Special loans support transgender, non-binary, formerly incarcerated, community and small-business members at key junctures.
Alternatives Federal Credit Union began 42 years ago when there weren’t great “alternative” financial options for consumers and small businesses. Our founders' innovation and passion to help people has left a lasting legacy that has led us to hire and retain staff who act as an inspiration web that is strong, connected and looking to meet the next big need in our community.
We take pride in our services, policies, and procedures because they contribute to a better society, a healthier community and a financially sound member. Some of our innovative programs to support our most vulnerable community members include: individual development accounts, Business CENTS (our small business development program), Student Credit Union, the Free Tax Preparation Program, lending for minority and women-owned businesses.
Most recently we have added TransAction, ReEntry Loan Fund, Community Assistance Loan Fund and a partnership with the City of Ithaca, New York, which provided the Small Business Resiliency Fund. Let’s look at each of these newer offerings in turn.
Building the Transgender Empowerment Initiative
In the summer of 2017, the National Credit Union Administration began accepting grant applications for its Underserved Outreach Initiative—which links directly to Alternatives FCU’s mission of serving the underserved. After much discussion among staff, our focus became our transgender and non-binary neighbors—a population often ignored by mainstream institutions. In fact, at the national and state levels, transgender and non-binary people are at a higher risk for unemployment, poverty, food insecurity, violence, lack of housing, health care and predatory financial resources.
Alternatives FCU approached Planned Parenthood of Greater New York for its expertise, as that organization has been proudly providing transgender hormone therapy and preventive health services since 2013. In 2013, there were 28 patients utilizing PPGNY’s transgender services. By the end of 2017, that number had increased to almost 600. With the support of PPGNY, we coined our initiative, “TransAction: A Transgender Financial Empowerment Initiative,” and applied for NCUA’s Underserved Outreach grant, which is available to low-income designated credit unions.
In November 2017, Alternatives FCU was awarded $23,000 from NCUA, backing our partnership and the services we aimed to provide. TransAction provides the transgender and non-binary people in our community with an alternative to high interest rate debt: responsible loans created specifically for their needs. TransAction sets a national precedent as such options haven’t existed in the past. We’re extremely proud of our groundbreaking partnership with PPGNY and hope to serve our transgender and non-binary community members with better options in a caring, compassionate way. We have two TransAction loans on our books so far. One is a line of credit; the other is a term loan.
TransAction has two loan types: a personal loan for one-time expenses related to gender-affirming surgeries and related costs (i.e., travel, lodging) and for transition-related clothing, vocal training, and other needs; and a line of credit for ongoing transition-related care and expenses (i.e., medical care, emotional support, medication, and transportation). The maximum amount offered for each loan is $20,000 with a reduced interest rate.
Supporting Formerly Incarcerated People
Addressing another perceived need in the community, our ReEntry Loan Fund was rolled out in January 2020. It is the first of its kind in the county, designed to provide small loans to those who have been previously incarcerated to help them reintegrate into society.
This initiative was conceived in November 2019, when Alternatives FCU’s business lending analyst, Dante Acquavella, and I attended a three-day summit hosted by Out in the Open at The Root Social Justice Center in Brattleboro, Vermont. There, Acquavella attended a presentation about incarceration and repression. This presentation and the discussion that followed inspired Acquavella to talk with our lending team members about how we might be able to help.
Our CU consulted with local community organizations that support formerly incarcerated community members about what the details and parameters of a potential program could look like. These organizations included the Multicultural Resource Center, Alliance of Families for Justice Ithaca, OAR and the Civic Ensemble. We learned that those released from prison are given a bus ticket and $50, so a loan could be transformative. Loan funds could be used to pay for clothing for job interviews, costs associated with vehicle ownership, Department of Motor Vehicle fees and court fines, utility and phone bills, rental security deposit assistance, and other necessities to truly make a difference in the life of a person re-entering the world from the prison system.
The proposed program received immediate support from members of two internal volunteer teams at Alternatives FCU, the underserved task force and the diversity team.
The resulting ReEntry Loan Fund provides loans of up to $500 to previously incarcerated individuals who have been referred to us by one of the partner organizations. These loans are secured by donations from community partners and Alternatives FCU. We have three ReEntry loans on the books and a few requests/applications in process.
Alternatives FCU invested $10,000 and the Park Foundation invested $25,000 to offset potential loan losses, as the program allows the borrower to qualify based on the recommendation from our partner organizations and without having to meet typical loan underwriting guidelines.
PPP Plus the Ithaca Community
When COVID-19 hit globally, Alternatives FCU was quick to act locally. Before the Paycheck Protection Program guidelines were established, we had already committed to participate because we knew we had to have those funds to support our local businesses.
The City of Ithaca also approached us to be the sole financial institution to administer its Small Business Resiliency Fund. The SBRF had $390,000 total, including Cornell University donating $100,000. Grants, cast as “forgivable loans,” were meant for locally owned businesses with fewer than 25 employees (as well as some other stipulations), and would have 0% interest. The loan would be forgiven if the business was still open and operating on Dec. 1, 2020. We completed 119 SBRF loans and all were forgiven.
While PPP and SBRF were created to support businesses, we then asked, what about individuals suffering from the pandemic? In response to this identified need Alternatives FCU launched the Community Assistance Loan Fund with $1.4 million dollars to lend at 0% interest and no payments for the first three months. The funds are available to individuals, businesses, organizations and nonprofits impacted with a loss of income due to the COVID-19 pandemic, and it is open to anyone in the community. These funds can be used for necessary expenses like rent, food, utilities and medication. We currently have 66 CALF loans on the books and lots more money to lend out.
Alternatives FCU lives the credit union philosophy of “people helping people.” If you want to learn more about how we’re serving our mission, check out the “News” tab on our website. What I hope people will see is that all of this happens in a very small part of the country. We are a one-branch operation with fewer than 50 employees and our commitment to social and economic justice fuels our staff and their innovations.
When I started working at this credit union in 2003 as a teller, I never envisioned staying this long, but I’m so glad I did. I see the positive, impactful change the CU has made in my life and in the lives of others, and I am inspired and dedicated to make sure that Alternatives FCU stands by its promise of “where good things happen.”
Reiley Schoen is chief operations officer at $145 million Alternatives Federal Credit Union, Ithaca, New York.