COLUMBUS, Ohio – Credit unions can stake a claim in urban areas, find a role in rural communities and, at the same time, make money at the expense of payday lenders and check cashers, Ohio credit union executives were told by a variety of speakers at the Ohio Credit Union League's third Community Outreach Conference The conference, held Dec. 4 and 5 is part of the league's continuing effort to bring credit union services to underserved areas of the state. About 60 credit union executives from around the state heard speakers from Ohio credit unions, Ohio government and beyond, describe the needs and demonstrate how credit unions can play a significant role in community development. U.S. Rep. Marcy Kaptur (D-Ohio) was expected to speak but was unable to attend since Congress was still in session. League President Paul Mercer said the thrust into these underserved urban and rural communities is an important aspect of the mission of credit unions, part of what makes credit unions different from more profit-oriented financial institutions and one of the obligations of their tax exemption. "Social responsibility is critically important to the long-term success of credit unions," he said. Several speakers noted that their efforts to expand services were at least in part a reaction to the growth of high-cost services such as check cashing and payday lending in areas poorly served by traditional financial institutions. Doug Fecher, chief executive officer of Wright-Patt Credit Union in Dayton, for example, described several efforts in his home community to compete with the payday lenders. Fecher, an Ohio league board member, said his credit union and several others in Dayton are closely watching a research project at the University of Dayton into payday lending and the ability of credit unions to offer competitive products. He hopes to be able to put together a company that will offer payday-type loans, cash checks and sell phone cards. "It looks like this thing will work if we can get the capital," he said. While he applauded efforts to legislate payday and other predatory lenders out of business, Fecher suggested that credit unions must realize that these lenders exist because a demand exists. "If we legislate interest rates (that kill today's payday lenders) and don't find a way to make those loans (that people go to payday lenders for), we'll be walking away from the problem," he said. "When you say no on a loan, they don't stop looking for a loan." Fecher also emphasized that while these efforts can pay their own way, they are part of the broader community-oriented mission of credit unions. "We have become traditional lenders," he said. "We drive them to the payday lenders who don't ask them to fill out an application or pull a credit report." Stan Barnes, CEO of CSE FCU in Canton, also tied CDCUs to the effort to provide an alternative to payday lenders. He said this kind of community outreach "makes a powerful political statement; it can put faces on issues in front of state legislators," and, he added, "It is the right thing to do Barnes described his CU's mentoring of a community development credit union affiliated with the Stark Metropolitan Housing Authority and urged those in attendance to consider a mentoring role. CSEFCU donated and refurbished equipment and furniture to Stark Metropolitan Housing Federal Credit Union and helped it negotiate a $1-a-month lease with the housing authority. He and his staff also helped the new CU link up with key vendors and it helped set up its filing system and write its procedural manuals. It also helped the neophyte staff develop a marketing plan and produce marketing materials. Then, Barnes helped SMHFCU find non-interest, non-member deposits, in part from banks looking to fulfill Community Reinvestment Act requirements. The housing authority also agreed to pick up any losses at the credit union for five years. "With that kind of support, it's hard to fail," said Barnes. Since opening June 1, 2001, the new credit union has enrolled nearly 300 members. "They're out there and they're making a difference," he said proudly. Anthony Debiasse, director of business development for CINCO Credit Union in Cincinnati encouraged credit union executives to take an interest in the community outside the "often-cloistered credit union environment." That's just what Lisa Carter, CEO of Appalachian Development FCU in rural Nelsonville has done. She recounted for attendees efforts in launching a credit union in one of the poorest, most isolated regions of the country. Mercer was not disappointed in the turnout at the conference, though it represented only about 10% of the state's credit unions. He acknowledged that the kinds of programs discussed at the outreach conference were risky business ventures, but "the cooperative model (that credit unions are based on) creates the imperative" for these outreach programs, he argued. He also pointed out that so many of the speakers were from Ohio credit unions. At the first outreach conference, he said, he had to import speakers from out-of-state. -

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