Marisol Federal Credit Union in Phoenix, Arizona started out as the Maricopa County Employee Federal Credit Union, organized by Charles Samuels in 1954. In 1999, with assets of $13 million, the credit union was struggling. The Board of Maricopa County Employee asked their NCUA examiner, Robin Romano, to become their CEO. “I was familiar with the credit union’s issues and the Board knew it was important to address them head-on,” says Romano. “In the early 2000’s we began to grow through mergers with credit unions close to us geographically and with similar memberships. As a credit union serving county employees we’ve always had a high percentage of members of modest means,” notes Romano. “Because one-third of county employees are Hispanic, we were familiar with the Hispanic market and had Spanish-speaking staff.” In 2002 Maricopa County Employee merged with Sun Catholic Credit Union, whose Catholic membership also included many Hispanics. In 2003 the credit union’s name was changed to MariSol Federal Credit Union to reflect the brilliant opportunities and future of the organization and its membership.
MariSol’s main branch sits in downtown Phoenix, an area that is financially challenged and underserved by mainstream banks. Romano had been working with underserved communities within the greater Phoenix area when she was approached in 2008 by Prehab of Arizona in Mesa. Prehab was helping the working poor in Mesa with a wide range of services, including rent assistance and help with utilities, and wanted to start a credit union to combat the influx of payday lenders and check cashers into the Mesa area. “Starting a credit union is hard work,” says Romano; instead she agreed to open a one room branch in the Mesa Community Action Network building two days each week. That same year Romano was approached by Chicanos por la Causa Credit Union. “We were in the midst of the Great Recession and CPLC’s credit union was in deep trouble.” CPLC’s credit union merged with MariSol in 2009.
“Up until the merger with CPLC I hadn’t known about the Federation or the CDFI Fund,” says Romano. “CPLC was a CDFI, and I met the Federation when they called about CPLC’s lapsed certification. The Federation helped me with MariSol’s certification application and we became CDFI certified in July of 2010. The Federation urged us to apply for a CDFI grant, which I wrote with help from the Federation. We got $750,000 to expand our outreach to Hispanics. MariSol had $20 million in assets when we merged with CPLC, whose assets were $5 million. But we also needed to take over CPLC’s loan losses. We were growing and needed capital, which is why the CDFI grant was so important to us. We joined the Federation shortly thereafter and soon we understood the tremendous value this organization brings to the table. We've had an opportunity to learn from best practices in serving low income consumers and financially underserved communities and we've also been able to share our experience with others in the field. Because there are many types of CDFIs—like banks and loan funds--it's very important for credit unions to have an advocate with the CDFI Fund, and that's one of the most important roles the Federation plays--ensuring a level playing field for credit unions, and that the Fund's programs and initiatives work for us.”
MariSol used their CDFI funding to expand their Quick Loan and Pay Yourself Mortgage products. MariSol introduced Quick Loan, a payday like alternative loan, in 2007. “Our FOM was going out to payday lenders – people from every ethnicity, across all income levels, even those with good credit scores. They liked the ease of getting a loan with no questions asked. So we created Quick Loans. It’s a $500 loan and we don’t pull a credit score. You need to have 6 months of employment and an account with direct deposit.”
Another innovative product MariSol created is the Pay Yourself Mortgage. “Arizona was a big foreclosure state. Finding a mortgage from 2008 into 2011 was difficult. On the plus side, people of modest means could finally afford a home, because prices had come down by as much as 60%,” explains Romano. The Pay Yourself Mortgage requires 3% - 5% down. Instead of mortgage insurance, MariSol charges a premium of 75 basis points on the loan amount, which is deposited into an account that can’t be touched for 5 years. At the end of the fifth year, up to 50% of the savings can be used for home improvements like the repair of a roof. After ten years, mortgage holders can access 100% of their savings. “This mortgage was designed for people who aren’t traditionally good savers. On a $100,000 loan the savings can add up to $7,500 over the course of ten years.”
Marisol used some of their CDFI grant to hire a bi-lingual business development specialist. “The best way to get your name known is to participate in community events,” says Romano. “We do about 30 community events each year. We’ve developed a curriculum of basic banking classes like ‘How to Buy a Car’. We hold classes in Spanish and in English in churches, at the Salvation Army, community centers and for county employees. I even teach in the Maricopa County jail. And we’ve also reached out to other CDFIs in our area – we’re working with Neighborhood Housing Services of Phoenix. They were interested in our Pay Yourself Mortgage. MariSol holds the loan while NHS services the loan. We have $1 million in mortgages with NHS now. We just started working with another CDFI on some redevelopment work here in Phoenix, and we got that because we’re the only CDFI certified credit union in Maricopa County.”
Romano is proud of MariSol’s growth and stability, “Our mission is to deliver high quality member services that meet the financial needs of our members while maintaining a strong financial condition. It’s been a lot of hard work and it takes time, but we’ve gained the trust of the community. The CDFI grant that MariSol got in 2010 has helped us grow in assets, loans and deposits. We had $20 million in assets when we merged with CPLC in 2009 and now 4 years later we’re close to $33 million in assets. We’ve tripled the number of checking accounts since becoming a CDFI. Now we’re applying for another CDFI grant to promote our Pay Yourself Mortgage. This time I’ve hired a Federation CU Breakthrough consultant to write the grant, and I’ve had a fabulous experience with them. I will never write another CDFI grant myself!”
For more information on the Federation’s consulting services, contact CUBreakthrough@inclusiv.org.