We believe matched savings programs like the one we hope to offer at the center are an important resource to help hard-working St. Paul residents," Hewitt said, noting that Thrivent has already had success with IDA programs in Chicago and Minneapolis. "We know that they help individuals and families achieve financial stability through improved money management and savings skills."
Raker said he's counting on word of mouth along with recommendations from area social service organizations and churches to spread the word about the financial center.
"We are looking at this particular project as a prototype that can be replicated in other communities," Raker said. Thrivent, who originally approached US Federal with the idea, has a similar partnership with a bank in the Chicago area.
"They said they like the idea of working with a credit union because they are also a mutual organization that shares similar values," Raker said.
City officials are pleased by the addition, saying that having a financial institution of this natural as a neighbor can only help the community's comeback efforts.
US Federal is the fourth-largest credit union in the Twin Cities and one of only three that serve the entire metro area.
"This new center will help countless St. Paul customer build assets, join the financial mainstream and reach their financial goals,' said Chris Coleman, Mayor of St. Paul. "The City of St. Paul is delighted to welcome this center to the East Side, and we trust that the center's unique financial and educational resources will enable people of all income levels to thrive." To support the effort, the city has chipped in grant money along with a loan through its STAR and HRA programs to remodel the old bank building.
FOR MORE DETAILS
* US Federal Credit Union, www.usfed.org
* Lutheran Social Services of Minnesota, www.lssmn.org
* Thrivent Financial for Lutherans, www.thrivent.com
