By: Merry Pateuk, SVP, Industry Engagement, PSCU/Co-op Solutions

The credit union philosophy is founded on the idea of “people helping people.” While credit unions are committed to providing services to members and the community, it’s also important to support the more than 300,000 credit union employees who also experience financial challenges. At PSCU/Co-op Solutions, we believe that financial wellness starts with our own employee family, and one of the ways we provide financial support when employees need it most is by partnering with the Community Impact Fund (CIF).

The Community Impact Fund is a 501(c)(3) organization that partners with credit unions and other organizations to provide zero-percent interest loans and saving incentives to employees. The CIF operates as a go-between for the organization and the employee, providing privacy and dignity to the employee. The credit union or organization promotes the program to their employees, while the CIF handles all applications and loan repayments and connects applicants with one-on-one loan support, financial counseling and financial education resources. If employees default on their loans, the CIF provides flexible repayment plans.

While any employee can experience temporary financial strain due to unforeseen circumstances, these loans have the greatest impact on employees who are defined by the United Way as ALICE^© — asset limited, income constrained and employed. ALICE describes a growing number of families who are working, but due to childcare costs, transportation challenges, the high cost of living and more, are living paycheck to paycheck. These workers often struggle to keep their households from financial ruin, so a zero-interest loan can be an incredibly powerful tool to help these families get back on their feet.

In addition to providing the loan, employees who make their payments on time are given 10% of the loan back as a rainy-day fund. This incentive encourages employees to stay on track with payments and serves as a way to provide education on the importance of funding a savings account. Employees are also provided formal financial training as a requirement for taking out the loan.

At PSCU/Co-op Solutions, the Human Resources (HR) department directly handled the employee hardship loan program before partnering with the CIF. The HR department was processing about 20 loans a year. Through the CIF, PSCU/Co-op Solutions has assisted more than 100 employees annually by providing loans without the HR team having to be involved in the employees’ finances. Since the partnership began about a year and a half ago, PSCU/Co-op Solutions has seen 114% donation utilization, meaning that money loaned has already been repaid and is being loaned out again to other employees in need. Overall, PSCU/Co-op Solutions has seen only a 5% default rate on the loans, in which case the loan turns into a grant for the employee.

WEOKIE Federal Credit Union has also partnered with the CIF for the past two years, providing 70 employee loans during that time. Through their partnership with the CIF, WEOKIE employees also have the opportunity to support a coworker and their family with a one-time gift during the holidays. “When our staff are struggling, there is no better feeling than to be able to step in and provide a helping hand during a time of need,” says Sarah Flanagan, Manager of the WEOKIE Foundation. “We aim to offer financial coaching to support our employees on their financial journeys. When they feel empowered to manage their finances, they can then pass on this confidence to our members.”

For Mike Scheid, Executive Director of the CIF, the power of a loan program is its ability to prop up credit union employees with assistance so that they can be receptive to financial education. “There are lots of platforms that provide financial education – but when you’re struggling, that’s the last thing that you are thinking about,” Scheid said. “We seek to meet the need first, then follow that with education.”

Scheid also shared that credit unions can take advantage of a Charitable Donation Account to invest in a variety of expanded investment options that would otherwise be impermissible by the National Credit Union Administration (NCUA). Up to 5% of a credit union’s net worth can be invested in an account, and the financial institution can keep 49% of the returns. The other 51% must be donated to an organization of the credit union’s choosing. What better option than to invest in your organization’s people?

By partnering with the CIF, your credit union can ensure that financial wellness starts with your organization, then branches out to your membership. Learn more about the CIF at https://communityimpactfund.org/. 

In her role as SVP, Industry Engagement, Merry Pateuk fulfills PSCU/Co-op Solutions’ strategic objective of leveraging the cooperative’s scale to advocate on behalf of the credit union industry. She cultivates relationships between PSCU/Co-op Solutions and local, state and national organizations that support credit unions and works collaboratively with industry partners to ensure alignment on key topics and a cohesive voice to strengthen credit unions’ position in the market.

Merry champions PSCU/Co-op Solutions’ efforts with numerous other system partners and is actively engaged in committee participation with Filene Research Institute, Credit Union Miracle Day and Credit Union Cherry Blossom Ten Mile Run, African American Credit Union Coalition, CUES and as a member of the Board of Directors of America’s Credit Union Museum. Merry also earned the Credit Union Development Educators (CUDE) and Africa Development Educators distinction from the National Credit Union Foundation.