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WASHINGTON – Two mainstream credit unions took the stage at a breakout session of CUNA’s Governmental Affairs Conference to tell credit union executives and board members a bit about how they have done well by working with lower income members and residents of underserved communities. Jim Blake, CEO of the $1.1 billion HarborOne Credit Union, headquartered in Brockton, Massachusetts, outlined for the breakout attendees how his credit union has worked in a variety of different ways to help ease members’ entry into the high cost housing market. The median price for a home in Massachusetts in 2004 was $340,000 and the median price for a condo was $240,000. Even though a significant part of HarborOne’s field of membership contains low-income areas the cost of housing still provided a key need among the credit union’s members that the institution has helped to meet. The town of Brockton has more than 90,000 residents, 35% of whom are minority and 40% of whom are low-income. The town, which is the hometown of boxing champion Rocky Marciano and the site of the first Santa Claus in a retail store, had fallen on hard times since it used to manufacture a large proportion of the shoes Americans purchased, Blake said. The credit union recognized the changing nature of its community early on, Blake explained, and took steps to adapt. Among other things, the credit union put a branch in the local high school more than 20 years ago to introduce good money management skills to students as well as promote the credit union’s programs. It helped found the Brockton Housing Partnership, a joint program with eight banks and two other credit unions that helped Brockton residents purchase homes. It participated in neighborhood revitalization efforts as well, Blake said. The results have been $91 million in real estate and other loans to low- and moderate-income households in the credit union’s field of membership, along with $102 million in loans to minorities in the area. Further, since HarborOne is a Massachusetts credit union, it is one of the only credit unions in the country to face Community Reinvestment Act examinations conducted by state examiners. The credit union’s efforts have earned it an Outstanding score in each of the credit union’s last 10 exams stretching back over 10 years, Blake said. Laura Edgar, senior vice president with the $1.2 billion Arizona Federal Credit Union drove home the need for credit unions to “think outside the box” when working with low-income members. Over 21% of the credit union’s membership are low- or moderate-income and of those 76% have checking accounts and 53% have loans. The loan balances for the low-income members on average are $11,982 versus $12,490. When credit unions take the time to get to know their low-income members and to meet them where they are, good things can happen, Edgar explained, including credit union growth and profitability. Lois Kitsch, a project director for the Filene Institute, the credit union research institution headquartered in Madison, Wisconsin, put the topic in industry-wide perspective. She pointed out that many of these low-income and underserved households tend to concentrate their business with the credit union, have fewer other financial institution options, are exceedingly loyal and represent good risk borrowers despite not having long credit histories. -

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