"From my experience, the greatest growth, profitability and consumer impact comes from those credit unions who do more than dip their toes in the water," he said. "Those credit unions that embrace the market fully and are willing to reinvent themselves are clearly different and better."

Bill Myers, director of the NCUA's Office of Small Credit Union Initiatives and former president/CEO of the $90 million Alternatives Federal Credit Union in Ithaca, N.Y., agreed.

Serving low-income members is an opportunity if credit unions treat it that way and the underbanked market is huge and growing, Myers said in an email to CU Times.

"One of the fundamental rules of retail business applies: know your customer. A credit union can serve low-income people very well if staff members take the time to get to know these customers, understand their position and respect their decisions," Myers said. "You need to build their confidence as your customers. You need to say to yourself, 'I'm going to look at where they are now and I'm going to give them something better than they can get from an alternative lender.'"

Twenty percent of credit union members also use an alternative provider such as payday lenders, check-cashing services and money orders, Myers said. Credit unions could create a nice business opportunity if they figure out how to serve these members better than the alternatives, he advised.

Butterfield said knowing their members better also helps credit unions mitigate and manage risks when making loans to those whose income or FICO scores are not as high. While working with lower income members can mean higher expense ratios, they can also bring in higher than average loan yields and fee income, he noted.

In addition, while lower income members might have higher short-term loan delinquencies than other members, the actual charge-off ratios of credit unions that work with lower income communities are near or below peer with credit unions that do not, according to some experts.

Further, those that do work with these members are up front about their need to manage risk, Butterfield said. For example, some credit unions mechanically inspect the cars they finance to make sure of their quality and roadworthiness. Others install GPS monitors on cars they finance for members with the lowest credit scores.

"They are not shy about their risk mitigation and pricing strategies. They know that their long-term sustainability demands the revenue required to serve this market. They measure and monitor risk," Butterfield said.

Finally, knowing all their members, including those with low incomes, means recognizing that people's credit scores migrate, he said. Credit unions need to keep close track of the loans that cost them the most money and price appropriately. They also reward members who scores are rising with opportunities to lower their rates.

"The irony is that for many, their greatest losses come from A and B borrowers that are sliding, rather than the D and E borrowers who are improving," Butterfield said.

Helen Godfrey-Smith, president/CEO of the $103 million Shreveport Federal Credit Union in Shreveport, La., said the cooperative's experience has largely backed up these observations.

"It is true that lower income members tend to be higher contact, higher touch members, especially at first," she acknowledged. "But it's also true they bring a lot of good to the credit union too."

In addition to slightly higher rates on loans, Shreveport's lower income members also have a much higher loyalty quotient.

"They are so grateful that a mainstream financial institution is willing to listen to them, to work with them and to help them with fairly-priced products and services that they can trust; they give a tremendous boost to the whole institution," Godfrey-Smith said.

For example, while lower income members might be delinquent with payments from time to time, they have very low charge-off rates on their loans and that helps keep the credit union's bottom line healthy each year, she noted.

Data from the NCUA supports that scenario. Shreveport closed 2013 with a positive income of almost $1.4 million and 2014 with just over $616,000 on the bottom line.

Julie Renderos, CFO at the $6 billion Suncoast Credit Union in Tampa, Fla., was reluctant to speak about low-income members in terms of expense or revenue. She said the credit union has had a mission to serve its members regardless of their income levels since 1934 and that such calculations were not Suncoast's focus.

However, Renderos did say the credit union used risk-based pricing on its loans to ensure it would not lose money serving lower income members even though Suncoast might not maximize profits by doing so. A loan with a higher rate to cover risk would still serve a member who could not get one or could only get one with predatory pricing if the credit union was not there, she added.

According to NCUA data, Suncoast closed 2013 with almost $75.6 at the bottom line and 2014 with just over $88 million.

Cliff Rosenthal, former president/CEO of the National Federation of Community Development Credit Unions, said fundamentally, lower income members want the same things all members want.

"It seems too obvious to state, but I have heard it both from community development credit unions I have worked and from those who are just discovering this population," Rosenthal wrote in an email CU Times. "Low-income people want the same things you and I do: a path to financial security, genuine respect and fair treatment, and a willingness to look at their character and potential, not merely their financial assets."

Prospective lenders should recognize the vulnerabilities and volatility of income of many low-income people, Rosenthal said. Those members have limited experience with certain forms of financial products and services, but they also have great potential to be loyal members when credit unions treat them right.