Multifaceted Community Outreach Works At St. Mary’s Bank CU

Should CUs accept the matricula consular as a form of ID?

Multifaceted Community Outreach Works At St. Mary’s Bank CU

Eugene H. Johnson

St. Mary’s Bank Credit Union, Manchester, N.H., is the nation’s oldest credit union. It began a community outreach program as a pilot in 1996 with family emergency loans. The loans were restricted to fuel assistance: $500 annually per family, with terms of 8% and up to one year to repay.

St. Mary’s Bank put up $10,000 for the loans that first year, explains Bruce Croteau, chief operating officer who directs the $500 million asset credit union’s outreach programs.

Family emergency loans are available only to low-income families as defined by the U.S. Department of Housing and Urban Development. Applicants are screened and referred by a nonprofit agency.

Since 1996, St. Mary’s has loaned $174,000 to 374 families. “These are people living on the edge, whose power or gas has been cut off,” says Croteau. “These are families no one would help.”

St. Mary’s increased its annual allocation to $30,000 and then $50,000 before returning to $25,000 per year. It's a high-risk program, Croteau explains. Only 70% of the fuel-assistance loans have been repaid. At first, nonprofit organizations referring applicants viewed the loans as an entitlement that didn’t need to be repaid. St. Mary’s had to clarify that the program is for people interested in self-help. It’s not charity. “We expect the money to be paid back so we can help other people,” Croteau says.

The credit union now grants family emergency loans for additional purposes, such as medical and dental care, transportation needs, and rental deposits enabling battered spouses to relocate.

Manchester is a magnet for immigrants looking for entry-level jobs because of the city’s proximity to Boston. The largest ethnic influx recently is Hispanic and Bosnian. To reach new immigrants, St. Mary’s board of directors approved a $1 million-per-year budget for outreach.

The programs aren’t intended to be charitable contributions. “Our intent is to mainstream these people,” says St. Mary’s President/CEO Ron Rioux, “even though our underwriting on these loans isn’t on the same basis as our regular loans.”

A community outreach committee from a cross-section of the credit union acts on the loan applications. Croteau heads the committee. Other members include Tom Andrew, vice president of lending; Anne Canty, executive assistant to the CEO; Karen Girard, marketing specialist; Shirley Bhutto, audit and compliance; Gloria Houle, consumer lending; and John Flanders, vice president of business lending.

St. Mary’s Community Outreach Program doesn’t stop with family emergency loans. It also makes homeownership loans in partnership with the Manchester Neighborhood Housing Services (NHS). Croteau serves on the NHS board and chairs its credit committee.

St. Mary’s partners in three ways:

Providing a $600,000 line of credit to NHS so it can warehouse loans;
Placing $1.25 million in a $3 million loan pool to help applicants make down payments; and
Providing adjustable-rate first mortgages. In the past year, it has made 19 such loans totaling $2.9 million with no defaults so far.

Manchester NHS provides 12 to 18 months of education and counseling before an applicant is considered for a loan. In some cases, the loans are for multifamily properties that NHS has renovated. In those cases, loan recipients become not only home owners but landlords as well.

The loans have helped renovate housing in the inner city, an area in decline. “We’re putting people into homes who for generations haven’t had home ownership as a dream,” says Croteau. “It transforms the community: Crime goes down, the neighborhoods are better kept, there’s more community involvement, and economic vitality returns with small businesses creating jobs.”

Losses under the various community outreach programs have been modest, says Croteau. They’ve come mainly from the family emergency loans. “We’re not out to make a profit,” he adds. “The aim is to break even.”

The most gratifying experience have been results Rioux has seen in bringing people into the financial mainstream. “Some people write you letters, sharing heart-warming stories,” he says.

And he’s pleased the New Hampshire Credit Union League has backed community outreach on a statewide basis. After seeing the results St. Mary’s has achieved, credit unions throughout the state agreed to put up $35 million over the next five years for similar programs.

“They thought our results were great, and they thought it was time to be involved as well,” Rioux notes. A press conference announcing the large outreach effort by credit unions brought out the governor, a congressperson, and National Credit Union Administration Board Member Deborah Matz. An immigrant from Nigeria talked about what St. Mary’s program has meant to him and his family.

“This was an affirmation of the success we’ve had,” says Rioux. “Our program proves you can reach out to people and it can work. It’s not a program that loses money.”

For more information about credit unions’ community outreach efforts, see the March issue of Credit Union Magazine.


Should CUs accept the matricula consular as a form of ID? Yes No	Multifaceted Community Outreach Works At St. Mary’s Bank CU Eugene H. Johnson St. Mary’s Bank Credit Union, Manchester, N.H., is the nation’s oldest credit union. It began a community outreach program as a pilot in 1996 with family emergency loans. The loans were restricted to fuel assistance: $500 annually per family, with terms of 8% and up to one year to repay. St. Mary’s Bank put up $10,000 for the loans that first year, explains Bruce Croteau, chief operating officer who directs the $500 million asset credit union’s outreach programs. Family emergency loans are available only to low-income families as defined by the U.S. Department of Housing and Urban Development. Applicants are screened and referred by a nonprofit agency. Since 1996, St. Mary’s has loaned $174,000 to 374 families. “These are people living on the edge, whose power or gas has been cut off,” says Croteau. “These are families no one would help.” St. Mary’s increased its annual allocation to $30,000 and then $50,000 before returning to $25,000 per year. It's a high-risk program, Croteau explains. Only 70% of the fuel-assistance loans have been repaid. At first, nonprofit organizations referring applicants viewed the loans as an entitlement that didn’t need to be repaid. St. Mary’s had to clarify that the program is for people interested in self-help. It’s not charity. “We expect the money to be paid back so we can help other people,” Croteau says. The credit union now grants family emergency loans for additional purposes, such as medical and dental care, transportation needs, and rental deposits enabling battered spouses to relocate. Manchester is a magnet for immigrants looking for entry-level jobs because of the city’s proximity to Boston. The largest ethnic influx recently is Hispanic and Bosnian. To reach new immigrants, St. Mary’s board of directors approved a $1 million-per-year budget for outreach. The programs aren’t intended to be charitable contributions. “Our intent is to mainstream these people,” says St. Mary’s President/CEO Ron Rioux, “even though our underwriting on these loans isn’t on the same basis as our regular loans.” A community outreach committee from a cross-section of the credit union acts on the loan applications. Croteau heads the committee. Other members include Tom Andrew, vice president of lending; Anne Canty, executive assistant to the CEO; Karen Girard, marketing specialist; Shirley Bhutto, audit and compliance; Gloria Houle, consumer lending; and John Flanders, vice president of business lending. St. Mary’s Community Outreach Program doesn’t stop with family emergency loans. It also makes homeownership loans in partnership with the Manchester Neighborhood Housing Services (NHS). Croteau serves on the NHS board and chairs its credit committee. St. Mary’s partners in three ways: Providing a $600,000 line of credit to NHS so it can warehouse loans; Placing $1.25 million in a $3 million loan pool to help applicants make down payments; and Providing adjustable-rate first mortgages. In the past year, it has made 19 such loans totaling $2.9 million with no defaults so far. Manchester NHS provides 12 to 18 months of education and counseling before an applicant is considered for a loan. In some cases, the loans are for multifamily properties that NHS has renovated. In those cases, loan recipients become not only home owners but landlords as well. The loans have helped renovate housing in the inner city, an area in decline. “We’re putting people into homes who for generations haven’t had home ownership as a dream,” says Croteau. “It transforms the community: Crime goes down, the neighborhoods are better kept, there’s more community involvement, and economic vitality returns with small businesses creating jobs.” Losses under the various community outreach programs have been modest, says Croteau. They’ve come mainly from the family emergency loans. “We’re not out to make a profit,” he adds. “The aim is to break even.” The most gratifying experience have been results Rioux has seen in bringing people into the financial mainstream. “Some people write you letters, sharing heart-warming stories,” he says. And he’s pleased the New Hampshire Credit Union League has backed community outreach on a statewide basis. After seeing the results St. Mary’s has achieved, credit unions throughout the state agreed to put up $35 million over the next five years for similar programs. “They thought our results were great, and they thought it was time to be involved as well,” Rioux notes. A press conference announcing the large outreach effort by credit unions brought out the governor, a congressperson, and National Credit Union Administration Board Member Deborah Matz. An immigrant from Nigeria talked about what St. Mary’s program has meant to him and his family. “This was an affirmation of the success we’ve had,” says Rioux. “Our program proves you can reach out to people and it can work. It’s not a program that loses money.” For more information about credit unions’ community outreach efforts, see the March issue of Credit Union Magazine. St. Mary’s Bank CU’s $1 Million Annual Committment
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Multifaceted Community Outreach Works At St. Mary’s Bank CU

St. Mary’s Bank CU’s $1 Million Annual Committment