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.
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.
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.