CDFI Credit Unions Build Inclusive Economies


This April, the Federation is celebrating the overwhelmingly positive impact CDFI credit unions have on the low-income communities they serve. CDFI credit unions consistently outperform their peers in growth, earnings and the services they offer by building new markets of eligible and successful borrowers. The Trump administration’s budget, America First: A Budget Blueprint to Make America Great Again, proposes cutting the CDFI Fund budget for 2018. The administration has suggested further cuts that would leave the CDFI Fund with only administrative funds to run non-discretionary programs in both 2017 and 2018.

The Federation urges the credit union industry and the public to share our members’ stories with legislators in a kind of virtual town hall. Protect the CDFI Fund from the proposed budget cuts! Impact stories will be posted to this blog throughout the month. Check back soon!

Page_Break_scroll

CDFIs improve access to affordable housing
Missoula Federal Credit Union, Missoula, MT

When Brooke and Daniel were served notice to vacate their apartment they were understandably worried. The young newlyweds needed stability, wanted to own their own home, and desired pride in investing in their community and having a place to call their own. They also wanted to be close to town to avoid costly and time-consuming commutes.

Unfortunately, conventional houses and home loans in the Missoula area made it impossible for them to find a typical house in their budget. The options were to move further from town, or to go back into the rental pool and try to save more money. Brooke heard about Missoula Federal Credit Union’s Manufactured Home Loan program and wondered whether this might provide a solution to the challenges the couple was facing.

missoula

While manufactured housing can provide sound affordable housing opportunities for Montana families, financing can be difficult. Conforming mortgages require a permanent foundation and all of the standard qualifying criteria. Non-conforming “chattel” loans tend to be short-term, require high down payments, and come with high interest rates. Missoula Federal Credit Union, the state’s largest CDFI, is working to change this reality. The credit union’s manufactured home loan product is available for new or used manufactured homes, regardless of foundation type. Homeowners can borrow up to 95% of the home value for up to 20 years, at a reasonable rate of interest.

Brooke had the drive and determination to find a solution for their family. She was smart to turn to a well-respected CDFI. Her husband, Daniel, remarks: “We did not know if we could qualify for a home; we did not fit the typical home buyer profile. After we found out that Missoula Federal had this program we decided to give it a try. Now friends, co-workers, and even our insurance agent are asking us how we were able to find and get the loan. Our answer is to go talk to Missoula Federal.”

Lori, the loan officer who closed the loan, remarked: “You could feel the excitement in the air. The positive feelings from Brooke and Daniel were infectious. This is the kind of attitude and hope that makes me proud to help people achieve their goals.”

Missoula Federal Credit Union is a CDFI credit union with six branches across Missoula in the At-Large congressional district of Montana. Incumbent Representative Ryan Zinke resigned the seat upon his confirmation as US Secretary of the Interior on March 1st. Greg Gianforte (Republican), Rob Quist (Democratic), and Mark Wicks (Libertarian) are vying for the seat in a special election on May 25th. Let the candidates know how important CDFIs are to your community. Contact Greg Gianforte at Greg for Montana, PO Box 877, Helena, MT 59624; Rob Quist at (406) 437-9650, or Rob Quist for Montana, PO Box 1917, Kalispell, MT 59903; and Mark Wicks at (406) 390-3575.

Page_Break_scroll

CDFIs clean up poor credit reporting
Border Federal Credit Union, Del Rio, TX

When Yago moved to the United States, he opened a savings account at Border Federal Credit Union in Texas. Staff ran a quick credit report to make sure everything was in order – it wasn’t. An incorrect date of birth, name variations, addresses where he’d never lived, and accounts that did not belong to him (including several collection accounts) all appeared on the report. Yago had bad credit according to a report simply based on his name.

Initially, Yago’s main goal was to have all the false information removed, but he also needed to establish credit of his own. He was interested in purchasing a home within three years.

Diana, a Border FCU Financial Counselor, worked with him on an action plan which included dispute letters, phone calls to creditors and filing police reports. The credit union services provided at no charge, regardless of the number of emails, phone calls and visits, encouraged him to continue the long and difficult process. Yago appreciated the promptness of response to his phone calls and emails; he knew that any question would be answered in a timely matter.

After a year, Yago was able to finally clear all negative and incorrect information from his credit report.

Border FCU Counseling Team

Border FCU Counseling Team

With Border FCU’s help and guidance Yago realized the importance of maintaining good credit and management of finances. He refers family and friends to the counseling department, praising their knowledge and ability to convey simple explanations. With negative items removed and positive credit built up, Yago bought a home last November.

Border Federal Credit Union is a CDFI credit union with branches in Del Rio, Eagle Pass, and Crystal City. It is headquartered in Del Rio in the 23rd Congressional District of Texas. Let Congressional Representative Will Hurd know how important CDFIs are to your community. Contact the Congressman at 830-422-2040; 1104 West 10th, Del Rio, TX 78840.

Page_Break_scroll

CDFIs resettle refugee families
Genesee Co-Op Federal Credit Union, Rochester, NY

As refugees from Burundi (via Tanzania), Hicuburundi and Ntibamumpaye were determined to start a new, prosperous life in the United States. Shortly after arriving in Rochester, they joined the Genesee Co-Op Federal Credit Union and started saving. While frugal and cautious about debt, they borrowed with the credit union and established good credit.

They’d begun saving for their first home when a slot in the local Acquisition-Rehab Program opened. Marketview Heights Association, a neighborhood housing organization, and Genesee Co-op FCU partner on this special program that assists low- and moderate-income people purchase and repair homes in the City of Rochester. Ty at Marketview Heights Association oversaw the acquisition and rehabilitation, and David at Genesee Co-Op FCU guided them through the mortgage process.

Hicuburundi-and-Ntibamumpaye-New-Homeowners_edit

Hicuburundi and Ntibamumpaye bought a wonderful, affordable large house in the northwest section of Rochester. They put 3% down and got closing cost assistance: $3,000 from a city grant and $5,000 from New York State Affordable Housing Program. After closing, $30,000 in improvements were put into the house: block windows in the basement, roof, new electrical service, windows, storm doors, removed chimney, new toilet, prep and paint after lead testing. Marketview Heights Association approved and oversaw all the home improvement contractors to ensure safe work practices and a safe home.

Today, Hicuburundi gardens extensively on their large plot, which is also perfect for parties with friends and neighbors. Ntibamumpaye has developed quite the reputation for her delicious cooking. They’ve also welcomed two other families of Burundian descent to the street, sharing knowledge and support across the community and beyond.

Genesee Co-Op Federal Credit Union is a CDFI credit union in Rochester in the 25th Congressional District of New York. Let Congressional Representative Louise McIntosh Slaughter know how important CDFIs are to your community. Contact the Congresswoman at (585) 232-4850; 3120 Federal Bldg. 100 State St., Rochester, NY 14614.

Page_Break_scroll

CDFIs support job training
Freedom First Credit Union, Roanoke, VA

Chris understood the training and experience required for driving tractor trailers and the tremendous opportunity for people across Virginia to become professional drivers. At CDS Tractor Trailer Training, there were so many potential students, but not enough who could afford the hours, days, or weeks of required classes to earn a commercial drivers’ license.

Freedom First Credit Union partnered with CDS to provide short-term, small-dollar loans to students earning their commercial drivers’ license. While traditional education loans require the borrower to take classes that lead to a degree, Freedom First’s workforce development loan program helps people pursuing certifications or licensures.

“This partnership is a win for everyone involved. We are able to get more students into school — and faster. The students benefit the most by getting the credit they need to go to school and start working,” explains Chris.

Chris Pender, Vice President of CDS Tractor Trailer Training, with Tim Cerebe, VP of Community Development at Freedom First CU

Chris Pender, Vice President of CDS Tractor Trailer Training, with Tim Cerebe, VP of Community Development at Freedom First CU

Because of the quality of training provided by CDS, many students have job offers before they finish the program, and their starting annual salaries range from $30,000 to $40,000. With this successful partnership, CDS expanded from Virginia Western Community College to several community colleges throughout Virginia.

Freedom First was awarded $1.725 million from Wells Fargo NEXT Opportunity Awards, enabling expansion beyond tractor trailer CDL licensure to include other community colleges and other industries such as healthcare, welding, and other job readiness programs.

Freedom First Credit Union is a CDFI credit union with 10 branches in Montgomery, Botetourt, and Roanoke counties, Virginia. It is headquartered in Roanoke in the 9th Congressional District of Virginia. Let Congressional Representative H. Morgan Griffith know how important CDFIs are to your community. Contact the Congressman at (540) 381-5671; 17 West Main Street, Christiansburg, VA 24073.

Page_Break_scroll

CDFIs recognize a nuanced view of financial health
Pacific Northwest Ironworkers Federal Credit Union, Portland, OR

An Ironworker for 13 years and a member for 11 years, Paul is a true believer in the benefits of a credit union.

“When I joined, I had bad credit,” says Paul. “They really helped me out. They look at things like work history rather than credit scores. You don’t find that at other banks.”

Several years ago, Paul was looking to the future and thinking about purchasing a home. He talked with Teri, the CEO of Pacific Northwest Ironworkers Federal Credit Union, about what it would take to get a home loan. Paul worked with Teri to create a plan that included debt consolidation as well as other ways to improve his credit score, and with Logan, Mortgage Loan Specialist, to apply for his home loan.

“It was a three year process,” Paul explains, but once he got on track for the home loan, “it was smooth sailing!”

PaulDiaz

“They understand the logistics of the job. The ups and downs in the work and paychecks.”

When it comes to spreading the word about the credit union, Paul isn’t shy about telling his co-workers about the benefits. From checking and savings accounts to home loans, union dues auto-deducations and life insurance, Paul uses the credit union’s products and services to their fullest.

Pacific Northwest Ironworkers Federal Credit Union is a CDFI credit union with branches in Oregon and Washington states. It is headquartered in Portland in the 3rd District of Oregon. Let Congressional Representative Earl Blumenauer know how important CDFIs are to your community. Contact the Congressman at (503) 231-2300; 911 N.E. 11th Ave, Suite 200, Portland, OR 97232.

Page_Break_scroll

CDFIs empower successful savers
Neighborhood Trust Federal Credit Union, New York, NY

When he started using the financial counseling services at Neighborhood Trust Federal Credit Union, Clemente needed to improve his credit. At his Financial Counselor’s recommendation, he opened a secured credit card from Neighborhood Trust FCU.

“The secured credit card has helped me a lot,” says Clemente. “In one year, I’ve seen my credit score jump 84 points! This product has also helped me to stay within the 30% limit. It helps me realize that I shouldn’t spend more money than what I actually have. I see this credit card as a way for me to stay in control.”

In just one year, Clemente’s credit score rose from “needs improvement” to “fair”. He also reduced his debt by over 80% — and saved more than $3,200.

clemente-neighborhood-trust

When asked about the possibility of federal funding being decreased to CDFI institutions, Clemente said:

“To Council Members, Congressmen and Representatives at the state and national level, please do everything in your power to maintain the subsidy for the financial counseling program and to the credit unions that provide them. Without this program, many people will simply fall into an abyss and won’t know how to manage their finances. Please do all you can to maintain this program and the services of the credit union so that other people can also take advantage of it, just like I did. There are no words to describe such an important service.”

Neighborhood Trust FCU is a CDFI credit union located in the Washington Heights neighborhood of New York City, in 13th Congressional district of New York. Let Congressional Representative Adriano Espaillat know how important CDFIs are to your community. Contact the Congressman at (212) 663-3900; 163 West 125th Street, Harlem State Office Building, New York, NY 10027.

Page_Break_scroll

CDFIs increase housing stability
South Side Community Federal Credit Union, Chicago, IL

Brenda didn’t have a bank account and was relying on various services when her brother told her about South Side Community Federal Credit Union. He and his wife had joined as part of the Oakwood Shores initiative, a partnership program between The Community Builders, one of the nation’s largest affordable housing developers, and the credit union to build the financial health and credit of tenants.

Although not an Oakwood Shores resident, Brenda was delighted to hear about the ability to save at her own pace and the variety of free financial classes on offer. She was able to attend workshops on credit building, money management, and holiday spending. Now, as a credit union member, she consistently puts money into savings despite living on a fixed income; indeed, she’s one of the biggest savers at South Side Community Federal Credit Union.

southside

Brenda and the entire family demonstrate the far-reaching impact of such community partnerships. Not only have the credit scores of The Community Builders-sourced tenants steadily increased, but more people on the South Side are able to find quality financial services for low- and moderate-income households.

South Side Community Federal Credit Union is a CDFI credit union in the 7th Congressional district of Illinois. Let Congressional Representative Danny K. Davis know how important CDFIs are to your community. Contact the Congressman at (773) 533-7520; 2813-15 W. Fifth Avenue, Chicago, Illinois 60612.

Page_Break_scroll

CDFIs enable higher education
Self-Help Federal Credit Union, San Francisco, CA

When Darrell found himself homeless after Hurricane Katrina, he made his way to San Francisco. Finding housing wasn’t easy without good credit, paycheck stubs, or bank statements. When Darrell enrolled at City College, they referred him to Self-Help Federal Credit Union.

“I didn’t have the best credit scores. They had to take a chance on me,” Darrell recalled.

Carlos, a manager at the San Francisco Mission Branch, sat down with Darrell to discuss what he needed and how to gain some stability in a new city and new school. He began with a secured credit card and then graduated to a Fresh Start Loan. Within two years, his credit score jumped 300 points.

Today Darrell is enrolled at San Francisco State University, on the track to a Bachelor’s degree in film-making. He also works part-time for NBA Champions, the Golden State Warriors.

Self-Help Federal Credit Union is a CDFI credit union with branches across California, Illinois and Florida. The San Francisco Mission Branch that helped Darrell is located in the 12th Congressional district of California. Let Congressional Representative Nancy Pelosi know how important CDFIs are to your community. Contact the Congresswoman at (415) 556-4862; 90 7th Street, Suite 2-800, San Francisco, CA 94103.

Page_Break_scroll

CDFIs help first-time home buyers
Royal Credit Union, Eau Claire, WI

Diana had always dreamed of owning a home. She works full-time and has a solid credit score, but a very limited credit history. She also faced a barrier common to many first-time home buyers, especially those with lower income—difficulty saving for a down payment.

A longtime Royal Credit Union member, Diana partnered with Jared, an officer in their home loan department, to review options. Fortunately, through the CDFI program, the credit union created a home loan product with a low 3% down payment (far lower than the typical 20%).

“Royal Credit Unions’s CDFI program offers an affordable monthly payment and minimal down payment—something that is hard to find in a home loan product,” noted Matt, Vice President of Mortgage Loan Sales.

Diana was able to secure her first-ever mortgage and her house payment is now under $500 a month – which saved her money over her previous rental.

keys-1317390_1920_edit

The power of the CDFI certification and grant made a big difference in Diana’s life as it does in so many others. Royal Credit Union provides home loans to low-income individuals and consumer lending (like auto loans and small dollar unsecured loans) through their CDFI program. In 2016, Royal Credit Union leveraged CDFI grant funds 50:1 ($500,000 loan loss reserve grant funds to $25 million in loans).

“As a lender, it’s so rewarding to be able to offer opportunities to more members. I’m proud to be able to make a difference,” said Jared, Mortgage Loan Officer, Royal Credit Union.

Royal Credit Union is a CDFI credit union with branches across Minnesota and Wisconsin. Their headquarters is located Eau Claire in the 3rd Congressional district of Wisconsin. Let Congressional Representative Ron Kind know how important CDFIs are to your community. Contact the Congressman at (715) 831-9214; 131 S. Barstow St. Suite 301, Eau Claire, WI 54701.

Page_Break_scroll

CDFIs enable new job opportunities
St. Louis Community Credit Union, St. Louis, MO

In more than 30 years of banking at St. Louis Community Credit Union (SLCCU), Michelle had never come to the credit union with such an emergency. A single mother and cancer survivor, she had found new hope in a new job offer. But there was a catch – the job was a 45-minute drive from her home, and her very old car couldn’t handle the new commute. Public transportation wasn’t an option, and she didn’t want to take out a high-cost title loan, which would have yielded very little cash.

Michelle hadn’t had a car loan in 10 years. She’d worked at a financial institution for many years, and she knew what banks expected from borrowers. “I thought I couldn’t afford it,” she says, “and I had some credit issues.”

She completed St. Louis Community’s online loan application. A SLCCU staff member called her and assured her that, no, her credit score wasn’t as bad as she thought, and yes, we could work with her. For Michelle, SLCCU’s help was a surprise and a relief. “Once I found out they could help me, even before I had the car, it was just like a weight lifted,” she says.

Michelle with her new car

Michelle with her new car

Michelle was able to close at a branch convenient to her, and set up automatic biweekly payments she can manage. She now has a message for people down on their financial luck: “Never underestimate St. Louis Community, and never underestimate what they can help you do if you give them a chance.”

St. Louis Community Credit Union is a not-for-profit, CDFI and Low-Income Designated credit union serving the St. Louis, Missouri region. SLCCU has 14 branches in St. Louis City and St. Louis County and is located in the 1st Congressional district of Missouri. Let Congressional Representative William Lacy Clay know how important CDFIs are to your community. Contact the Congressman at (314) 367-1970; 111 S. 10th Street, Suite 24.344, St. Louis, MO 63102.

Page_Break_scroll

CDFIs help people out of high cost debt
Kinecta Federal Credit Union, Manhattan Beach, CA

A serious car accident, a death in the family, hours at work suddenly cut – it can happen to anyone. Those common, but unexpected situations lead to new expenses and diminished income. With limited options available, many people turn to payday loans, moving from loan to loan and falling deeper into debt. One instant could change a life forever.

Nix Neighborhood Lending, a Credit Unit Service Organization (CUSO) of Kinecta Federal Credit Union, provides alternatives to help people in their community escape the payday loan cycle. They offer Payday Loans (at lower rates and with fewer fees), Personal Loans (for cash in hand and to pay off debt), and Payday Payoff Loans (a unique loan program that consolidates and settles payday loans in affordable payments).

“The Nix Personal Loan has helped our customers save money and get out of high cost debt while building their credit,” explains Tracy Fairbanks, Marketing and Community Programs Manager at Nix Neighborhood Lending.

Kinecta Federal Credit Union is a CDFI credit union with branches across southern California from Goleta to San Diego. Nix Neighborhood Lending and Kinecta Federal Credit Union are headquartered in Manhattan Beach in the 33rd Congressional district of California. Let Congressional Representative Ted Lieu know how important CDFIs are to your community. Contact the Congressman at (310) 321-7664; 1600 Rosecrans Avenue, 4th Floor, Manhattan Beach, CA 90266.

Page_Break_scroll

CDFIs help low-income youth build credit
Self-Help Federal Credit Union, San Francisco, CA

Many low-income youth in this country grow up without access to employment and credit, both of which are key to financial security and upward mobility. Meet Joshua. Working a full-time, minimum wage job and still unable to meet basic living expenses, Joshua took out several payday loans. Joshua explains, “You gotta pay back that money two weeks later with interest. It’s stressful you know? They give you $150 and you are paying $100 in interest! It’s double the stress.” Additionally, Joshua found himself delinquent on several accounts including a federal student loan and a major credit card.

Joshua enrolled in Year Up Bay Area, an employment training and placement program for 18-24-year-olds that also offers financial capability services through MyPath Credit. This program is a partnership between MyPath and Self-Help Federal Credit Union to connect young, underserved consumers to quality financial services. Working closely with MyPath’s Financial Counselor, Joshua took the necessary steps to bring his delinquent accounts into good standing, while simultaneously learning effective money management habits and implementing credit best practices. In six month Joshua’s credit score jumped dramatically from zero to over 600. He got a credit builder loan through Self-Help Federal Credit Union. Over the next six months, Joshua’s credit score continued to climb. With continued coaching, Joshua got a secured credit card, used it responsibly and within another six months found his score had moved up several more points to the high 600s.

Joshua on the streets of San Francisco. Photo courtesy of National Public Radio.

Joshua on the streets of San Francisco. Photo courtesy of National Public Radio.

Before MyPath Credit, Joshua says he had never thought about savings accounts, financial goals and emergency funds. Now Joshua has a stable salary, his negative accounts are all in positive territory, and he has an emergency fund of $500, all at the age of 26.

Self-Help Federal Credit Union is a CDFI credit union with branches across California, Illinois and Florida. The San Francisco Mission Branch that helped Joshua is located in the 12th Congressional district of California. Let Congressional Representative Nancy Pelosi know how important CDFIs are to your community. Contact the Congresswoman at (415) 556-4862; 90 7th Street, Suite 2-800, San Francisco, CA 94103.

Page_Break_scroll

CDFIs provide financial coaching for a better tomorrow
New Orleans Firemen’s FCU, Metairie, LA

Paige had gotten into a bind. Like many other young adults new to accessing credit, Paige had accumulated 10 different credit cards under her name, and a few were at their limit. Struggling to balance the cards, Paige’s stepfather suggested Paige speak to his credit union, New Orleans Firemen’s FCU (NOFFCU). Once there, she was able to connect with Kathy, NOFFCU’s Financial Services Manager, and after their first session, a light bulb went off in Paige’s head.

Previously, Paige was not sure of how best to handle her finances. She did not know what was coming in or going out of her checking account. As Paige says, “people my age do not learn these types of financial skills – they have to just figure it out.” Together, Kathy and Paige developed a plan. Paige opened a savings account and set down firm goals, which included closing out her current credit cards, opening a lower-rate NOFFCU credit card, and transferring outstanding balances towards a NOFFCU signature loan. Paige would pay down the signature loan, using the NOFFCU card only for emergencies, meeting with Kathy regularly to help Paige measure her progress.

Kathy, Financial Services Manager with New Orleans Firemens' FCU,  works with Paige to create a financial plan

Kathy, Financial Services Manager with New Orleans Firemens’ FCU,
works with Paige to create a financial plan

Now, Paige feels like she “gets it” and has a better understanding of her finances. With Kathy’s guidance, Paige feels that she has the information she needs to make the right decisions. Now Paige is starting to set goals for the future, including owning her own home someday soon, and working with NOFFCU in making that dream a reality.

New Orleans Firemen’s FCU is a CDFI credit union and the third oldest federal credit union in the United States. It has branches in New Orleans, Jefferson, St. James, Pearl River County, St. Tammany and Lafourche Parish and is headquartered in the 1st Congressional district of Louisiana. Let Congressional Representative Steve Scalise know how important CDFIs are to your community. Contact the Congressman at (504) 837-1259; 110 Veterans Boulevard, Suite 500, Metairie, LA 70005.

Page_Break_scroll

Share your story!
Send your impact stories and photos to Clarissa Ritter, Director of Marketing and Communications, at critter@cdcu.coop.

 

Stay Connected

Sign up to recieve news & updates from The Federation