Creeks, Rivers, Deltas

Like the Mississippi River for which its home state is named, Hope Credit Union draws power from many places and instills new life for everyone in its path.

 
 

Water from 31 different states eventually finds its way into the Mississippi River, which provides a vital flow of ecological as well as cultural and economic resources to the Delta Region.

Yet for all its majesty, distress is nothing new to this region — neither is division, nor isolation. Racial oppression runs deep throughout the region's history, marked by dreadful lows as well as more recent, yet hard-won, highs.

In 2005, one of the worst storms in recent decades racked up $100 billion in damages, claimed roughly 2,000 lives, and struck both a physical and psychological blow that fundamentally altered the course of the Gulf Coast for years to come.

By the time Hurricane Katrina let up, the recession was right around the corner, leaving residents questioning whether they were under siege once more or if the blows had ever really stopped.

In the capital city of Jackson, MS, the upper and middle class started to move away from less affluent urban neighborhoods, with reputable financial institutions hot on their heels. Those of modest means who were left behind soon fell victim to predatory payday lenders who rapidly exacerbated residents' financial issues.

Although he passed away decades before, blues legend Skip James — who himself was born in Bentonia, MS — sums up the financial outlook of these communities well in his song "Hard Time Killing Floor Blues."

"You know that people
They are driftin' from do' to do'
But they can't find no heaven
I don't care where they go"

Yet a funny thing has happened amidst all that difficulty — people have maintained hope, strong and steady as the Mississippi River. In a time and place where trust was hard to come by, the people of Jackson chose to believe in the love of their families, the collective strength of their community, and in many cases, the good graces of one particular financial institution willing to stick it out where the vast majority of others had failed or failed to try.

CU QUICK FACTS

  • Hope Credit Union
  • HQ: Jackson, MS
  • Assets: $186.7M
  • Members: 28,419
  • 12-MO Share Growth: 20.28%
  • 12-MO Loan Growth: 4.15%
  • ROA: 0.19%

The story of this institution, Hope Credit Union ($186.7M, Jackson, MS), actually begins with a Community Development Financial Institution called Enterprise Corporation of the Delta (ECD).

In 1994 a group of Mid-South civic and business leaders recruited Bill Bynum to take a $1.5 million grant from The Pew Charitable Trusts, which had to be matched 3:1, and establish a loan fund to stimulate manufacturing opportunities in the region.

"Our charge was to help create jobs that paid decent wages, offered good benefits, and used business development as a way to transform the Delta," Bynum says. "We took a $6 million loan fund and were nuts enough to think we could make a dent, but that's how things started."

Soon after, the group expanded its focus to support financing for healthcare, affordable housing, and small business, more specifically tasking itself with helping to fill the historical capital gap that had long existed in the region for underserved entrepreneurs, women, and people of color.

"There were no megabanks here, and outside of agriculture lending, financial options for these folks were pretty much limited to pawn shops and payday lenders," Bynum says. "This meant there was far more demand than we actually had liquidity to respond to."

A year later, Bynum started Hope Credit Union to serve the members of Anderson United Methodist Church. The organization soon grew to include multiple church SEGs and a couple thousand members, with basic offerings like savings, deposits, and some consumer loans.

"This was the first credit union to be chartered in Mississippi in about eight years, and to my knowledge there haven't been any state-chartered credit unions created here since," Bynum says. "We didn't immediately realize what a valuable piece of paper that charter was."

Despite these early wins, the reality of the momentous tasks both organizations faced soon grew evident. Hope Credit Union found itself in need of growth and scalability as well as additional product development capabilities, while ECD was in need of liquidity to meet the growing demand for its services. For these and many other reasons, it made sense for the two groups to finally join forces in 2002.

"You can only go so far with volunteers and if we wanted to be the primary financial service provider for our members, we needed more infrastructure and more capacity," Bynum says.

Prior to this point, Bynum had worked directly with the Clinton administration to establish the New Markets Tax Credit Program — which had been designed to bring investments into low-income, economically distressed areas — and ECD was awarded a $15 million allocation of these credits.

Using proceeds from the sale of the credits, along with vetted commercial loans that were placed onto the smaller organization's books, ECD was able to make a secondary capital investment into Hope, becoming its new primary sponsor.

In addition to bringing both organizations together under the Hope umbrella, the partnership expanded the breadth of services and products available for both parties.

For example, through the credit union, ECD — which was eventually renamed Hope Enterprise Corporation — was now able to raise liquidity through insured deposits as well as build a mortgage portfolio organically instead of buying loans from others. At the same time, Hope was able to take advantage of ECD's strategic connections and financial resources as well as use the safe incubator space that organization provided for riskier or yet unproven business lines.

In just a few years, the cooperative became one of the nation's fastest growing credit unions in terms of membership, tripled its employee base, and grew its assets twelve fold.

"We had plans to grow aggressively using the New Markets Tax Credits, but not as aggressively as we ended up growing after Katrina hit," Bynum said. "We felt it was important to do everything in our power to help the people of the Gulf Coast recover."

Deserts In The Delta

It's not a lack of water but of financial options that has the Delta region reeling. According to Bloomberg, more than 1,800 bank branches have closed since 2008, 93% of which were in low-income neighborhoods. As Hope Credit Union's CEO Bill Bynum points out, many of these closures occurred within the institution's own footprint.

"We've got a lot of communities out there that are at risk of dying on the vine if they can't get access to non-predatory financial services," he says. "Just because banks leave, it's not like people stop needing homes, stop sending their kids to school, quit starting small businesses, or give up on addressing the basic needs we all want for our families."

 

Although Hope was one of the first organizations to use New Market Tax Credits to fuel growth — and also remains the only credit union in the country to take advantage of the program — that's not the only support on which it has relied. At other times in its history, Hope has made use of grants from the Ford Foundation, the W.K. Kellogg Foundation, the Treasury Department, loans from religious orders, and other outside support.

According to CFO Richard Campbell, Hope is also a NCUA-certified Low-Income Credit Union (LICU), a Treasury-certified Community Development Financial Institution (CDFI), and a member of the National Federation of Community Development Credit Unions (aka a CDCU).

All together, these support structures not only help the credit union achieve its financial mission by offering benefits such as expanded business loan caps, they also support its philanthropic and operational goals.

Despite the many changes Hope has experienced since its initial iteration, the credit union's primary mission remains as it was in the beginning, to have a team and set of products that could connect unbanked or under-banked individuals to affordable, practical services in a way that they would perform. And data indicates that a vast majority of Hope's current members fall into this demographic. For example, one-third of new members joining last year were unbanked at the time and had no financial account anywhere else.

A series of strategic expansions into other states has also greatly expanded Hope's borders in the past 10 years, and grown its asset size by around 25%, according to Alan Branson, the credit union's chief operating officer. This includes three mergers since 2008 alone, all of which were with organizations that primarily served low-income and poverty-stricken markets.

As a result, Hope's footprint now includes more than 28,000 members and 16 branches spread throughout Mississippi, Louisiana, Arkansas, and Tennessee. Through some strategic investments in new technology, operational efficiencies, complementary partnerships, and an essential redesign of the traditional branch model, Hope is actually aiming to double the number of individuals and locations it serves over the next three years.

"For example, the community of Terry, MS, is losing a regional bank, and in 2014, Hope has an opportunity to go into that market and help people help themselves," says Robert Gibbs, Hope's chairman of the board, who was a Circuit Judge for the Seventh Judicial District of Mississippi before eventually opening his own private practice. "We've done the same thing successfully in Utica, MS, in 2013. I'm proud that we are continuing to do those things that needed to be done and serve communities that others won't."

There's nothing easy about the work that Hope does — if it were, everyone would do it. But this toil is never in vain.

"We'll go where we are wanted and needed," Bynum says. "But as a credit union, we're also uniquely positioned to respond to the needs of the underserved. It's in our DNA."

As a result of this unwavering conviction, Hope is slowly, surely moving its members and its communities into a new normal, and a future that Skip James himself may have dared to wish for as he finished out some of the last lines in his lonesome ballad…

"Well, you hear me singin'
This old lonesome song
People, you know these hard times
Can't last us so long"

Who? What? Where? When? Why?

We provide a look beyond the credit union at other key events and happenings in this history-rich region.

Who?
Medgar Evers was an Army veteran, an athlete, an Alcorn State University graduate, and a tireless civil rights activist who frequently worked with the Regional Council of Negro Leadership (RCNL) and the National Association for the Advancement of Colored People (NAACP).

Tragically murdered in 1963, Evers was shot in the back by an individual who walked free for 30 years before finally being convicted. His martyrdom, and other events like it, helped pulled back part of the curtain on the abundant racial injustices occurring at that time. Bob Dylan wrote the song "Only A Pawn in Their Game" about Evers, and a Brooklyn University as well as the Jackson International Airport were both eventually renamed in his honor.

What?
The Mississippi Delta is birthplace of the Blues, which along with Jazz, is considered one of the most influential American-born music genres. This region has produced more notable blues musicians than any other throughout the years, including notable names such as Son House, Muddy Waters, B.B. King, and even that other King, Elvis Presley, who was born in Tupelo, MS.

Where?
Located at 119 Pinehurst Street in Jackson, Mississippi is the former home of the 1973 Pulitzer Prize winning author Eudora Welty, author of "The Optimist's Daughter." In addition to becoming a National Historic Landmark and drawing visitors from far and wide, the home was also designed by the same architect who built this city's first skyscraper.

When?
December 1540, Spanish explorer and conquistador Hernando DeSoto becomes the first European to travel inland into what will — hundreds of years later — become known as the state of Mississippi. Following his death from fever in 1542, his body is reportedly sunk in the Mississippi River to hide the evidence from the local tribes, who had been told he was immortal in order to deter violent conflict.

Why?
Don't mess with good hygiene. In Tylertown, MS, it is unlawful for someone to shave in the middle of the street. And in Temperance, MS, the law requires all dogs being taken for a walk to wear diapers.

 

 

 

April 11, 2014


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