Affinity Plus Federal Credit Union’s decision to open a new branch in the St. Paul, Minn., Midway neighborhood was part of its strategic focus on serving the community.

The $4.1 billion asset credit union had closed a branch near the state capitol due to the pandemic. The nearby Midway location had a lot of foot traffic and offered a greater community focus.

“We’re a low-income-designated credit union. This means the majority of our members fall into low- and moderate-income levels, says CEO Dave Larson. “We’ve done really well with that focus. We’re the first credit union in the Midway neighborhood. Our board has put more emphasis on us to be more strategic about where we’re putting branch locations.”

The credit union fully invests in the low-income communities it serves. In 2021, it merged with White Earth Reservation Federal Credit Union, which was chartered to serve the tribe but was advised by NCUA to seek a merger partner. Affinity Plus absorbed the credit union, retained all employees, and remained dedicated to serving the tribe, building a new branch on the reservation in 2022.

When it invests in underserved communities, Affinity Plus accounts for members’ specific needs. At the Midway branch, for example, all employees are bilingual in Spanish or Tagalog.

It also offers early pay, which gives members access to their regular paychecks up to two days early, improving cash flow and creating better money management.

It’s not simply access to services that makes a difference to the community but ease of access, says Amber Shanley, director of branch services.

‘We don't answer to Wall Street; we answer to our members.’

Dave Larson

“One of the differences is being able to offer services on the same day,” she says. “We have a lot of individuals who are unbanked or underbanked, and they're using debit cards provided by their employer that charge them fees when they swipe it or when they go to the ATM. Here, they’re getting an instant-issue card without the fees and with free direct deposit.”

Most important is the message those accommodations send, Larson says. “We don’t judge.”

He adds that the credit union is simply fulfilling its obligations as a not-for-profit financial cooperative.

“I’ve been CEO for 10 years,” Larson says. “Not once has our board told me that we need to drive harder at profit. They want to run a financially healthy organization, and they want to help people. We’re here to serve Minnesotans and the underserved and unbanked populations.”

He notes that Affinity Plus eliminated nearly all of its punitive fees, including overdraft charges, during the pandemic. Members are allowed a $100 allowance without an overdraft or courtesy pay fee.

“We learned a lot about ourselves through that, and a lot about our members,” Larson says. “We also listened to our members and employees. And obviously, we brought it forward to the board to make a permanent change with it.”

Among the results of those changes:

• 50% of savings from the elimination of nonsufficient funds fees went to the most vulnerable members: those with credit scores below 620 and within low- or low-middle income groups.
• Members across all demographics use the $100 allowance. But those who benefitted most were lower income, lower credit tier, and minority and younger members.

• Millennials continue to be the largest demographic group to pay courtesy pay charges. But the percentage of millennials paying these fees declined from roughly 14% to 9% because of the $100 allowance.
• Nearly 30,000 members saved $4.9 million from June 30 to Dec. 30, 2022, due to the changes. Some members benefitted as many as 14 times.

What’s more, Larson notes the changes simply reflect the makeup of the area Affinity Plus serves. Foreign-born residents comprise 20% of St. Paul’s population.

The credit union has partnered with the City of St. Paul to develop a New American Loan Program for up to $2,000 to cover the costs of obtaining U.S. citizenship. The program recently expanded to Minneapolis.

“We don't answer to Wall Street; we answer to our members,” Larson says. “We’re proud of what we're doing to help people, and that continues to drive our passion.”