One of the oldest credit unions in San Antonio did something new on Friday, opening a branch at the Neighborhood Place, a local nonprofit community center located on the West Side.
River City Federal Credit Union has established a micro-branch staffed by two employees in the center where it has partnered with a social services organization, Family Service, for several years to provide financial literacy programming and banking services.
With a mission of ending intergenerational poverty, Family Service has offered its clients free financial counseling services for about 10 years — coaching individual families on ways to reduce debt, build credit and save money.
By most measures, the organization has done just that. In 2021, several hundred people applied what they had learned at the Neighborhood Place to reduce delinquent debt, 51 opened savings accounts and a dozen were able to buy a home.
But “we can’t do that by ourselves,” said Mary Garr, president and CEO of Family Service, a 120-year-old nonprofit.
That’s why Family Service was already partnering with River City Federal Credit Union, referring clients to the institution for services like checking and savings accounts.
“They’ve been working with us for several years now as we’ve helped to bring people out of a significant financial challenge in their lives onto not just a stable platform but on one that can help them move forward,” Garr said.
Family Service established the Neighborhood Place in 2006 as a local community center designed to address the specific needs of a neighborhood where 23% of residents live below the poverty line.
Such alternative services often come with high fees, anywhere from a few dollars to $10 to cash a check or up to $2 or more per money order, according to Forbes.
Services at the Neighborhood Place include classes in behavioral health, parenting and English as a second language, and free access to a computer lab and job training programs. In the Financial Empowerment Center at the Neighborhood Place, clients can learn the basics of creating a budget and building savings.
Mainstream vs. alternative
About 6 million people in the U.S. are considered “unbanked or underbanked,” according to the Federal Deposit Insurance Corporation. Those are people without access to mainstream financial products such as checking or savings accounts, instead relying on alternative services like payday lending or check cashing services.
“In a lot of zip codes, they don’t always have adequate financial institutions that are able to meet their needs, and too often, we have populations that struggle with … predatory lending practices,” Garr said.
Meanwhile, banks have doubled down on closing branches nationwide since the pandemic began, according to a report by the National Community Reinvestment Coalition.
As online banking has become more prevalent, more than 4,000 banks closed their branches since 2020. However, National Credit Union Association data shows credit union branches have maintained levels and have plans to add more.
There are at least five other banks and credit unions in the area of the Neighborhood Place, said Kim Arispe, director of economic stability at Family Service.
“We still work with a significant number of clients that brick and mortar is still easier for them — especially upfront to be able to build that relationship and be comfortable receiving those services,” Garr said.
With 14,000 members and $149 million in assets, River City Federal Credit Union operates five branches in San Antonio, where it first opened in 1936.
In addition to its main downtown location, the credit union also has branches in the South Texas Medical Center area and in the Northwest and South sides of the city.
Opening an office on the West Side has been a longtime goal of the credit union, which already has a lot of members residing in the area, said Mike Sanchez, chief retail officer at the credit union.
“That was one of the reasons but also because we know that there are so many unbanked individuals in that community and there are financial institutions there that don’t offer low-cost services to that community,” Sanchez said.
In 2016, River City was certified by the Department of the Treasury as a Community Development Financial Institution. CDFIs are mission-driven financial institutions that provide financial services to economically disadvantaged individuals within underserved communities.
Membership in the credit union is open to anyone who lives, works, worships or attends school in Bexar County.
The credit union branch at the Neighborhood Place will be located in a small office and will offer a full slate of services except for handling coins.
It will be open to clients and the public on Mondays and Wednesdays from 9 a.m. to 1 p.m.; Tuesdays and Thursdays from noon to 5 p.m., and on Fridays, 9 a.m. to 4 p.m. The branch is closed on weekends.
In connection with the opening on Friday, the credit union offered a free seminar on budgeting, saving and credit scores.
“My hope is that this branch will increase financial access and break down barriers for those in surrounding communities, ultimately providing financial opportunities for our neighbors and having a positive impact in San Antonio,” stated Jeff Ivey, president and CEO of the credit union.
This article has been updated to clarify that the new credit union branch will handle cash except for coins.