Written by: Mike Senecal
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
In a Nutshell: Many banks and credit unions are weighing the pros and cons of maintaining a branch presence in an era of digital transformation. But California’s AltaOne Federal Credit Union considers a personal touch essential to its mission of serving underserved communities and rectifying financial inequalities. Its personalized approach includes communitywide education and philanthropy to help more people feel comfortable with and benefit from financial services. AltaOne is a credit union dedicated to expanding essential financial services and providing support to more Californian communities.
Data from the Federal Deposit Insurance Corporation (FDIC) indicates that 4.2% of American households are unbanked, meaning they lack access to financial services. Although that figure is the lowest since the FDIC began tracking unbanked and underbanked individuals in 2009, it still translates to more than 5.6 million U.S. households.
As the world’s fifth-largest economy, California may seem relatively immune to financial exclusion. Yet, as the nation’s most populous state, it’s home to the highest number of unbanked and underbanked people compared to other states.
Embracing digital transformation may seem a logical strategy for companies interested in expanding access to financial services. But many underserved Californians, particularly within predominantly Hispanic immigrant communities, continue to prefer cash — a preference rooted in cultural and historical mistrust of traditional banking institutions.
That’s where AltaOne Federal Credit Union comes in. Chartered in 1947 as an institution for employees of the Naval Ordinance Test Station in Ridgecrest, California, AltaOne now has 12 branches and manages almost $1 billion in assets.
Through its community charter, it serves everyone who lives, works, worships, volunteers, or attends school in Kern, Inyo, Mono, and northern San Bernardino counties.
More than that, Director of Marketing and Community Development Chris Lowe said AltaOne is a credit union dedicated to addressing income, wealth, and access inequalities. Its mission is to leverage its status as a federally designated Community Development Financial Institution.
“We focus on doing what’s right for our communities,” Lowe said. “We have evolved according to the needs of the people we serve.”
That means giving digital transformation its due and upgrading the AltaOne platform to provide state-of-the-art digital financial services incorporating AI. It also calls on the credit union to remember the essential personal nature of financial transactions and money management.
To that end, AltaOne explicitly seeks out areas within its service footprint where unbanked and underbanked individuals and businesses operate in banking deserts. When AltaOne is the only game in town, it strives to be everything to everybody by giving people all the tools they need to succeed.
“We have to hit every single part of the financial picture for them — or have access to partners who do,” Lowe said.
Meeting Members and Businesses Where They Are
AltaOne’s 2022 expansion through the acquisition of a bank branch in Ridgecrest typifies its inclusionary approach, which applies to businesses and consumers alike. When the bank, a competitor, announced it wanted to exit the market, AltaOne stepped in to enable the institution’s predominantly business customers to maintain their existing relationships.
Another credit union might have consolidated services after purchasing a bank branch in a small town where its headquarters resided. But the AltaOne solution gave valuable continuity to those businesses.
“Even though Ridgecrest is our hometown, we still wanted to keep this other option available to the people who banked there,” Lowe said. “We worked with the bank so we could still serve those people locally.”
Things are a little different in Bakersfield, which is by far the largest market in AltaOne’s service area. There, the focus is on consumer, auto, and mortgage lending to new U.S. residents with an Individual Taxpayer Identification Number (ITIN) instead of a Social Security Number.
“A lot of what we do through ITIN, especially the home loan pipeline, gets members out of private loans so they can have an affordable house payment and make living the American dream accessible to them,” Lowe said.
Others, especially the newest immigrants without much financial history in the U.S., simply need to transition from the cash-centric habits and traditions of their countries of origin. AltaOne makes it easy by meeting those prospective members where they are, which is often in farm fields where they labor.
Cash is not only increasingly old-fashioned, it’s also unsafe to keep large amounts of money at home. Through a partnership with a local radio station, AltaOne goes into neighboring fields on Fridays during the growing and harvest seasons with an offer of a $500 credit card.
In the small county of Inyo, AltaOne partnered with Friends of the Inyo, a nonprofit that supports protection and care for the land and water of the Eastern Sierra, during Latino Conservation Week. The nonprofit brought to the credit union’s attention that the National Park Service was going cashless.
With four national parks in the area, it could be a hindrance to Native and Hispanic communities to access the national parks. The idea for the event was born out of removing barriers to enjoy nature and the outdoors. By being able to provide debit and credit cards to these communities, they can enjoy nature while being cashless.
“We had a staff member standing on the corner in front of our Bishop Branch with a ‘Free Tacos’ sign to get people to come,” Lowe said. “And it worked! People did come and learn about how we could assist them.”
A Hands-On Approach to Financial Wellness
AltaOne employs a similar approach to financial education, meeting credit union members, community members, students, and businesses with resources they can use to take the next step on their financial journey, whatever that means for them.
“These are all in-person,” Lowe said. “We do events online also, but we get a better turnout when it’s face-to-face.”
Budgeting workshops teach the basics of financial management and planning to optimize short- and long-term outcomes. Homebuying workshops go through the nuts and bolts of the purchasing journey in all its facets.
“It’s literally how to buy a home — what to look for, what lists to make, and how to decide what’s right for you,” Lowe said.
Lowe stressed that AltaOne’s homebuying workshops are more than invitations to take out a mortgage. The same is true of its small business workshops. Instead of an exhaustive sales pitch to take out a loan, AltaOne offers practical advice along with guidance on how to qualify and obtain a loan.
The credit union tailors fraud awareness workshops to senior citizens. Team members strive to include an educational piece during typical member encounters and communications. The credit union’s mantra is that everyone who comes to a presentation needs to leave with something they learned.
That’s doubly true in area schools, where AltaOne helps build the next generation of credit union members through career days and Bite of Reality simulations that give financially naive teenagers a taste of the deferred gratification necessary for credit building and financial success.
The emphasis on in-person events does not mean the credit union deemphasizes online resources. A partnership with the notable financial wellness provider GreenPath provides members with tools, credit counseling, financial literacy materials, webinars, and other materials to help them achieve their financial fitness goals.
Online, AltaOne also offers a blog, a podcast, a fraud alert center, and many other resources to help members, consumers, and businesses stay safe online while using digital financial services to their best advantage.
“Our goal is to improve lives, so we’re eager to help the people and communities we serve,” Lowe said.
Charitable Initiatives Help Members Give Back
Research by the California and Nevada Credit Union Leagues demonstrates that California credit unions deliver billions in financial benefits to members while championing financial health and community empowerment.
As one of 36 federally designated Community Development Financial Institutions (CDFIs) in California, AltaOne leverages grants and subsidies to help communities provide more affordable housing options and extend financial services to more consumers. CDFI status also helps AltaOne do its part to build more accountable and responsive workforces and support more small businesses.
Through the AltaOne Foundation, AltaOne pursues a charitable giving strategy focused on employee volunteerism and support for small charities that can produce a significant impact. AltaOne encourages staff to volunteer at nonprofits that have personal meaning to them.
Even part of the nominal fee members can pay to skip a loan payment a couple of times annually goes to the foundation.
Although AltaOne still donates to many of the big national and international charities, support for local nonprofits carries a mutual, local, beneficial effect. That’s because, Lowe said, the credit union never forgets the source of the funds.
“It’s not our money; it’s our member’s money,” Lowe said. “It’s their investment in their community.”
Most of the foundation’s grants are small, usually around $1,000. Teams in each of the credit union’s branches pick grant recipients from their areas after reviewing the applications entirely in-house.
A point of pride for Lowe is how AltaOne partners with other credit unions. It exemplifies the credit union’s willingness to work across organizational boundaries to get things done as part of the credit union ethos of people helping people.
“There’s still work to do to level the financial playing field,” Lowe said.
