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Partnerships Before Products: How LES People’s FCU Drives Systemic Change

Last updated: August 13, 2024

We all know that products are a credit union’s bread and butter, so to speak. But a “product-first” mentality can result in more transactional relationships with your members, not to mention a product mix that may not fully meet their needs.

This month, we talked to Alicia Portada, Director of Communications and Community Engagement at Lower East Side People’s Credit Union, about how they focus on following the need, keeping boots on the ground, and centering more vulnerable communities when it comes to their expansion strategy. We also tackled this month’s BIG question:

What if credit union marketing efforts were less product-focused and more partnership-focused? What would that look like in practice, and how could this approach help realize The Credit Union Difference?

Key takeaways:

Follow the need. There are lots of businesses out there that make assumptions about what people need and want to push their solutions. Sure, they might do some focus groups, but a far more effective approach is to really stay close to the community you serve and always make sure you’re listening. That’s what the Lower East Side People’s Federal Credit Union does so well.
A partnership approach can ensure the right product mix. And again, this comes back to listening. When you’re partnering with other organizations who have boots on the ground, you’re going to get a more nuanced understanding of the real challenges people in your community are facing. I loved Alicia’s example of how her credit union created a program to help drivers achieve car ownership rather than renting cars at exorbitant rates.
A partnership approach is also crucial to a credit union’s expansion strategy. There’s been a bit of a growth frenzy, so to speak, in the credit union movement in recent years. A lot of credit unions are pursuing really aggressive growth strategies, sometimes through mergers and acquisitions, but I so often worry that some have lost track of their WHY in the process. I love seeing a credit union expand in a targeted and sustainable way that, circling back to the first takeaway, really follows the need.

References

Read the full transcript:

Katie Stone:
Welcome to another episode of The Remarkable Credit Union podcast. We created our podcast to help credit union leaders think outside of the box about marketing, technology, and community impact. The Remarkable Credit Union is brought to you by PixelSpoke, a digital marketing agency that works with credit unions to create user-friendly, high-converting, award-winning websites. As a B Corp and an employee-owned cooperative, we believe that business can and should be a force for good.

Each episode we bring on expert guests from the credit union and broader cooperative movement for conversations about the intersection of marketing and social impact.

Our goal is to challenge your preconceptions about business as usual, and provide you with actionable takeaways that you can use to grow your membership, improve the financial health of your cooperative and better serve your community. I’m Katie Stone, I’m CEO and a co-owner here at PixelSpoke.

Kerala Taylor:
And I’m Kerala Taylor, the director of Marketing and Impact, and also a co-owner at PixelSpoke. Today we are going to be diving into our big question, which is what if credit union marketing efforts were less product focused and more partnership focused? What would that look like in practice, and how could this approach help realize the credit union difference?

So today I am so excited to welcome Alicia Portada to help us deconstruct this question. She has worked at the Lower East Side People’s Federal Credit Union for 12 years. She started there as director of marketing and currently serves as director of Communications and Community Engagement. She’s also very active in her community serving on the board of the Cooperative Economic Alliance of New York City, where she helps strengthen economic relationships among various types of cooperatives. And she is the board treasurer of her own housing cooperative. Previously she was board co-chair for New Immigrant Community Empowerment, otherwise known as NICE, an organization that helps new immigrants build social, political and economic power. And Alicia is originally from Peru. She came to New York City after winning the visa lottery, making her the first person in her family to move to the United States. Alicia, thanks so much for joining us.

Alicia Portada:
Hi, everybody. Thank you for the invitation.

Kerala Taylor:
We met at the Inclusive Conference back in May where Inclusive offered a site tour of your credit union and the neighborhood. And I was just so fascinated by the Lower East Side People’s Federal Credit Union’s history. I feel like it’s a little different from so many credit union origin stories. I’ve heard so many times that classic story of a group of employees who got together and pooled funds in a cigar box. That’s a great story too. But your credit union was started by neighborhood activists when the last bank branch closed in the neighborhood. So can you tell me a little bit about how that history has shaped who you are today?

Alicia Portada:
Absolutely. When the last bank branch in our neighborhood closed, the Lower East Side Federal Credit Union was born from the activism of the 1980s period marked by the neighborhood’s deterioration, rising crime, crack epidemic, and significant disinvestment in housing. Our community activists rallied when they heard that the Manufacturer Hanover Bank was leaving the Lower East Side, leaving the neighborhood without any banking services in a hundred square mile area. Dedicated community activists rallied when they heard the Manufacturer Hanover Bank was leaving the Lower East Side, leaving the neighborhood without any bank services in a hundred square mile area. These activists managed to force the bank to stay in a unique way by converting the bank’s infrastructure into a credit union thanks to the Community Reinvestment Act. Manufacturers can over settle with a joint planning council. That was a diverse group of individuals representing the Lower East Side, and the building became a tenement house.

The bank space itself transformed into the home of the Lower East Side People Federal Credit Union. In the first week hundred accounts were open, and from then on it took a lot of courage and creativity to remain open. Actually until 2010 when the credit union finally could sustain itself solely from operational income. So what inspires me the most is the spirit of activism that continues to define our credit union.

I work with and continue to meet some of the very people who founded our credit union and other community groups in the neighborhood. Their commitment to the Lower East Side Peoples has been a powerful influence on our organization and is very contagious. I take pride in joining this fight and in getting people excited about it too. There is still much to be done, and we are working on adapting and evolving to better support the families, businesses, and organizations that make our neighborhood resilient today.

Kerala Taylor:
That is such an inspiring story. Thank you for sharing that. I did not know the full story. It has kind of all the elements of a scrappy startup story and in an industry when there aren’t really that many scrappy startups these days. I love to hear that, and I’m always inspired by stories of community members coming together and doing something positive.

I really felt that energy when I toured your credit union, and not just your credit union but the surrounding neighborhood and its cooperative infrastructure. We went to a few community gardens, we went to a food co-op and I just love to see all these different cooperatives cooperating with each other. So I’m just curious if you can talk a bit about how your credit union contributes to a broader cooperative movement, both in your neighborhood but also across New York City?

Alicia Portada:
Yeah, Lower East Side People’s has been a strong ally of the solidarity economy and the cooperative movement. For years we’ve provided vital support for Housing Development Fund Corporations, HDFC. These are housing co-ops, right? Funding them, many of them self-managed housing co-op buildings to keep them afloat. Additionally, we have extended the affordability of our individual accounts offering savings accounts for businesses, organizations and other co-op organizations with a little as $25.

When our policies allowed, we customize our products to serve a specific sectors within the solidarity economy. For instance, when drivers co-ops wanted to buy their own cars instead of renting at exorbitant rates from say Uber, we created a program to help them achieve car ownership with better rates than they would have gotten it anywhere else. On a more individual level, and I think this is practiced by other people at the organization, their participation with other organizations. But I volunteer work with the Cooperative Economic Alliance of New York City, CEANYC. And this has allowed me to get closer to many other forms of cooperatives and attempt to form economic connections with different cooperative. Say worker co-ops, food co-ops, housing co-ops. And for example, we ask, “How can a worker co-op be connected with a housing co-op?” This ties might be not immediately clear, but they are there, right? Because worker owners live in housing co-ops or aspire to, and many housing co-ops need the services that these worker co-ops provide.

This has been more evident to me when joining the board of my self-managed housing co-op. I must confess, it comes with a lot of stress due to the steep learning curve of learning about housing regulations and operations. But it forces us to work together, seek support from the movement and as a consequence really creates lasting community bonds. But honestly, I believe that the most meaningful way for someone to be part of the cooperative movement is to understand how you fit into it, recognizing both the benefits you receive and the commitments you have to make. It might begin with something very simple as opening an account at a credit union. Over time as you experience the value and perhaps give up a bit of convenience, you start making that account and your membership more active. And then you can have your primary account at a credit union. For example, I always say I never ask Amazon to do the next day delivery, but now it is the norm.

Similarly, there are conveniences that all their for-profit commercial banks provide that you can forgo, which won’t significantly impact you, but your support and your money can greatly benefit the cooperative movement.

Kerala Taylor:
I love that. I can relate to so many things as someone who’s been trying to wean myself off Amazon for quite a while, and understanding the trade-offs of convenience. And also at PixelSpoke grown cooperative, and it has been a very steep learning curve. We converted back in 2020. We understand the rights and responsibilities that come with that, but I think, I’m sure, Katie, you can relate to this, but we still very much feel like we’re learning how to co-op, so to speak. It’s not always intuitive how to make decisions and get things done together.

Katie Stone:
Yep. So true. So, Alicia, I wanted to back up a little bit. You were touching on housing and housing cooperatives, and I think we can all acknowledge that rising house costs are a huge issue across the US. Certainly here in Portland, Oregon it’s a big concern, and according to the Council for Community and Economic Research, the cost of housing in Manhattan is a staggering 404% higher than the national average.

So I’d love to hear how do you help ensure that lower income populations are able to afford to live in your neighborhood? And I’m particularly interested in your advocacy work around the community land trusts and the products and services you offer for Housing Development Fund Cooperations, HDFCs?

Alicia Portada:
Right. For our HDFC buildings, which are limited equity and income restricted, we offer loans in the credit union, right? Offer loans with low monthly payments and no prepayment penalties, to help these buildings with their cash flow now until they are able to sell a unit or receive a flip tax. And they pay a bigger portion then of the loan, or maybe pay off the whole loan completely, right? Furthermore, our current advocacy centers on creating a public bank that would repurpose the municipal deposits currently housed in commercial banks into projects like community land trusts and other affordable housing models to help fund them to make them sustainable.

Also, one thing we should keep in mind is that the Lower East Side where our main branch is, right, and the East Harlem community where we have our second branch in Manhattan have the highest concentration of public housing. So even though gentrification is rapidly growing, there are many New Yorkers in our neighborhoods that need our services. And the residents can solicit loans from us, and we can facilitate payment plans that fit their monthly budgets.

But I think a big way to advocate for affordability is by spreading information about affordable options. I had no idea about HDSE’s buildings before working at the Lower East Side People’s, and now I live in one. This personal experience of living, and now helping manage one, right, give me that expertise to promote these options to the community and to speak up, and my credit union when defining policies or changes and policies for this specific sector.

Katie Stone:
So true. Education is such a key part of this whole picture and getting the word out, and so that folks know the options available to them. So that’s really impressive how you all are approaching this. You mentioned that you have a second branch in Harlem, I think you said, and I was going to ask about that next. I know you’ve expanded beyond the Lower East Side. Can you talk a little bit about your expansion strategy? How do you decide where to open a branch, and how do you continue foster that close community connection in new location that’s so central to your identity?

Alicia Portada:
Yeah, the second branch is in East Harlem, right? And I think that we had a bit of experience with expansion through mergers and partnership. By far the most successful and sustainable expansions that we have, have been when partners are actively involved, right?

And particular this one, the one in East Harlem, which has a lot of similar demographics as the Lower East Side, but it’s less gentrified. We merged with then Union Settlement Federal Credit Union. And one important thing was that I had worked there just a couple of years prior. And I knew the community, and of course I knew the partners. So our approach was very respectful. We committed to the existing staff, reach out to partners before coming in. We kept the location for a while and adopted a branch name to reflect that community. So now it’s called the East Harlem People’s Federal Credit Union, right?

This has worked very well. This is the second-biggest branch that we have, but also we have another branch in the North Shore of Staten Island. Staten Island was known back then as the Forgotten Island. We don’t call it like that anymore. And we had strong partners there working with the immigrant community. And together with our first version of our mobile van branch, we set up camp every Wednesday at their sites.

The community quickly learned about us and sought our services such as IT application assistant, checking accounts, credit building loans, one to four family mortgages as well. This is a very residential area. There are more houses there than co-ops and apartments, like in Manhattan. And this branch actually is currently our fastest growing branch. This is where we get in the majority of our membership. And now for example, with all this experience, we are currently working on opening a branch in The Bronx through a more intentional partnership.

We learn of several coalitions in The Bronx working on different initiatives and researching the possibility of opening a credit union there. This group decided it was not cost-effective to open a new credit union but rather partner with an existing one. And that’s how we connected from here. The Bronx Financial Access Coalition, BxFac was formed, and they obtained initial funding, right? In this partnership, we aim to reach more partner groups, conduct our reach with our new mobile branch and ensure a strong community connection. It is a higher level of commitment and accountability where the coalition members ensure appointments and referrals for us, host presentations about credit union membership and actively do follow up on behalf of their members and participants to ensure satisfactory services from us. This physical branch is expected in the fall of 2024, so very soon, but we feel that this will just enhance this community connection and community that we are forming, that we have formed, right?

Katie Stone:
Yeah. As you were speaking, I was just thinking it just sounds like such an authentic approach to connecting with your communities and really being on the ground and serving their specific needs, so really special.

Kerala Taylor:
Yeah, and we’ve definitely talked on this podcast before about growth in the credit union movement, and the idea of sustainable growth with a clear why. And growth just kind of for growth’s sake, where a credit union just decides it wants to reach a certain asset size. So it definitely seems like you’re more in the sustainable growth camp where you’re really looking for communities that have a demonstrated need, and I love that. I also love how you’re adapting the name of your credit union depending on the neighborhood that you’re in. You have talked a bit about your mobile branch, and I had a lot of fun peeking inside that when it was parked outside your credit union when I visited. And I’m just curious if you could tell us a little more about how that came about, and how do you decide where to bring your mobile branch? How do you get the word out, and what’s been the response?

Alicia Portada:
So in general, people love the mobile branch. And I have to give a shout-out to my team, current and past, who have worked on this initiative because driving and looking for parking in New York City is not fun. But, yeah, both people and partners love seeing a mobile branch park outside their organizations. The wrapping design of the van features bridges on all the sides, symbolizing our mission to bridge banking opportunities.

Of course, the most important aspect is our team members who deliver services. They are knowledgeable, friendly and able to speak Spanish. At LES People’s, our members and staff were very committed to expanding our services. We already had excellent relationship with organizations that required our services outside our field of membership, and we were essentially doing pre-mobile branch work by going out and opening accounts in person at our partner sites.

The idea of the mobile van branch was born after Hurricane Ida. This is 2012, which closed our Lower East Side branch for a week due to flooding. We thought, “Wouldn’t be great if we had a mobile unit that we could park outside the affected area, but is still close enough for our members by foot.”

Fortunately, the former CEO of Betex and The Bronx had a similar idea, and we partnered to cover the cost of a use mobile branch about the size of a big school bus. Initially it was convenient for Staten Island due to its lower population density and more parking availability. This version initially had an ATM inside, which was a hassle to pull out. Soon we learned that for better outreach, we needed to downsize the van, so we opted for a Mercedes Benz Sprinter van for a new version, similar in size to the Amazon vans. I’m talking about Amazon today. You see everywhere in the city, right?

This one doesn’t have an ATM, but we complemented with our network of ATMs and digital services for larger deposits. The van, the mobile branch, is available for all our select partner groups that we have. We have about 65 now, and we just ask that they help us with the parking space in front of the organization and where they want to have us. And, no, the van has internet. We can open accounts there, people can apply for a loan. They can apply for an ITN as well, or even ask questions that they may not dare to ask in another financial institutions. And we start the conversations, and if we can’t help them, that’s where we utilize the power of the network and we send a referral to someone else.

Katie Stone:
Yeah, I don’t know. I just want to back up and give a round of applause to your team that drives around those buses and vans and finds parking in New York City. That’s impressive on its own, but what a great way to literally meet your members where they’re at. You mentioned partnerships. I did take a look at the partnerships page on your website and wow, holy cow. You work with so many community-based organizations, coalitions, and other public agencies. I’d love to hear more about that. What do you look for in a partnership? How do you select your partners, and how have they helped you realize your mission?

Alicia Portada:
Yeah. We are fortunate to have a network now that refers other partners to us, and we look for engaged groups working on economic development, skill training, financial counseling, employment preparation, community integration. Anything really Where our financial tools can complement their efforts. Our partners have been instrumental in practicing our mission by facilitating impactful initiatives. For instance, we collaborated with the Uber drivers group to help them purchase their vehicles instead of renting them at exorbitant rates.

We obtained IT and certification for our staff to serve immigrants needing banking services. Offer also interest free loans for DACA application fees for DACA recipients and supported young people in the summer youth employment program with transition accounts and financial education. These partnerships amplify our impact by addressing specific community needs, empowering individuals through financial inclusions, and inspires us to continue evolving to better serve our communities. We pretty much listen. They’re the ones that aspire, that have the creative ideas, right, the initiatives.

Katie Stone:
So with those partnerships, I’m curious to know, do they typically reach out to you initially, or are these folks that you are finding in the community where a partnership might make sense?

Alicia Portada:
Yeah, that’s what I said. We are fortunate now because we are now getting many referrals, but when I started working before, we were in that community searching the partners that were around us, trying to connect with them, update our contact list because people transition and all that, but now it’s just very organic.

Katie Stone:
That’s great. You’ve touched on this a little bit with some of your examples, but can you provide us with a specific example, or one or two if you want, of some deeper partnerships you’ve developed, and how you serve one another in those partnerships?

Alicia Portada:
Okay, so one that comes to mind that our relationship was very impactful is with a New Immigrant Community Empowerment, right, with NICE. This is an organization that helps immigrants build social, political and economic power. They were a select partner group for a long time. A select partner group is a SEG. In credit Union lingo these are select employer groups, but we just changed the employer for partners, so we call them SPGs. In 2012 I was recommended to join their board and I did, and I was quickly invested in their mission, given my own experience as an immigrant.

NICE became one of our top referral sources for new membership. We collaborated on educational workshops that grew exponentially because they grew exponentially, I mean from hundreds to thousands attending our workshops. And our collaboration was so fruitful that I also recommended for a NICE staff member to join the LES People’s store, and work more towards having a bigger presence in Jackson Heights Queens, where they were located, potentially even establishing a branch there, but we’re not there yet.

And the other partnership, and I think we can see some of these similarities too, is with the Bronx Financial Access Coalition, BxFac. Their board members and staff from both organizations, from them, from the coalition and from the Lower East Side People’s work closely together on coalitions for financial inclusion and community empowerment, right?

BxFac partner now sits on our board at the Lower East Side People’s, and that creates this synergy of influence and mutual benefit. To me, these are examples of alignment of interest, what I call the harmony of interest as opposed to conflict of interest.

Katie Stone:
Thanks a lot. Yeah. Remind me a little bit of something that I read that you said, “Around the solidarity economy, and about how if we’re working in solidarity, my happiness doesn’t mean your loss, my work supplements yours.” I just love that and found it so inspiring, and it sounds a lot like the partnerships you’ve forged within your community.

Alicia Portada:
Thank you. I forgot about that one, but, yes.

Kerala Taylor:
That’s wonderful. I’m going to remember that. And speaking of memorable lines, I saw a slogan. You have T-shirts that say, “Build Wealth Not Debt.” And I love this because I worry… Payday lenders aside, we know they’re really, really pushy predatory lenders out there, but I also worry just that the more mainstream financial services industry can be rather aggressive and pushing credit cards and other loan options. I certainly get a ton. It’s like the only mail I get anymore. If banks and financial service institutions didn’t exist, I’m not sure I would ever get any mail. But I’m just curious how your credit union defines wealth, and what community wealth looks like for you?

Alicia Portada:
Certainly for us, we define wealth, not just as in financial terms, but also in terms of community wellbeing. Wealth means empowering our members to achieve financial stability and security without falling into cycles of debt. Now, community wealth to us, it’s about fostering economic and financial inclusion. It’s ensuring that everyone in our community has access to affordable financial services and opportunities to build assets. It is connecting members with resources within and outside the credit union. This is the member experience that we aspire to have with our members, right, that we want our staff, our members to talk to, start with a simple conversation about what is out there, what opportunities they have.

Yeah, but we promote financial inclusion, I think very actively with our products, affordable products that we offer, the loans that we create, and many credit unions, right? We’re responsible terms, we always think that cannot jump too much after the promotion. And financial counseling services that empower individuals to make informed financial decisions. I have to say that for example, this idea of building wealth, not debt, actually was born from interactions with the solidarity economy. We were in a meeting, and we were just trying to figure it out what credit unions mean to the movement. And then we said, “This is excellent, so we’re going to be using it and practicing.

Katie Stone:
Really cool. All right, let’s switch gears. I have some rapid fire questions for you, so I’d love to hear what is your favorite meal?

Alicia Portada:
I have to say ceviche. The Peruvian style. The Peruvian style, though.

Katie Stone:
Okay, great. What is your favorite cause?

Alicia Portada:
Animals and climate.

Katie Stone:
Oh, great. What’s the best advice you ever received?

Alicia Portada:
This is a quote. These two quotes actually came to me very closely. So this year, so I was like, “Yes, this is it.” “Everyone thinks about changing the world. No one thinks about changing themselves.” And then on the book I read, “The eye sees everything by itself.” And that was Shakespeare. So I’m determined this is my thing for 2024.

Katie Stone:
I love it. Looking inward, huh? Okay. All right. Last question. What is your favorite word?

Alicia Portada:
Community.

Katie Stone:
Oh, beautiful.

Kerala Taylor:
It’s a great one. All right, let’s do our final take. Just to remind our listeners, the big question today was what if credit union marketing efforts were less product-focused and more partnership-focused? What would that look like in practice, and how could this approach help realize the credit union difference? And, Alicia, you shared a lot of great thoughts here, but I’m wondering if in just a few sentences you can sum up your thoughts on this big question?

Alicia Portada:
Right. So I guess the fear is that our partnership-focused approach is less profitable, but in fact it is more sustainable for our co-op and for the community. By offering products that are actually needed when they are needed ensures the demand and that impact. We don’t want to work in a silo, reading trends and copying that what bigger banks are doing. There is power in local approaches. It is like when you cook something with so much care, but no one likes it or no one has seconds. You want people to savor your products and to be satisfied by them.

Kerala Taylor:
Well, as a mother who cooks a lot for our family, I can certainly relate to putting a lot of care into a meal that no one eats.

Alicia Portada:
I was going to say that as a Peruvian, I need to make my food reference.

Kerala Taylor:
Absolutely. But you know what? I love eating, and I always like the meals I cook, so maybe that’s enough. But, Alicia, thank you so much for joining us today. We really appreciated having you on.

Alicia Portada:
Thank you. This was really great and really fun. I appreciate it.

Katie Stone:
Yes, great chatting with you.

Kerala Taylor:
What a fascinating conversation. I’ll tell you, when I talk to credit unions who are so deeply embedded in their community, it really gives me goosebumps. Then thinking through a few key takeaways, I’d say first and foremost, what I took away from this conversation was the importance of following the need. I think there’s a lot of businesses out there that make assumptions about what people need, and I want to push their own solutions. And, yeah, they might do some focus groups, but a far more effective approach is to really stay close to the community you serve and just make sure you are always listening. That’s what I feel like the Lower East Side People’s Federal Credit Union does so well.

Secondly, a partnership approach can ensure the right product mix. Again, this comes back to listening. When you’re partnering with organizations who have boots on the ground, you’re going to get a more nuanced understanding of the real challenges people in your community are facing.

I loved Alicia’s example of how her credit union created a program to help drivers achieve car ownership rather than renting cars at exorbitant rates. It seems to be a program that came around simply because they listened to a need.

And lastly, a partnership approach is also crucial to a credit union’s expansion strategy. I do have very ambivalent feelings about the growth frenzy in the credit union movement in recent years, and you might’ve heard me talk before on the podcast to this issue, but I do feel like a lot of credit unions are pursuing really aggressive growth strategies often through mergers and acquisitions, and I worry that some have lost track of their why in the process. I just love saying a credit union expand, but in a targeted and sustainable way. That circling back to the first takeaway is about following the need.

Well, thanks for joining us today for another great episode. The Remarkable Credit Union is brought to you by PixelSpoke, a digital marketing agency that works with credit unions to create user-friendly, high-converting award-winning websites. As a B Corp and worker-owned cooperative, we believe that business can and should be a force for good. You can learn more and check out our work at pixelspoke.coop. That’s PixelSpoke, all one word, .coop. Until the next time, I wish you the best of luck in making your credit union remarkable.