> Click here for CU Times' in-depth coverage of this grant highlight
The majority of young adults between the ages of 23 and 28 consider "making better choices about managing money" the single most important issue for individual Americans to act on today, according to a recent Charles Schwab survey. In St. Louis, Mo., St. Louis Community CU is doing something about it. The credit union is helping both youth and adults in their community become more financially literate thanks to outreach efforts in local schools and community partners. The credit union also offers products specifically for the unbanked and underbanked.
Over the past few years, St. Louis Community CU has become a “go-to” resource for trustworthy financial literacy advice and knowledge thanks to their popular seminars around the St. Louis Metropolitan area. Unfortunately, they didn’t have the staff to expand their efforts. With an Innovation Grant from the National Credit Union Foundation (NCUF) this year, the credit union was able to hire a full-time financial literacy specialist to help meet the demand for financial education in their area.
“Financial education is part of NCUF’s mission and a natural extension of the credit union philosophy,” said Bucky Sebastian, NCUF Executive Director. “We are proud to support St. Louis Community CU’s financial literacy efforts and applaud their many program successes.”
Reaching Youth & Young Adults
Source: St. Louis Community CU
Paul Woodruff from St. Louis Community CU poses with students from St. Louis Charter School.
One of the most active aspects of St. Louis Community CU’s financial literacy program is their Junior Achievement (JA) classes in local elementary, middle and high schools. The curriculum includes National Endowment for Financial Education (NEFE) material and issues related to budgeting, credit, identity theft, insurance and using one’s skills, values and interests when making important life decisions.
In the first six months of the 2010, their goal was to reach 75 students a month in local public schools (450 total). However, by the end of the school year in June, they had taught 160 classes reaching almost 3,500 students (total for 2010 so far is 4,276 students through 201classes).
The students were also given tests before and after the classes to determine if their knowledge of financial issues had increased. The credit union reported that, on average, the students’ test scores improved by about 20% with a bigger increase of 24% to 36% for high school students. The most dramatic increase was seen by participants from satellite classes for high school students in early workforce development training. Their improvement in post-test scores over that of pre-test scores ranged from between 39% to 73%.
St. Louis Community CU also presented seminars on topics ranging from budgeting, credit, and financial products to adult groups with the support of their many community partners, including the Urban League of Metropolitan St. Louis. They reached almost three times as many people as anticipated so far this year, helping almost 2,000 adults through 118 seminars.
Source: St. Louis Community CU
A St. Louis Community CU home ownership workshop at the Urban League of Metropolitan St. Louis.
Like the youth presentations, individuals were given tests before and after the seminars. On average, the adults’ knowledge of financial issues increased 44% thanks to the seminar.
Helping the Unbanked & Underbanked
Not only are the financial literacy programs provided by St. Louis Community CU educating the community, they are leading people to a financial institution that will embrace them with products that meet their needs.
Many of the adults who participated in the CU’s seminars have either never had an account with a financial institution, or are unable to establish a mainstream banking relationship due to blemishes recorded on their credit report. For those with bad credit, the credit union has been able to offer their Freedom (Second Chance) Checking Account to qualify many people for checking and savings accounts. Since the introduction of the Freedom Checking Account, over 5,500 accounts have been opened with 90% of the accounts still open and actively used.
In addition, the credit union has been successful in opening 242 Credit Matters Loans in the first half of 2010, which are credit builder loans for individuals who either need to establish credit or who need help in repairing their credit. The loan amount is $600 and the term is 12 months. Out of the 242 loans, only one loan has been in delinquent status.
St. Louis Community CU also offers Freedom Loans, an alternative to the traditionally high cost payday loans. The maximum loan amount is $500 and the term is 90 days. Over 550 Freedom Loans have been opened this year and 10% of any loan advance must be placed in a locked savings account that can only be accessed once the balance of the loan is paid off.
While the number of individuals taking advantage of these products continues to increase, the credit union has also worked to educate the new members on the benefits of their free automated services to sustain healthy banking practices. For example, for the first six months of 2010, over 33% of Freedom Checking Account holders set up direct deposit with their employers and over 30% are actively using online banking.
“St. Louis Community CU is one of many credit unions participating in our REAL Solutions program,” said Lois Kitsch, NCUF’s National REAL Solutions Program Director. “These are great examples of the products and services that REAL Solutions credit unions are offering members that need them the most.”
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.