ASI Helps Members Look Beyond the Recession
- ASI FCU has focused on helping lower-income members meet their financial needs from its very beginning.
- Members have coped with a ‘triple whammy’: Hurricane Katrina, the Great Recession and the Deepwater Horizon explosion.
- The credit union serves 80,000 members spread across South Louisiana, and in New Orleans fully half of those are Latino or Vietnamese.
ASI Federal Credit Union became a low-income credit union before the low-income credit union designation, or even the NCUA, existed.
Chartered in 1961 to serve the blue collar shipbuilders and dock workers at the Avondale Shipyard, Inc. (now owned by Northrup Grumman), the now $293 million credit union has focused on helping lower-income members meet their financial needs and advance their financial lives from the very beginning.
"Working with lower-income members and the underserved is almost part of our DNA as an organization," explained Sarah Taylor, executive vice president with ASI.
But while working with the underserved has long been a core part of ASI's culture, Taylor acknowledged that at times since 2005, the credit union has felt like it existed primarily to help its members cope with, survive, recover from and flourish in spite of natural, economic and industrial disasters.
"[ASI CEO] Mignhon Tourne frequently calls it our triple whammy," Taylor said, referring to Hurricane Katrina in 2005, the Great Recession that got underway in late 2008 and the Deepwater Horizon explosion and severe oil spill of 2010. "They have been a series of huge challenges for the credit union to help its members overcome."
The latest challenge, on the day of the interview, had been a burst pipe over the weekend that had left four inches in water on the first floor of the CU’s headquarters in Harahan, La., temporarily exiling part of the credit union's headquarters staff to trailers and making those that remained on the second floor double up to make more room for the displaced.
"We have gotten to where we feel we can take a lot of things in stride," Taylor said, laughing quietly.
If the last six years have felt like one long challenge with different facets, it may be because ASI is very closely linked to much of the New Orleans and south Louisiana geography and many of its people.
The credit union serves 80,000 members spread across South Louisiana, and in New Orleans, fully half of those members are Latino or Vietnamese, leading the CU to have one of its now 15 branches dedicated to Spanish-speaking members and another dedicated to Vietnamese-speaking members. In addition, 60% of its members live at or below the poverty line.
"The different parts of the triple whammy hurt our most vulnerable members because they struck from so many different directions," Taylor explained. First, lower income and blue collar workers generally were among the most impacted by Hurricane Katrina. They were also among those who could not easily evacuate the city ahead of the storm and those least likely to have insurance to cover their losses from it. They were also the ones most likely to be hurt by the economic downturn and the Vietnamese members, in particular, have been hurt by the oil spill as they had carved out an economic niche in the seafood industry, Taylor explained.
To help it organize, manage and fund the many recovery projects that it faced, ASI borrowed an idea from other CUs and launched a nonprofit development organization, A Shared Initiative Inc. or ASII. Launched in 2005 after the storm, the organization began with zero funds and only one manager, but has since grown to become the community development arm of the CU.
At first, in the days immediately after the flooding receded, much of ASI and ASII's time was spent helping to rebuild or refurbish housing in New Orleans, but as other nonprofits got up and running in the city, the CU stepped back from the actual rebuilding or remodeling projects and moved on to helping refinance those efforts and supporting members as they moved through that process, Taylor explained.
The CU found markedly different situations in different parts of the city and area, Taylor explained. In New Orleans' mostly residential Lower Ninth Ward, the CU found a lot of members with their former homes, whether rented or owned, razed to the foundations and in need of complete rebuilding. While in the Upper Ninth Ward, which is more commercial, there was a greater need for refurbishing work and business loans to help reestablish lost commercial efforts.
One of the things ASII did, as it grew to seven full-time employees and an operating budget of $300,000, was to refurbish and open a two-story building in a mostly overlooked part of the Upper Ninth Ward. The center, named after Clifford Rosenthal, CEO of the National Federation of Community Development Credit Unions, leases out space to other development nonprofit organizations, provides space for neighborhood nonprofits and other groups and houses the ASII staff.
ASI backed away from directly addressing housing needs, in part, because it became apparent that other needs became pressing as well, Taylor explained.
First, financial education, particularly for members coming back and trying to maneuver their way through different programs and find different sources of funding.
"We began to see a flood of online payday lending," Taylor said. "So we had to educate members about the dangers of getting trapped in those loans and show them some alternatives."
The alternatives included three different types of payday loan alternative, each tailored to help different members at different levels of involvement with the short-term, high-interest loans, Taylor said, remarking that Louisiana is one of the least regulated states when it comes to payday lending.
Another need that become clear was for micro lending to small business in the region, particularly to lower income, minority and other marginalized entrepreneurs. On its own and through partnering with another nonprofit organization, ASII has booked 26 commercial micro loans for almost $450,000, the CU reported.
For example, Kim Loan Cao, a Vietnamese immigrant and survivor of Katrina, received a $15,000 micro loan to help her expand her inventory in a small shop she rebuilt after having been wiped out in the storm. Another member, bookkeeper Monica Landry, used a micro loan to purchase software and hardware for her accounting business that also had to be rebuilt after the storm.
Yet another need that became clear in the wake of the oil spill was for translators to work with Vietnamese members trying to work through the process of getting compensation for their oil spill related losses from the trust fund BP established to cover those losses. The credit union was one of the only institutions in the area that had the experience with financial communication in Vietnamese, in addition to the trust of its members, to really help facilitate the process, Taylor explained.