JACKSON, Miss. – In the space of just a couple of years, astrong new community-based financial institution has begun to makeitself known in Jackson and other parts of the economicallydepressed Mississippi River Delta Region. In July 2004, theEnterprise Corporation of the Delta, headquartered in Jackson, wona $15 million grant award from the U.S. Treasury Department'sCommunity Development Financial Institution's New Market Tax Creditprogram. This gave Enterprise $15 million in tax credits that itcould offer to Delta businesses willing to invest in theEnterprise's operations – in this case the then $5 million HopeCommunity Credit Union. Area business interests reacted quickly andstrongly, according to Bill Bynum, CEO of both Hope Community andthe ECD, but if anything the communities the credit union sought toserve reacted even more strongly. “It's not quite as simple asadding money and getting a credit union,” Bynum said, chuckling abit, “but we are very pleased at how well we have grown.” NCUA'sdata illustrate what has been happening. The credit union's 5300reports show that in the year between June 30, 2004 and June 30,2005, Hope Community has grown from a $4.5 million credit union toa $38 million credit union. Its total loan portfolio has grown from$1.9 million to $8.7 million and its total deposits rose from $3.5million to $25.7 million as the credit union has raised its profilein the communities it has long sought to serve. “What the NMTCmoney allowed us to do was to begin a marketing effort to let morepeople know about the credit union and to bring in more productsand services, such as share draft accounts, debit and ATM cards,and different types of loans,” Bynum said. Hope adopted a number ofdifferent marketing strategies designed to help bring the creditunion closer to the people it wanted to serve. First, it increasedits partnership program through which the credit union partnered,almost in a SEG-like way, with churches, civic centers and otherorganizations around the Delta. The partnerships heightenedawareness among people about the credit union and served to attractthem even though, as an associational credit union – members becomeeligible to join Hope by becoming a member of the ECD – it didn'tneed to form these relationships. Second, Bynum explained, thecredit union decided to open some targeted branches, particularlyusing former bank facilities which had been abandoned. The first,in a lower middle class part of New Orleans, opened in December of2004, just in time to be closed in the wake of Hurricane Katrinaand the second opened in a former bank branch that had closed inJackson. “We anticipate it will take about two months for us torestore the branch in New Orleans,” Bynum said, “and in themeantime we are going to keep looking for opportunities.” Notsurprisingly, Hope sees those opportunities most often amongJackson's 23 most economically-distressed census tracts, placeswhere banks had long abandoned. Bynum pointed out that the creditunion's research had indicated that Jackson had 18 bank branchestotal, 11 of which were downtown. But on the other hand theresearch showed that the city's poorer neighborhoods supported 38payday lenders, check-cashers and pawn shops. Bynum stressed thatHope Community has been seeking to fulfill a community developmentrole as well as a financial institution need. So far this year,according to NCUA, the credit union has made just over $3 billionin member business loans, indicating the credit union's longer termimpact in the areas it serves. But some of that communitydevelopment role can have its downside. For example, Bynum pointswith pride to Hope's manual underwriting on loans that, he says,allows the credit union to make more loans than it might otherwisebut also might contribute to inefficiency that keeps the creditunion's return on average assets lagging its peers. Likewise, whereHope has reached out very well to some of the communities it hassought to help, there are indications that it may need more bridgebuilding among some of Jackson's credit union community. “They area very progressive credit union, but I really don't know much aboutthem,” said Gary Fairly, CEO of the $39 million Jackson Area FCU.“They sort of came out of nowhere.” Fairly pointed out that Hope'snewest branch is only a few miles from his office but that no onefrom Hope had dropped by to introduce themselves. “I really don'tknow anything about them other than what I have heard on thegrapevine.” But Charles Elliott, CEO of the Mississippi CreditUnion League, said that any credit unions which might feel nervousabout Hope's fast start just don't understand that Hope's targetedcommunities are not those where other financial institutions,whether banks or credit unions, really were interested. “Hope'sfocus from the very beginning has been on helping the underserved,”said Elliot, who had been involved in Hope's organization, said.“They're not out to step on anybody's toes.” And, like the rest ofLouisiana and Mississippi, Hope is also working through Katrina'seffects. Because the branch in New Orleans had only been open arelatively short time when Katrina struck, Hope only has a smallloan portfolio at risk due to damage and dislocations of the city.Nevertheless the storm's aftereffects have made the credit unionrethink its previous business plan of tackling pockets of povertyaround Delta region. “Instead of having pockets of poverty toconfront,” Bynum said, “now we have about a third of the state thatis in need of redevelopment and who are going to need some help.Our job just got that much bigger,” he added. -

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