Paul Phillips

A Heart for Service

CU leader embarks on bold effort to serve people who lack access to affordable financial services.

October 2, 2013

At a strategic planning session a few years ago, directors and key executives at Freedom First Credit Union, Roanoke, Va., focused on one vital question:

“If we weren’t here, who would care?”

From the discussion arose a new commitment.

“We said, ‘Let’s be different,’ ” recalls Paul Phillips, president/CEO. Under Phillips’ leadership, Freedom First embarked on a bold effort to serve people who lack access to traditional financial institutions.

“In doing so, we’ve breathed new life into the credit union and given our work purpose,” Phillips says. “Our skill sets are evolving to include such things as grant writing and leading community collaborations to do things for-profits either would not or could not do. It’s been a fun journey.”

In 2010, Freedom First obtained designations as a community development credit union, a low-income credit union, and a community development financial institution. It also created products and programs designed specifically for low-income people, who comprise 61% of the credit union’s members.

One such program is Responsible Rides, a collaboration with community nonprofits and Enterprise Car Sales. Borrowers get not only a loan, but also classes in personal finance and vehicle maintenance.

Most of the loans go to single minority mothers with credit scores below 600 and annual incomes of no more than $18,000. Phillips reports a “manageable” delinquency rate for the $1 million portfolio.

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He remembers the first borrower, who arrived to make her first car payment only to find the lobby door locked on a Saturday.

“She started crying because she was so proud of making that first payment,” Phillips says.

The woman soon realized the drive-through was open. For the first time in her life, she used a drive-through to conduct financial business.

Freedom First also participates in the Federal Home Loan Bank’s Set-Aside Program to issue forgivable loans for home weatherization, repairs, mobility adaptations, and more.