As one of the MOST progressive credit unions out there, the $1.7-billion GTE Financial recently shattered the notion that only small to mid-size CUs can earn Community Development Financial Institution (CDFI) status and then go after grants that allow it to better serve the underserved.
Indeed, the Tampa, Fla.-based GTE was able to use a CDFI grant to fund special training to get its front-line staff certified as financial counselors.
Focusing on its low-income designation and CDFI certification has helped the 240,000-member CU expand its ongoing community work and create a building block to support its growth and member value while also increasing lending to low-income areas.
GTE Financial now offers a full range of community development products and services designed to meet the needs of members of low-to-moderate means, including:
- Community development loan products, such as credit builder loans, a first time auto buyer program (providing members with no credit with reliable transportation to work), shared secured credit cards, micro business and small business loans. GTE Financial is in the process of exploring offering payday loans, anti-predatory short-term loans, and other services.
- Community development savings and account services include prepaid debit cards, which allows GTE to compete with other businesses offering high cost check-cashing and money orders. Business share accounts and international remittances are also under consideration.
- Capacity-building services consist of financial counseling and education and bilingual services.
- Partnerships, such as with the Federal Home Loan Bank of Atlanta to offer a variety of purchase and home rehabilitation products such as First-time Homebuyer, Community Partners & Veterans, etc. In addition, auto loans through new partnerships with Wheels of Success (WOS) and Sun Coast Services allow for unique character lending and credit building loans.
One of many examples of how GTE's CDFI grant award has helped its members includes the story of a member whose automobile was a "repair only" contract for WOS, Tampa's only nonprofit organization providing a full range of transportation solutions that include vehicle replacement, car repair, licensing, car payment, and down payment assistance to low- and moderate-income working families.
This particular member came to WOS as a victim of severe domestic violence, with a vehicle that was in desperate need of repairs. She couldn't make a break from her abusive home life and keep her job without a reliable vehicle. Before work could begin on her vehicle, she made her break for independence from her abuser. WOS arranged for the repair of her vehicle, giving her the means to get to work where she soon received a raise and was able to complete the WOS program.
As her finances improved, she was able to afford a vehicle payment. GTE Financial was there to help, approving her for a credit union-donated 2006 Honda Accord. Today she has the confidence, independence, and, yes, air conditioning (a Florida necessity) that she hasn't enjoyed for more than 10 years.
This is one of the daily examples of how GTE Financial makes a meaningful impact on the lives of its low-income members through its CDFI grant award.
A CDFI grant award lets credit unions do what they do best in service to their members while at the same time boosting its reach—allowing it to better serve more low- to moderate-income consumers.
Stacy Augustine is President/CEO of CU Strategic Planning, Tacoma, Wash.
