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FARMERS BRANCH, Texas – Individual development accounts by definition appear to be a product well suited for credit unions, but no “plug-and-play” package exists for credit unions interested in pursuing IDAs, and what works for one financial institution may spell failure for another. To educate credit unions on the benefits, diversity and mechanics of IDA programs, and to foster communication between credit unions and community-based organizations supporting IDA programs, the Texas Credit Union Foundation and the Corporation for Enterprise Development hosted the first known credit union-specific IDA Training Program here Aug. 19. “This pilot training provided credit unions, community partners and other stakeholders with opportunities to acquire knowledge, develop skills and expand networks necessary to create, manage, and support effective and efficient IDA initiatives,” said Elaine Laroa, executive director of TCUF. The pilot training program was developed based on the results of IDA focus groups conducted earlier in the year by the CFED. “What we found from our focus groups is that there is a real need to support credit unions in their IDA program design,” said Steven Shepelwich, CFED senior program manager. Shepelwich said credit unions are ideally suited to help in the process of teaming assets and education for low-income members. IDAs are matched savings accounts for qualifying low-income consumers trying to buy their first home, pay for post-secondary education and job training, or start a small business. More than 10,000 families nationwide are currently saving through IDAs with the help of 400 private and non-profit organizations. CFED underwrote the training session utilizing grant dollars from the Ford Foundation. Participants included representatives from eight Texas credit unions in various stages of researching or implementing IDA programs, credit union league officials from Texas, Louisiana, New Mexico and Montana, and six Texas community-based IDA organizations. Trainer Inger Guiffrida, a financial educator and asset building strategies consultant, explained how IDA programs work and facilitated hands-on activities covering asset building, IDA program drivers (target markets and outcomes), program design, costs and funding sources. “The purpose of IDA programs is to help people purchase assets, and to minimize the hindrances and maximize the helpers in that process,” Guiffrida said. “One reason financial institutions hesitate to initiate IDA programs is that there are only two basic drivers – the funding organization, and the regulations governing the financial institution,” Guiffrida told participants. “Otherwise, the program design is wide open. You can look at that as a negative or you can look at it as an opportunity to be an innovator. The key to a successful IDA program,” she continued, “is finding a good partner that knows and understands the market.” Guiffrida also addressed participant concerns regarding recruitment (marketing) and retention of individual development accountholders. A lunch session featured a discussion with Woody Widrow, project director for the Texas IDA Network, and Ferol Beer, a representative with the Alliance for Multicultural Community Services. Widrow delineated the different roles and levels of involvement credit unions can have in IDA programs, including providing special savings accounts, holding match money, teaching financial literacy, and providing mortgages for IDA savers. Beer reported on the five-year partnership the Alliance has enjoyed with USE Credit Union in a highly successful IDA program. USE CU is the depository and account custodian for a Houston area refugee IDA program that has enrolled 900 participants who have cumulatively saved over $1 million in less than four years. The 2-to-1 total program savings of over $3 million has helped refugees purchase 530 cars, 14 educations, 11 business start-ups and 104 homes. The training helped Teri Portillo, Women’s Southwest Federal Credit Union, clarify next steps for her credit union’s program. Portillo is researching IDAs and expects to launch a program in the next 6-12 months. “IDAs are definitely something we want to do. We need to shore up funding first, and the training gave us additional ideas for doing that. It was also nice to hear from people who are having success with IDA programs. Yes, it’s a lot of work, but in the long run, we can help a lot of people.” CFED’s Shepelwich and TCUF’s Laroa both expect additional IDA training programs in the future. [email protected]

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