FINAL REPORT “Combating Poverty with Assisted Self-Help ...

[Pages:118]FINAL REPORT

"Combating Poverty with Assisted Self-Help:

Building Assets for Independence with America's Poor"

A study of 23 Community Development Credit Unions (CDCUs) in 16 states to examine the feasibility and effective operations of

CDCU-based "Individual Development Accounts" (IDAs)

final report to the Michigan Family Independence Agency

and the Michigan Legislature

by

Maryellen Lewis, Project Leader Susan Cocciarelli, Specialist

John Melcher, Associate State Director

Center for Urban Affairs Michigan State University

1801 W. Main Street Lansing, MI 48915

517-353-9555 msu.edu/~cua

November 1999 [REVISED]

NOTE: This Web-version has been reformatted as a single-sided text, so page numbering will be slightly different from the printed text.

This report was prepared pursuant to the receipt of financial assistance from the U.S. Department of Commerce, Economic Development Administration . The statements, findings, conclusions,

recommendations, and other data in this report are solely those of the authors and publisher, and do not necessarily reflect the views of the government or the University.

For more information, contact Michigan State University, Center for Urban Affairs Community and Economic Development Program, 1801 West Main Street, Lansing, MI 48915-1097, (517) 353-9555.

MSU is an affirmative action, equal opportunity institution. ii

TABLE OF CONTENTS

ACKNOWLEDGEMENTS................................................................................................ v

LETTERS FROM PARTNER ORGANIZATIONS ......................................................... vi A. Michigan Credit Union League .............................................................................. vii B. National Federation of Community Development Credit Unions ......................... viii

I. EXECUTIVE SUMMARY.......................................................................................... 1

II. OVERVIEW OF PROJECT AND FINDINGS ........................................................... 4 A. Original "Problem Statement" for this study ............................................................ 5 B. Purpose and Scope of Work...................................................................................... 7 C. Methodology ............................................................................................................. 8 D. Summary of Findings................................................................................................ 8 E. Technical Assistance Insights: What kind of help do CDCUs need for this program, and where can they get it? ....................................................................... 15 F. Conclusions: Insights for Michigan feasibility ...................................................... 17

III. IDA BACKGROUND INFORMATION................................................................... 23 A. Individual Development Accounts (IDAs) and CDCUs: The Fusion of Place and Practice............................................................................ 24 B. Insights From the National IDA Demonstration Project: Downpayments on the American Dream Policy Demonstration............................ 27 C. What are IDAs? An Introduction........................................................................... 32

IV. 6 CASE PROFILES OF CDCU-BASED IDA PROGRAMS ................................... 37 A. Indianapolis, IN: Near Eastside Federal Credit Union .......................................... 38 B. Cleveland, OH: Faith Community United Credit Union ....................................... 44 C. Philadelphia, PA: Borinquen Federal Credit Union .............................................. 52 D. Philadelphia, PA: New Horizons Federal Credit Union ........................................ 60 E. Ithaca, NY: Alternatives Federal Credit Union (AFCU) ....................................... 70 F. Burlington, VT: Vermont Development Credit Union .......................................... 74

V. 17 BRIEFS OF CDCU-BASED IDA PROGRAMS ................................................. 80 A. Rochester, NY: Progressive Neighborhood Federal Credit Union (PNFCU) ....... 81 B. Rochester, NY: Genesee Co-op Federal Credit Union .......................................... 82 C. Bronx, NY: Bethex Federal Credit Union ............................................................. 82 D. Newark, NJ: New Community Federal Credit Union............................................ 83 E. Columbus, OH: Capital City Federal Credit Union............................................... 84 F. Chillicothe, OH: HYS Federal Credit Union......................................................... 84 G. The Plains, OH: Appalachia Development Federal Credit Union (ADFCU)........ 85

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H. Minneapolis, MN: Wendell Phillips Community Development Federal Credit Union............................................................................................... 86

I. Leon, IA: So. Central Iowa Community Action Program CU-SCICAP Credit Union............................................................................................. 87

J. Newport News, VA: Newport News Neighborhood Federal Credit Union .......... 88 K. Berea, KY: Central Appalachia People's Federal Credit Union (CAPFCU) ........ 89 L. College Station, Ark: College Station Community Federal Credit Union............. 90 M. Shelby, MS: Shelby/Boliver County Federal Credit Union................................... 91 N. Demopolis, AL: Demopolis Federal Credit Union ................................................ 92 O. Birmingham, AL: NRS Community Development Federal Credit Union ............ 93 P. Los Angeles, CA: Episcopal Community Federal Credit Union........................... 94 Q. Santa Cruz, CA: Santa Cruz Community Credit Union (SCCCU)........................ 94 VI. APPENDICES............................................................................................................ 96 A. Internet Sources on Individual Development Accounts(IDAs) .............................. 97 B. "20 Promising Ideas to Promote Savings in Low-Income Communities"

by the Corporation for Enterprise Development (CFED)....................................... 99 C. "Fifty Ways to Match Your IDA" by Robert Friedman, CFED ......................... 101 D. New Horizons FCU -- program evaluation summary [NOT INCLUDED] ......... 105 VII.FURTHER READING ON CDCUs ........................................................................ 106 A. Overview............................................................................................................... 107 B. Readings................................................................................................................ 107

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ACKNOWLEDGEMENTS

Even more than most studies, this report would not have been possible without the help and generosity of a wide network of people.

Our two formal partners are the Michigan Credit Union League and the National Federation of Community Development Credit Unions, which together represent the broadest range of expertise available to Michigan communities on community development credit unions and CDCU-based IDA programs. We are grateful to the staff and members of the NFCDCU, particularly to Cliff Rosenthal, Cathie Mahon, Deyanira del Rio and Aron Weisner for their assistance and support of this project even when it was only a glimmer of an idea. And we have benefited greatly from our partnership with the MCUL on this project, particularly from Gary Moody's strong interest, advocacy and good humor even when confronted with our idealistic timetables.

Most of all, we appreciate the help and encouragement from CDCU practitioners and members around the country, who shared generously of their time and experience despite the scheduling inconveniences of our extensive road trips to visit their fascinating and diverse communities.

And in Michigan, we are grateful for the interest and support of the MI Family Independence Agency and the Michigan State Legislature which funded this exploratory project, and to Representative Hubert Price for his continuing leadership to bring the sustainable community benefits of the CDCU movement to Michigan.

Maryellen Lewis Susan Cocciarelli John Melcher

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LETTERS FROM PARTNER ORGANIZATIONS

A. Michigan Credit Union League B. National Federation of Community Development Credit Unions

vi

A. Michigan Credit Union League

vii

B. National Federation of Community Development Credit Unions

viii

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