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Peoples FCU helping low-incomers to build wealth
OAKLAND, Calif. (12/14/10)--People’s FCU was the only deposit financial institution in West Oakland, Calif., when it when it opened its doors in 2001--all the banks had fled in the area in the 1960s. As in most poor neighborhoods, many fringe financial service providers--check cashers, pawnshops and payday lenders--target the area’s unbanked and low-income population.
Leah Dorner of People’s CU assists Rodney Charlot at People’s FCU Volunteer Income Tax Assistance site. (Photo provided by the National Credit Union Foundation)
The credit union attacked this problem head on. It provides access to affordable financial services and savings accounts and loans. It also helps 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 FCU was able to expand and manage its community programs. Almost 90% of members earn below 80% of the area’s median income, including 51% that earn less than $22,000 per year, according to People FCU’s membership data. “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.” One of the most successful parts of People’s FCU’s community programs is free income tax preparation through its Volunteer Income Tax Assistance (VITA) site. The average income for households served by the credit union’s VITA site is less than $20,000. Earlier this year at its VITA site, People’s FCU:
* 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.
Also, 25% of filers received the Earned Income Tax Credit (EITC), which usually is unclaimed by low-income workers either because they are either unaware of the credit or they don’t file their taxes to claim it. People’s FCU encourages filers to save part of their refunds and open savings accounts with the credit union. Eighty percent of new savings accounts opened at the VITA site earlier this year are still open today. The credit union also offers credit report review sessions at the VITA site to link filers to credit building education and opportunities. Its representatives also ask filers to complete a financial “wish list” or survey that inquires about their financial goals so it can offer them relevant credit union products and financial education. NCUF Innovation Grants are made possible by supporters of the foundation and the Community Investment Fund.


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