The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

We Help Break The Poverty Cycle

On September 20th, 2010, posted in: Uncategorized by

A couple of weeks ago, I talked about the social injustice that exists in the financial services world.  Hard working families that are holding on to the lower rungs of the prosperity ladder, too many times, find themselves paying the de facto equivalent of a tax for being poor.  Honestly, studies show that where poverty, race, and the lack of mainstream banks intersect, there is an ugly world of shadows, shakedowns and sharks, i.e. the alternative financial services world (aka the fringe economy).

St. Louis Community Credit Union hates economic inequality.  We’re busy fighting the foes to financial well-being.  We want people to have more money in their pocket, not less.  We are pro-thrift; we want people to save money.  That’s a big difference between us and the financial services underbelly of the fringe economy.  Savings is essential to long-term financial success, and we have countless products and great rates that demand little money to get started.

Yes, we are motivated to do what we can to provide a better choice to those who are unbanked and looking to get on the other side of struggling.  Break the “cycle” is what we like to call it.  The “cycle” is expensive indebtedness caused by payday lenders; the “cycle” is check cashers that charge excessive fees; the “cycle” is the informal network of aunts, uncles and friends who many times can least afford to help, but are called upon to cover the shocks of life’s unexpected emergencies; and the “cycle” is pawning a cherished belonging to pay an electric bill.  Let’s stop the “cycle.”

From a financial services “paycheck to paycheck” perspective (when savings is impossible), we believe that the first big step out of the “poverty cycle” is to open a checking account.  Seems simple enough – or so one would think?  Not really.

First, there has to be a financial institution in the area.  According to a published study, the number of banking offices available to the up-scale population had a growth spurt over the 20 years from 1975-1995.  Conversely, the number of banking offices available in low-income communities during the same period shrunk by 20%.  In fact, if you made over $50,000 per year in 1995, you had 69,656 offices in which to visit; less than $50K – 1,719.  OH MY GOSH!!!!  (The study is dated, but do you think the trends have changed?  Me neither.)  So, the first thing we do is make St. Louis Community Credit Union available.  We have convenient offices in low/moderate income communities with more to come.

Second, we give consumers a second chance with a checking account.  Folks make mistakes, and sometimes all they need is a chance at redemption.  We get it – even criminals get paroled.  You’re not perfect?  Well, we can sure try to help.  So far, over 5,000 people have a second-chance checking account at St. Louis Community.

Third, we don’t have expensive fees, fees, fees and more fees.  Remember, we’re trying to break the cycle.  Yeah, we charge fees.  Compare ours to theirs and you’ll see how much money we keep in the pockets of the people in our community.

Fourth, you can sign up for direct deposit.  Fifth, get FREE home banking and bill pay on-line and save on gas, stamps, checks, envelopes, time, etc.  Sixth, manage your account well and be rewarded with the option of a payday loan alternative at a fraction of the costs of payday lenders.

Honestly, there’s a seventh, eighth, ninth, tenth, and on and on.  My point is this: at St. Louis Community Credit Union, we help the unbanked people in our community to “break the cycle.”  We’re in the community with offices to serve.  We give folks a second chance to get the checking thing right.  We don’t gouge on the whole fee thing.  And direct deposit saves the check-cashing fee.

Sure, there is more work to do, but what we’re doing at St. Louis Community Credit Union is a great place to start.

SLCCU is motivated by the prospects of never having to tell someone who is in the unbanked or underbanked world “no, we can’t help you.”  We have created a cadre of locations, products and services that allow us to say “yes, yes we can.”  So tell someone you love.

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