ROCHESTER, N.Y. - When it comes to serving the underserved, credit unions must be willing to expend additional time, offer additional services to attract new members and generally be more flexible in their loan approach, said panelists participating in the most recent Partnering And Leadership Successes (PALS) workshop organized by NCUA Board Member Debbie Matz. Representatives from 320 credit unions, including some from Louisiana, Ohio and Massachusetts, forfeited their Columbus Day holiday to attend the workshop titled "Serving the Underserved Without Losing Your Bottom Line." The event was co-hosted by the NCUA, The Summit FCU, NAFCU, the National Federation of Community Development Credit Unions, and the New York State Credit Union League. "It's particularly gratifying that this is a holiday, and you've all given up your day off," Matz said in her opening address. "Your members are very fortunate to have you running their credit unions." Citing statistics about increasing net worth, increasing assets but flat membership, Matz emphasized the importance of expanding credit union membership. Adding that 10 million to 20 million unbanked households currently exist in the United States, Matz also emphasized the importance of reaching out to immigrant communities, largely located in underserved areas. However, expanding service to underserved communities is not without risk. To succeed, credit unions must first develop the proper mindset for serving the underserved, said panelist Melissa Marquez, loan officer with Genesee Co-op FCU in Rochester, N.Y. "If you're only looking at the credit score to determine `yes' or `no' [on a loan], we're in big trouble," Marquez said. In many cases, residents of underserved areas do not have a credit score. As an alternative, Marquez suggested looking at other sources to assess stability, such as payment history for a rental apartment, car loans, utility bills, rent-to-own appliances or event tithing to a church. She also emphasized the importance of becoming comfortable with an applicant's work situation, which often relies on several part-time jobs, temporary jobs or even undocumented sources of income. Credit unions also must have added patience for dealing with people who have overcome drug or alcohol addiction, or who speak languages other than English. "These loans require handholding.they take time," Marquez said. "It's counseling-based lending. And, if you have to say `no' to a loan, you also have to discuss what they can do so you can say `yes' in the future." Another avenue for reaching out to the underserved is by offering transaction services, such as bill payment, check cashing, payday loan alternatives and wire transfers, suggested Pablo DeFilippi of the World Council of Credit Unions, Inc., and board president of Lower East Side People's FCU in New York City. DeFilippi sees transaction services as a way to attract the unbanked into one's credit union; once there, the credit union can work on building trust and help set individuals on a course to improve financial education. Building trust is another key issue, particularly for immigrants who come from countries where government and other institutions are not trust worthy. According to Kirk Kordeleski, CEO of Bethpage FCU in Bethpage, N.Y., community outreach-volunteering at soup kitchens, establishing scholarships, working with various community groups-is the critical first step to building trust. "Try to connect with the community before trying to do business in the community," Kordeleski said. "It shows commitment to the area, commitment to the community and commitment to the members." [email protected]