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Reaching Low Wealth Households

What is meant by reaching out to low wealth households?

Low wealth households lack the financial resources to help them through income disruptions or financial emergencies. They are asset poor. Given the state of the national economy, many more are joining the ranks of low wealth each day. Reaching out to these households mean offering affordable financial products and opportunities to build wealth. It may mean offering non-traditional products such as payday loan alternatives, credit builder programs, and small savers products. It may mean partnering with community organizations to provide VITA services, IDA programs, micro-business loans, and financial education.

Who are the low wealth households?

Eighty percent of households hold just 16% of total U.S. net worth distribution. So there are a lot of low wealth households to serve. Whereas even high income level households can fall into the definition of low wealth, those households most apt to have low wealth include: * Low- to modest-income households * Minorities * Young adults * Single parent households * Those with disabilities

Why should credit unions care?

Thirty million workers in the U.S. today between the ages of 18 and 64 earn $9 per hour or less. That equates to $18,800 per year and puts a family of four at the poverty level. An added burden to low wage families is the lack of common employee benefits such as health insurance, sick leave and even vacation time. A single catastrophic event such as an illness can leave these families without shelter or adequate food. Helping households of modest means is part of the credit union social mission. The credit union movement began because many consumers had little access to affordable financial markets. Unfortunately, that hasn’t changed. The need for credit union cooperatives serving under-served markets remains as strong today as it did 100 years ago.

What can credit unions do?

Many credit unions have long recognized that serving the ever-growing low-wage and low-wealth markets make good business sense. Affordable, but sustainable products and services help modest income households use more of their earnings to build wealth. The five examples of credit unions included here show a wide range of products, services and community partnerships that exhibit member and community commitment. The partnerships enable credit unions to stretch their effectiveness and outreach capabilities.


Ithaca, NY

Serving Low-Income Households » View details

Alternatives Federal Credit Union uses a Credit Path model to describe where people are situated at various points along a continuum between poverty and self-sufficiency. The credit union uses the Credit Path model as a guide in designing products and services to meet members’ needs at their different points along the path and to help them progress towards successful asset ownership.

Communicating Arts

Detroit, MI

Low-Income Branch » View details

In 2008, Communicating Arts Credit Union opened a new branch within the impoverished community of Highland Park. The majority of residents live below the poverty level. When a community developer decided to build a shopping and office complex in the area, CACU jumped in with both feet. Membership growth increased 10% in 2009, with 25% of those members coming from the Highland Park area.


Harahan, LA

Serving Low-Income Households » View details

ASI and its members are still recovering from the Katrina hurricane. The credit union estimates between 60% and 70% of its members fall into the low income designation; that is, their incomes are less than 80% of the area median family income. While the credit union had a low-income designation pre-Katrina, many of its members are facing even harsher financial situations post-Katrina. More than half of the credit union’s products are targeted towards low-income membership.

Santa Cruz Community

Santa Cruz, CA

Serving Low-Income Households » View details

Santa Cruz Community CU is committed to the community it serves by contributing to lasting social and economic justice. Its core community development programs include child care, financial education, IDAs, VITA sites, and microenterprise lending. To accomplish its community-based mission, it established Santa Cruz Community Ventures, a 501©(3) nonprofit affiliate, to secure outside funds for these programs.

Park Side

Whitefish, MT

Free to Choo$e Initiative » View details

The Free to Choo$e program is a partnership between Park Side FCU and the Community Action Partnership of Northwest Montana to help families of low- and moderate-income take charge of their finances and start to lead lives of choice, not necessity. The whole family is encouraged to participate in a 12-class, structured financial literacy course. To date, 103 families have completed the program.

Documents / Articles

Serving People with Disabilities


Two participants at a recent Life Simulation face the hard realities of living in poverty.
The Life Simulation experience is designed to help credit union employees, volunteers and leadership begin to understand what it might be like to live in a typical low-income family trying to survive from month to month. In the simulation 40 to 80 participants assume the roles of up to 26 families. Some families are newly unemployed, some are homeless and others are senior citizens living on disability payments or raising grandchildren.

During the three hour activity, these “families” are struggling to make ends meet in the simulated month of four fifteen minute weeks. At the conclusion of the exercise (this is not a game), participants will be more aware to the daily realities of many American families. Walking in another’s shoes is a far more effective way to sensitize others to the needs of immigrants and other low-wage working families than from traditional diversity or classroom learning.

For more information, please contact Lois Kitsch at lkitsch@ncuf.coop or 407-616-2409.

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