CDAC Spotlight:
Innovative Partnership Brings Hope to Small Towns

Over the last year, Hope Credit Union (HOPE) announced the opening of four branches within the Eighth Federal Reserve District. The branches were the offspring of an innovative credit union/bank partnership that harnessed the spirit of the Community Reinvestment Act (CRA) and resulted in an expansion of banking services in three of the poorest counties in the country.

As part of its branch optimization activities, Regions Bank identified the Delta markets of Drew, Shaw, Itta Bena and Moorhead, Miss., as areas where operations could be consolidated. However, given the CRA-sensitive nature of the locations, the bank did not want to exit the towns without an alternative solution. In three of the four towns, all with populations of fewer than 2,500 residents and very high poverty rates (see Figure 1), the bank branch served as the only depository.

FIGURE 1

Delta Cluster

	Delta Cluster	Mississippi	U.S.
Poverty Rate	38%	22%	15%
% Unbanked	20%-24%	14%	8%
% High School Graduate	70%-74%	81%	86%
% Not in Good Health	27%-30%	21%	17%
Median Home Value	$74,875	$100,800	$175,700
Unemployment Rate	10%	7%	5%
% African American	70%	37%	13%
African American Poverty Rate	46%	36%	27%

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Regions reached out to its long-time partner, HOPE, to discuss the possibility of taking over the branches. HOPE had a long track record of working with low-income residents and in low-income communities throughout the Mid-South. Additionally, HOPE could offer a more comprehensive menu of products and services than Regions for the residents of the Delta markets.

The two organizations worked together to develop a solution that worked well for HOPE, Regions and the community. Regions donated the four branches in the consolidation area and provided startup capital to facilitate HOPE’s retail transition into the communities. Regions also granted HOPE access to its list of customers and an in-branch presence to market the benefits of member ownership in HOPE.

For me, the opening of the four branches in the Delta Cluster was a moment of pride. I grew up in the Mississippi Delta and personally knew people who did not always have access to banking services or a relationship with a banker. I took a job with HOPE nearly two decades ago specifically to use the financial service system to make a difference in people’s lives. Seeing people come from nothing to accomplishing their goals is why I’m here.

At HOPE, I served on the training team for the organization’s new associates in the Delta Cluster. When prospective members arrived at HOPE, I emphasized our unique difference—as a mission-driven institution. Early on, I taught our new associates to take the time to talk with the people who walk through our front doors. At HOPE, we don’t say no; we may say not yet and we always figure out a way to meet people where they are.

One of the first members with whom I worked in Moorhead was Mr. Kelly. For months, Mr. Kelly was unable to drive because his truck had broken down and he was stuck in a cycle of payday loan debt. Living on the outskirts of town, he relied on friends, family and even strangers for transportation. When news broke that HOPE was open for business, Mr. Kelly walked several miles to meet with a HOPE representative. When he arrived, he was greeted by me. I listened to his story, reviewed his situation and in the end, made a loan that pulled him out of the grips of a predatory loan and provided the cash needed to fix his truck.

Mr. Kelly was not alone. Since opening the branches, HOPE has experienced significant growth in the acquisition of accounts. Figure 2 provides an overview of the trend in HOPE’s account growth.

FIGURE 2

The Itta Bena and Moorhead branches opened in September 2015. Over 600 members have joined the credit union in those two markets, opening over 1,200 accounts. The Drew and Shaw branches opened more recently in April 2016.

HOPE’s success in the Delta Cluster in such a short amount of time underscores an important point. The CRA still matters. As the financial system rapidly evolves, questions of its reach and its utility continuously emerge. What remains unquestionable is that in Drew, Shaw, Itta Bena and Moorhead, the policy fostered an environment where local people were better off than before the partnership occurred.

At a time in our country’s history when division remains far too often a default frame of reference, a bank and a credit union worked together to identify and implement a solution where the institutions, the community and its residents all came out ahead. The HOPE/Regions Delta Cluster case illustrates how good policy breeds good practice.

CDAC Spotlight: Cassandra Williams

Cassandra Williams is a vice president and regional branch administrator for Hope Credit Union. She is responsible for overseeing all retail and operational activities for HOPE’s northern region, which serves over 10,000 members. Williams has over 20 years of community development and banking experience, which includes 16 years with HOPE. Previously, she was an assistant vice president at Union Planters Bank. Williams is a member of the board of directors of the Blues City Cultural Center in Memphis, Tenn. She holds a bachelor’s degree in finance and a master’s in business administration from Delta State University. She is a member of the Community Development Advisory Council (CDAC) for the Federal Reserve Bank of St. Louis.

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CDAC members are experts in community and economic development and financial education. They complement the information developed through outreach by the Eighth District's Community Development staff and suggest ways that the St. Louis Fed might support local efforts. A list of current members is available at www.stlouisfed.org/community-development/community-development-advisory-council.