The following interview with Opportunities president and CEO, Cheryl Fatnassi, was conducted by NerdWallet, a company focused on helping people lead better lives through financial education and empowerment.
Based in Winooski, Vermont, Opportunities Credit Union was named the most prolific real estate lender among all credit unions in its asset category (<$50 million) in September 2011. A large part of their lending success can be attributed to their programs working with multilingual financial literacy, credit building and debt counseling programs for Vermont’s diverse population. As a community development credit union, Opportunities is committed to serving low-income, underserved and rural populations. Cheryl graciously took time out of her busy schedule to speak with NerdWallet about Opportunities’ unique programs.
NERDWALLET: HOW WOULD YOU DESCRIBE THE POPULATION SERVED BY OPPORTUNITIES?
Cheryl: A large percentage of Vermont’s residents are low-income and unbanked. We also have quite a few immigrants and refugees living here. Most of Vermont is rural, and housing is very expensive compared to the average local salary. There are also not a lot of transportation options to get to where the jobs are, so you’re at a major disadvantage if you can’t afford a car. Opportunities has a variety of lending programs designed to address the unique challenges of living in Vermont.
WHAT FINANCIAL LITERACY SERVICES DO YOU OFFER?
We offer between 140 and 160 financial literacy classes a year on dozens of topics, such as budgeting and saving. After attending basic classes, people can take advanced ones like our homebuyer class. We want all our members to develop enough financial literacy skills to meet their goals. Most of our classes target specific populations: seniors, people in prison, the homeless, battered women, and kids, just to name a few.
All our materials are tailored to that population’s unique financial needs. When we teach budgeting, it’s always realistic and only deals with income that population is likely to have, and services they can afford. We even have classes for people who can’t read. We just explain financial concepts with pictures. We want to make people feel welcome in our classes regardless of what level they’re starting at.
TELL US ABOUT YOUR MULTILINGUAL FINANCIAL LITERACY CLASSES.
The Vermont immigrant population hails from 40 countries, so we’ve worked hard to make our services more accessible. We originally did classes with translators, but then we realized people were still going home with materials in English, which wasn’t exactly helpful, so we trained people to conduct classes in five different languages. Right now, we offer classes in Arabic, French, Swahili, Nepalese and Kurundi.
Many of these classes are versions of our standard financial literacy courses, but we also have a “Banking in the USA” class for immigrants, which helps them understand differences between their home banking system and what they’re likely to encounter here. Some people come from countries with no formal banking system at all, so the U.S. financial system is especially confusing and daunting for them. We talk a lot about negotiating. Here, we don’t bargain at the grocery store, but we bargain when buying a car or buying a house. People also don’t understand how or why they can get different rates on financial products, so we talk about that.
TELL US ABOUT YOUR PROGRAMS FOR BUILDING CREDIT.
We have a variety of programs and financial products to help people build and repair their credit, and pay off their debts. We also employ three full-time, HUD certified financial counselors. Members can apply online to meet with one for free. Once you schedule a meeting, they’ll help you identify your financial goals and the current barriers to getting there. They’ll also help you define steps and put together a written action plan, which might include opening a savings account to set aside payments, and attending financial education classes. Those who enroll in one of our matched savings or rewards programs may be eligible for up to $2,500 in matched savings after two years, or they may be eligible for smaller rewards for regular saving habits. We currently have 600 people in debt retirement and credit building programs like this.
DOES OPPORTUNITIES RECEIVE FINANCIAL ASSISTANCE FROM OUTSIDE ORGANIZATIONS?
We rely on a number of outside programs to provide down payment and closing cost assistance to our members, and grants often provide the rewards and matches for savings and timely loan payments. We originate and service over $65 million in loans through the Vermont Housing Finance Agency, the USDA Rural Development Program, and Fannie Mae, as well as partners like the Federal Home Loan Bank of Boston, which provides equity builder grants. We also receive grants from local organizations like the Sisters of Mercy, the Vermont Network Against Domestic Violence, Women Helping Battered Women and the Association of Africans Living in Vermont. They provide the funding for very low cost loans, along with rewards for savings and timely payments.
HOW MUCH FINANCIAL ASSISTANCE CAN HOMEBUYERS RECEIVE?
Many of our homebuyers qualify for grants between $10,000 and $20,000 that are forgivable after 5-7 years. Oftentimes, a grant is the difference between people being able to afford a house or not. Many of people we lend to are not only first-time homebuyers, but also the first generation in their family to buy a house. Before they come to us, they might not even know they can afford one. Giving people access to grants also improves the likelihood they’ll make their payments on time. People are more motivated if they know they have equity in their home and can receive assistance with their payments.
WHAT ABOUT HOMEBUYERS WHO DON’T WANT GRANTS OR DON’T QUALIFY?
Families can earn money for buying a house in other ways too. Some opt to accumulate money over time through a special savings account, called an IDA (Individual Development Account). We manage 12 federal IDA programs and have our own in-house IDA program as well. Federally funded IDAs aren’t just for homes, though. Our proprietary IDA’s can be used to pay off collections, accumulate money for rent and utility deposits, and fund other items that create financial independence. People can also save money toward a different goal, such as a car, their education, or their business. Regardless of the objective, we try to match goals and reward people for saving every month.
I HEAR YOU’LL ACCEPT LANDLORD REFERENCES IN LIEU OF A TRADITIONAL CREDIT HISTORY WHEN SOMEONE APPLIES FOR A LOAN.
That’s true. We accept non-traditional credit references, which means we’ll let people use utility bills, phone bills, or records from their landlord to prove they can make payments on time. These are just some examples, however. If a member has another regular bill that they pay on a monthly basis, we will verify this and include it in our underwriting decision process. If you don’t have a credit score (or a good credit score), you might be able to prove your ability to make payments in other ways, and so we honor that.
DO YOU FEEL LIKE ANY OF OPPORTUNITIES’ PROGRAMS ARE RADICAL?
Not really. Not all of our programs are conventional, but everything we do ties directly into our primary goal of helping people build skills and achieve financial independence. We’re teaching the people of Vermont how to save, and how to navigate the U.S. banking system. We’re always trying to improve our financial products and services to reach people in the best way possible.