ST. LOUIS, Mo.-St. Louis Community CU has entered into a four-year partnership with Carrollton Bank that will increase lending opportunities for low-income consumers throughout the region, among other things.
Dorothy Bell, VP of public relations and community affairs at the 47,000-member, $226-million credit union, explained that the agreement arose out of SLCCU CEO Patrick Adams' good relations with Carrollton Bank.
Bell noted St. Louis Community's status as a community development financial institution (CDFI) made the collaboration work more smoothly.
The partnership, valued at $800,000, comes just as SLCCU has opened its CU Excel Center, a "financial literacy and life skills facility" that will provide consumer education in the St. Louis region-one of the nation's highest under-banked populations, according to a 2009 FDIC study. Funds from the partnership were used to help launch the center.
As part of the partnership, Carrollton Bank will provide additional employees to staff the center, while also helping SLCCU to expand lending opportunities for members. The community bank is providing $500,000 to be put toward making more small-dollar loans available at the credit union, including Pay Day Alternative and Credit Builder loans. SLCCU will continue to originate those loans. Beyond that, Carrollton will make its low-down-payment FHA loans available to St. Louis Community CU members, along with commercial lending opportunities for local entrepreneurs.
Small Dollar Loans
Bell was hesitant to speculate on how the partnership would spur growth at the CU, but suggested that the increase in available small-dollar loans would especially be of use for members, as the CU specializes in serving low-to-moderate income consumers. As of its most recent Call Report, SLCCU had 13,133 loans on its books totaling more than $79 million. It has a Net Worth Ratio of 13.79.
Carrollton Bank is also set to provide funds for SLCCU's 11th satellite branch, which is expected to open in a social service agency later this year, though specifics about date and location are still being ironed out. Bell noted that St. Louis Community could open a satellite branch without Carrollton Bank (it currently has 10 satellite branches throughout the city), but said that the Carrollton partnership allows it to be done much faster.
"This effort is part of our strategy to bring that mainstream banking service option to consumers living in or around the city's urban areas," said Bell.
Members are being notified about the collaboration in newsletters, e-mail blasts and local press. The agreement runs for four years, but Bell said that principals will meet regularly to make changes as necessary. She said there is no specific plan once the four-year term expires, but noted that "with all good collaborations, you'll want to come back to the table to see how you can make it even better and go forward."
While banks and CUs have significant cultural differences, Bell said that was not an issue for this partnership. "The more that we became involved with Carrollton Bank, the more we saw that we both have that desire to make a difference in the communities that need us most. This will allow us to reach even more people, because we're so like-minded when it comes to having a passion to serve."