But not all financial institutions are predators. Some are re-discovering the notion of the old-time community bank, where customers were valued as people and not just looked upon as lines on a balance sheet. The Anchorage Daily News tells us about Credit Union 1, which recently opened a branch in Anchorage's Mountain View neighborhood. It's the first time a financial institution has operated in Mountain View in 20 years; crime and diversity deterred other prospective outfits.
But the crime has steadily dwindled, and Credit Union 1 decided to work with the diversity. Many of the residents of Mountain View, being low-income, were among the "unbanked", meaning they had to pay check-cashing outlets to cash their checks, or patronize predatory payday lenders for loans. Many of them are without transportation on-demand, so they must rely upon other people or the People Mover bus system.
Here are some of the more impressive highlights of Credit Union 1's Mountain View operation:
The branch offers a number of unusual features. Boxes in the lobby for utility payments — the credit union then will deliver them. Free Internet. A classroom for financial literacy classes that can also be reserved for community organizations. Customers can buy prepaid debit cards so they don’t have to carry cash, even if they don’t have a checking or savings account. Many tellers are bilingual.
Credit Union 1 piloted a program for people with “colorful credit,” [Credit Union 1 President Leslie] Ellis said. Specially trained loan specialists consider the applications of people with poor credit histories. The credit union keeps close tabs on their payments. “When they are late on a payment, we call them up and ask what happened,” she said. On-time payments mean lower interest rates. That approach works.
Though its crime rate has been on the decline, Mountain View still has a reputation as a rough neighborhood, which might be one reason other banks stayed away. To increase the image of security, Credit Union 1 built a police substation into their building. They rent it to the municipality for $10 a year.
Note that Credit Union 1 didn't blackmail Congress into giving them TARP funds in order to do this. Note that they don't gouge customers with an endless array of nitnoid fees. Note that they don't engage in pernicious tricks like credit all the withdrawals first and the deposits last on a given day in order to artificially create an overdraft situation to trigger overdraft fees. This credit union decided to take a chance on an evolving neighborhood and do business the right way, albeit with a reasonable expectation of future customer loyalty and profitability. Building business by building relationships. This is the way we once did business when America was still a country where the competing interests of Wall Street and Main Street were harmonized and balanced, instead of a soulless kaleidoscopic global marketplace where Wall Street is allowed to rampage at will and TARP-guzzling superbanks take taxpayer funds to pay executives bonuses. Actually, Daniel Mitchell of the CATO Institute offers an interesting analysis on TARP; he contends it was the methodology rather than the concept which was flawed. I think he's on to something.
And if it will work in Mountain View, this model can also work in other evolving communities around the nation.