A new credit union is opening in Kalamazoo. The Community Promise Federal Credit Union will be holding an open house Tuesday at the Edison Neighborhood Association. Community Promise is a community development credit union, which will provide financial services and education to low-income people. It’s opening in the Edison Neighborhood, where currently there are no financial service institutions.
WMUK’s Gordon Evans spoke with the chairman of the Community Promise Credit Union’s board Jim Houston and Lee Kirk, who is the community relations director and has worked to bring a community development credit union to Kalamazoo for the last four years.
Houston says the credit union will provide an alternative to pay day lenders and check cashing services. He says people who rely on those services can end up in a cycle of poverty and have trouble paying back those loans. (Check out a recent Marketplace report on Payday lending) Houston says the Community Promise Credit Union will offer services at a much more affordable rate.
Lee Kirk says the credit union will initially will be driven by volunteers. He says they will be on a tight regulatory leash to start. Most of the credit union’s products will be in the $500-$2500 range. Kirk says the credit union will offer an alternative to pay day loans, which includes creating a savings account.
Financial education will be an important part of the credit union’s mission. Houston says when people apply for a loan they will have to learn about what they’re getting into. Kirk says every time there is interaction with a customer it is a chance to educate and to build trust. He says some of the financial education will take place in Kalamazoo schools.
Both Houston and Kirk say there will also be an effort to reach out to the Hispanic community, which has a high concentration in the Edison Neighborhood. But membership will be available to anyone who lives, works, volunteers or goes to school in the city of Kalamazoo.
Having a community development credit union in Kalamazoo will address an unmet need according to Kirk. He says people at other non-profit groups in Kalamazoo and ministers at churches all say they see the need. Houston says he came from a poor background, and understands that if you have only a little money it’s important that you know how to manage it.