A financial access forum focusing on "unbanked" consumers at the Federal Reserve Bank of St. Louis featured input from Missouri credit unions.
“Promising Pathways to Wealth-Building Financial Services” took place October 25-26 in St. Louis, and included representatives from the Missouri Credit Union Association, St. Louis Community Credit Union, and Vantage Credit Union. Also present at the meeting was Cathie Mahon, CEO of the National Federation of Community Development Credit Unions and Laura Castro de Cortes of Centris Federal Credit Union (Omaha, NE), who also serves on the Consumer Financial Protection Bureau’s (CFPB) Advisory Board.
This financial access forum was designed to help communities and practitioners make informed choices about how to connect underbanked households with wealth-building financial services. The forum looked at the makeup of underbanked consumers, what financial products currently exist to meet their needs and how those products are distributed.
Nearly 170 participants from across the country heard from leading experts, industry representatives and on-the-ground providers of financial services focused on unbanked, underbanked and unhappily banked consumers. Paul Woodruff, Community Development Manager for St. Louis Community Credit Union, presented at a roundtable session titled “Credit Products.”
Woodruff highlighted three different areas that St. Louis Community has focused on to reach unbanked populations – including a credit-building loan product and two payday lending alternatives. The credit union, which has 50,000 members, has nearly 5,000 Freedom Loans - a $500 line of credit that looks at the members’ history rather than credit score for qualification.
“Any time that credit unions can get up in front of bankers and regulators to demonstrate that there is a clear difference between us and the banks and show the approach we are taking to reach the underserved is a good opportunity,” explained Woodruff. “There are a lot of people who still don’t understand why credit unions are different and taking part in a presentation like this allows us to talk about the great products and services we offer, and also what makes credit unions so special and how we can work together with other financial services and regulators.”
Policy barriers and opportunities were also discussed and retained for possible future use.
“It was a great opportunity to learn more about products and services that credit unions and other financial institutions are adopting to reach out to underserved communities,” said Missouri Credit Union Association Vice President of Compliance and Advocacy John Thomas, who attended the forum. “We want to get more people involved with credit unions so they can begin to stabilize and improve their financial lives, and better understanding what they need and what others are doing is an important step in that direction.”
Follow up information about the forum should be posted on the Federal Reserve’s website this week. There is also a page dedicated to the Household Financial Stability Project, with links to additional information in the left column.