BETHPAGE, N.Y. – Serving the underserved is so ingrained in Bethpage Credit Union's philosophy and business model, that when the credit union was approached by CUNA last year to commit to the association's Home Loan Relief Program the CU's decision barely needed to be discussed.
But BCU President/CEO Kirk Kordeleski stresses, "We didn't go into the HLPR program or get involved with serving the underserved in our communities to get business or Community Reinvestment Act credits. We did it because it's the right thing for us to do especially considering the demographics of the communities we serve."
In 2002, Bethpage CU was approved to serve three underserved areas on Long Island – Hempstead, Bayshore and Central Islip. But even before it got its community charter, BCU already had a presence in these communities by having branches in both Hempstead and Bayshore. The credit union expects to open a Central Islip branch in the first quarter 2007.
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Bethpage also counts 300 business partners throughout Nassau and Suffolk counties in its field of membership.
According to Kordeleski, Bethpage's commitment to serving the underserved in the communities it serves extends beyond the CU's involvement with the HLPR program. He encourages the CU's staff to be active in the communities and be involved with other not-for-profits, local governments and chambers of commerce. Credit union staff also sits on the boards of various area charities.
"We want people to think of us as the folks who are part of the community and active for the right people," he said.
"Our attitude has been to become a trusted partner for the residents. We try to get to know the communities. If it's a Hispanic or immigrant community, we try to have representatives there to be part of and interface with the community," Kordeleski added.
Bethpage CU was part of the original group of CUs that made commitments to the HLPR program when it was announced by CUNA in October 2005. Kordeleski guesses the reason why the CU was tapped was because of its large community charter and the fact that Bethpage has been very active politically and strong proponents of credit unions "walking the walk."
"Unlike CRA requirements which are mandated, credit unions' involvement in the HLPR program is strictly voluntary. The credit unions that have made commitments to the program have chosen to do so, not because they're required to. Their involvement is more driven by credit unions just being credit unions and their interest in looking for ways to provide unique services to the underserved," said Kordeleski.
Since making its $30 million commitment to HLPR, Bethpage has made $5 million in HLPR loans. Kordeleski is confident the product will gain momentum as the weather warms and gets into the spring and summer months. The CU has also gotten more information about the product to its business market and the communities it serves.
"It takes time to build momentum for a product like this," he said, adding he's confident the CU made the right decision committing to HLPR.
"There are distinct advantages to this product in a high-priced market like ours," said Kordeleski.
"Area research shows fully a third of the engineers in the area under the age of 35 are living at home because they can't afford to buy a home in Nassau or Suffolk County. The average price of a home in Nassau County is $500,000 and in Suffolk it's $400,000. Close to 50,000 people in the last year ages 20-35 have moved out of the area because they couldn't afford to buy a home. That's why the HLPR product is so necessary," he continued.
At this time, Kordeleski is sure Bethpage will renew its HLPR commitment and might even increase it when the time comes "though not by much," he said. Bethpage's mortgage servicing portfolio is currently over $1 billion, it also holds $700 million in its mortgage portfolio.
Kordeleski isn't surprised more credit unions haven't committed to the HLPR program – as of April 6, 120 credit unions had committed a total $1.074 billion to the HLPR program. Of course he said he'd like to see more CUs follow these CUs' leads.
"Credit unions by nature are conservative. Having to take on a risk in their loan portfolio is something some credit unions are uncomfortable with. In addition, with any organization like CUNA you're never going to get everyone on the same page. With this initiative, not all credit unions see the political advantage of demonstrating the credit union difference through this type of product," he said. -
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