The business case for community building

Community development financial institution credit unions are making friends and making money.

Credit unions have a mission to help struggling members and a need to protect their own viability with prudent underwriting. That’s often seen as a tension, but it doesn’t have to be, say leaders of credit unions participating in the Community Development Financial Institution program. CDFI status allows CUs to have it both ways, they say.

Consider what happened recently when CUES member Brice Yocum, CSME, CCE, CEO of $280 million Tucoemas Federal Credit Union, Visalia, California, needed a haircut. His young barber, Cris, was excited because he had just received his first credit card and would be able to make needed purchases. But he was less than thrilled with the 24% interest rate he would be charged on unpaid balances.

So Yocum told Cris about a Tucoemas FCU Visa card that offered a fixed rate as low as 10.99% and would never be higher than 18%. He also told him about a checking account that would pay Cris money rather than charge him as his current bank did. He went on to inform Cris that he could qualify for a $250 bonus by joining the CU’s Pathways program, a financial well-being outreach it had recently started, Yocum recalls. If Cris stuck with it for six months, building better habits and accomplishing goals, he could earn another $250, Yocum explained.  Cris was delighted and decided to join Tucoemas FCU, Yocum reports.

“We couldn’t have had that conversation in 2016,” Yocum observes. “He wouldn’t have met our underwriting standards. We couldn’t have helped him.”


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