WASHINGTON- Without a lot of fanfare, Pat Brownell, executive director of the National Credit Union Foundation has expanded the scope and reach of the organization. Since moving her office from Madison, Wisconsin, to the capital of the country here last year, the Foundation has engaged itself in credit union member educational and asset-building programs that seem to be popular topics both in Congress and at non-profit foundations that offer grant money for study and implementation. In turn, the Foundation (also a non-profit) has turned-around some of that grant money, dispensing it to credit unions and leagues that are knee-deep in efforts to bring banking services to low-income areas, charter new credit unions and do the other necessary "grunt" work that lies behind those headline-grabbing press releases about "serving the underserved." It's not just the catastrophe-centered clearinghouse that many in CU-land take for granted anymore, allowed Brownell, acknowledging that many of the initiatives with a full-head of steam now have been in planning stages for many months. As fresh ideas, they are even older, but the banker lawsuit and the press to pass the Credit Union Membership Access Act had to be dealt with first. Then, of course, the dust had to settle. The Foundation will still be there, she said, to collect donations and administer a fund if a credit union is ever again destroyed in a terrorist bombing ( like Oklahoma City's Federal Employees CU). But the Foundation's credit union development and model program initiatives are the ones that have taken on the force of a gale wind of late. After announcing receipt of a Ford Foundation grant for $350,000 to expand better and more productive ways that credit unions can help members save (the current American savings rate is still pitiful once employer-partnered 401 (k) plans are considered) the CU Foundation has been looking into what works, what doesn't and why. It may also fund a small-scale pilot program that could be expanded statewide or on a national basis, should it prove effective, of forming credit union service organizations, (CUSOs) to open up check cashing centers. A special emphasis is placed on creating working relationships with and among credit unions and other community groups and organizations. Brownell brought that message to a faith-based CU breakout session held at the recent annual conference of the National Federation of CDCUs, in Denver, for example. She sees her conference appearances as a means of getting, as well as giving out, valuable information. This is no pie-in-the-sky stuff, Brownell noted. Getting the raw data needed to separate the worthy-sounding and feel-good-froth from the meat and potatoes of what makes members- especially low-income members- start a regular savings plan, and brings them closer to the financial mainstream is knowledge that can be put to use by all credit unions. This is the work that the Foundation has always pursued, but Brownell has quietly marshaled the power of leverage and visibility to continue the effort. Making a quiet evolution from a charitable operation to one that forges (or assists) alliances that provide real-time answers and solutions to big CU-land questions just seemed like the logical next step, she admitted. The Foundation's latest grant disbursements fulfill the promise of bringing real service to potential members that are out of the mainstream right now. One grant, for $144,000 (to be distributed over a five-year period) went to the Latino Community Credit Union in Durham, North Carolina to pay for operational and start-up costs for the new CU (CU Times, July 5) and for bilingual materials and Web site development; the other, for $33,000, (to which the Minnesota Credit Union Network will pony up $11,000 as partner) will go to the Northcountry Cooperative Development Fund to cover consultants' fees to conduct a feasibility study of forming a credit union for the cooperative housing community in St. Paul. Taken together, these projects can provide a bird's eye view of what the Foundation sees as part of its natural work. One is already up and running (The Latino Community CU) and the other is a work in progress that may or may not become a reality, depending on what the research finds. And an offshoot of the larger research project may yield usable information of interest to small CUs that may want to offer share draft services. But one salient fact rings through in each, said Brownell. They are all collaborations of interested parties that come from various sources. There is no more throwing money at a problem by funding a single-source idea or program. These are all projects that involve local grassroots initiatives that were well underway before the CU Foundation took them on. The Latino CU, for example, had the backing of the local Hispanic Center, El Centro Hispano, the North Carolina CU League, State Employees CU and Self Help CU. The lack of affordable housing in the Twin Cities area of Minnesota is the underlying need behind the other effort. But before a CU is launched, it must first be determined how the cooperative community can address the need. And the role played by a new credit union, and where the mix is with existing CUs needs to be vetted. "Whatever the results of the study," Brownell noted, a lot will be learned that will be useful in the future. A small grant of $3,500, with a matching grant of $3,600 from the Minnesota CU Network will go to Menagha Co-op FCU to start-up a share draft program. The money will pay for the software and equipment the CU needs to offer checking services. Also involved were Liberty Check Printers and Mid Minnesota FCU, which is monitoring the smaller CU. It is that combination of both raw questions in search of answers and nuts and bolts assistance that shows what the business of the Foundation really is. Taking what it has learned from a variety of programs and extrapolating the knowledge gained so that it is useful to credit unions and leagues throughout the country. As Ray Burnett, president of Mid Minnesota FCU said in a released statement, the obvious goal is to allow Menagha to offer share drafts to members, there are other, equally important points. We want to develop a model program here that can be used to help other small credit unions implement share draft programs." Leapfrogging grant money from the Ford Foundation previously received, the CU Foundation now wants to use new grant money to take what it has learned a few steps farther, developing materials and a full-fledged marketing plan that credit unions can use to stimulate savings. "We want a very aggressive package," said Brownell, "then we'll target 3,000 credit unions to promote the plan and materials. From that, we'll pick ten for documentation and tracking. We'll track both credit union and members' assets to see if the concept works. The point is to find out what will get people to save more aggressively. Does advertising and marketing really work? Is there a crossover between a share savings and an asset builder CD, or an IRA, for example? Do members then begin to use other credit union services? Will they save for a home?" "It's a three-year, in-depth effort to get the answers to these unknowns, because one year's time is insufficient," said Brownell. The National CU Foundation has also just submitted a new $350,000 grant proposal to Ford that excites Brownell. If the money is forthcoming (they hope to know by July's end) it would fund 18 months research into finding out if credit unions with very close ties to their sponsor groups have more opportunity and fare better at educating their employees/members in financial literacy, especially low income members. The unique position of a credit union with such an aggressive educational program, together with a sponsor employer with a lot of low and middle-income workers that participates in the program presents a rare chance to see what measured progress can be made. Also, the idea of forming CUSOs that are either wholly, or jointly-owned by a CU(s) to provide low-cost transactions for low-income residents will be investigated. "We want to find a way to model a CUSO with the face of a checkcasher. I think it's doable," said Brownell. "If we get the grant, we'll underwrite Filene to work with NACUSO to work on it." There is currently a big drive to find ways for credit unions to reach out to some of those 30 million-estimated Americans who have no formal banking relationships. Restricted by field-of-membership rules, many CUs cannot offer so-called "lifeline" banking accounts, said Brownell. A CUSO may be one way to do that. -
caburger@cutimes.com
