In 2015, Matanuska Valley Federal Credit Union in Palmer, Alaska, offered a promotion on signature loans at its Waipahu, Hawaii, branch office.
It turned into way to help people become U.S. citizens.
A segment of the credit union’s membership is composed of immigrants from Micronesia and the Philippines who petition for citizenship.
The signature loans were offered up to $7,500—roughly the cost of citizenship—at terms up to 48 months.
“Our normal terms for signature loans is 36 months but we wanted the payment to be a little more reasonable so we extended it to 48 months,” says Jaccie Gaines, consumer lending manager for the $430 million asset credit union.
Rates on the loans were tiered, starting at an annual percentage rate of 6.99%.
“The challenge for the members that apply for these loans is that they haven’t established a lot of credit history, Gaines said. “That puts them into what we call the C category. What we find is one credit union will give them a $1,500 loan and another financial institution might give them $2,000. They were going to several financial institutions to get the amount they needed to meet the cost of the petition.
“We decided to take a look at their financial situation,” Gaines continues, “and if the income was there, they could come to us for a single loan.”
Gaines says the credit union has to look beyond the typical credit profile to make the petition loans.
“We’ll look at job stability and capacity to pay,” she says. “Sometimes it’s just about being a loyal member of the credit union or having a family member who’s a long-term member.”
The credit union ran the promotion from August through Dec. 2015 and attracted more than $600,000 through 162 loans.
“We really helped a lot of members,” Gaines says, “We hope to offer it again this year.”