SERV­ING THOSE WHO HAVE SERVED...TIME

In Lans­ing, Mich., a part­ner­ship be­tween banks and a lo­cal credit union is help­ing re­cently re­leased pris­on­ers gain ac­cess to tra­di­tional bank­ing prod­ucts.

Credit Union Journal - - Contents - BY AL­LI­SON PRANG AND AARON PASSMAN

In Lans­ing, Mich., a part­ner­shp be­tween banks and a lo­cal credit union is help­ing re­cently re­leased pris­on­ers gain ac­cess to main­stream fi­nan­cial ser­vices.

PROF­ITABLY SERV­ING LOW-IN­COME con­sumers is a long­stand­ing chal­lenge for many banks and credit unions, but it’s es­pe­cially tricky when the prospects are for­mer pris­on­ers.

Wage gar­nish­ments for old debts, dif­fi­culty find­ing em­ploy­ment with a crim­i­nal record and other is­sues make it hard for th­ese peo­ple to build sig­nif­i­cant de­posit bal­ances, much less be­come cred­it­wor­thy. And then there’s the ad­just­ment to life on the out­side af­ter years, or decades, locked up.

It’s “a whole new world,” said Am­ber Pax­ton, di­rec­tor of the Lans­ing, Mich., Of­fice of Fi­nan­cial Em­pow­er­ment.

Four lo­cal fi­nan­cial in­sti­tu­tions — three banks and one credit union — are work­ing to ease the tran­si­tion for those parolees and pro­ba­tion­ers by help­ing them join the fi­nan­cial main­stream.

For Lans­ing-based CASE Credit Union, par­tic­i­pa­tion helps ful­fill part of the credit union mis­sion of serv­ing the un­der­served.

When CASE be­gan work­ing with var­i­ous com­mu­nity part­ners a few years ago, the idea was just to help serve the un- and un­der-banked. Over time, how­ever, “It evolved into a po­si­tion of ‘We’ve got all of th­ese parolees or pro­ba­tion­ers that no one will touch their money — the banks won’t touch they’re money be­cause they’re felons,’” re­called Karen Casler, com­pli­ance and com­mu­nity de­vel­op­ment man­ager at CASE Credit Union.

“We started go­ing to the pa­role of­fice here in Lans­ing twice a month and sit­ting down with th­ese peo­ple and tak­ing their money and open­ing ac­counts and help­ing them to un­der­stand their fi­nances. Some of them have been in jail so long they didn’t know what a debit card was. Some of them have never writ­ten a check. So we pro­vided in­for­ma­tion to them about a check­ing ac­count and what things you can and can’t do.”

One fac­tor that eases the process for CASE is as a com­mu­nity-char­tered credit union, th­ese new mem­bers aren’t re­quired to be a part of any par­tic­u­lar SEG in or­der to join.

“In the ed­u­ca­tion process, the parolees get ex­plained to them what a bank is and what a credit union is, and then they make their de­ci­sion,” Casler said, ad­ding that none of the par­tic­i­pat­ing in­sti­tu­tions pres­sure par­tic­i­pants to use their ser­vices.

UN­PROF­ITABLE…FOR NOW

For now, the in­sti­tu­tions are more likely to lose money on the ac­counts, Pax­ton ac­knowl­edged. “It’s a highly un­banked pop­u­la­tion and we know that bank­ing is sort of step one” to fi­nan­cial sta­bil­ity.

CASE has made loans to some par­tic­i­pants, but Casler in­di­cated that is the ex­cep­tion rather than the rule.

And while com­mu­nity-minded ef­forts such as this are part of the credit union DNA, that al­tru­ism is shared by bankers from other par­tic­i­pat­ing in­sti­tu­tions, who framed their in­volve­ment as a mat­ter of duty more than as a growth op­por­tu­nity.

“We have some re­spon­si­bil­ity to try to re-es­tab­lish peo­ple, I be­lieve,” said Sally Rae, ex­ec­u­tive vice pres­i­dent at the $378 mil­lion-as­set Dart Bank in Ma­son, Mich.

The $15.3 bil­lion-as­set Flagstar, based in Troy, Mich., un­der­stands that peo­ple might need a sec­ond chance, Wright said. “It’s one of the great things that we’re able to serve our com­mu­nity by of­fer­ing the op­por­tu­nity to do bank­ing again.”

CASE CU’S par­tic­i­pa­tion comes as Michi­gan credit unions con­tinue to ride a wave of suc­cess, ben­e­fit­ting from larger im­prove­ments in the state’s econ­omy. Ac­cord­ing to re­cent data from CUNA and the Michi­gan Credit Union League, loan growth at Michi­gan CUS grew by more than 11 per­cent dur­ing the first quar­ter of 2017, and roughly half the state’s pop­u­la­tion are now credit union mem­bers.

‘A GOOD FIRST STEP’

Amiy­atosh Pur­nanan­dam, a fi­nance pro­fes­sor at the Univer­sity of Michi­gan’s Ross School of Busi­ness, said Lans­ing’s work “should be ap­plauded,” but cau­tioned that the “long-term is­sue” is whether the peo­ple the pro­gram is tar­get­ing will con­tinue to use tra­di­tional bank­ing ser­vices. If a cus­tomer reg­u­larly gets some­thing like a gov­ern­ment check de­posited into their ac­count or some kind of sub­sidy, they’d be more in­clined to keep that re­la­tion­ship, he said.

“Ed­u­ca­tion is a good first step, no doubt about it,” he said.

To read more, visit www.cu­jour­nal.com

Peo­ple’s CU, Mid­dle­town, R.I., re­ceived an Out­stand­ing Award for the 2017 An­nual Work­site Health Awards from the Greater Prov­i­dence Cham­ber of Com­merce and Blue Cross Blue Shield of Rhode Is­land for its com­mit­ment to help­ing em­ploy­ees lead health­ier lives. Sep­a­rately, the CU do­nated $2,449 to the Leukemia and Lym­phoma So­ci­ety.

Madison, Wis.-based CUES do­nated $1,575 to Chil­dren’s Mir­a­cle Net­work on be­half of qual­i­fy­ing credit unions who par­tic­i­pated in CUES’ Ex­ec­u­tive Com­pen­sa­tion Sur­vey and/or Em­ployee Salary Sur­vey.

Cal­i­for­nia CU, Glen­dale, Calif., an­nounced the re­cip­i­ents of its spring 2017 Teacher Grants, which will ben­e­fit stu­dents from schools across Los An­ge­les County. Ten re­cip­i­ents re­ceived up to $500 to use to­ward their class projects.

WFCU Credit Union, Wind­sor, On­tario, cel­e­brated 150 years of ser­vice by the Wind­sor Po­lice Ser­vice and hon­ored Se­nior Con­sta­ble John Atkin­son who, 11 years ago at the age of 37, was taken from his fam­ily and com­mu­nity far too soon, with the estab­lish­ment of the WFCU Credit Union John Atkin­son Me­mo­rial Schol­ar­ship.

Earth­mover CU, Yorkville, Ill., raised $1,944.55 for Scott Arend, 27, by sell­ing a va­ri­ety of candy at its five lo­ca­tions. Arend was badly burned in a grill ac­ci­dent last sum­mer and had no in­sur­ance at the time. Con­sumers CU, Kala­ma­zoo, Mich., a new branch in Bat­tle Creek to bet­ter serve the area and its ex­ist­ing 1,200-plus mem­bers. The new of­fice features a ren­o­vated lobby and drive-thru space with In­ter­ac­tive Tell­ers that have live, two-way concierge video as­sis­tance with a teller.

SIU Credit Union, Car­bon­dale, Ill., awarded $1,000 schol­ar­ships to five stu­dents for the 2017-18 school year.

First Fi­nan­cial FCU

of Mary­land, Lutherville, Md., awarded 45 de­serv­ing high school stu­dents with $3,000 col­lege schol­ar­ships. Win­ners were cho­sen from a field of more than 300 ap­pli­cants.

Hughes FCU, Tuc­son, Ariz., sur­passed 100,000 mem­bers, $837 mil­lion in loans and $1 bil­lion in as­sets in 2016. The news was an­nounced to ap­prox­i­mately 500 mem­ber-own­ers at the credit union’s 65th an­nual meeting, when the CU also awarded a total of $10,000 in schol­ar­ships to lo­cal high school stu­dents.

New Eng­land FCU, Wil­lis­ton, Vt., named the three win­ners of the 2017 NEFCU Nurs­ing Schol­ar­ships. Each year, NEFCU’S Nurs­ing Schol­ar­ship Pro­gram pro­vides three schol­ar­ships of $3,000 each to qual­i­fied ap­pli­cants.

As com­mu­ni­ties in the Caroli­nas con­tinue with Hur­ri­cane Matthew re­cov­ery ef­forts, the Caroli­nas CU Foun­da­tion pre­sented a do­na­tion of $20,000 to the Dis­as­ter Relief Fund at North Carolina Com­mu­nity Foun­da­tion and $20,000 to the One SC Relief Fund, housed at the Cen­tral Carolina Com­mu­nity Foun­da­tion.

A ded­i­cated part­ner com­mit­ted to youth lit­er­acy, Riverdale, Utah-based Amer­ica First CU kicked off Na­tional Credit Union Youth Fi­nan­cial Lit­er­acy Month by par­tak­ing in var­i­ous lit­er­acy events and hap­pen­ings through­out Southern Ne­vada.

FO­RUM CU, In­di­anapo­lis, placed sec­ond among large com­pa­nies on the In­di­ana Cham­ber of Com­merce’s “Best Places to Work” list for 2017. This marks the sixth con­sec­u­tive year FO­RUM has re­ceived recog­ni­tion on the list, with the CU earn­ing a third place rank­ing last year.

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