Community CUs As Partners & Leaders
Understand your community's values to earn members' trust.
Forging strong partnerships has helped the $98 million asset Latino Community Credit Union grow faster than it could have on its own, says Erika Bell, vice president of strategy and services for the Durham, N.C. institution, which won the Credit Union National Association’s (CUNA) 2010 Community Credit Union of the Year Award for credit unions under $250 million in assets.
At $1.8 billion asset HarborOne Credit Union, Brockton, Mass.—top winner in the category of credit unions with more than $250 million in assets—credit union officers serve on the boards of every major organization in the community, says Leo MacNeil, senior vice president, community relations. This gives HarborOne a sound understanding of both the business and social needs of the marketplace.
In a Credit Union Magazine interview, Bell and MacNeil reflect on their community roles.
CU Mag: Describe the communities you serve.
Bell: Latino Credit Union serves low-income Latino and other immigrant communities in North Carolina. The credit union was created to provide a safe place for Latinos and the unbanked to keep their money. Now in its 10th year, we’ve grown to 53,000 members and provide access to a full package of affordable financial services and education.
We have members from Puerto Rico as well as all 18 Spanish-speaking nations in Latin America, most notably Mexico, El Salvador, Honduras, and Colombia. Because our services are tailored to new immigrants, the credit union also has significant member groups from non-Spanish, non-Latino countries in Asia, Africa and Europe.
MacNeil: HarborOne is a Massachusetts state-chartered, community-based credit union founded in 1917. Our field of membership consists of those who live or work in Norfolk, Bristol, Plymouth, and Barnstable counties. HarborOne has 155,000 members, and is a leading mortgage lender south of Boston and one of the leading indirect auto loan leaders in the state.
CU Mag: What are the keys to your growth and success?
Bell: Latino Community was created as an innovative grassroots response to a wave of violence against the community, based on the perception that Latinos carry cash. The credit union has been created by and for the community it serves.
All staff are fully bilingual and bicultural. The majority are immigrants themselves, so they’re able to relate to members.
Partnerships with State Employees’ Credit Union, Self-Help Credit Union, El Centro Hispano, andthe North Carolina Minority Support Center have helped us grow and expand much more quickly than we would have been able to on our own.
MacNeil: HarborOne has a visionary board of directors and an enthusiastic staff led by a dedi-
cated management team. We recognize that creating advocates among our members is the best form of marketing success. Having a good understanding of our community and believing we have a role to fill have provided us with an opportunity to do well by doing good.
Our staff carry out our mission every day. As a result, their knowledge and understanding of our goals and objectives and the actions that we’re taking are critical.
CU Mag: What have been your challenges in serving members and businesses?
MacNeil: We face competition from large national and regional banks as well as small local community financial institutions. The challenges we continue to face typically deal with convenience of both ATM networks and branch locations.
While we have 15 branches today, the requirements of serving the needs of one customer segment looking for branch locations, while at the same time dealing with the other electronic channels, continue to add an expense burden to the organization. Managing this transition from a generational standpoint is one we continue to deal with.
We’ve been in the commercial lending business for only 2½ years, but we’re now the No. 2 Small Business Administration (SBA) lender in the state (and the No. 1 credit union SBA lender in the state). The challenge we face is creating awareness that we’re in the commercial lending business and we’re in it for the long haul.
Bell: The majority of our members have never had a relationship with a financial institution. So staff must earn the community’s trust and educate members about the importance of integrating into the mainstream U.S. financial system.
We invest in a comprehensive financial education program to help move people along the financial competency continuum—from using basic transaction accounts to establishing and using credit, and finally to building wealth for themselves and their families. While education is a significant investment for the credit union, it yields positive results for our members, the credit union, and the entire community.
CU Mag: How have your members and communities been affected by the economic downturn?
Bell: As with many of us during this time, some of our members have been negatively affected. Fortunately, since the credit union always provided responsible loan products along with thorough counseling around affordability during the loan application process, our members continue to pay back their loans. Our delinquency rate, including our mortgage loan portfolio, is much lower than the national average. We focus on creating strong relationships with members to understand their changing needs. And we emphasize financial education to mitigate the effects of the economic downturn on them.
MacNeil: Brockton has one of the highest foreclosure rates in Massachusetts and its unemployment rate is over 10%. In 2005, 2006, and 2007, subprime lenders actively preyed on low- and moderate-income residents, minorities, and immigrants.
We’ve responded by working with members facing economic challenges and reaching out to the entire community by providing resources such as the MultiCultural Banking Center and HarborOne U. Our employee volunteers, the Caring Crew, also provide help for community organizations and their clients.
CU Mag: What is your advice for newly chartered community credit unions?
MacNeil: Get to know your community values quickly. Motivate your officers and employees to volunteer on behalf of the credit union. Strive to get the active business leaders in the community aware of your services and appeal for their support.
Bell: Involve your community from the outset. Staff, management, and the board of directors should reflect the community you’re serving so that you understand the needs of your community, and earn members’ trust.
Serving the Unbanked and Unemployed
“Our members live in areas that are considered the most unbanked and underbanked in the U.S.,” says Treina Lind, assistant vice president, business and community relations, St. Louis Community Credit Union, and a Merit Award winner in CUNA’s 2010 Community Credit Union competition in the under $250 million in assets category.
“But I think the economic downturn opened the door for a larger segment of the community to see what was ‘the norm’ for St. Louis Community,” she adds. “We’ve remained dedicated to serving them all.”
It’s a priority, but not always easy. The $192 million asset St. Louis Community must manage the risks of making loans to members who haven’t always had the opportunity to borrow. The credit union serves a very “hands on” group of members, so it becomes a balancing act to provide enough staff and locations, while holding down operating expenses.
But success comes because staff stays focused. “Our senior team created this vision and reinforces the importance of our work in the community by setting goals that align with our mission to help our members,” Lind says.
In Medford, Ore., being viewed by the community as the local and trusted financial institution during these difficult times has contributed to 7% membership growth—more than three times the national average, notes Jeanne Pickens, director of marketing for $484 million asset Rogue Federal Credit Union, a Merit Award winner in the more than $250 million in assets category. The credit union serves a three-county area.
Challenges remain, however. Southern Oregon experiences some of the highest unemployment in the state—about 13.5%. Many businesses are struggling, and foreclosures are rising. In response, Rogue Federal developed Rogue Solutions—a program that analyzes members’ debt and helps them restructure payments. Another initiative is Building Hope—a foreclosure prevention program working in conjunction with a local housing association and media outlet.
Lind and Pickens agree understanding your community is critical. Hirefront-line staff that are part of the community, Lind says. “Then create an advisory committee to make suggestions to and review decisions from the board and management.”
“Get out in your community and find out what it is people want and need during these economic times,” Pickens emphasizes. “Find a way to connect with the community and find ways to meet their unrecognized needs. People in difficult financial situations sometimes don’t realize there could be a solution. What better way to show the credit union philosophy of people helping people then getting out there and making a difference in our communities.”