ARLINGTON, Va. — Credit unions' efforts to reach out to underserved communities and develop better strategies to serve lower income members took several steps into the credit union mainstream in 2007.
The biggest step, on the national level, was the take off in the REAL Solutions program, a research and training effort in helping credit unions discover new products and strategies for reaching out to underserved communities. The National Credit Union Foundation took over the administration and chief sponsorship of the program from its developer, the Filene Research Institute, in late 2006. Since then the reaction to the effort has been so enthusiastic that the program had to apply some brakes in the middle of the year in order to be able to meet credit union demand and the effort seems likely to keep building in 2008.
As of the close of the year, the Foundation listed REAL Solution programs in about 50% of the states with more in the pipeline.
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Other noteworthy efforts started to come up to speed in 2007. The National Federation of Community Development Credit Unions and the NCUF announced the first four partnerships in the Credit Union Development Corps., an exchange program between Credit Union Development Educators and the Federation's network of community development credit unions.
In this new program, participating DEs will visit a CDCU for one week to learn first-hand how it effectively serves its low-income members. Subsequently, a representative from the CDCU will then spend one week at the DE's institution learning about that credit union's programs and operations. During each exchange, the visiting representatives aim to use their expertise to help their hosts, while at the same time learning about each credit union's operational strengths.
Some of the different attitudes toward learning how to work successfully with underserved communities could be seen in the steady flow of larger, so-called mainstream credit unions into the Federation's Community Development Partners program. The program partners lower income credit unions with mainstream credit unions to help both better serve their lower income communities.
Many development partners opened new branches in low-income areas, offered services to immigrants, helped people repair their credit or get a first loan, offered alternatives to payday and predatory lenders, financed affordable housing, or are assisting a local CDCU, the Federation said.
But credit unions not only acted on the national stage to improve their efforts to help lower income members, CUs across the country also stepped forward.
For example, in California, the $4.3 billion Kinecta Federal Credit Union purchased a $45 million payday lending chain and converted the 55 retail payday lending outlets into branches, transforming the payday lending loans into credit union loans with longer repayment terms.
In example from North Carolina, the $14.7 billion State Employees' Credit Union and the $708 million Local Employees Federal Credit Union, both headquartered in Raleigh, joined together to announce a big push to help 400,000 of their members fill out their federal tax returns to take advantage of the Earned Income Tax Credit and other similar programs. NCUA, for its part, held several town hall meetings nationwide to find out what credit unions were doing to serve the underserved and how NCUA to facilitate that. NCUA Board Member Gigi Hyland chaired the task force that stemmed from NCUA's Member Services Assessment Pilot. A final report is expected in the first quarter of 2008.
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