Choices Federal Credit Union is an instrumental financial institution in the Forest Park Southeast neighborhood. The credit union has successfully served the employees, clients and volunteers of eight area organizations that offer social services for low-income communities. Choices Federal Credit Union is becoming one of the key pieces of the puzzle to insure the long-term stabilization of neighborhoods like FPSE. The credit union provides access to capital for persons at all income levels. Phil Minden, the chairman of Choices Federal Credit Union and a FPSE resident, recently sat down with Tara Bolen to talk about what the credit union has to offer the community, their success stories and what they are working on for the future.
TB: What is Choices Federal Credit Union?
PM: Choices Federal Credit Union was founded by eight local social service organizations about five years ago. The purpose of the credit union is to provide affordable financial services and loans to unbanked and under banked families in the St. Louis area. We serve twenty-one social service organizations now which include employees, volunteers, and any clients. So anyone who has ever been a client of their organization can join the credit union.
We noticed that people who have little or no experience with a financial institution find it very difficult to walk into a mainstream bank or credit union and open an account because they usually don’t have a credit history, or if they do have a credit history it’s damaged. The mainstream financial businesses don’t want to have any interaction with them. Our credit union is the stepping stone for such people. We want to prepare them so they can handle their financial needs responsibly. We provide affordable financial services like direct deposit, check cashing, and reloadable debit cards for people so they can have twenty-four hour access to their money. The credit union also provides loans both unsecured and secured, which can act as payday loans. Also, we offer new auto, share secured loans, and credit builder loans, which are ways for people to reestablish their credit.
TB: Do you offer traditional loans?
PM: Yes, we are a savings institution so we have traditional savings account that pays a dividend. We currently don’t offer checking accounts. Most of the members we have are either not ready for checking accounts, or if they had them in the past, they had issues maintaining them. We will write checks on their behalf. We have members that come in every month and we write rent checks & utility checks for them, but otherwise we refer them to other institutions to obtain a money order.
TB: What’s the benefit of joining the credit union?
PM: Members to the credit union can get access to really low cost financial services. If an individual has an account with Choices, it only takes a ten dollar deposit to open other accounts. They can cash checks for free instead of relying on check cashing outlets which in turn saves them a lot of money. Also, an individual can borrow unsecured money up to $1500.00 based on their credit score. We have risk based lending guidelines. Even if you have bad or no credit you can at least get a three-hundred dollar loan from us as long as we can establish that you can pay it back in a timely manner. We also refinance payday loans and car loans. People will come to us that have payday loans are paying one-hundred to two-hundred dollars a month, but never seem to touch the principle of it. We can refinance those loans and spread their payments out over twelve months which could bring it down to fifty dollars a month and they are done.
TB: What is your role at the credit union?
PM: Currently, I am the chairman of Choice Federal Credit Union. I lead the board and I’m also a volunteer teller there. I know a lot about the day to day operations because I had to learn it all to become a teller.
TB: What has been some of the major past accomplishments of the credit union?
PM: In addition to getting some sizable grants from the US Treasury which we are very proud of, our greatest accomplishment is the impact that has been made on individual members’ lives. One successful story involves a member from Habitat for Humanity. She signed up to buy a home through them. Her debt to income ratio was too high, which means she had too much debt. The main issue on her credit history was a car loan. She bought a car from used lot and self financed right there and she was paying over 30% interest. We were able to refinance that loan for her and bring the rate down to about 14%, spread the payments out longer, and that brought her debt to income ration down so she could qualify to buy a house. Three months later she moved into a home purchased from Habitat for Humanity.
TB: Are there any projects you are currently working on?
PM: We are very excited about entering into providing loans for tenants to buy homes that are living in the neighborhood. There are over two-hundred and fifty single family homes that have been built throughout the city of St. Louis under what is called the “Low Income Housing Tax Credit Program”. A number of those units are starting to expire from having to stay a rental for fifteen years, or are just starting to expire. The owners may choose to sell those to the tenants. In many cases they are owned by not-for-profit organizations so once the houses expire out of the program, the not-for-profit may choose to sell them to the tenant. None of the not-for-profits have a process to do that so we stepped in and helped them to set up a loan product in which their tenants can purchase the homes and the not-for-profit stays involved with the tenant.
TB: How can people get more info about your credit union?
PM: Come visit us at our location at 4471 Arco Avenue in the Forest Park Southeast neighborhood. We are open 3 days a week right now, Tuesday & Thursday from 4pm to 7pm, and Saturday from 9-noon.
If people want to call in they can do that too 535-9000. I encourage people to drop by and talk to one of our tellers or managers about the benefits they can get when they join.