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SLCCU, Community Partners Break the Cycle of Debt

Due to the ever-increasing cost of living, many low-income individuals and families are finding it harder to put money away in a savings account. Without a savings account, it’s very easy for an individual or family to fall behind in paying bills or rent. This cycle of financial instability can lead to potential barriers to permanent housing.

Several of St. Louis Community Credit Union’s (SLCCU) community partners recognized the need for financially stable options that provide empowerment. One of those partners, YWCA Metro St. Louis, has been working to assist low-income individuals in utilizing Individual Development Accounts (IDAs). These specialized accounts reward positive saving behaviors with sponsor matches; in this case sponsors would include YWCA and United Way.

“This program works towards reducing permanent housing barrier debt for the women that are in our traditional housing program,” says Nicole Hughes, YWCA Transitional Housing Program manager. “That is one of the greatest barriers they have in returning to sustainable permanent housing.”

The concept is simple. Program participants agree to take financial education classes, establish financial goals, and save money within a specified amount of time. For this particular application, participants are asked to focus on debt reduction.

“They are able to save $250 at any institution of their choosing,” explains Hughes. “These are non-custodial accounts and the YWCA and United Way match with $500.”

Many of the participants immediately stated they wanted to go to St. Louis Community Credit Union. Hughes credits this to the stellar reputation SLCCU has within the community and the credit union’s convenient locations.

“Last July, the transitional housing program at the YWCA was granted 15 hybrid, small-dollar IDA accounts,” says Hughes. “IDA accounts are very new, and we did not have any experience with them. So the first thing I did was call up Paul Woodruff, manager of SLCCU Community Development, and say, ‘Paul, I have this product, help me make it work.”

And did they ever make it work! Of those 15 accounts, 12 have been opened and two of the accounts have been utilized.

“Not only was one participant able to reduce her landlord debt, but also developed a savings pattern that was created with the encouragement she received from the staff at the SLCCU Forest Park branch,” says Hughes. “Due to this savings pattern, she was able to go on to reduce the entire debt on her own. She offers her sincerest thanks to St. Louis Community Credit Union.”

Hughes challenges the community to start thinking about IDAs as a homeless prevention tool. Partnerships like this make a community, and its individuals, stronger...one account at a time. 

Pictured: Nicole Hughes (left), of YWCA, and Shalia Ford (right), also of YWCA, provide testimonials at the 2013 St. Louis Community Credit Union Ambassador Luncheon.