Case Study: SWLA
SWLA Credit Union Leverages CDFI Grants to Support Job and Housing Security
Southwest Louisiana Credit Union’s membership includes a lot of plant workers, and training opportunities to improve their job positions were out of their financial grasp. First, they’d have to pay for the educational opportunities, such as school for a commercial driver’s license, and then they’d have to take off six to eight weeks from work. Plus, many would need childcare on top of that. But in the end, the workers could be earning more and often received signing bonuses for new jobs they would qualify for after the training.
“We knew it was a need, but we weren’t sure how to address it,” Chad Miller, CEO of the $106 million credit union in Lake Charles, La., explained. Recognizing these problems, SWLA sought to offer a new type of student loan product – one that would meet both the members’ needs as well as the credit union’s needs.
Collaborating for Solutions
SWLA Credit Union would need help designing the product and reserving for the loans. Enter the experts at CU Strategic Planning, who have decades of experience working on just such programs.
“We loved what SWLA Credit Union was trying to accomplish for hard-working members of their community,” CU Strategic Planning Founder/CEO Jamie Strayer said. “We live to unlock credit unions’ potential to change lives. SWLA definitely fit the bill.”
The team at CU Strategic Planning really dug in to develop a comprehensive, strategic business plan around this new student loan concept that would help SWLA Credit Union earn one of Treasury’s Community Development Financial Institution Fund grants to fund the necessary reserves to support the program and design this innovative student loan, balancing safety and soundness with the members’ needs.
A brochure detailing SWLA's new student loan program
“CU Strategic Planning is at the forefront,” Miller explained. “They’re accessible. They contact us for information to develop the plan.”
The proposed business plan submitted to Treasury’s CDFI Fund included deferred payments and interest until 90 days after completing the coursework. It covers the cost of the training, as well as childcare and rent during the time away from work. Borrowers in the program have been very appreciative of the support from their credit union. Frequently, participants are able pay off the loan with any signing bonus or increased income they receive before interest is even applied.
Turning Grants into Action
SWLA Credit Union was approved by Treasury for a $950,000 CDFI Fund grant to support the program. So far, the credit union has made 10 of these new student loans totaling $35,950.
“CU Strategic Planning handled all of the necessary reporting to the CDFI Fund,” Miller said. “I could tell it would have been Hell for us to do.”
In fact, the innovative student loan program was so successful, and the process made seamless by CU Strategic Planning, SWLA Credit Union came back for another for an affordable housing initiative. “Barn-dominiums” are popular in Lake Charles, as well as mobile and tiny homes, which provide secure, low-cost housing for many financially vulnerable residents. The credit union used the $714,000 grant it received from the CDFI Fund for its second program to expand its reach with like-minded, relevant community partners and fund the building of these affordable housing options, plus fund its allowance for loan lease losses for the subsequent mortgages SWLA Credit Union made for members to buy their new homes.
Those funds have been turned into action! SWLA Credit Union has made 23 of these mortgages, totaling more than $2 million at an average loan amount of $87,950.
SWLA Leverages Data to do More
“CU Strategic Planning’s grant writing is second to none, but what I really enjoy is to actually dive into all the data about the area they collect,” Miller added. He continued explaining that the research done for the grant approvals not only earned SWLA Credit Union’s grants, but it provides insight into small businesses or pockets of the community that are underserved by traditional financial institutions.
“CU Strategic Planning is at the forefront.”
From that information, the credit union is able to make further strategic decisions, such as its partnership with a local college to develop a financial education curriculum to help their students get jobs and loans. It also assists the credit union to target its tax preparation services, financial education and consumer debt consolidation efforts.
While SWLA Credit Union loves helping its members, supporting its employees is also a strategic goal. Makeitta Citizen, brand ambassador at SWLA Credit Union, highlighted that the free tax clinic it hosts in collaboration with the local United Way assists members but also allowed employees to become certified at tax preparation. The members appreciated the help, further improving relationships, and employees expanded their skills and felt invested in, creating a stronger bond between them and SWLA Credit Union.
Angie Bellow, chief administrative officer for the credit union, said SWLA’s culture is very intentional about developing its team members, which contributes to its success with members. As part of the financial counseling the credit union does in partnership with a local health center, all of the employees working there got certified as financial counselors as well.
“They were very please and all of them volunteered to do it when we offered,” Bellow shared. She added that the employees really appreciated that because they were able to apply many of the lessons there to their financial lives, in addition to helping members.