Counter payday lenders to protect the community
Listening to the community allows Karen Madry to stay in touch with the 8,000 members of Federal Credit Union Afena.
“Our community is at the heart of everything we do, especially the work we do to provide alternative lending solutions to underbanked and low-income people,” said Madry, president and CEO of the co-op. $ 84 million asset credit in Marion, Ind. “Like many very poor communities, we have a proliferation of high interest loan stores and payday lenders who take advantage of financial vulnerability. It’s our job to educate as many people as possible that there is a better way.
Madry’s commitment to providing low-interest loans as an alternative to payday loans led to the creation of “Bridge the Gap,” a unique partnership between the credit union and the Community Foundation of Grant County.
The loans provide members with emergency funds between $ 200 and $ 2,000 and are available exclusively to people earning less than 80% of median family income. Repayment terms vary by loan amount, but favor small payments, typically less than $ 50 per month, to reduce the stress on family budgets created by predatory payday loans.
Madry has developed an additional program to help members who have already fallen into the clutches of high interest loan stores.
“We have members with loans from finance companies who pay up to 50-60% APR, sometimes more,” she says.
“It’s our job to educate as many people as possible that there is a better way.”
Refinancing high interest debt saves members thousands of dollars in interest. Madry recounts how a member reduced his monthly payments by $ 1,200 when he refinanced his loans through the credit union.
Designing loan products that meet the needs of the community has helped Afena Federal Credit Union thrive, but growth can be difficult.
“My biggest challenge is figuring out how to strengthen my staff in a society where people increasingly seek to work remotely while ensuring that members receive excellent service when they are in the branch”, explains Madry. “The older members are more physical, while the younger ones are tech-savvy. We are constantly trying to thread this needle.
Credit union stocks and loans were up more than 12% year-over-year at the end of October, while assets were up more than 15%. The introduction of remote deposit capture, instant issue debit cards, and a credit card rewards program in 2022 will allow Afena Federal Credit Union to continue to grow.
Madry, who joined the credit union as CEO in May 2014, thrives on a busy schedule, relying on her faith and daily prayer to “fill the well.”
Being part of the CUNA Small Credit Union Committee provides networking and inspiration, including “permission to think outside the box”.
“I think the reason so many small credit unions are disappearing is that they are stranded like they always have been,” says Madry. “We have to be continually ready to reinvent ourselves. “