Bringing economic opportunity and post-Katrina relief to the Mid-South.
You’ve probably heard of food deserts—locations in which at least 33 percent of inhabitants reside more than one mile from a supermarket or grocery store. But “bank deserts” are very real, too. Underserved by proper banking institutions, these areas most often develop in places with low-income residents and within communities of color. They create fertile ground for predatory lenders and check-cashing companies that charge unfair, exorbitant fees. The Mississippi Delta is one such bank desert. However, Hope Credit Union m has provided an important banking oasis for the Delta since 1995.
HOPE is a community development financial institution (CDFI), certified as such by the federal government. The concept behind CDFIs is to ensure the availability of capital and financial tools in a responsible and affordable manner, particularly in vulnerable areas. Because CDFIs Photo from Veri Soda are rooted to their communities, they often take special care—by providing financial and business counseling and assistance to borrowers—to ensure their loans succeed. Where mega-banks won’t go, community development banks and credit unions like HOPE help fill the gaps.
Initially organized as a small church-sponsored credit union, HOPE’s original goal was to serve and empower low-income residents of Jackson, MS. As demand grew, HOPE had to find a way to grow to meet more of the area’s needs. The credit union and its work was popular, and many member churches signed up to sponsor HOPE and help it grow.
However, it wasn’t until 2002, when the nonprofit Enterprise Corporation of the Delta (ECD) became its primary sponsor, that HOPE had the resources and connections to significantly expand throughout the mid-South. ECD had a history of providing fair and low-interest loans for commercial, mortgage, and community facilities in financially strained areas of Arkansas. Today, HOPE has 22 branches in Louisiana, Mississippi, Arkansas, and Tennessee, and it offers online banking across the country.
“Almost 91 percent of our mortgages are to first-time home buyers, and our average home buyer has a household income less than $40,000,” says HOPE president/CEO Bill Bynum. “Eighty-six percent of our business loans are in economically distressed communities.”
After Hurricane Katrina wreaked havoc along the Gulf Coast in 2005, destroying homes and businesses, as well as the few resources many of the Delta’s most vulnerable families had, HOPE took on a new role: As one of the few financial agencies already servicing the region, HOPE was in the perfect position to spearhead rebuilding efforts.
“We eventually became one of the primary organizations responding to the needs of low-income people after Katrina,” says Bynum. HOPE grew from 55 staff to over 150 within 18 months after the storm.
HOPE helped channel over $600 million in fair, low-interest loans and other financial services to local businesses and low-income households affected by Katrina, allowing many to rebuild rather than remain displaced.
Then the economic crisis of 2007 hit, before many Delta residents could fully get back on their feet. According to Bloomberg Business, after the recession, banks shut down over 1,800 branches in the US, 93 percent of which were in postal codes in which the household income was below the national median. And as the banks left, predatory and payday lenders flooded the vulnerable low-income markets left behind, including in the mid-South. But HOPE stayed, expanding into the same markets to give people fairer, more responsible financial options.
“Instead of following the trend of other financial institutions, we doubled down,” says Bynum. “If organizations like HOPE don’t step in and fill those gaps, a lot of people are going to be shut out of economic opportunity.”
Even though HOPE has grown at a tremendous rate over the years—today, HOPE has 30,000 members and nearly $300 million in assets—it has never strayed from its core mission to serve low- to moderate-income persons in financially deserted areas. In fact, 36 percent of HOPE’s members did not have a bank account before joining the credit union. As the wage gap grows and the country becomes more diverse, Bill Bynum says HOPE’s goal is to “make sure everyone has the tools that they need to support themselves and contribute to the economy.”
HOPE aims to spread into more bank deserts to help underserved persons beyond the Delta. With a membership in the Shared Banking Network, HOPE offers account holders across the country the opportunity to visit one of over 5,000 network credit unions and ATMs in the US and conduct financial transactions as if they were at a HOPE facility.
“Since the economic recession, HOPE has tripled the number of people we’ve served,” explains Bynum. “And as banks are leaving markets, HOPE is going in and providing people with a full menu of financial services, protecting them from predatory lending.”