Anatomy of a low-income CU; hopeful founders counting on perseverance

THURSTON COUNTY, Wash. – A group of fewer than 10 community activists has managed, by dint of persistence and perseverance, to bring a credit union organizing effort to the very brink of success. If, by the end of this year, the Thurston Union of Low Income People (TULIP) credit union will finally open its doors under a charter from the State of Washington, it will be almost entirely through the patience and doggedness of those 10 people. “Looking at it now it was definitely worth it,” said Kitty Koppelman, manager of the credit union organizing effort and the Food Co-op staffer and occasional bookkeeper. “But,” she admitted, “when we started out none of us knew it would be quite this long.” The effort grew out of the activists’ convictions that access to affordable and accessible financial services and to capital and education they could use to found their own business and become more self-sufficient were essential to the lives of the many different types of low-income people they served Koppelman said. The only question was how to get it done. They were an unlikely bunch to start the job. Among them a legal aid lawyer, a teller at a credit union, a couple of activists who worked on local housing issues, and a staff member at a local food co-op – all banded together around the idea that the diverse population of low-income people they served needed a credit union. Nobody, initially, had much of a financial background or even much credit union experience. As the effort progressed they would come into contact with a board member from the $881 million Washington State Employees Credit Union, (WSECU) who would in turn help introduce them to credit union senior staff that could help them. “But in the beginning we were just about it,” said Koppelman. Koppelman credited the Olympia Food Co-op for being the first institution to believe in the organizing effort and, crucially, to back its belief with cash. The co-op allowed Koppelman, while still an employee, to devote much of her time at first, and then almost all of her time later, to organizing the credit union. Koppelman credits the co-op’s willingness to back the project for allowing the group to achieve its goal since, she pointed out, the effort turned out to have been far too much for just one group of volunteers to have been able to do. “Even with an extremely dedicated volunteer staff,” Koppelman said, “it was still too big a job without at least one full-time staffperson. Everyone was very busy and we would not have been able to finish what needed to get done.” Despite their frustration with the pace of the project Koppelman said the group never did lose heart or lose sight of their idea, even though there were many days when it appeared as though they accomplished nothing toward it. In 1998 Jen Minich, a student at the time and teller at the WSECU gave the group one link to established credit unions. WSECU had enrolled Minich in a program called Development Education, sponsored by the National Credit Union Foundation (NCUF), the World Council of Credit Unions (WOCCU) and CUNA Mutual. At the conclusion of the program each of the new Development Educators (called DEs) adopted a project to work on and Minich, who had already been part of the TULIP effort, chose to work with TULIP. She also urged the TULIP organizers to apply for an NCUF grant and the Foundation approved the grant request. The grant approval played a significant role. Although the $5,000 was definitely needed, the fact of being awarded the grant was almost more important than the money, Minich explained. Getting the Foundation’s recognition in the grant helped advance the perception that the TULIP organizers were serious and that they had what it took to go the distance and see their institution chartered. Minich, who is currently looking for another credit union job after having moved to Seattle from Olympia, is still involved with the TULIP effort although in merely an advisory capacity. The recognition that came with the grant helped facilitate the contacts that were eventually finalized with WSECU and other financial institution supporters. Now 17 lending institutions have pledged more than $1.75 million in insured deposits to the new institution to both help cover expenses and invest in savings accounts at the credit union. Among the lenders pledging funds are the O Bee Credit Union, WSECU, Twin County Credit Union and Boeing Employees’ Credit Union (BECU). Further, WSECU has deepened its commitment by agreeing to handle all TULIP’s back office responsibilities, at least in the beginning. BECU has also stepped in, agreeing to provide an ATM machine at the credit union’s offices, which will be in the Food Co-op, and agreeing to service it on behalf of TULIP. TULIP decided to have members make all their cash transactions through an ATM for the first two years so the credit union could keep the overhead from hiring staff as low as possible, Koppelman explained. The Washington State regulators were one group that Koppelman said, in an ironic way, gave a lot of evidence of its commitment to the project. Koppelman called their involvement a “mixed blessing” since, on the one hand, the organizers appreciated having the authorities looking over their shoulders for much of the effort while, on the other hand, wondering if all the regulatory hoops were really necessary. Koppelman noted that, if the TULIP effort ultimately fails, it will not be because the attempt has not been sufficiently evaluated. Koppelman said that the TULIP group is preparing to open by the end of the year but is poised to tackle any last minute problems that might arise. “We haven’t filed the final chartering papers yet,” Koppelman said, “but we expect to have them in by mid-September.” True to their original mission, the TULIP organizers have acted to keep their credit union focused on helping low-income people. The credit union’s member will not be able to exceed income guidelines and the credit union will specialize in making small loans to help members avoid payday lenders and gain capital to start their own businesses. [email protected]