Michigan CU League Report Documents Credit Unions' Social Impact - Represents Fruit of Long Labor

NORTHVILLE, TOWNSHIP, Mich. – The Michigan Credit Union League has drafted a report which seeks to document the beneficial impact credit unions in the state have had on their communities. The 2005 Community Reinvestment Initiative Aggregate Report is its first “social mission report,” the league said. The league drew data for the report from a variety of sources, including credit union call reports and the league’s community reinvestment survey. The report covered a variety of statistics, everything from how much money Michigan residents have saved from lower loan rates and higher dividend rates on deposits in 2005 ($187 million), to information about very specific efforts to help low-income households such as the Just File It! We’ll Help! program which helps members file and receive benefits from their federal tax returns. The report also said that credit unions in the greater Detroit Metropolitan Statistical Area approved almost double the number of first mortgage applications received from low- and moderate-income applicants than other financial institutions had (82% approval ratio for credit unions versus 45% for other financial institutions). The slickly produced, full-color report is studded with graphs and charts as well as “did you know” boxes, which contain facts about credit union activities. “Did you know,” asked one, “69% of credit unions are involved in at least one community volunteer project. 49% offer products and/or services that are specifically targeted toward low income members.” David Adams, CEO of the Michigan Credit Union League, explained that the report would be an annual production and that it was a part of a much larger overall initiative that the league put into place two years before. According to Adams, the league came across the idea of helping to encourage and facilitate credit unions’ social outreach work after a meeting of the American Association of Credit Union Leagues, which had been dominated by discussion of documenting what credit unions were doing to meet their social missions. Adams said the league had taken the message to heart and realized the effort would have two foci. First, it was and would remain the right thing to do and something that credit unions should be doing even if it is never recognized and, second, it could provide Michigan CUs a way to answer the allegations that credit unions have been failing their social responsibility. So, out of this effort the league organized its Community Reinvestment Initiative and divided the broader effort into six working groups that addressed specific topics within the broader initiative. The working groups couldn’t perform the work for credit unions or necessarily convince them to do it, but they could serve to incubate the ideas and practices credit unions could put into place to meet their social goals. The six working groups address Community Action, Financial Education, Shared Branching and Outreach, Affordable Financial Services, COOL Cities, and Student Lending. The Community Action working group was charged with developing ideas for how credit unions could more effectively work with their surrounding communities and for helping Michigan CUs plan to swing into action quickly in the event of national and other disasters. The group came under pressure quickly, Adams said, with the impact of the deadly tsunami in Southeast Asia in December 2004 and the Gulf Coast hurricanes in 2005, and performed well. Michigan CUs raised $65,000 for tsunami relief, but after the hurricanes came ashore eight months later raised over $600,000 for relief of those victims. The Financial Education working group put into place the league’s ideas for different aspects of financial education, including everything from CU branches in schools to adult financial education. The Shared Branching and Outreach working group tackled the topic of shared branching generally, but with a special focus on helping CUs plan branches in low-income or immigrant communities which are underserved. The Affordable Financial Services working group sought to help CUs keep their fees and loan rates low while they keep their interest rates high and the Student Lending working group helped credit unions put scholarship programs into place for Michigan students. Adams explained that the COOL Cities working group got its name from Michigan Governor Granholm’s COOL Cities initiative which is meant to help bring about redevelopment of Michigan’s urban landscape. The working group works on helping to develop low-income lending products, including alternatives to payday loans as well as ways credit unions can offer more home mortgages for low-income households. All these initiatives seek to foster best practices and ideas that Michigan credit unions can use in their own daily work to better target their effort to work with low-income communities, Adams explained, and then to document that work in part for the public policy debate. “The banking industry has unfairly and inaccurately portrayed the credit union mission as solely to serve people of modest means,” Adams said. “In fact, the credit union mission is much broader than just serving people of small means,” he added. -