People’s Federal Credit Union’s community programs are assisting low-income families to more effectively build wealth for themselves, their families, and the community. People’s Federal Credit Union (People’s) is a division of Self-Help Federal Credit Union, located in Oakland, Calif.
According to People’s membership data, almost 90% of members earn below 80% of the area’s median income, including 51% that earn less than $22,000 per year. People’s was the first deposit-taking financial institution open to the public in West Oakland when it opened its doors in 2001 – all banks had fled the area in the 1960s. As in most poor neighborhoods, there are many fringe financial service providers – check cashers, pawnshops, payday lenders, which target the area’s unbanked and low-income population. These businesses provide useful services, but charge high fees and interest rates which make it harder for families to save, and provide no opportunities to build credit.
Making a Difference in West Oakland
People’s has attacked this problem head on by providing access to affordable financial services, savings accounts and loans, and helping build assets by providing individual credit coaching, financial literacy and credit education workshops, and free income tax preparation. With an Innovation Grant from the National Credit Union Foundation (NCUF) this year, People’s was able to expand and manage their community programs.
“People’s model of combining financial education with access to affordable entry-level and asset-building financial products is excellent,” said Lois Kitsch, NCUF’s REAL Solutions National Program Director. “Better yet, it can be replicated by other credit unions in the country. This is particularly relevant as tax season is right around the corner.”
Source: People's FCU
Leah Dorner assists Rodney Charlot at People’s VITA site.
VITA Sites - People Helping People
One of the most successful parts of People’s community programs is free income tax preparation through their Volunteer Income Tax Assistance (VITA) site. The average income for households served by the credit union’s VITA site is under $20,000.
Earlier this year at their VITA site, People’s:
- Completed 443 tax returns, a 41% increase over 2009.
- Generated $544,099 in refunds for the West Oakland community, and;
- Saved filers an estimated $110,750 in fees they would have paid to have their taxes prepared elsewhere.
In addition, 25% of filers received the Earned Income Tax Credit (EITC), which usually is unclaimed by low-income workers either because they are unaware of the credit or they don’t file their taxes to claim it.
As part of their VITA site, People’s encourages filers to save part of their refunds and open a savings account with the credit union. 80% of new savings accounts opened at the VITA site earlier this year are still open today, a testament to People’s success.
They also offer credit report review sessions at the VITA site to link filers to credit building education and opportunities. People’s also asks filers to complete a financial “wish list” or survey that asks about their financial goals in order to link them to relevant credit union products and financial education.
An Innovation Grant at Work
NCUF Innovation Grants are made possible by supporters of the Foundation and the Community Investment Fund (CIF), an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs.
This “Innovation Grant at Work” is part of a series highlighting NCUF grantees making a positive impact in their community and empowering consumers to achieve financial independence through credit unions.