Notes from the Field: Cooperative Finance Creates Economic Opportunity in Rural Communities

Cathie Mahon, Federation President/CEO recounts her recent visit to rural Alabama, where hyper-local cooperatives drive financial inclusion in low-income communities

I recently had the opportunity to visit rural Eutaw, Alabama and meet with the board of long-time Federation member FOGCE FCU. I was joined on my travels by Dan Letendre, Senior VP at Bank of America and a long-time CDFI credit union supporter. Among those in attendance were Carol and John Zippert, founding members of the Federation of Southern Cooperatives, which serves rural and urban communities through cooperative economic development, land retention, and advocacy to build collective wealth throughout the South.

Dr. Carol Zippert is also president and founder of FOGCE FCU, formerly called the Federation of Greene Country Employees Federal Credit Union, which opened in 1975 to serve the underserved residents of Greene County Alabama, one of the most impoverished counties in the nation. Under Carol's stewardship, the assets of the credit union have grown from $25,000 when it first opened to $1.4 million in 2018.

The credit union provides vital access to credit and savings and serves as the lifeblood for so many in the county. While this credit union may be labeled "small" at $1.4 million in assets and almost 800 members, when you consider the population of this rural county is less than 8,500 people, they have almost 10 percent market share of the county's total population.

And despite Greene County's high rates of poverty, FOGCE FCU has delinquency rates below 1 percent. How do they keep delinquency so low? As community organizers, FOGCE staff know what resonates with their members, always reminding them that the money they're borrowing is from the community -- that this money comes from your neighbors' savings.

This ethos has served both the credit union and the community well, as clearly demonstrated a few years ago when the credit union drove out the only payday lender operating in the in the county, because people in the community knew the credit union was the better choice. The payday lender couldn't survive because it had no business.

This trip drove home the Federation's recognition of the importance of supporting these strong and committed "hyper-local" financial institutions, which serve as the best -- or often, the only -- real choice for low-income individuals and families. We're proud to have credit unions like FOGCE FCU in our membership because the financial access they provide to these communities truly embodies the spirit of financial inclusion.

In cooperation,

Cathie Mahon
President/CEO