"We need to be able to relate to the members that are coming to us and it is important to be personable," said Davis. "When they meet with us it is like a jury structure in that it is a committee of peers who are here to help them with their immediate needs."

Here is how it works-loans that are declined are sent to the branch manager as the first step in the appeal process. Managers who are still uncomfortable with approving the application send it to a management review committee consisting of lending managers and branch managers. If the committee still feels that a personal interview is needed then it is passed on to the credit committee.

"Members that want to have the interview are the ones that are real serious and intent on fixing whatever the problem is," said Haines. "The credit committee tries to make a difference in their lives. The process itself can be intimidating so the first thing they do is put the member at ease explaining that this is a service we offer and they are not being singled out. It really calms them down before conducting the interview."

Credit committee interviews are scheduled once a week and can run up to three hours depending on the number of people seen. Some 90% of these interviews are face-to-face meetings connecting the committee with the members.

"We do as much counseling and advising as we do loan approval," said Davis. "We can't always grant the loan, but we focus on education discussing how they got into their financial situation and what can be done to help improve it. The member response is usually very positive. After we explain why we can't give them the loan most members go back to improve their credit and financial budget situations."

Davis says the credit union must be doing something right, as the second-chance loans boast a very low delinquency ratio of 0.36%, as of January 2006-lower even than the credit union's overall ratio. In 2005, the credit committee reviewed 116 loans and was able to work with the members and approve approximately half of those loans, while extending counteroffers to many of the others that more appropriately met those members' needs.

"For most of these members the goal is not to go through this process again," said Davis. "We've had very few repeaters. Most of the time we help the members get back into the mainstream."

Haines says the credit committee not only helps set credit unions apart from banks, but can also serve as a recruiting ground for great board members. So far four board members got their start on the credit committee.

"You should see the members' gratitude and the impact the credit committee's one-to-one interaction has on members' lives," said Haines. "This is a service that no one other than a credit union can provide-we can reach out to members who are credit challenged and become the starting point to help them rebuild their lives."

Haines says a recent comment from a new member probably sums up how vital a role the credit committee plays.

"She had met with the credit committee and as she was walking out the door she said she was amazed that someone cared enough to take time out of their evening to help her and that her bank never would've done that," said Haines. "Our credit committee brings back the human element of the whole loan process."

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