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Reaching Out

CUs take to ferries and float planes to serve indigenous communities.

September 23, 2011
KEYWORDS family , native , services
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Reaching Out

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  • CUs worldwide say there are more similarities than differences when it comes to serving indigenous versus nonindigenous people.
  • An Australian CU uses talking billboards to accommodate members who neither understand English nor read or write their native language.
  • Board focus: Financial education helps CUs minimize loan delinquencies and charge-offs.

 

Alaska’s Inside Passage is a 500-mile stretch of islands noted for its intriguing waterways, pristine forests, abundant wildlife, and captivating glaciers.

There’s also rain—12 to 14 feet per year on average. And during winter, sustained winds of 50 to 60 miles per hour aren’t uncommon, grounding the area’s primary modes of inter-island transportation—ferry boats and float planes.

“If the weather is bad, we don’t get off the island,” says Nathan Fawcett, executive treasurer of the Metlakatla Indian Community, Alaska’s sole Federal Indian Reserve. It’s located 16 seafaring miles from the nearest town of Ketchikan. “We’re pretty remote compared to the lower 48.”

Metlakatla’s 1,400 residents felt especially isolated in 2005 when Wells Fargo closed the community’s only financial institution branch. Consumers couldn’t cash their paychecks and businesses couldn’t make deposits without taking expensive, time-consuming ferry or plane trips to Ketchikan.

Enter Tongass Federal Credit Union, based in Ketchikan, which took over the vacant bank space. “No one else would consider a branch, so we did it,” says Susan Fisher, CEO of the $53 million asset credit union.

The decision turned out to be the best thing for both the community and Tongass Federal. Members have convenient access to financial services and the credit union has opened 900 member accounts in Metlakatla, including several held by Fawcett, who also serves on a Tongass Federal advisory board. The credit union is building a full-service branch on the island.

“I’m glad Tongass is here,” Fawcett says. “We have a vested interest in it—we’re shareholders. The better we do, the better Tongass does.”

Despite the challenges facing many indigenous communities—generally higher rates of poverty and unemployment—credit unions worldwide say there are more similarities than differences in serving indigenous versus nonindigenous populations. Although physical environments can be extreme, serving any new group requires fostering trust and following through with excellent, affordable, and convenient products and services.

Financial education

Because the average income of most Tongass Federal members is “staggeringly low,” the credit union embraces financial education, Fisher says. “People who are in monetary crisis sometimes don’t have choices or even know what options are out there—they’re bailing as fast as they can but the boat is filling rapidly.”

She recalls a former principal telling her not to bother setting up a school savings program on Annette Island because “these kids don’t have any money.” Fisher did so anyway and the students in Metlakatla now lead the credit union’s savings program, which encompasses 13 schools on three islands. The program overall has $43,500 in savings.

“These ‘kids’ do have money and are being rewarded for managing it well,” she relates.

A grant from the National Credit Union Foundation several years ago enabled Tongass Federal to hire a financial counselor for one year in Metlakatla to educate members about credit and money management. Fisher credits this effort for the credit union’s low delinquency and charge-off rates.

“Just look at our call report and admire our extremely low charge-off rate,” she says. “Our members pay their credit union first, even during the roughest economic times.”

Tongass Federal’s ratio of charge-offs to average loans is 0.2%, compared with its peer average of 0.83%. Its overall loan delinquency rate is 0.42%, versus 1.55% for peer credit unions.

Next: ‘Winter road season’

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