DEI Renaissance: People Trust Community FCU

DEI Renaissance: People Trust Community Federal Credit Union

North Little Rock, Arkansas Chartered in 2022 https://www.ptcfederal.org/ Even before the idea for People Trust Community FCU and People Trust Loan Funds were born by way of an Arkansas barber shop, it was first a part of a boy’s dream to help his mother climb out of poverty. Arlo Washington grew up in low-income housing in Arkansas, with his single mother and two siblings. He had always dreamed of helping his mother escape poverty, but she passed away two weeks before his high school graduation. His whole world was turned upside down. “I didn’t know what to do next,” Washington says. “She never got the home she always wanted, and I wasn’t going to make her proud of me and lift her out of poverty. How will I change the narrative? How do I go from here to breaking the cycle of generational poverty?” A Haircut and a Dream As a child, Washington had become inspired by the barber business – he would often exchange his services sweeping up hair on the barbershop floor for a haircut. “I learned so much being there, sitting and listening to all of the stories and community concerns. Barbers are the cornerstones of the brick buildings, the pillars of a community, and this was a sure way for me to create a better future for myself and to help my community along the way,” Washington explains. After Washington graduated from barber college in 1997, he wanted to open his own shop. But, without any credit or the qualifications needed to receive a traditional loan, he hit a brick wall. Three years later, with a $1,750 student loan check from a local university, he finally opened his first business. As he made money, he re-invested back into his business. He continued to add more chairs and more stations until the shop was fully staffed. “Business was booming so I did it again and again – and 27 employees later I wanted to do more,” Washington explains. What was his next move? In 2008 he opened Washington Barber College. “I realized it could be a career for some and a stepping stone for others,” he says. “What it did for me, it could do for them.” A Solution to the Credit Desert Up until 2009, there were 234 brick-and-mortar payday lending companies in the state, and more than 200,000 Arkansans utilizing these risky services. Fortunately, in 2009 law was passed to ban predatory payday lenders from operating within the state of Arkansas. While lawmakers were effective in eliminating predatory lending, there weren’t alternative financial products and services available for those low- to moderate-income communities who relied on payday loans. Additionally, recidivism rates and poverty were on the rise. Systemic racism in the financial services industry expanded the racial wealth gap in Arkansas. “Arkansas became a credit desert,” Washington recalls. “I kept hearing stories of generational poverty and how unbanked families were struggling to survive. I was seeing the need for access to affordable credit and capital in low-income communities for individuals and small businesses just like mine.” Washington knew what his next step would be. He launched People Trust Community Loan Fund, a Community Development Financial Institution (CDFI) certified by the CDFI Fund in 2016. People Trust Community Loan Fund is sponsoring the credit union. Since its inception in September 2022, the credit union has been serving low- and moderate-income individuals and families who would not otherwise have the opportunity to qualify for safe and affordable financial products and services. “In an effort to stop the bleeding in these communities, People Trust emerged out of an unmet credit need,” Washington explains. Credit Union on a Mission Washington and his team are proud of the work they have done thus far, but their mission is not complete. “Creating a pathway to credit and access to capital has provided significant relief to underestimated populations who had no hope of ever getting out of poverty,” says Washington. However, the racial wealth gap is being exacerbated, according to Washington, due to the extraction of wealth, not enough circulation of resources, a lack of financial education, and restricted access to credit. Additionally, brick-and-mortar financial institutions are scarce in lower-income communities. People Trust Community FCU is working to change all of that in the Little Rock area. Over the last five years they have grown tremendously in loan volume and customer base. “We are on a mission to restore confidence in the financial system through access to cooperative credit and to close the racial wealth gap in Arkansas,” says Washington.