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Unique Financial
Center to be Place Where All Are Welcome
Center to combine access to financial products, services and savings
programs with financial education programs and counseling
A unique collaboration of
nonprofit and not-for-profit organizations will soon open a new type of
financial center designed to serve a diverse customer base.
US Federal Credit Union, Lutheran Social Service of Minnesota (LSS) and
Thrivent Financial for Lutherans have joined forces to deliver an
innovative combination of financial services and education from the
historic Old Swedish Bank Building in St. Paul. The center—as yet
unnamed—will open in the Payne-Phalen neighborhood in the late summer of
2007.
Unlike many financial
organizations that seek to serve high wealth customers, the new center
will welcome all customers, including unbanked customers who, of
necessity, have turned to high-cost fringe financial providers such as
check-cashing outlets, payday lenders, rent-to-own stores or pawn shops to
access their money.
The center will combine credit union products—such as checking and savings
accounts, consumer loans and mortgage services—with financial education
programs, debt and credit counseling services as well as special savings
programs.
“This new center will help
countless St. Paul customers build assets, join the financial mainstream
and reach their financial goals,” said St. Paul Mayor Chris Coleman. “The
City of St. Paul is delighted to welcome this center to the East side, and
we trust that the center’s unique financial and educational resources will
enable people of all income levels to thrive.”
A Collaborative Effort
US Federal will establish and operate a branch within the center,
offering their full menu of products complemented by specific services
designed to meet the needs of the local neighborhood, and especially those
“underserved” by traditional banks.
LSS will serve as the center’s managing partner, responsible for the
overall planning, staffing and operations of the center’s financial
education, counseling and mentoring programs.
Thrivent Financial will fund
various start-up and operational costs, and guarantee private matching
funds for individual development accounts (IDAs), a matched savings
program.
“We hope the center will
become the financial institution of choice for residents on the East
Side,” said Bill Raker, president and CEO of US Federal Credit Union. “We
are confident that credit union services will appeal equally to those
having little or no bank interactions, to middle income customers and to
neighborhood business owners.”
“This center will connect
customers to other supportive services to help them establish financial
stability to meet financial emergencies,” said Mark Peterson, president of
Lutheran Social Service of Minnesota. “Through education programs and debt
and credit counseling services, the center will help its customers develop
personal financial management skills to protect, sustain and grow their
assets.”
Matched Savings
Thrivent Financial is
preparing a grant application to the Office of Community Service, U.S.
Department of Health and Human Services, to enable the center to offer
individual development accounts (IDAs) to qualifying low- to
moderate-income customers. If approved, the IDA program will allow
qualifying participants to have their savings matched and grow on a
three-for-one basis.
For every dollar saved by a
participant for appreciable assets—such as buying a first home, paying for
post-secondary education or funding a small business—Thrivent Financial
and the federal government will each contribute $1.50 ($3 total). The
program entails mandatory financial education classes, and certain income
and savings restrictions would apply.
“We believe matched savings
programs like the one we hope to offer at the center are an important
resource to help hard-working Saint Paul residents build a strong
financial base for their future and join the economic mainstream,” said
Brad Hewitt, Thrivent Financial senior vice president of fraternal
operations, which oversees the program. “Thrivent Financial has previously
established IDA programs in Chicago and Minneapolis, and we know that they
help individuals and families achieve financial stability through improved
money management and savings skills.”
A Multi-Cultural
Working-Class Neighborhood
Most products, services and programs offered through the center will
be available to all US Federal Credit Union members and potential members
(customers). US Federal serves those that live, work, worship, attend
school or volunteer within the Greater Twin Cities CommunitySM. Marketing
efforts for the center will focus on multi-cultural residents and
businesses of St. Paul’s lower East Side.
Most families living in this
multi-cultural working-class neighborhood have modest but self-supporting
incomes. An increasing number of East Side families, however, are
financially struggling. According to data from the 2000 census distributed
by the Wilder Research Center, roughly one-fifth of East Side residents
were born outside the United States, and nearly one-tenth came to the
United States within the past 15 years. Many are not part of the financial
mainstream.
The Old Swedish Bank
Building: The Center’s Home
The center will be the anchor tenant of the renovated Old Swedish Bank
Building, 965 Payne Ave. The building is being renovated by the
Neighborhood Development Center, and is owned by the East Side
Neighborhood Development Company, a local nonprofit bringing residents and
business people together to “create wealth and well-being in a thriving
and engaged multi-cultural neighborhood.”
“We are excited about this
center and the benefits it will bring to its customers,” noted Peterson of
LSS. “Helping working people become financially stable, grow their wealth
and achieve their dreams is the heart and soul of our collaboration.
Helping people is our bottom line.”
US Federal Credit
Union
US Federal Credit Union is Minnesota’s oldest financial
cooperative dedicated to providing sound financial services and promoting
financial security and economic well being for all. For more information,
visit www.usfed.org.
Lutheran Social
Service of Minnesota
Lutheran Social Service of Minnesota offers a wide variety of
human support services relating to the basics of life—food, shelter,
safety, physical and emotional well-being. For more information, visit
www.lssmn.org.
Thrivent Financial for
Lutherans
Thrivent Financial for Lutherans is a Fortune 500 financial services
membership organization helping nearly 3 million members achieve their
financial goals and give back to their communities. For more information,
visit www.thrivent.com.
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St. Paul Pioneer Press - February 18, 2007
