Hartford Business Journal

8 Hartford Business Journal • July 15, 2019 • www.HartfordBusiness.com FOCUS By Gregory Seay gseay@hartfordbusiness.com J ayne Defrancesco, a Hamden grandmother raising her three grandkids, wanted a reliable car. Defrancesco's old car needed extensive repairs after 300,000 miles. So, in March she turned to Nutmeg State Financial Credit Union, a Rocky Hill member credit cooperative specially designated to financially aid low-income members and the community. After enrolling in Nutmeg's "Working Wheels" borrower-financial literacy pro- gram, Defrancesco — following several weeks of financial tutoring — bought a 2010 Nissan Rogue with 100,000 miles for $8,600 using a relatively low-interest auto loan from the credit union. The program isn't just another public- relations attempt by a lender to help low- income and credit-challenged residents. Instead, it's Nutmeg's latest initiative as a Community Development Credit Union and Community Development Financial Institution (CDFI), national and federal designations, respectively, aimed at boosting low-income consumers' financial IQs, as well as access to loans and other financial services. Only four Con- necticut credit unions have the CDCU designa- tion, making them eligible for millions of dollars in grant funding from the U.S. Treasury, among other ben- efits. In exchange, they must issue 60 percent or more of their lendable funds to target markets, including disen- franchised neighborhoods or communi- ties, and minority populations. Three out of four of those credit unions also have CDFI designations, whose other members include unregulated commu- nity development organizations, such as Hartford's HEDCO, which stakes "micro'' and other loans to small businesses. They're all playing a role in trying to chip away at the 20.8 percent of Con- necticut residents who are unbanked or underbanked, according to the Federal Deposit Insurance Corp. Dana Clark, Nutmeg's vice president for lending, said the credit cooperative identified that its target market, includ- ing Hartford, Middlesex, Tolland and New Haven coun- ties, and parts of Fairfield County, was populated with minority and low-income resi- dents who coveted better access to banking services. "It is for this rea- son we made the strategic decision to become a CDFI and CDCU credit union," Clark said. Her credit union's CDFI/ CDCU designa- tions, Clark said, offer a way for it to deepen its market- ing connection with its neediest members, while simultaneously improv- ing consumers' accessibility to check- ing/deposit services, auto loans, mort- gages and home-equity lines of credit. Beyond that, the tags allow Nutmeg and other similar credit unions to stand out in the highly competitive banking sector that has extended its reach online and onto mobile devices. "It's an opportunity for them to show they're different from a normal bank,'' said Jules Epstein-Hebert, program officer for Inclusiv, a New York CDCU- support organization that provides tutorial and other programming and funding access to its steadily growing ranks of CU members. Inclusiv's programming enables member CUs to fulfill their community- support obliga- tions under their state and federal banking char- ters. Commercial banks and thrifts, too, have similar obligations. Its more than 260 members have provided fi- nancial education and counseling to some 8.5 million U.S. consum- ers, and issued affordable and equitable loans totaling $77.1 bil- lion, according to Inclusiv's 2019 first-quarter report. Along with Nutmeg State, one of Connecticut's largest credit co-ops with $455 million in assets, Hartford's Untapped Market Local credit unions see opportunity as community-development lenders Community development credit unions in CT A community development credit union is a member of the National Federation of Community Develop- ment Credit Unions. It must meet certain lending and servicing guidelines and focus on serving low- and moderate-income individuals in communities with limited access to sound financial services. There are four Connecticut CDCUs: Cencap Federal Credit Union, Hartford East End Baptist Tabernacle Federal Credit Union, Bridgeport Members Credit Union, Greenwich Nutmeg State Financial Credit Union, Rocky Hill Dana Clark, Vice President for Lending, Nutmeg State Financial Credit Union Jayne Defrancesco, of Hamden, with her Nissan Rogue SUV, purchased recently with assistance from Nutmeg State Financial Credit Union. Nutmeg is among niche lenders whose community- development charters enable them to offer an array of financial-literacy programming and services to needy members. HBJ PHOTO | BILL MORGAN

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