JACKSON, Miss. – In the space of just a couple of years, a strong new community-based financial institution has begun to make itself known in Jackson and other parts of the economically depressed Mississippi River Delta Region. In July 2004, the Enterprise Corporation of the Delta, headquartered in Jackson, won a $15 million grant award from the U.S. Treasury Department's Community Development Financial Institution's New Market Tax Credit program. This gave Enterprise $15 million in tax credits that it could offer to Delta businesses willing to invest in the Enterprise's operations – in this case the then $5 million Hope Community Credit Union. Area business interests reacted quickly and strongly, according to Bill Bynum, CEO of both Hope Community and the ECD, but if anything the communities the credit union sought to serve reacted even more strongly. “It's not quite as simple as adding money and getting a credit union,” Bynum said, chuckling a bit, “but we are very pleased at how well we have grown.” NCUA's data illustrate what has been happening. The credit union's 5300 reports show that in the year between June 30, 2004 and June 30, 2005, Hope Community has grown from a $4.5 million credit union to a $38 million credit union. Its total loan portfolio has grown from $1.9 million to $8.7 million and its total deposits rose from $3.5 million to $25.7 million as the credit union has raised its profile in the communities it has long sought to serve. “What the NMTC money allowed us to do was to begin a marketing effort to let more people know about the credit union and to bring in more products and services, such as share draft accounts, debit and ATM cards, and different types of loans,” Bynum said. Hope adopted a number of different marketing strategies designed to help bring the credit union closer to the people it wanted to serve. First, it increased its partnership program through which the credit union partnered, almost in a SEG-like way, with churches, civic centers and other organizations around the Delta. The partnerships heightened awareness among people about the credit union and served to attract them even though, as an associational credit union – members become eligible to join Hope by becoming a member of the ECD – it didn't need to form these relationships. Second, Bynum explained, the credit union decided to open some targeted branches, particularly using former bank facilities which had been abandoned. The first, in a lower middle class part of New Orleans, opened in December of 2004, just in time to be closed in the wake of Hurricane Katrina and the second opened in a former bank branch that had closed in Jackson. “We anticipate it will take about two months for us to restore the branch in New Orleans,” Bynum said, “and in the meantime we are going to keep looking for opportunities.” Not surprisingly, Hope sees those opportunities most often among Jackson's 23 most economically-distressed census tracts, places where banks had long abandoned. Bynum pointed out that the credit union's research had indicated that Jackson had 18 bank branches total, 11 of which were downtown. But on the other hand the research showed that the city's poorer neighborhoods supported 38 payday lenders, check-cashers and pawn shops. Bynum stressed that Hope Community has been seeking to fulfill a community development role as well as a financial institution need. So far this year, according to NCUA, the credit union has made just over $3 billion in member business loans, indicating the credit union's longer term impact in the areas it serves. But some of that community development role can have its downside. For example, Bynum points with pride to Hope's manual underwriting on loans that, he says, allows the credit union to make more loans than it might otherwise but also might contribute to inefficiency that keeps the credit union's return on average assets lagging its peers. Likewise, where Hope has reached out very well to some of the communities it has sought to help, there are indications that it may need more bridge building among some of Jackson's credit union community. “They are a very progressive credit union, but I really don't know much about them,” said Gary Fairly, CEO of the $39 million Jackson Area FCU. “They sort of came out of nowhere.” Fairly pointed out that Hope's newest branch is only a few miles from his office but that no one from Hope had dropped by to introduce themselves. “I really don't know anything about them other than what I have heard on the grapevine.” But Charles Elliott, CEO of the Mississippi Credit Union League, said that any credit unions which might feel nervous about Hope's fast start just don't understand that Hope's targeted communities are not those where other financial institutions, whether banks or credit unions, really were interested. “Hope's focus from the very beginning has been on helping the underserved,” said Elliot, who had been involved in Hope's organization, said. “They're not out to step on anybody's toes.” And, like the rest of Louisiana and Mississippi, Hope is also working through Katrina's effects. Because the branch in New Orleans had only been open a relatively short time when Katrina struck, Hope only has a small loan portfolio at risk due to damage and dislocations of the city. Nevertheless the storm's aftereffects have made the credit union rethink its previous business plan of tackling pockets of poverty around Delta region. “Instead of having pockets of poverty to confront,” Bynum said, “now we have about a third of the state that is in need of redevelopment and who are going to need some help. Our job just got that much bigger,” he added. -

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