6 FOCUSREPORT /The Underserved & UnbankedAll financial institu- tions have certain superpowers that consumers lack.
They are built to navigate complexity. They know how to measure risk, and price it. They knowhow to plan and prioritize financial resources in crisis. They havedeveloped the capability to assessa web of changing regulations.They can look at a large pool ofpeople and predict who is mostlikely to need their services.
Credit unions have another superpower: They are built to servemembers, which means they havea culture trained to turn theirpowers to their members’ benefit.
If ever there was a time peopleneeded the help of superpowers,it is when they have been threatened with a novel coronavirusthat might kill them and can easily over whelm the hospitals wherethey might need to be treated.Those powers are needed whenmassive numbers of them havelost jobs from a pandemic-in-duced economic coma.
One way to look at the crisis isto try to gauge the extent of risk itposes to credit unions. Another isto look at the risk it poses to members. CUNA issued a paper April 3that does both.
It found the risks were broadlysimilar: Those with small budgetswere most likely to suffer the most.
And minorities were likely to suffer
disproportionately, and, by exten-
sion, the credit unions that dispro-
portionately serve minorities are
likely to need the most help.
The CUNA paper, “The Coronavirus (COVID- 19) Recession& its Impact on Credit Unions,”noted minority communities tendto benefit the least from a strongU.S. economy and suffer the mostwhen the economy falls intorecession.
In general, credit union mem-
bers who have low incomes will
suffer most. “They tend to have
less access to high-quality, afford-
able health care, and they are more
likely to experience job disruptions
arising from the need to care for el-
derly family members or children.”
Their vulnerability is exacerbat-
ed in the current crisis because,
CUNA senior pol-
icy analyst, said
the crisis arrived
when economic inequality among
Americans was already at record
levels and gaps were widening.
For example, 40% of Americans
didn’t have $400 to cover an emer-
gency “despite the fact we had a
really strong economy.”
Credit union members “are fac-
ing challenges at levels not seen
before,” Salem said. “You see
people having to make choices
on what bills they are supposed
CUNA is watching how credit
unions respond to the crisis and
gathering their stories to share
with others, Salem said. One sto-
ry is emerging in Oregon, where
three credit unions have allied to
offer an emergency loan program
for members hurt economically
by the pandemic. They are:
• Point West Credit Union, Port-
land ($93.8 million in assets,
• Consolidated Federal CreditUnion, Portland ($252.4 millionin assets, 15,517 members)
• Trailhead Federal Credit Union,Portland ($120.1 million in assets, 9,423 members)
Point West has been serving
non-citizens for two decades. It
has more than 1,500 non-citizen
members and its $70 million
loan pool includes $12 million in
loans made to non-citizens using
their Individual Tax Identifica-
tion Number as part of their loan
As the coronavirus spread,Point West managers realizedthese members were especiallyvulnerable. “We are actively working to help them,” Point West COOSteve Pagenstecher said.
Point West and the two othercredit unions worked with theirleague and an areanonprofit. By lateMarch, they hadredirected a loanprogram originallyintended to support affordablehousing into anemergency loanprogram for peopleaffected by the pandemic’s economic effects. Point West’s program was open to non-citizens, inthe hope that the loan might replace some of the benefits federalprograms denied them.
Many Oregonians have lostwork because of social distancing measures. The federal government has tried to help by providing enhanced unemploymentbenefits and grants to small businesses through the Paycheck Protection Program and disaster assistance loans through the SmallBusiness Administration.
“None of these are available to
people who have an ITIN,” Pagen-
stecher said. “They pay taxes, but
they get none of the benefits. This
situation is hard for everyone, but
for people who are undocument-
ed, it’s harder.”
Low- and moderate-income
members who have been finan-
cially impacted by the COVID- 19
pandemic can borrow up to
$2,500 at 0% APR for two years.
No payments are due for 90 days.
Members must be at or below
threshold for their area’s medi-
an household income, which is
$87,900 for a family of four living
in the Portland metro area.
The program is supported
through grants from the Meyer
Memorial Trust, a Portland-
based non-profit serving Or-
egon, and the Northwest Credit
Union Foundation, which serves
Washington, Oregon and Idaho.
The grants pay the credit unions
the equivalent of 5% interest on
the emergency loans and fund
a loan loss reserve. “So far, it’s
been very successful,” Pagen-
As of April 24, the credit unionshad funded 82 loans worth a combined $204,700. Point West alonehad received 180 applications,approved 65 and funded $77,500through 29 loans. It had morethan $80,000 in the pipeline forthe 36 approved loans that werenot yet funded.
Mary Vasquez, community advocate at Point West, was interviewed for an eight-minute videoon the emergency loans postedApril 16 by TV JAM, a Spanish-language news outlet.
Within eight days, the video hadgarnered more than 19,000 views,322 shares and 49 comments.Point West received more than 80applications within a week – morethan double the number it hadreceived previously. “It just wentwild,” Pagenstecher said.
The three credit unions haveenough support for $337,000 inloans, and are looking for additional funding from other organizations. “Those dollars are goingto go fast,” he added.
Adam Lee, incubator director
at the Filene Research Institute
in Madison, Wis., said Point West
a credit union can
be proactive and
systematic in its
efforts to help mi-
need to use their
ability to identify
members who are
most likely to need their exper-
tise, Lee said. Members need to
know what their options are, and
which they should pursue first.
Credit unions won’t have the ca-
pacity to solve all their members’
problems, but they should have a
long list of others who might, he
“Show people a path,” Lee said.“This is incredibly complex.” n
Point West Reaches Out to Help Hispanics in Pandemic
Y Minorities are likely to suffer most in therecession.
Y Credit unions should be proactive in offeringhelp.
Y The best help might be directing them toothers.
Portland, Ore., journalist Juan Antonio Martinez, left, interviews Mary Vasquez of Point West CU about its
emergency loans open to non-citizens impacted by the pandemic.