Hope Credit Union: Impact Banking for a Hopeful Future

by Sara Loving

Hope Credit Union mortgage client and first-time homeowner Melbatine Hunter. Photo courtesy Hope Credit Union.

As institutions that give profits back to their members rather than to shareholders, credit unions are usually a better banking option than megabanks. However, choosing a credit union is no guarantee that  our money is being used most effectively in your communities. There are low-impact credit unions, just like there are low-impact banks.

This year, Hope Credit Union won the Wall Street Journal Financial Inclusion Challenge for its high-impact, exemplary work in the US South to reinvigorate communities that have traditionally had few financial options. The award is given to the organization that most effectively provides financial security to those who have previously struggled economically. The Wall Street Journal specifically emphasized Hope’s work in the Mississippi delta, a region with historically high poverty rates.

In many towns Hope works in, there are no financial institutions besides payday loan and check cashing businesses, and many residents are understandably distrustful of the banking industry. Hope has committed to providing excellent banking services and resources to those who need them most—low-income families and communities in towns that are otherwise banking deserts—for 28 years. Hope’s mission is “to be a community development financial institution that provides a substantial number of low-wealth people and communities with the financial tools and resources needed to achieve a better quality of life.” In the towns and cities where it operates, Hope has clearly brought this vision to life.

Formed in 1995 as Mississippi’s only church-sponsored credit union, Hope Credit Union was created by members of Anderson United Methodist to offer vital financial services to low-income residents of Jackson through asset development, financial education, and community reinvestment. Since connecting to other faith-based organizations driven to community investment in 2000, it has grown enormously and expanded its financial service offerings at its branches and online.

In one year alone (2015-2016), Hope Credit Union increased lending by 93%, primarily in housing (56% increase) and business lending (153% increase). These areas of lending are particularly important because both allow borrowers to build and spread wealth in their communities. Megabanks often focus primarily on consumer lending, which is important but does not provide a foundation for long-term wealth to the individuals receiving the loans. Socially responsible banking institutions have high rates of mortgage lending and/or small business lending, with an emphasis on underserved
individuals and neighborhoods.

Many of the people Hope serves have never had a checking account or any amount of savings, and they desperately need housing and small business loans to begin to build wealth. Hope provides these individuals with not only the loans to become self-sufficient, but with the education and individualized attention they need to start trusting financial institutions and building wealth.

Due to both geography and mission, many of the individuals and communities Hope Credit Union works with are black. It is inarguable that banking and race in this country are inextricably intertwined; those who think otherwise should ask themselves if they’d prefer to walk into a bank and apply for a loan as a black person or a white person. The historical disparity in US banking has greatly contributed to the severe wealth gap between black and white Americans. Institutions like Hope, which primarily serve and are run by people of color, get money into the hands of individuals who have been disproportionately and intentionally neglected by traditional US banks.

Institutions like Hope Credit Union do more than just provide financial services; they support and nurture the communities they work in and have a commitment to positively influencing the lives of those who are financially struggling the most. When we decide to move our money out of megabanks and into banking institutions like these, we may not feel we are really changing the way the banking industry works. But making the change will encourage others around you to do so as well, and this effect can ripple through communities. This can eventually help move large amounts of capital to places where it’s used for good. The more we support banks and credit unions like Hope, the more our money matters.