Serving the Underserved: Baton Rouge Roundtable Blog
Baton Rouge, LA – On April 15, over 40 representatives from credit unions, charities, community organizations, loan funds, and vendors arrived from across Louisiana to discuss financial inclusion for the unbanked and underbanked. The Federation partnered with the Louisiana Credit Union League for an all-day event hosted by Catholic Charities of the Diocese of Baton Rouge.
After a breakfast meet-and-greet, Reverend Raymond Jetson, pastor at Star Hill Church and CEO of MetroMorphosis, began the day’s proceedings with prayer. Pablo DeFilippi, Federation VP of Membership, kicked off the day with a discussion on the building blocks of community finance – low income designation, CDFI Fund certification and membership in the Federation.
Next, CU Breakthrough Consultant, Sarah Taylor, outlined the market opportunities in Louisiana. Nearly one in four Louisiana households is underbanked and over 40% of the population does not have a savings account. Many of these individuals have subprime credit, including 71% of New Orleans residents, who sometimes turn to predatory lenders to meet their needs. With traditional credit union membership aging, low- and moderate-Income consumers offer a great opportunity for credit unions to sustainably grow their member base and assets while serving some of the neediest in their communities.
Some of the most engaging discussions of the day occurred in response to the lunchtime screening of “Spent: Looking for Change” a film by The Young Turks.The film inspired a conversation on how to better meet the needs of underbanked individuals who are turning to unregulated financial institutions like payday lenders, check-cashers, or pawn shops. Several suggestions were raised during the discussion:
• Focus on the needs of members
• Meet people where they are with regard to their financial priorities—don’t make assumptions about their needs
• Partner with community development organizations to open up a new, or larger, network of community members – in fact, local charities may even make grants available to credit unions investigating ways to grow their membership
• Remember that a founding mission of the credit union movement is to promote thrift
• Mine your data – check ACH records to see which members are sending payments to loan funds and check cashers, and work with them to find alternatives
• Create products that are convenient, accessible and easy to understand to combat and compete with payday loans
• Catholic Charities of the Archdiocese of New Orleans made grants to local fisherman to upgrade fishing vessels and netting to promote efficiency and create higher profit margins. Consider offering targeted loans for specific business purposes
• ASI FCU discussed their Memorandum of Understanding in place with the Honduran Consulate—credit union representatives visit the consulate each Friday to work with members of the Honduran Community
• Southern Teachers & Parents FCU is working with the Louisiana Credit Union League on the issue of community partnerships in Louisiana
• It will be important to involve social service agencies in any Louisiana CDFI Coalition that is established
This conversation was followed by a guided discussion with credit union representatives about ways external resources and partnerships have helped them better serve their communities. Mignhon Tourne, ASI FCU CEO, spoke about the products that ASI has been offering to clients as alternatives to payday lenders. Kathy Deloney, CEO of Red River Mill Employees FCU, spoke about how their credit union is meeting the needs of its members in underserved Campti, LA. Darlene Moore-Hurst, CEO of Michoud CU, spoke about the trials she and her credit union faced in the aftermath of Katrina and the work she has done to make affordable financial solutions easily accessible to Michoud’s members.
David Aguillard of Catholic Charities of the Diocese of Baton Rouge and Reverend Jetson discussed community initiatives they have organized and participated in. David presented a small-dollar Loan Pool Project in Kansas City where Catholic Charities partners with credit unions; he hopes to spearhead a similar program in Baton Rouge. In this program, risk would be shared by the lenders and the community, building a stronger partnership between financial institutions and community members. MetroMorphosis aims to transform communities from within; they have developed programs aimed at empowering members of the community. One program, their Urban Leadership initiative, identifies promising young people and nurtures their leadership skills.
After an overview of micro-finance and business lending products and services by Blake Myers, a CU Breakthrough consultant with the Federation, another consultant, Susan Brunner, spoke about the elements of a successful partnership. Best practices include the importance of being clear about expectations up front when forming a new partnership. Partners should align their mission and strategic priorities, define quantifiable goals, match services or products to the needs of the clients, and define the right “touch-points” or connections between the partnering institutions.
One of the overarching goals of the day was to build interest for the establishment of a Louisiana CDFI Coalition. By the conclusion of the day’s discussions, representatives of credit unions, loan funds, and charitable organizations were energized and eager to begin forming partnerships. This is only the beginning of the conversation! The Federation plans to hold a follow-up event to begin the work of establishing a state-wide CDFI Coalition to raise funds and awareness about Louisiana institutions service to their communities.
Click here for the day’s program and presentations.