Hope CU Seeks Fairer Shares of COVID-19 Aid

A study created by Hope Credit Union’s research arm is being used by a grassroots group in Louisiana to help make sure pandemic relief is distributed more fairly in this year’s round.

The report, “Racial Inequities in the Distribution of Louisiana’s Coronavirus Relief Funds: A Report for Community Leaders,” argued that funds distributed in last year’s federal relief didn’t reach enough people in Louisiana parishes with the highest proportion of minorities and most persistent poverty.

The report released April 8 was prepared by the Hope Policy Institute, the policy division of the Jackson, Miss.-based federal credit union, and the Power Coalition for Equity and Justice, which describes itself as a coalition that “works to build power and voice in traditionally disenfranchised communities across Louisiana.”

Calandra Davis, co-author and a policy analyst at Hope Policy Institute, said the report is being used by organizers to inform local leaders and prepare for the next round of funding under President Biden’s American Rescue Plan Act of 2021.

“They want to make sure the process is more equitable next time,” she said.

Credit unions, their leagues and associations regularly lobby Congress and statehouses on issues such as financial regulations they consider onerous. However, few take stands on issues directly affecting members as specific as the issue of coronavirus relief on such a hyperlocal scale.

Hope ($367.6 million in assets, 36,229 members) has been doing so in part because it is a Community Development Financial Institution. Also, Davis said most of the credit union’s members have low incomes, and the credit union’s mission is to provide greater financial opportunities to those members in Alabama, Arkansas, Louisiana, Mississippi and Tennessee.

“We can’t do that by simply opening accounts. We have to take a systematic approach,” she said.

The credit union is involved with a similar study in Alabama, and has used other approaches elsewhere. For example, in Mississippi, it relied on a grassroots network that reached out to municipalities in poorer regions and offered technical assistance in applying for funds.

Louisiana received $1.8 billion from the $150 billion Coronavirus Relief Fund, part of the overall Coronavirus Aid, Relief and Economic Security (CARES) Act.

One factor limiting the ability of smaller parishes and towns from applying was that the municipalities would be reimbursed only after they spent the money, creating a significant cash flow hurdle.

“This reimbursement structure meant that parishes already struggling to access resources before COVID-19 had trouble getting the relief funds, particularly majority people of color, rural and persistent poverty parishes,” the report said.

Data for the first two rounds that ended July 15 showed some parishes had neither received a payment nor requested funds already allocated to them, especially some in northeast Louisiana, a Mississippi Delta area with high proportions of minorities and low incomes. The third and final application deadline was Oct. 15.

“Within the final weeks of the program, Hope was able to connect with mayors in the parishes that had not yet applied during the first two rounds of funding.

“Using targeted communications and existing relationships to reach people where blanket mass communications and emails had overlooked, several mayors in northeast Louisiana parishes were able to apply for the funding before the last round of payments,” the report said.

The report also said that areas that didn’t get their fair share last year have fewer resources this year to rebuild. “This means communities that were helped now will likely have a faster recovery while communities left out will feel the economic burden longer.”

Davis said one factor that might help in distributing this year’s funding is that significant amounts are provided directly to local governments, rather than requiring them to apply through their state.