How to Create a Game-Changing Financial Product

In a heavily regulated industry like financial services, innovation can seem daunting. There are so many regulatory hoops to contend with, not to mention a fierce aversion to risk. But as Jerome Emanuel, Chief Lending Officer at Alternatives Federal Credit Union has discovered, if you focus on solving a proven problem and finding ways to say yes, the doors that end up opening just might surprise you.

Jerome joins us for this month’s episode of The Remarkable Credit Union podcast to discuss Alternative FCU’s game-changing FAIR Mortgage product, including what inspired it, how they got it off the ground, and what the results have been to date. He also addresses this month’s BIG question:

How can a financial product address systemic inequality, and what risks are entailed in changing the rules of the “game?”

 

 

References & links:

• Jerome’s hip hop group, Dirt Disciples
• Alternatives FCU’s FAIR Mortgage
• Alternatives FCU’s 2022 Impact Report
• The Jackie Robinson Story

 

Key takeaways:

1. An ownership mentality has positive trickle-up effects. It’s not just about possessing an asset. Jerome said, “When it’s yours, it’s different,” something that we can attest to as co-owners of a worker-owned co-op. At PixelSpoke, we bring that ownership mentality to work with us every day and it’s such a game changer. We’re not just thinking about our own narrow roles but also the long-term health of the company.
2. When looking at any eligibility criteria for a financial product, the leading question should always be, “What are we afraid of?” If we’re going to disqualify someone because of their credit score, let’s make sure we’re clear on why we’re doing that. Maybe the credit score itself isn’t really the most accurate indicator of whatever it is we’re afraid of, and maybe there are other indicators we can look at.
3. When assessing a loan application, focus on the positive instead of the negative. That’s such a fundamental shift! It seems that more traditional loan processes are designed around identifying red flags, and for those of us applying, there is so much shame wrapped up in our financial vulnerabilities. Going back to the credit score example, maybe you’ve made on-time rent payments for years, but you still have not-so-great credit because rent isn’t factored into your credit score, and that score is what gets flagged. Let’s find ways to say “yes” instead of “no.”

 

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, CEO and Co Owner at Pixel Spoke.

Kerala Taylor: And I’m Kerala Taylor, also a co owner and the Director of Marketing and impact@Pixelspoke. Our big question today is how can a financial product address systemic inequality and what risks are entailed in changing the rules of the game, so to speak. We’re so excited to be joined today by Jerome Emanuel. He currently serves as the Chief Lending Officer for Alternatives Federal Credit Union, which is a really, really impressive CDFI credit union based in upstate New York. Before joining the credit union movement, Jerome spent almost 20 years in the automobile industry and he also has extensive experience serving his community. He’s built and led numerous economic development initiatives. He’s also part of a hip hop group called the Dirt Disciples and I look forward to sharing a link to that in the show notes because it’s some pretty impressive work there. Jerome, thanks so much for joining us.

Jerome Emanuel: Of course, thanks for the wonderful intro.

Kerala: So I know just a little bit about your story. I read an interview with you in the Alternatives Impact report, but I’d love to learn more. I mean, it seems like you’re relatively new to the credit union movement and you’re on this mission to make loans more accessible than ever. And I would just love if you could talk a bit about the experiences and perspectives you bring to the table to help inform this mission.

Jerome: I can say that my mission was to make loans more accessible, which is why the reason that I joined the credit union but that wouldn’t be accurate. I really joined the credit union Alternatives, to be specific, because of the work that they were already doing and it really aligned with the work that I was trying to do, which was really deep in the woods as far as like trying to help with systemic racism or fight inequality. There were so many things that I was involved in, especially with the work with the NAACP, hosting rallies when things went pretty self with George Floyd and so many others. And when I was introduced to Alternatives, it really shined a light on like, wait a minute, there’s, there’s an organization that like actually wants to do this and they’re a financial institution. It’s like, hold on, like I want to be a part of that. That’s really like what the driving force was. I don’t know that I initially wanted to be in lending. Like that wasn’t really like the thing. Like it was more of like, what can I do to help you all do the wonderful things that the organization was already doing. Especially in my community we have a lot of small businesses, specifically black and women owned businesses and wildly underfunded most cases. Everybody’s using their own money, borrowing money, trying to get their businesses off the ground, oftentimes having to make a decision between am I going to keep the lights on in my building or am I going to keep the lights on in my house? Alternatives was actually going out and getting grant money to support these businesses and just saying here, thank you for everything you’re trying to do and here’s a hand up and not a handout, and then offering technical assistance and support. And that’s kind of where I started to come in from the technical assistance standpoint, helping businesses, because that was my background. And then it ended up getting into lending. Right time, right place, I suppose, and I suppose here we are. But that’s kind of the reason, I guess, that I got to this movement.

Katie: I can relate to that in some ways. I know when I was looking for this job and I was fortunate to land at Pixel Spoke, I was really looking less for a position and more for an organization that I thought aligned with my values. So that resonates a lot with me. I’d love to talk more specifically about the Fair Mortgage product you’ve helped develop, which launched spring of last year, 2023. And just for our listeners, FAIR is an acronym that stands for Finance Addressing Inequality and Racism. So working at Pixels Book, we’ve seen a fair range of mortgage products and this one really seems to set a precedent just with the name in and of itself. Our experience is that credit unions as a whole have been a little bit timid about addressing racism head on. So we’re just curious, was there any fear here or push back here when you rolled out this product?

Jerome: None. No.

Katie: Great.

Jerome: The concept behind it is so elementary to me that I don’t think that a lot of people in the credit union movement may think that way. I know a lot of credit unions that are pretty cautious right now, especially when it comes to mortgages, with the market being the way that it is, the housing shortages, interest rates, blah, blah, blah. And what it really breaks down to is what is the appetite of the credit union’s risk to do these types of loans. And what it really broke down to for me in particular was focusing the product around one specific idea. And that idea is if you give people an opportunity that may not typically have an opportunity, and you help them with that opportunity, they’re going to feel the loyalty to want to pay the mortgage back. They want to continue to have that relationship with you. And it’s been working. There was a great quote that I remember reading where in the article somebody said the bank said that I couldn’t afford a twelve hundred dollars a month mortgage, so I went out and rented a $2,000 house. And I thought that that was very powerful because that’s what’s really happening. Like, landlords aren’t underwriting the way that mortgage lenders are underwriting. They’re basically looking at, well, can you afford it? Can you not afford it? Maybe do a credit check to make sure you’re paying your bills. At the end of the day, it’s either you pay your bills or you get out. Right. I think some of that, like, resonated with me. It’s just like, what’s broken here? Like, why isn’t it more accessible for people to get mortgages if it’s so easy for people to rent houses and rent apartments and what’s in the way? So that’s when we really started to ask a lot of questions. So a lot of research went into this product before we launched it and started asking some subject matter. Experts across the country actually did a lot of research at what other credit unions were doing. There’s some great programs out there. Don’t get me wrong, there’s some pretty good mortgage product programs out there that I thought that they almost had it right. They were really close to getting it right. But I feel like there were things in the mortgage product itself that maybe we could stretch the envelope a little bit. During the research, that’s what we decided to do is kind of stretch the envelope.

Katie: Yeah, and you’ve certainly done that. This fair mortgage product requires no minimum credit score, no down payment, no private mortgage insurance, and it doesn’t disqualify applicants automatically based on bankruptcies, collections, student Loan defaults or medical debt. That’s something that might put fear in a lot of credit union executives. So I’m just curious, how do you determine eligibility?

Jerome: Let’s break that down. So bankruptcies it’s not that we’re not looking at bankruptcies. Of course we’re looking at bankruptcies. We would like to see people reestablish after bankruptcy. I think that that’s normal. I think that that’s a natural thing from a risk perspective to take a look. But the real question is underlying all of what you’re saying, right? What are we actually afraid of? So when you ask that question, the rest of the answers start to fall into line and the bankruptcy, like, what are we looking for? Well, somebody files a chapter 13, that’s a five year commitment that they have to reestablish their credit, essentially they’re paying their bills back. Five years. I mean, that takes discipline. Why would I want to discount somebody from having the ability to say like, okay, well in five years from now, after the five years that you’ve been in credit jail, so to speak, right. You’ve already made your commitment, you fulfilled that commitment. Let’s take a six month snapshot, let’s do some financial education, let’s make sure that things are going on the right track. But as far as I’m concerned, if you’re able to make that five year commitment to a bankruptcy, especially specifically a Chapter 13, that requires discipline to be able to pay that debt back, and you do that, to me, that shows character, which is one of the five Cs of lending. So that became something that was real important.

The student loans, again, what were we afraid of? Were we worried about that would happen and what’s the garnishment? So also realizing that there was a difference between private student loans and federal student loans, and we had to differentiate that within the actual product in itself. But we were afraid of the garnishment. Well, so what could we do? Well, we could take the income and deduct the garnishment right up front and see if they still qualify. So that’s what we ended up doing is if this happens, right? We’ve already kind of prepared for that in advance. So this isn’t going to stop you from being able to buy a house. We’re just saying that we know that this is there, we know it’s a threat, we know it’s not on the report right now.

The credit scores again, what are we afraid of? What are we worried about? With the credit score. What is the credit score actually telling us? More importantly, what is the credit score not telling us? It’s not telling us everything. You got a cell phone bill that’s not showing up on there unless it’s delinquent. So it’s not telling us that you’re paying your cell phone bill. But we know you’re paying your cell phone bill so we can use that. Your rent’s not showing up on your credit report. We know that you’re paying your rent. We can use that. You know what we’re really looking for in the credit report? We’re looking for consistencies. We’re looking for reasons of why we should not reasons of why we shouldn’t. And I don’t think a score determines somebody’s ability to be able to pay a loan or not. I think the scores quite frankly are biased. I think that they’re targeted and I don’t think the credit scoring system in itself is fair. I don’t think it’s a fair measure. So I think that we can look deeper into a person and credit scores don’t define people. So that wasn’t something that was a concern.

Katie: It’s really a beautiful holistic view. Like I just really appreciate it.

Kerala: Yeah. As someone who has a lot of student loan debt and who has struggled in the past with the credit scores and just not only what my credit score is, but why I have the score, I do. I really appreciate the more holistic approach. And also I bartended for many years and I saw that the fair mortgage gives special consideration to people who are self-employed or whose income is largely tip or commission based. And I appreciated that provision.

Jerome: Super simple, right? Like yeah, I mean real estate agents have a hard time buying houses. Like, think about that for a second.

Kerala: I actually never thought about that.

Jerome: Houses for a living. But because your commission based, you can’t buy one. Like, isn’t that nuts? Like credit union folks. What are we doing here? Like what are we actually doing here? So we can figure out kind of around about if you’re good at your job or not. Especially with commission based employees. Especially if you’ve been on the job for a long time. Like let’s say that you’re a bartender or waiter, waitress or in the hospitality or in sales or whatever the case is and you’ve been doing it for a long time, you’re probably pretty good at it. We can also see the dips in business. So where we will see the dips in business are typically seasonal. So they’ll either Be summer or winter. So what are we looking for? We’re looking for this six month snapshot. So somewhere in there we’re going to see peaks in the valleys and then we can take that in base an average. And I’m like, okay, on average this is roughly what you make. So when I bought my house, there’s a personal story of why this was so important to me. Because I did spend a lot of time, a lot of years in, in the sales industry and I did, I did, I was on commission and when I went to get my mortgage, I’d say 40% of my income was based on commission. And the credit unit at that time that I was working with, they said, well, we can’t use that. It’s like most of my income. What do you mean you can’t use it? So you’re trying to determine my debt to income, even though I’ve been consistently making this for years, but you can’t use it. It’s like, well, I’m not going to change what I’m doing. I like what I’m doing. Let’s take a look at being more inclusive and less exclusive. Let’s stop looking for reasons of why we can’t do something. Let’s start looking for reasons of why we can.

Kerala: I love that. And you talk about peaks and valleys, which are certainly part of commission based work or people working for tips. It’s also part of life. There’s a lot of uncertainty in life. So something I thought was brilliant is how you bake an emergency savings fund into the monthly payment. Because a lot of saving I found is just about getting it started. And then once that money’s going out the door and you’re not thinking about it can really accumulate. So I’m just curious like where you got that idea and if you’ve seen any success with people being able to build savings this way.

Jerome: I stole half of it. I am not ashamed of that. I stole half of it from another credit union that was doing something similar. But I didn’t think that they were taking it far enough. There were too many rules and regulation, too many restrictions around how you could use that savings. Like you had to make 12 payments on time before you had access to it. And then after that then it’s like three years and then you could use it for x, y, z. And there were so many loopholes and it’s just like, okay, I ended up asking a question and I think I broke our core trying to figure out how to answer this. Question, right? It’s like, well, why don’t we just take a percentage out of every payment and just put it into a savings account? And it’s like, well, I don’t know if our system can do that. It’s like, well, can we ask. Can we ask if our system is capable of doing that?

So I think then we really got pretty deep into it to a point where it’s like, okay, well, mathematically we made it so that it was a flat amount that was going into a savings account every month. But then there was a determination, because with everything else that I’ve seen, all the research that I did, and I can’t say that I looked at every credit union’s mortgage product across the country, but I looked at the most aggressive ones that I could find, and every one of them had a requirement that the savings program that they did have had to be used for something that had to do with the house or housing repairs or things like that. And I didn’t like that. As you said, life happens, things happen. Something happens with your car, something happens with a family member, something happens with yourself where you need access to money. And I didn’t want to put a restriction on when you could access the money or why you could access the money. We just want to say, okay, let’s get you start getting used to saving. Let’s continue to put that money into the account. And as things happen in life it’s. It’s kind of like a security blanket. And the longer that you save, the more that obviously will be there. So it just seemed like the right thing to do, especially for people that have never owned a home before.

This is my first home. There’s so many unexpected things that happen in a house where it’s just like, what do you mean? I have to spend twelve hundred dollars on a stove. I just want to heat up my food. And these are things that like, you can’t wait on. It’s like, okay, well, where’s the money going to come from? Right. Oftentimes you find people applying for personal loans for small dollar amount personal loans, and it would make more sense to have the money there readily available in case somebody needs to use it. So that’s where that came from. Instead of just making it into this pocket and creating these rules, we just broke away from the rules and then just said, here you have access to it, starting from payment number one.

Kerala: I love it.

Katie: So, Jerome, I think a lot of people in the credit union movement would look at this product and say, well, that’s nice, but what’s the delinquency rate? How is this product affecting the bottom line? So I’d love to hear what are the results you’re seeing at alternatives since.

Jerome: We’ve been tracking the Fair Mortgage. Two delinquencies total. It’s very, very low. Literally two loans, two people, and they caught up. So, wow. I mean, it’s not like we don’t have an underwriting process at all. It’s not like we’re just throwing money out the door. We do have an underwriting process and like I said before, the general belief is still true. We do feel we have seen where we’ve given people an opportunity to build generational wealth that typically wouldn’t have done it. I mean, listen, my daughter and my future son in law are 24 and 26 years old. They own a house right now because of this product.

Kerala: Wow.

Jerome: They’re already building generational wealth at 24 and 26 years old. I didn’t get my first house until I was 38. So just think about what situation that they’re going to be in 14 years from now with the equity in the home that they’re going to have. That’s what this is about. Like having access to be able to build generational wealth. Like, how do you do that? Like, it’s almost like saying applying for a job and you need all this experience, but I don’t have the experience. Well, you need experience to get the experience. Well, how am I going to get the experience if you don’t give me the experience? Right. Like again, dear credit unions, what are we doing? It’s one thing to say this is our mission and this is what we want to do. It’s another thing to say we’re actually going to do it.

One thing that we do that I think that is very unique and it’s super small, but it’s worth mentioning. We do a gift basket for everybody that gets a new home through the product. And it’s random things homemade soaps, things that people are businesses. Local businesses that we’re working with are like donating. We put it in a basket and then we hand deliver to each home and just say thank you for doing business with us. And they’re so happy to see us. They’re so happy to just say, like, this is mine. Like nobody can kick me out of here. Like, this is my house and it’s freedom to an extent. When it’s yours, it’s different. You’re going to treat things differently. And we’ve seen real examples of that. I mean, every example of it, we’ve seen it. And it does disrupt the natural order of things. And I think part of what the credit union movement means to me is to disrupt the natural order of things.

So, yeah, what you might see, I mean, in the area that I live in is a predominantly white area. The region is a predominantly white region. And as a result of like, we’ll call it as a result of redlining, like, you see where like some, we call them housing projects, you can call them tenements, you can call them whatever you want. They’re. They’re sectioned off in certain places where you want to keep certain people in certain places and things like that. And now we’re starting to see more diverse neighborhoods, right? And this supersedes what government can do. We don’t have to ask permission to do this. Right. So now all of a sudden we’re starting to see like some of the results in such a short amount of time. And the fact that a lot of this is happening just kind of word of mouth, like, we’re not advertising it, we’re not like throwing it all over the place. The fact that it’s happening kind of organically, it’s truly remarkable to see.

Katie: So speaking of getting the word out, I would love to hear how you’re marketing this product. How do you make sure that the people who need it most know it exists and are encouraged to apply? I know when I bought my first house, like the idea of getting a mortgage was something I didn’t even know I could do. And it was only through parents and other people telling me, like, yeah, this is something you could do. You should look into home ownership. So how do you reach those people? How are you communicating that this product is a little different right now?

Jerome: Grassroots is the best approach for us. Again, we are a small asset size credit union. I believe within my core that if we started blasting this product across our region, our level of service that we’re able to provide to members would be drastically impacted. Our team would be drastically impacted by the ability to be able to serve the members properly. So we haven’t been broadcasting it, so to speak. So it’s been really word of mouth, talking to people, going to places where there’s hosting homeowner seminars going to places where homeowner seminars are happening. There’s lots of really, really great community partners that we have that host several events. How to buy a house kind of things where we can talk about this product to people in detail. And honestly, it’s the best way to do it right now for us. Because to some people it’s like, it’s just too good to be true. There’s still some people that just say, like, yeah, I don’t believe you. I’d like to see where we are at a five year period with the product, collect some more data, which would be able to let us know where we’re kind of headed with this. And then how much farther can we push the envelope?

There’s things that I wrote up in the actual proposal that went to the RVP and our CEO and eventually the board. But I was like, yeah, they’re never going to go for that. I even remember hitting send and it’s like, okay we’ll take it to the board. And it’s like, okay. And then I remember when the product was sent to the board for a vote and the board unanimously voted yes. And like, I’m sitting here, like, I’m talking to you guys, like literal tears are coming down my face. I’m trying to, I’m trying to keep a straight face to say, like, I’m unaffected or like, I felt like I knew that this was going to happen. I didn’t have a clue. I thought that they were going to tear this thing to shreds. I’m just like, this was just like, okay, in a perfect world, this is what I want to do, right? And when they all voted yes, I was just like beside myself. I got a text message from my VP. It’s like, I know you’re crying. And I’m like, I’m not crying. You’re crying. I knew what the impact was going to be. I’m saying, like, I knew what the impact was going to be.

Kerala: I’m almost crying. What a great story.

Jerome: No, it’s a real thing. Like, that was like one of the most emotional moments that I’ve had since I’ve been here. Not just knowing that it was passing, but knowing what it was going to do. The community that we’re, that we’re serving, knowing the people that it was going to impact. And, and when we did that first mortgage, it was just like, man, like, this is cereal. Like, this is so dope.

Kerala: Jerome, I have a feeling you’ve already alluded to this, but I don’t think you’re going to stop with this one product. So I’m just curious, like, what direction are you headed in next? You might not be able to share all the details, but what do you have cooking?

Jerome: Quite a bit, actually.

Kerala: Not surprised.

Jerome: Being a chief lending officer, dealing in consumer lending, business lending, as well as mortgage lending, in the amount of time that I’ve been in the credit union industry and having to know, learn and understand all three within a very, very short timeframe was pretty intense. So I’ve gone through some very, very intense training over and over and over again. Just really learning what’s out there right now and then trying to figure out what else can we do to help bridge the generational wealth gap. And small business is something that we’re super focused on. I’m working on a product right now for small businesses that is pretty super cutting edge. I don’t want to dive too deep into it because there’s still some things that really need to be worked out. But we really want to be able to help small businesses. And we understand that a lot of folks just within certain demographics, specifically, especially people that have been previously incarcerated, that’s something that we’re very focused on. People that have a hard time finding jobs because of being previously incarcerated or not being able to find a good job, whatever a good job means to them, not to us by their definition, not by ours. And I say this all the time.

There’s two types of entrepreneurs in my mind. And one of them is you have an entrepreneur that does something well and wants to do it for a living. And then you have another entrepreneur that can look into a community and see something that’s missing and create it. And I think that both are necessary, but without the access to capital and without access to generational wealth, which is how most businesses get started. Most of these businesses fail before they hit a business plan. They’re already done, especially with startups. So working on something surrounding startups, we have an excellent business development team that focuses on helping startups. That’s kind of where I started in this credit union world is in technical assistance for business development using the business model generation, the business model canvas as the book and the canvas as the worksheet. Walking people through the details, like taking them through the idea phase and then having them go through the entire process to say, you know what, I think that this is okay. Like, let’s go forward with the business plan. Let’s go some financial projections and then let’s really take a look at, at those five Cs of credit. Let’s take a look at the plan itself. Is it a solid plan? Is there a demand for it? What is the character of the person that’s applying for the loan, what support can we surround ourselves around, and then the product itself. So we’re working on something that’s pretty cool. I’m sure once it rolls out, I’ll probably hear from you guys again.

Kerala: I can’t wait.

Katie: All right, well, let’s ask some rapid fire questions. So, Jerome, we’d love to hear, what’s your favorite movie?

Jerome: It depends on my mood. [inaudible] Yeah, sure. The Jackie Robinson movie. For whatever reason, sometimes I just feel like crying and having that feeling of joy at the same time. Super inspirational to me. I was just talking to somebody about this, about why Jackie Robinson was so important to me as a person, as a figure. All the hostility that he had to deal with coming into major League Baseball and having the mental discipline to be able to deal with extensive racism to levels that I don’t even think that I would be able to even make it past the first inning. Better yet, to go on and win rookie of the year and open that door. So that’s like one of my all time favorites.

Katie: Yep, I’m a huge baseball fan and Jackie Robinson and I have the same alma mater, so big fan there. All right, so what’s your life slogan?

Jerome: I want to leave the world a better place than where I found it. I don’t think that it really gets more simple than that for me.

Katie: All right, what is a place that you’d like to visit that you have never visited?

Jerome: Rome. All right, first of all, I love architecture and I love ancient architecture. Also, I’m a history buff, so. Plus, I like conspiracy theories and all that other kind of stuff.

Katie: The perfect epicenter of all those things.

Jerome: Yeah, let’s just like, just go to the hall[?] part of everything.

Katie: All right, so this is my last rapid fire question, and we require total honesty for this one. So what is a song you’re most embarrassed to admit you like?

Jerome: Yo, that’s not cool. All right, Joe, plug your ears. Never going to give you up by Rick Astley. I don’t know what it is. I don’t know what it is about that song, but every time it comes on, I’m just….

Kerala: Now some songs are just catchy.

Jerome: I get the little bop and I start to do the dance. The dance does. And I swear to you, I’m going to play it as soon as we’re done with this, just to get it out of my head. I thought it was over, to be honest. And then when Wreck It Ralph came on, because I got kids, and then Wreck It Ralph did it at the end, and then it just came back and revisited my brain, and it just stays there. So now every time I hear it, it’s just like, yeah, so.

Katie: So what you’re saying, Jerome, is you’re never going to give it up and.

Jerome: I’m never going to let you down.

Kerala: I’m going to have to listen to that song right after we’re finished here. But let’s do our final take first. This is where we ask you to succinctly summarize your thoughts on a big, hairy question. And as a reminder, our big question today was how can a financial product address systemic inequality and what risks are entailed in changing the rules of the game? We’ve addressed this the entire conversation, but can you summarize your thoughts on this?

Jerome: A financial institution, through a product, can do a lot to change systemic inequalities. As long as you’re asking the right questions and addressing the core of what the actual problem is and not thinking about the profit. If you’re thinking about it from a perspective of how do we make more money, you’ve already lost. If you’re thinking about it from a perspective of we can solve this problem and we want to solve this problem, and we’re willing to put our money where our mouth is. I think that that’s where you start. Whatever you think the problem is, whatever credit union is listening, whatever you think the problem is, and it’s a problem that you want to address. If you hyper focus on the problem and break it all the way down to the root of the problem, you’ll find the product that solves that problem. And I think that that’s what we did with Fair, and that’s what I’m most proud of is the main question that we asked ourselves, which really started the conversation, is what are we actually afraid of? And I think we addressed that. I’m super proud of what we’ve done, what this team has done, and I’m super proud of my credit union. I mean, I’m super proud of my credit union in our board for just having the courage to just say, you know what? Like, yeah, let’s do it. Because not everybody’s, not every credit union, not every board is going to be okay with that. And I’m super proud of where I work. Our VP, our CEO, Kathleen Clark, Kevin Metlicki[?], and our board of directors. This would not be in the world hadn’t it been for them saying, like, yeah, let’s push the envelope, and I got to give them a shout out I’d be remiss if I, if I didn’t. And it takes a village. And credit unions, you’re part of that village and you’re also part of your membership.

Kerala: So that’s wonderful. I really hope we have some folks listening that are inspired to go back to their credit unions and start asking some hard questions. One of my favorite ways to frame the work of credit unions is not selling products, it’s solving problems. And you seem to do an impressive job of that at Alternatives. That’s all we have time for today, but thank you so much for joining us, Jerome.

Jerome: Oh, you’re so welcome. Thank you so much for having me. I really appreciate the opportunity to talk about what we’re doing and please steal our ideas.

Kerala: Love it. Well, we certainly covered a lot of ground in that conversation. Now it’s time for some key takeaways. And I would start with this idea of an ownership mentality and how it has positive trickle up effects. We devoted a lot of this conversation to homeownership and it’s not just about possessing an asset. I loved what Jerome said. When it’s yours, it’s different. And I can attest to that both as a homeowner and as a co owner of a worker owned co op at Pixel Spoke. We bring that ownership mental mentality to work with us every day. And it is such a game changer. We’re not just each thinking about our own narrow roles, but we always have the long term health of the company in mind.

Secondly, when looking at any eligibility criteria for a financial product, what if the leading question was what are we afraid of if we’re going to disqualify someone because of, say, their credit score? Let’s make sure we’re clear on why we’re doing that. Maybe the credit score itself isn’t really the most accurate indicator of whatever it is we’re afraid of. Maybe there are other things we can look at.

And that leads me to my last takeaway, which is looking at what’s positive in a loan application rather than negative. And really that is such a fundamental shift. It seems like most traditional loan processes are designed around identifying red flags. And for those of us applying, I’m sure we’ve all been there. There’s so much shame wrapped up in our financial vulnerabilities. Going back to the credit score example, maybe you’ve made on time rent payments for years, but maybe you still have not so great credit because rent isn’t factored into your credit score and it’s that score that gets flagged. So let’s follow Jerome’s lead and find ways to say yes instead of no.

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 employee 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. Until the next time, I wish you the best of luck in making your credit union remarkable.