Credit union organizers behind an initiative in Atlanta’s Westside neighborhood are hoping a new center providing financial services and financial literacy training can be an anchor for revitalization.
Despite its historic importance – having boasted civil rights luminaries such as Martin Luther King, Jr. and Andrew Young as residents – the area has fallen into pervasive decay in recent decades, along with poverty, crime, drug abuse and high unemployment. Home to a predominantly low-income African-American community, the Westside also suffers from a lack of access to mainstream financial institutions, and many residents are underbanked or unbanked completely.
The launch of the On the Rise Financial Center this month is part of an attempt to begin solving those problems. The center – a partnership between the National Federation of Community Development Credit Unions and Equifax, Inc., the Atlanta-based consumer credit reporting agency – provides Westsiders with financial services, counseling and financial literacy training.
A handful of local credit unions – the $23 million-asset 1st Choice Credit Union, the $42 million-asset BOND Community Credit Union and the $62 million-asset Credit Union of Atlanta – are also part of the initiative, and will participate by staffing educational activities and providing additional support with financial products and services.
“The Westside community is a conglomerate of individuals, families, and businesses,” Sheilah Montgomery, board member of 1st Choice Credit Union, told Credit Union Journal. “To have a thriving community, the residents and business owners must have the ability to have a decent living with plans for a financially secure future. On the Rise Financial Center is positioned to be part of the solution for the Westside financial wellness initiative.”
David Stiffler, community affairs manager at Equifax, told Credit Union Journal that the Westside is a “highly distressed” community that has come under focus from local parties interested in revitalizing what had once been a vibrant neighborhood.
“It has extreme levels of poverty and is one of the most underbanked communities in the country,” he said.
40 percent unbanked
According to the Corporation for Enterprise Development (CEFD) non-profit, Census Tract 003700 in Atlanta – which comprises the southern portion of the Westside – ranks as the fifth-most unbanked census tract in the county. In this tract, 40.5 percent of local residents are unbanked and 35.8 percent are underbanked. Georgia is itself the third most underbanked state in the country (12.2 percent unbanked, 19.4 percent underbanked). By comparison, for the nation as a whole, 7.7 percent are unbanked and 17.9 percent are underbanked.
CEFD data reveals that four of the top five unbanked states are located in Dixie; with many of the most unbanked counties clustered in Texas and Mississippi.
Put another way, The 2015 Assets & Opportunity Scorecard, compiled by CEFD, ranked Georgia as the 49th worst among all states for its percentage of consumers with subprime credit scores; 43rd worst for its percentage of unbanked residents; and 49th worst for its percentage of households that are underbanked.
Ann Solomon, strategic initiatives director at the Federation, said that many parts of the south and southeastern U.S. are particularly vulnerable and suffer from high rates of poverty and lack of accessible financial institutions. The Westside of Atlanta might be considered an epicenter of this crisis.
“In terms of access to opportunity, home ownership and other economic issues, the Westside presents many challenges,” Solomon said.
A study from the Westside Economic Inclusion Collaborative revealed that in Metropolitan Atlanta (a large area with a population of more than 5.7 million) there are 1,294 banks for every 100,000 people. In the Westside, comprising area codes 30314 & 30318, there are only seven banks for every 100,000 residents.
Operation: ‘Educate and inspire’
1st Choice’s Montgomery said the primary goal for CUs working with the center is to “educate and inspire” through financial counseling and coaching.
“Providing the financial knowledge to make choices to save and borrow responsively will inevitably contribute to financial well-being in the short term and generational wealth in the long term,” she added.
Many Westside residents face ongoing financial stress due to the lack of jobs in the area and struggle to gain access to affordable financial products and services, she said. “The credit union will provide the financial counseling and coaching to help build financial wellness,” she added.
Montgomery called the opportunity to serve the Westside community an “honor and obligation.”
“We recognized the financial experience and expertise we provide can enhance and elevate the lives of individuals, families, and businesses in a positive and productive way,” she said
J. Craig McDonald, chief executive officer of BOND Community Federal Credit Union, told Credit Union Journal that although the Westside is “slightly outside” of its field of membership, “we feel strongly that working with the Federation and our sister community development credit unions to strengthen the west side of Atlanta is very important.” Offering financial counseling to help people improve their lives not only helps the Westside neighborhood but all of Atlanta, McDonald emphasized.
The facility recently began holding group financial education classes, one-on-one financial counseling and coaching, education for home ownership, and access to financial products and services.
And if the center is a success, said the Federation’s Solomon, as more and more consumers use its services, CUs may begin opening brick-and-mortar branches in the area – which would potentially translate into higher loan volumes and increased membership rolls.