CommunityWorks Credit Union: Financial Freedom for All

CommunityWorks Carolina, whose mission is "building a brighter future for underserved families and communities through financial education, lending, and investing," is introducing another avenue of access to financial services to residents of Greenville County: a federal credit union.

Credit unions differ from banks in a variety of ways, but essentially, a credit union is a not-for-profit money cooperative where the members are owners. The CommunityWorks Credit Union is a specialized type known as a community development credit union, designated as such because the services it provides are geared towards underserved populations and focus on education, lending, and investing, allowing customers to take control of their financial well-being.

CommunityWorks started out as the Greenville Housing Fund in 2008, but when the economy took its downward turn that year, financial stability became more of an issue than housing needs, so the organization shifted direction and in 2009 their first strategic plan solidified their business model to focus on lending.

As a U.S. Treasury-certified Community Development Financial Institution (CDFI), CommunityWorks provides for their customers financial wellness checkups and other tools to help them fix financial challenges. The CDFI business model is to serve low-income markets; qualifying organizations can be nonprofit lender, a credit union, or a bank that focuses on community lending.

"When demand for loans outgrew the available capital," says CommunityWorks executive director Deborah McKetty, "we started looking at the credit union model so we could use local deposits for loans."

She continues, "When we got into the lending business, we  tried referring customers to other banks, but their business models didn't support lending to a lot of our referrals."

While banks may sometimes look at credit unions as nonprofit competitors for their business, CommunityWorks had already built strong relationships with area banks, and those partnerships will continue to be strong.

There are positives for the banks, too, says McKetty: "Several banks, like TD Bank and CertusBank, invest capital that we can turn around and lend, so they get CRA (Community Reinvestment Act) credits."

Additionally, the banks gain goodwill in the community by having someplace where they can refer clients. Instead of turning people away, they can offer the credit union as safe, more positive alternative than the high-cost payday lenders many people have had to resort to.

The credit union had a soft opening this past Monday, and the grand opening will be in September. "Anyone in Greenville County who wants their money to be put to good use helping others is welcome to join the credit union," says McKetty, but the goal is to reach at least 20% of the unbanked population, the target group.

Initially, the services provided will include small loans, savings, and online banking, with checking to be added later. Already, the CommunityWorks Credit Union has approved over $200,000 in loans.

"We want to meet families where they are," says McKetty. "The biggest challenge is educating people about where they stand and helping them to work towards financial wellness."

Sharon Purvis is a freelance writer and editor who makes her home with her husband in Duncan, South Carolina. You can find more of her work at SharonPurvisWrites.com.