ASI FEDERAL CREDIT UNION (PDF) by mmcsx

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									ASI FEDERAL CREDIT UNION

       creating opportunities
     for low-income members
Who We Are,
And Who We Serve
 ASI Federal Credit Union was founded in
 1961 at Avondale Shipyards.
 Today, we serve over 85,000 members and
 hold over $200 million in assets.
 Members come from one of our ten chartered
 communities, or work for one of our 550+
 Select Employee Groups.
More about Louisiana
 and Orleans Parish
According to 2000 Census Bureau statistics, Louisiana’s median
household income was equal to roughly $32,566; in Orleans
Parish, this number was closer to $27,133. The national median
household income that year equaled $41,994.
In January 2005, the state unemployment rate was at 5.6%
[unadjusted/MSA rate was 6.3%]; unemployment in the New
Orleans area was at 6.2% (up from 4.4% the previous month).
Louisiana’s poverty rate is at roughly 18.1%, one of the highest
in the nation. 26.6% of children in Louisiana live in poverty.
Of ASI’s 85,000+ members, over 21,000 reside in Orleans Parish.
A MCIF report generated on these members shows that almost
8,000 of them (more than 1/3) earn an annual household income
of under $29,999. Even more discouraging, well over 25% of
ASI’s members from this parish earn annual household incomes
of less than $19,999.
    The Payday Lending
    Problem in Louisiana
     Payday lending operations run rampant in the state of
     Louisiana and are highly unregulated. While a number of
        residents may hold accounts at local banks or credit
                       unions, many still do not.
 It is far too easy for low-income individuals to seek out the
      “quick fix” offered by payday loans and cash advances;
  credit unions face fierce competition with these operations.
  These businesses extend loan terms and charge up to 400%
  interest for small loans, often resulting in a client’s inability
      to pay off the loan, thus perpetuating the cycle of debt.
    According to a 2003 study sponsored by the Center for
   Responsible Lending, 91% of all payday loans are made to
       borrowers with 5 or more payday loans per year. The
    average borrower rolls over a payday loan between 8 and
       13 times a year. 31% of those who frequent predatory
      payday lenders roll loans over 12 or more times a year.
The problem is rampant; the payday loan industry is growing
                  rich off of low-income borrowers.
           What does ASI do
       to combat this problem?
   PRODUCT/SERVICE                              USE
        Stretch Plan               Alternative to Payday Lending

  Credit Enhancement Plan          Alternative to Payday Lending

     Asset Builder Loan            Alternative to Payday Lending

    Yours-to-Own Loans                Rent-to-Own Alternative

Payday Lender ReBuilder Loan       Alternative to Payday Lending

                               Designated, matched savings accounts
        IDA Program
                                     for 1st-time homebuyers
                                Allows ASI to facilitate small business
         SBA Loans
                               lending while minimizing risk to the CU
                               Designed to prevent predatory loans to
   Graduate Car Program
                               recent graduates with little or no credit
            The Stretch Plan
WHAT:            Open-ended line of credit; no credit check required
LOAN AMOUNT:     $200-$500
PREREQUISITES:   Must maintain direct deposit; must provide written
                 proof of income for the last 6 months; account must
                 be open for at least 3 months; cannot have filed
                 bankruptcy in the past year; cannot be participating
                 with any consumer credit counseling service; has
                 not caused the credit union a loss
APR:             15%
FEES:            $16/month
BENEFITS:        Overdraft protection up to credit limit; free travelers’
                 checks; discounted money orders; free credit life
                 insurance on balance; free 10-minute pre-paid long
                 distance calling card; plan participants receive .25%
                 discount on all loans, except VISA
VOLUME:          7,800 since program inception; 2,270 in 2004
       The Next Tier of Products
Credit Enhancement Plan                  Asset Builder Loan
  Amount: $1,000-$3,000                    Amount: $1,000-$3,000
  Payment: $51.00 per $1,000               Payment: $50 per $1,000
borrowed per month, includes $4          borrowed, per month ($35 toward
weekly fee ($35 applied toward           loan payment/ $15 savings into a
balance, $16 toward fees)                holding account)
   Prerequisite: 6 month timely
                                            Prerequisites: 6 month timely
payment history, direct deposit, may
                                         payment history, direct deposit,
not have filed bankruptcy in the past
12 months
                                         may not have filed bankruptcy in
                                         the past 12 months
   Benefits: FREE checking, travelers’
checks, and option to skip-a-payment        Benefits: 5% APY on savings
in December                              account
  Fees: $4.00 weekly fee                   Fees: NONE
  APR: 15%                                 APR: 15%
  1x Cost: $13.75 to borrow $1,000         1x Cost: $5.75 to borrow $1,000
  Volume: 2,072 total; 282 in 2004         Volume: 448 total; 142 in 2004
     The Yours-to-Own Loan
Made possible through a Predatory Relief and
Intervention Deposit (PRIDE) grant/loan hybrid from
the NFCDCU
Designed to combat predatory rent-to-own operations
25% of total loss, after all collection efforts, is secured
by PRIDE
Loans used for the purchase of new home furnishings
and appliances
No credit check required; however, member must show
proof of income and cannot have caused ASI a loss
Set at 15% APR
53 Yours-to-Own loans have been booked since
program inception; only 4 members have caused the
credit union a loss
The Payday Lender ReBuilder Loan
WHAT:            “Consolidation Loan” to payoff payday lenders
LOAN AMOUNT:     Up to $3,000
TERMS:           15% APR, for up to 18 months
PREREQUISITES:   - Must maintain direct deposit (those who cannot
                 receive direct deposit, but who otherwise qualify for
                 the program, are referred to the Consumer Loan
                 Supervisor for review)
                 - Cannot have filed bankruptcy in the past year
                 - Cannot be participating with any consumer credit
                 counseling service
                 - Must attend two 3-hour financial management
                 classes, presented by the credit union
                 - Member must sign an agreement stating s/he will
                 not borrow from payday lenders through out the term
                 of the loan
 The Payday Lender ReBuilder Loan,
            Continued
BENEFITS:   - Low loan rate of 15%
            - A savings account is established to offset the
            additional risk, and also to provide some funds
            for the member once the loan has been paid off
            - $15/month must be deposited into the holding
            account for future use
            - Funds in this holding account are frozen and
            can only be used to offset the loan should the
            member default
            - Savings duns will be released to the member
            when the loan is paid in full
VOLUME:     26 to date
        QUESTIONS?

      Shannon L. Cian
Community Development Specialist

     shannon.cian@asifcu.com
      504.733.1733, ext. 2376

								
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