Michael Bartlett

Credit Union Journal

September 4, 2006

A partnership between Fresno County FCU and the Fresno
West Coalition for Economic Development (FWCED) has helped more than 50
lower-income people join the CU and begin building assets, according to a new
study.

The Chicago-based Woodstock Institute, which says its
mission is to research, develop and promote ways to bring economic resources to
lower-income and minority families and communities, released the findings as
part of a case study.

The FWCED is a non-profit organization founded by a group
of community residents who wanted to bring a grocery store to their isolated
neighborhood. After succeeding in its first effort, FWCED continued to fight
for improved access to additional services for the neighborhood.

25% Using Payday Lenders

According to the FWCED, it realized the need for
comprehensive financial services in 2003 after a survey conducted by community
leaders found 25% of Fresno West residents used payday loan products. Three
payday loan outlets located in the neighborhood carried a 456% APR on their
short-term loans, the maximum allowed by California
usury law. A FWCED survey of 900 low-income Fresno residents indicated 95% of respondents
were interested in using credit union services; check cashing and wire
transfers were cited as the most needed services. With no nearby bank branches
and residents having to travel considerable distances to reach the closest
financial institution, FWCED sought out a credit union partner.

Marva Williams, senior vice president of the Woodstock Institute,
met with representatives of FWCED and FCFCU in early 2005 to broker an
agreement on the structure of the new association. However, FWCED and FCFCU had
difficulties negotiating how to expand the credit union’s FOM to include the
residents of Fresno West.

The credit union was reluctant to add Fresno West’s zip
code as a geographical field of membership because the zip code extends into a
rural area to the west of town, which would have the effect of adding
additional rural communities.

To ensure the partnership targeted FWCED clients and
protected the integrity of FCFCU’s membership base, Woodstock Institute
suggested an associational FOM be added to the credit union’s charter. Once
FWCED clients complete a money management workshop, they are eligible to join
the Fresno West Association. Among the benefits to the FWA is an invitation to
apply for membership in FCFCU.

FWCED held an official press event to formally announce
the partnership at the installation of an FCFCU ATM at the area grocery store-the
same grocery store that prompted the group’s existence seven years earlier.

Lessons Learned

The Woodstock Institute said its participation in
facilitating the partnership between Fresno County FCU and the FWCED
demonstrated several important lessons that were essential to making the
partnership work, including:

• The community
organization did its homework. It conducted two studies in 2003 researching consumer
demand for credit union services.

• The CU was
flexible in revising its FOM through the addition of the Fresno West
Association.

• NCUA
regulation facilitating the adoption of underserved communities was crucial to
the CU being responsive to Fresno West residents.

• Credit unions
and associations sometimes need to step back and consider all alternatives.
FWCED and FCFCU had hit a road block until the Woodstock Institute identified
the ability to establish an associational add to FCFCU’s field of membership.