Credit unions talk a good game about wanting to serve low-incomepopulations.

But do they really?

Will regulators and insurers even let them?

The topic has been on my mind lately, and the 2013 CommunityDevelopment Financial Institutions Fund announcements earlier thisweek brought it to the forefront.

I think many in the industry tend to think about the CDFI awardslike I do: as an opportunity for more business and revenue. Sure,you help people along the way, but let's be honest: your balancesheet is the top priority.

Helping poor people is a thankless job. It brings to my mind ascene fromThe Simpsons. Idealistic do-gooder Lisa brags about herweekend job helping the poor, and Homer replies, “That's not a job,that's a waste of time! What can poor people pay you? Nothing!”

The poor live paycheck to paycheck. Some are desperate, and as aresult, risky. If you target low-income populations andcommunities—maybe offering second chance checking or financing ahousing development—you can expect your examiner will give you anearful about risk management.

And that's where the problem lies: adjusting your balance sheetto accommodate for risk and revenue often results in products andservices that don't benefit the underserved any more than checkcashers and payday lenders do.

Case in point: a press release I received a couple of weeks agopromoting a case study. The paper profiled a credit union thatbegan providing transient workers with deposit accounts. As aresult, it needed to beef up risk management.

Fair enough.

The study explained how a vendor service provided the creditunion with hundreds of risk alerts each month, resulting in about$100,000 worth of additional extended holds. (I assume monthly, butthe release didn't specify.)

The holds stopped countless fraudulent items, the pitch said.Still good news.

But I couldn't help but wonder what if some holds were theresult of a negative balance or previous NSF activity. Digging alittle deeper into the service, I learned those situations resultedin extended holds, too.

The last thing a person with a negative balance needs is anextended hold on a deposit. The Great Recession forced many peopleinto self-employment, and those checks aren't subjected to payrollfunds availability laws. Furthermore, the self-employed aren't paidon a regular basis. It's impossible to budget when you don't knowwhen you're going to be paid, and most self-employed folks don'tearn enough to build up a savings cushion. Anybody who doesn'tunderstand that, and thinks those lazy do-nothings just need to geta job and learn how to balance their checking accounts, is out oftouch with the reality of millions of Americans.

Before joining Credit Union Times as a staff reporter,I was a freelancer for the publication. I also provided marketingservices to credit unions. All of my paychecks were subjected toholds of five business days, even the official credit union checks.In a pinch, I could call my credit union and have a hold removed,but only because I had previously worked there.

Had I not been a former employee, I would have gladly paid acheck casher's processing fee, because it would have provided meimmediate access to my funds and been less expensive than anNSF.

The bottom line: the credit union wasn't always the best placefor me.

The point isn't that credit unions should ignore riskmanagement, crossing their fingers and hoping for the best whenserving low-income populations.

Rather, I wonder if credit unions can provide truly beneficiallow-income services while satisfying risk management requirementsand breaking even.

We've seen unflattering reports about overdraft profits atcredit unions. For many of you, it's your largest revenue lineitem. How many stop and think about the ethical questionsassociated with this strategy? Does dropping your NSF fee a buck ortwo below the local community bank really allow you to claimethical superiority?

There are plenty of credit unions doing great work servinglow-income populations with an eye toward helping people first, andfinding a way to make it work on the balance sheet second.

But there are plenty more who claim they help the poor, but arereally only helping their bottom line. Others would like to do morein this area, but feel limited by regulators, bond insurers andtheir financials.

There's lots of talk about our sluggish economy being the newnormal. Those conversations should include ways to better helpcredit unions serve the poor.