Holy Rosary Credit Union reaches out to underserved communities

Carole Wight

By Marty Denzer
Catholic Key Reporter

KANSAS CITY — Holy Rosary Credit Union is housed in a small, former convent next to Holy Rosary Catholic Church in the Columbus Park neighborhood in Kansas City. From the moment you enter the building, it’s obvious that the institution is out of the ordinary. Flyers and posters on the bulletin boards are in three languages. A fascia board hanging above the teller windows is imprinted “Bless all who enter here.”

Carole Wight, Chief Executive Officer of Holy Rosary Credit Union, is also not what you’d expect from a credit union in an old, traditionally Italian Catholic neighborhood. “I’m not Catholic, I’m not Italian and I’m not a man,” she said with a grin. But her passion is to build and expand the credit union for the Catholic faith, and that means serving the immigrant, the underserved, as well as the established communities.

Holy Rosary Credit Union, dubbed the “melting pot” credit union, has been doing just that for many years. Most of its original members were Italian immigrants. The credit union was founded in the basement of the church and chartered in December 1943. It was geared toward helping the first generation Italian community, which was usually unable to obtain loans through traditional banks. As they gained wealth and higher incomes, they moved into new neighborhoods, enabling new immigrant groups to settle in the community. First Cuban refugees, succeeded by Vietnamese and Latino families now live and work in the neighborhood of Holy Rosary parish. The credit union operated out of the church basement until 12 years ago when it moved into the former convent. Wight likes being “in the nuns’ home, it feels right.”

Today it serves seven parishes — Church of the Holy Martyrs, Our Lady of Sorrows, Holy Cross, St. Andrew the Apostle, Our Lady of Peace, St. Anthony, and Holy Rosary. Organizations including Paris Brothers grocers, Holy Cross parish Boy Scout Troop 80 and the Cherith Brook Catholic Worker Community are also members.

Recently, Holy Rosary Credit Union was awarded a national Catholic Campaign for Human Development grant to expand its services into additional parishes in Kansas City and St. Joseph that could benefit from credit union membership and serve more people. The funds will be used in part to develop financial education programs for parishioners and entrepreneurs who are or will be members of the credit union.

Credit unions got their start about 160 years ago. In the mid 1840s, farmers in Germany experienced crop failures and famine. Herman Schulze-Derlitsch established a cooperatively owned flour mill and bakery, and sold bread to the farmers at reduced prices. Several years later, he applied the same concept to extending credit and, in 1849 organized the first cooperative credit society. At the same time, Friedrich Raiffeisen wanted to make it easier for farmers to get credit to purchase needed livestock, equipment, seeds and other things necessary for their livelihoods.

The caisse populaire de Levis, the first North American credit union, began operations Jan. 23, 1901 in a Quebec, Canada, Catholic parish, with a deposit of ten cents. Its founder, Gabriel-Alphonse Desjardins, was a journalist who served as a French-language parliamentary stenographer at the Canadian House of Commons. In 1897 he had learned of a Montreal resident who was ordered by the courts to pay nearly $5,000 interest to a loan shark, on a $150 loan. After researching European financial cooperatives, Desjardins and his wife developed the caisse populaire, a distinctive, Catholic parish-based model.

Also at the turn of the century, French-speaking Canadian immigrants who had settled in Manchester, New Hampshire, attended Ste. Maries’ Catholic Church. With the help of Desjardins and their pastor, Msgr. Pierre Hevey, the parish community founded St. Mary’s Cooperative Credit Association on Nov. 24, 1908. Parishioner Joseph Boivin, an attorney, voluntarily managed St. Mary’s credit union (now St. Mary’s Bank) out of his home in the evenings.

Early credit unions ensured better financial services for the working class in Europe and North America. A century later, there are many credit unions throughout North America, both secular and faith-based. Catholic parish-based credit unions proudly point to their historical predecessors.

Wight said Holy Rosary, like all credit unions, is a cooperative. “Catholic parishes are a wonderful resource for a credit union,” she said. “The support — both community and spiritual — is vital to the success of the membership of the credit union. Our philosophy is people helping people, giving people a chance. Here at Holy Rosary, we have a lot of services geared toward the immigrant population, but we work with all people.”

Wight, married to a minister and the mother of six, became CEO and president of Holy Rosary Credit Union in January 2008. She had previously worked at a larger credit union, but right from the beginning, she loved Holy Rosary.

“I believe in the philosophy of having a chance to put your money where your heart is. For many people, their faith is where their heart is, so why not put their finances in a faith-based financial institution? This credit union, like all faith-based entities, is a cause for good.”

Members, or shareholders, own the credit union, and profits are not the primary motivation. “I believe credit unions should make money by offering loans,” Wight said, “not by adding on fees. We want to help people get on track financially, and convert them to savers. We offer programs and services to educate them financially and help them build wealth.”

When she came on board, the credit union offered a basic share account, or savings account, checking and traditional loans, including auto and unsecured loans. Real estate loan programs were offered to help the immigrant market purchase homes in the community or to use them for small business start ups. But the credit union did not yet offer electronic services including online banking, or credit/debit cards.

Many members and potential members speak little or no English, which compelled Wight to hire part- time tellers who spoke Spanish and Vietnamese as well as English, and she added Saturday hours. She applied for a Low Income Designation from the National Credit Union Administration. To receive that designation, at least 50.1 percent of a credit union’s membership must earn 80 percent or less than the median family income for the metropolitan area in which they live.

More than 7,000 people live in the Holy Rosary area community. They are mostly young adults, with a median age of 31. According to HUD, in Kansas City, the median family income in 2010 was about $70,000.The median annual household income in the Holy Rosary community is about $23,000, or about 47 percent below poverty level. Almost 15 percent are foreign born, from East Africa, Vietnam and other Asian nations, Mexico or other Latin American nations. About half of the heads of households are women.

Holy Rosary Credit Union received the Low Income Designation in 2009. One of the benefits of the designation is the credit union can participate in the NCUA community development revolving loan program which awards loans and grants to institutions for technical assistance. Wight promptly applied for a $15,000 technical assistance grant to develop products and services for the credit union’s outreach efforts.

The credit union’s Hispanic outreach began with Father Joe Cisetti, pastor of Holy Cross and St. Anthony parishes, requesting membership opportunities for his parishioners. Wight said Father Cisetti feared that some immigrant parishioners were becoming victims of payday lenders, check cashing services and other alternatives to banks.

One of the first programs Holy Rosary Credit Union began with the St. Anthony parishioners was Suz Finanzas Hoy, Your Finances Today, a financial education course. Through Americorps Vista, the credit union contracted with Ximena Pacheco, a Chilean native with a background in personal financial education and a Masters degree in sustainable finance, to build a curriculum for unbanked and under banked Hispanic immigrants. Parish leaders selected by Father Cisetti were the first participants.

Pacheco introduced the 22 men and women to the U.S. financial system; checking accounts and how to protect themselves from fraud; understanding credit and developing a household budget. They were then introduced to home buying and college financing, as well as how to start a micro-business.

Documentation of the credit union’s Latino outreach efforts, compiled by Nancy Pierce, PhD, president of Tipton Research Group and former president of Mazuma Credit Union-Kansas City, was undertaken through a grant from the National Credit Union Foundation to the Missouri Credit Union Association and published in 2011. According to Dr. Pierce, Latinos often distrust financial institutions and are leery of their regulatory systems, especially if they are undocumented, and worry that services will be denied.

Reaching out to the Latino community presented a variety of challenges to Wight and Holy Rosary Credit Union. Many are undocumented and live in constant fear of deportation. The language most often spoken at home is Spanish or “Spanglish,” if there are school age children in the home, Dr. Peirce wrote.

Undocumented immigrants are usually unable to obtain credit or are leery of applying for it, so they pay cash for low priced, often unreliable vehicles and appliances. Insurance is difficult to obtain or higher premiums are charged.

The immigrants realize they are often taken advantage of due to their status.

According to Dr. Pierce, the Latino family’s primary financial consideration is the ability to access credit so they can send their children to college, which is seen as the main avenue to future success.

In the three and a half years since Wight took the helm at Holy Rosary Credit Union, the institution has expanded its services. Low required minimum account balances and the use of character-based underwriting help low-income members qualify for loans and other services. Credit union officers use “human touch points” in many of their dealings with members and potential members. One such touch point is the financial counseling and/or education that occur jointly with a transaction or loan approval.

The credit union offers members free checking with no minimum balance, free debit cards, online banking and bill payment. Wight and the staff work to teach members to use a checking account to pay bills rather than purchasing money orders.

Customers who send money to family in Mexico can use Directo a Mexico, a low-cost international remittance service available through the credit union.

Opening a savings account can be difficult for an immigrant who lacks a social security or individual tax identification number. Holy Rosary Credit Union offers the SAFE account, a non-interest bearing savings program that enables them to save money.

In addition to auto and home loans, the credit union also offers a Credit Builder loan to build or rebuild credit. A member can borrow up to $1,000 which is deposited in a savings account to serve as the loan’s collateral. The deposit earns interest, enabling the member to build both credit and savings.

Two pay day loan alternatives are available to help members pay off the high interest loans and even avoid taking one out. With the short term advance loan, a member can borrow up to $500, and pay it off in 90 days. With the consolidation loan, a member can borrow up to $3,000 to pay off pay day loans and take up to 36 months to repay the credit union. Both programs require financial counseling before the loans are approved.

The credit union’s staff works to prevent charge offs, and Wight applauds their success. Financially stressed members can get extensions, lower payments and even lower rates to help them make their payments. Members have redoubled their efforts to repay their loans, and the credit union’s loss ratio is only .4 percent annually.

Wight has also had the credit union’s web site translated into Spanish and Vietnamese, making it easier for non-English speaking members to use Holy Rosary’s online banking and bill paying services.

Wight is excited about the CCHD grant. The funds will be used in conjunction with funding from a grant awarded by the Community Development Financial Institution to develop products and services for low income and underserved people in the community.

St. Therese Little Flower Parish, which was awarded a local CCHD grant, is coordinating with the credit union to provide a financial education course, similar to the one at St. Anthony, but geared toward English-speaking people.

Ximena Pacheco, who designed the Suz Finanzas Hoy curriculum, has been hired to develop a Business Incubator lending program at the credit union. She formerly worked with the Kauffman Foundation to develop a small business educational curriculum, and will work with entrepreneurs to prepare them to start a business.

Wight believes it is important for children to learn about finances and money management early. At the request of Jean Ferrara, principal of Holy Cross School, the credit union offers selected 6th through 8th graders a money management course. The students learn that their “dreams are possible with smart planning, wise spending and saving habits.” Upon completion of the course, the students become officers at the Holy Cross School Branch of the credit union that is open once a week during the lunch periods for students to deposit and withdraw savings.

As a result of the Holy Cross School Branch, the credit union established the KIDS savings account for children of members. “We start with 10 cents, get ‘em saving,” Wight said.

Wight looked at the teller windows, the bulletin boards, the flyers and the posters. “Everything we do is directed toward helping people manage their money and build their assets. We want our members … financially healthy and … their needs met. That’s why we have staff members who speak English, Spanish and Vietnamese. That’s why we have programs of financial education and micro business start ups. That’s why we offer free checking and the rest. That’s why our web site is in three languages. See that board above the tellers? It’s hard work, but we have been blessed here at Holy Rosary.”

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Saturday
August 19, 2017
Newspaper of the Diocese of Kansas City ~ St. Joseph