CDFI Connect Q&A: Helen Godfrey-Smith, CEO of Shreveport Federal Credit Union

  • "Life happens to people. It happens to well-to-do people and less-well-to-do people."

Feb. 26, 2014 (CDFI Connect) – Shreveport Federal Credit Union, founded in the late 1950s as a small working-class lender, has long since blossomed into a regional force that caters to a growing market.

Under the leadership of CEO Helen Godfrey-Smith, it specializes in reaching out today to what it calls the "unbanked and underbanked."

As a CDFI and a Member of OFN, it is also an aggressive proponent of consumer education, promoting in its literature the importance of "thrift, savings and the wise use of credit" and advocating programs that help their members "manage and control their financial well-being, thus moving them to financial sustainability."

CDFI Connect spoke recently to Godfrey-Smith from her office in Shreveport.

Q: What, in your own words, is your core mission?

A: Our core mission is to empower the residents of our communities―wherever we have a presence―whether by personal financial enrichment or small-business support or by expanding financial literacy, by expanding access to capital, or by offering entrepreneur assistance in becoming market-ready.

Q: How do you find members?

A: Many of them come to us because their financial position prevents them from functioning in the regular marketplace. We do what traditional financial institutions don’t do. We help people improve their credit scores, we teach them how make good decisions and good choices, we nurture a savings mentality, we encourage discipline, we advocate a management mentality.

Q: What's been the growth trajectory at Shreveport Federal Credit Union?

A: We were founded in 1956 as a tiny operation, and by tiny I do mean tiny. We grew very gradually, and by 1983 or so we had just under $2 million in assets. Then we got a lot bigger as we pushed out into the market, which obviously saw a tremendous need for the services we provide. We now have over $100 million in assets. We have eight full-service branches in Louisiana and Mississippi and thousands of members. I think it's fair to say we’ve made a difference in countless lives in this region.

Q: Do you have a favorite story along those lines?

A: Yes! There's a small company here called Metropolitan Circles that provides various sorts of healthcare support and that was started by three young men from Grambling State University who came to us in 1999 with a proposal in which they wanted to borrow $20,000. I took the chance on those young men ― at the time we were much smaller than we are now ― but I gave them a letter and line of credit. They now employ 160 people in our region, including in Alexandria, Shreveport and Natchitoches. That’s an example of how we will take some extra risk on people we believe in; we want to give people a chance, and ― let me tell you ― 160 jobs in this area is not a small number.

Q: Do you do mortgage lending?

A: We do. Our specialty there is low- to moderate-income mortgage lending, and today we have about 13 or 14 million dollars in that market. It's not only about lending, as far as we’re concerned, though, and a good part of our mission there is to help potential home buyers become market ready. We do home-buying seminars and we have a credit-score program in which our members come and sit with us and work with us through a direct relationship we have with Experian. We are able to help them walk away with a plan that they can follow so that over the course of 6 to 12 months they’re in a position to improve their credit score. Our best success story actually is the one seen in our mortgage portfolio. We typically have zero percent delinquency over 60 days, and you can chalk a lot of that up to the borrower-education effort we put into it. There are rough patches, sometimes, but those can be managed.

Q: How can a credit union help manage a member's "rough patch"?

A: The first thing we remember, and that we demonstrate in our member relationships, is that life happens to people. It happens to well-to-do people and less-well-to-do people, and the difference is that those in the higher echelon of the economic strata can recover quicker than low- to moderate-income folks. That’s why we’re a little more liberal than a traditional bank might be in getting people through that rough patch. Our belief is that we all deserve a chance to have our own home, a chance to have a reliable car so we can have a job. For every car loan we do, by the way, we count that as one job created, and 66 percent of our loan portfolio is for new and used cars, which speaks to one of our management strategies: We don’t have a lot of unsecured debt on our books. So even if a loan goes way past due, we have options. We may lose 10 percent on a charge-off, but we’ll still have something to back us up. We don’t have many charge-offs, though.

Q: What do you get out of being a CDFI?

A: We get certain resources non-CDFI credit unions are missing, and we get rewarded for the community investments we make. Just having access to the CDFI Fund in itself is a huge opportunity, and the CDFI Fund appreciates the fact that credit unions are what they are. Rather than putting millions into something that has regulations or requirements that can really slow things down, the CDFI Fund looks at somebody like us and says, "Hey, they’ve already proven themselves to be accountable to their community."

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