To serve the un-banked

Plans for low-income credit union to be unveiled in community meeting

Joy Bishop, center, hosted a luncheon at her home to introduce some friends and community leaders to the concept of a community credit union being championed by 
Judge D. Kelly Thomas, left, and Dr. Luther McKinney, right.

Joy Bishop, center, hosted a luncheon at her home to introduce some friends and community leaders to the concept of a community credit union being championed by Judge D. Kelly Thomas, left, and Dr. Luther McKinney, right.

A new credit union is forming in Blount County with the goal of teaching people how to fish.

A group of community leaders are just steps away from creating BlountUnited Credit Union, a non-profit credit union for low income residents. The goal is to teach them how to manage their money and become financially responsible.

“We are not giving anything away but an opportunity,” said Tennessee State Court of Criminal Appeals Judge D. Kelly Thomas, Jr. “Education will be large part of what we do. We are going to offer small personal loans at a very competitive rate that is not going to accelerate geometrically if you miss payments.”

Thomas said the new low-income credit union is going to develop close relationships with its members. “It won’t be a join-and-borrow-money operation. If you borrow, you have to participate in financial management education programs,” he said.

Thomas is one of several community members, including Dr. Luther McKinney, PhD, director of institution research at Maryville College, who are serving on a committee with the goal of setting up BlountUnited Credit Union.

“(Writing Blount and United together) was an intentional move to show the Blount County connection with the haves and have-nots,” McKinney said. “We’re all one community. BlountUnited illustrates us working together.”

There will be a community meeting to explain the credit union and discuss how to move forward at 6 p.m. Thursday, Sept. 25, at the Blount County Public Library. Thomas said the committee wants to talk about what is going on with the credit union.

“We are going to be spreading the word about what we’re doing, what we feel the need is and how this will give folks an opportunity to move from the minus column to the plus column,” he said.

McKinney said it has taken almost two and a half years to get to this point. The idea grew out of meetings to discuss racial and community unrest following an incident at a Hispanic store in Alcoa. What concerned community leaders saw was a lack of opportunity for economic stability for different members of the county community, said McKinney. “It was a matter of how do we solve that issue. It was suggested there was a credit union in Bradley County we could look at,” he said.

The conversations with Bradley County were eye-opening, said McKinney. “At the time it was the only low-income credit union in the state. The one being formed in Blount County will be the second one in the state,” McKinney said. “Our intention is to open in February of 2009.”

McKinney said the committee forming the credit union will show interested parties how a low income credit union functions and how it will benefit Blount county. “It is a pack of information they can take away that says this is who we can help and how we can help. Instead of giving them a fish, we’re teaching them how to fish,” McKinney said. “We’re giving them an opportunity to help themselves and, in the process, make Blount County into a more progressive community.”

McKinney said it has been a continuous effort to get the charter written. “We’ve rewritten the charter numerous times, submitted it to the state and got information back on improvements that needed to be made, and we now have a finished product,” he said.

McKinney said the credit union needs to have the finances to meet the needs of engaging the charter in order to have a viable charter. “If you have a charter on paper and don’t have the finances, you just have paper. If you have assets, you have the means to provide services you want to provide to members of the community,” he said.

The committee is waiting to get assets in line so they can submit their proposed charter to the state for a final time. The credit union is currently operating under the umbrella of the Blount Chamber of Commerce’s non-profit 501-C3.

“All money that comes to us for formation of our credit union is managed by the Chamber Foundation,” the judge said.

The credit union is using an office space in the building behind Tractor Supply on West Lamar Alexander Parkway. “We hope to move to the Alcoa City Center. The point of all this is our desire to give people an opportunity to learn ways to manage their finances and to acquire or achieve self-sufficiency, to acquire long-term financial security,” Thomas said.

Thomas said there is a definite need for a low-income credit union. “I found out from the Department of Children’s Services that there are 14,655 families in Blount County who receive food stamps and/or Families First or TennCare. That just blew me away,” he said.

The judge said the low-income credit union is going to offer any service a person needs to pay their bills but they won’t offer checking accounts. “If they don’t have a checking account, we will cash checks, offer money orders and we will have small secured and unsecured personal loans. We will, in connection with those, offer financial management education,” he said. “We are going to participate in Individual Development Accounts, which is a federal program that allows people to save money over a set period of time with a goal to use that money for one of several approved uses -- like education or home buying.”

The judge said at the end of that period, usually two or three years, instead of getting their money back, they will get two or three times their money. That could be a gateway for people into home ownership or an education for their children. “If you had a child who was a freshman in high school who wanted to go to college but the HOPE scholarship wasn’t going to be sufficient, you could save a $1,000 a year. At the end of three years instead of $3,000, you have $9,000,” he said.

Thomas said the reason the institution won’t be offering checking accounts is because they are expensive to manage. “We’re going to do savings accounts. We will take in members, anyone who lives, works or worships in Blount County,” he said. “Our mission is to help the unbanked or people who had banking relationships and, for whatever reason, lost them.”

McKinney said the new credit union will help members understand they can accumulate wealth over time. “They can find power through that wealth to buy a home or educate their children and do something more than just exist,” he said. “They can have a better quality to their lives and the lives of their families.”

McKinney said the new institution is getting buy-in from different segments in the community, from religious organizations, businesses, foundations and individuals. Some are giving zero-interest loans to help capitalized the low-income credit union, and others are giving grants or gifts.

“We want to raise $300,000-plus to start the credit union liquid. We want to actually have a sufficient financial base to carry operations into the future,” he said. “The Bradley County initiative had three years and broke even after three years. After three years, we want to be solid and liquid and fluid and have a profit generating.”

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