Lower Valley Credit Union’s Suzy Fonseca: ‘Planting Seeds of Opportunity for a Better Tomorrow’

Editor’s Note: With 2013 in the rear-view mirror, Anthem asked Northwest credit union presidents and CEOs to reflect on the past, consider what lies ahead and talk about the challenges — and the opportunities — that await credit unions in 2014. Look for “The CEO Perspective,” an occasional series of interviews from the corner office, in upcoming Anthems.

It was only one phone call, from one car dealer, on an otherwise unremarkable Thursday afternoon. And yet there may be no better example of what Lower Valley Credit Union means to the people of Sunnyside and the Lower Yakima Valley.

“The dealership called to let us know they had a young couple there who insisted that LVCU handle their car loan,” says Lower Valley President/CEO Suzy Fonseca. “We let them know we’d be happy to take a look and see what we could do, even after they told us that this family would more than likely not qualify based on traditional lending requirements.”

The family had very little income and no real credit history. But they were working with a local church organization that had raised $1,400 to help with a down payment, and church members told them to contact Lower Valley “because we would be their best chance of finding affordable financing,” Fonseca says.

“When the young family came in, they had something pretty special with them: their 18-month-old son, who was suffering from a brain tumor,” Fonseca says. “This family desperately needed reliable transportation so that they could seek medical care for their infant son.”

The result, Fonseca says, was not a traditional loan. “But we are not a traditional lender. We are a credit union that serves an amazingly diverse membership facing real-life situations. Needless to say, there was not a dry eye in the loan department as this young family became Lower Valley Credit Union members that day.”

A few days later, Fonseca and her team left for Washington, D.C., where they were honored by Credit Union Times at the Governmental Affairs Conference with a Trailblazer Award for “service to the underserved” – recognition, perhaps, that even on otherwise unremarkable days, Lower Valley is doing remarkable work.

“Our vision is clear,” Fonseca says. “Plantando semillas de oportunidad para un mejor mañana.”

The translation: “Planting seeds of opportunity for a better tomorrow.”

Suzy Fonseca began her career at Lower Valley as a teller in 1998. In the 16 years since, she has served as operations supervisor, chief operations officer and, since 2011, as president and CEO. Under her leadership, Lower Valley’s membership has grown from 5,600 to roughly 8,600, its loan portfolio has increased by $14 million, and its total assets have jumped from $50 million to $64 million.

Fonseca is a member of Washington DFI’s Budget and Efficiency Task Force. She is also a member of Sunnyside’s Chamber of Commerce and serves as a Rotary President, and her credit union is an active participant in a wide variety of community events and organizations, including food banks, foster care projects, victim-relief outreach programs and the annual Relay for Life.

She spoke with Anthem recently about those efforts, and about the impact she wants Lower Valley to have every day on the community it serves.

Q: Lower Valley recently won a Trailblazer Award from Credit Union Times for “service to the underserved.” What did that recognition mean to you, and how deeply does “service to the underserved” inform what Lower Valley does every day?

Lower Valley Credit Union President/CEO Suzy Fonseca (second from right) celebrates with her colleagues after winning Credit Union Times’ Trailblazer Award at the Governmental Affairs Conference.

This award has such a significant meaning for the entire LVCU family, because it speaks directly to our mission. Our guiding principles have always been centered on serving our incredibly diverse membership, and receiving recognition on a national stage for doing what we love has been extremely humbling.

Our strength comes in knowing exactly who we are as a credit union and embracing our place in the credit union movement. We don’t make million-dollar loans; that’s not our niche, nor our passion. But like many small- to mid-size credit unions around the nation, we are still extremely relevant to those we serve.

We make it a point to look at the individuals that other financial institutions might pass over for various reasons – those who lack a credit file, have a history of credit issues, or simply don’t fit a traditional financial institution’s profile. We stop and pause on these individuals, and we give them the time they deserve. We do this because we recognize that these are the people who need a financial partner the most – the underserved segment of the communities we serve.

It is not uncommon for “unbanked or underserved” individuals to walk in our doors with an old, tattered LVCU business card that was handed down to them. They look to us for hope, for opportunity, and that’s where LVCU shines.

Q: When you talked about your members at the Trailblazer awards ceremony, you said, “We know their struggles firsthand.” Can you talk a little bit about the community Lower Valley serves – who are your members, what struggles have they faced, and why have they been “underserved” in terms of basic financial resources?

Our communities are agriculturally based. The Lower Yakima Valley boasts some of the farming industry’s top producers of apples, hops, grapes and dairy products. Due to the abundance of farm work, we attract a large number of farm laborers, many of whom migrated to the area to improve their family’s economic condition. As a result, about 82 percent of Sunnyside’s population is Hispanic; that number is reflected in our membership, too. Roughly one-third of our members speak only Spanish.

A number of our employees, including myself, are first- or second-generation Americans. Many of us worked in the agricultural fields as children, alongside our parents. So we are definitely not strangers to hard manual labor and the struggles that come with seasonal work. We are keenly aware of the devastation that issues such as personal injuries can cause on a family’s already-strained budget.

We are very much in tune to the seasons and how they affect the needs of our farmers and our farm laborers. For example, the winter season is especially brutal if a family did not plan ahead and budget accordingly, so we make sure to promote our savings plans and loan products strategically tailored for these situations. One of our most popular offerings is our unsecured “Winter Loan,” which is available in amounts of $500-$3,000, regardless of credit score. I think it’s important to note that we have only had one default since the inception of this product three years ago – one more example of the positive effects of our strong member relationships.

We are also aware that many undocumented Hispanic families distrust government- type entities and see formal institutions as a portal to possible deportation. These families are vulnerable because of their citizenship status, and so they often prefer not to seek financial partnerships as a way to avoid the “added risk.” That’s why we’re partnering with OneAmerica on a pilot project that integrates naturalization assistance with accessible citizenship loans for eligible legal permanent residents in the Yakima Valley. LVCU’s role will be to serve as the funding source, as well as a provider of financial education and a resource for referrals to relevant naturalization services. Both organizations will refer eligible clients to each other’s programs, according to the needs of the participants.

We also understand the importance of technology in an evolving world, and that a lack of education and fear of the unknown are huge roadblocks that can hold many of us back. For many of our underserved members, the latest technology is a luxury they simply cannot afford. That is why we have designed our new corporate office building (set to open in early fall 2014) with a tech pod and a community conference/training room, where we will offer training and learning sessions targeted specifically to our communities’ financial needs.

Q: It sounds like those kinds of products and programs have helped Lower Valley make significant inroads. How have you earned the community’s trust and formed the kind of bonds that have brought people to your door for those services?

We’ve earned the trust of our members through respect and by being extremely straightforward and genuinely sincere. We don’t have the gadgets, the frills or the smoke and mirrors; all we have is drive and passion for what we do. We love to help people, and with our help we equip our members to better help themselves over time.

There is also much to be said about staffing to meet the needs of a target market. LVCU originated in this valley, and our staff is representative of that fact. Across the organization, approximately 60 percent of our employees speak Spanish; at the branch level, 75 percent do.

I also think it’s important that the type of work we do has been so engrained in our organizational culture that it took a strategic facilitator at a planning retreat to point out the uniqueness of what we do. We literally had no idea that our business model was that unusual. But I suppose what is unusual is that we’ve been able not only to maintain that model over 56 years, but also to flourish over time because of its outstanding success.

Q: You’ve mentioned the importance of financial literacy at Lower Valley. What are some of the key educational programs you have in place?

Ellane Jepson, Lower Valley’s vice president of branch operations, works with schoolchildren during a financial literacy workshop.

Our particular demographic responds extremely well to personal counseling. One-on-one interaction seems to be preferred by our members because of their desire for personal relationships and the privacy those relationships provide.

We have conducted personal counseling since the day we incorporated in 1958, and we continue to provide it on a daily basis. We recognize that this method might not seem the most efficient and/or cost-effective to other credit unions because of the time associated with each member, but we believe very strongly in our efforts. And the reward for LVCU is evident in our low delinquency and charge-off ratios over the years.

Personal counseling is also extremely effective for us because, as I mentioned earlier, technology is a luxury not available to the majority of our members. Face-to-face meetings allow us to remove what might otherwise have been an obstacle to financial education and other valuable resources.

Q: You’ve loaned money to low-income members. You’ve loaned money to first-time borrowers. You’ve loaned money to members who don’t even have a reportable credit history. Talk a little bit about those efforts, why they are so important, and how they have paid off for members and for the credit union.

During the first quarter of 2014, we were able to help 132 new consumers develop a credit file for the first time. Of those loans, 128 were for used cars with an average balance of less than $13,000 – which means these new members weren’t looking for extravagance, but rather for a reliable method to travel to and from work in an effort to improve their families’ economic condition. To get them started on the right path to financial success, the loan process focused on the importance of budgeting and credit responsibility.

Let’s keep in mind that everyone needs some form of reliable transportation. Many of our members do not have to struggle to attain this necessity, but others are not as fortunate. Many struggle financially because of their citizenship status, family hardships or poor financial budgeting, or simply because they don’t have the skills required to provide for themselves as adults in today’s consumer-oriented world. Isn’t it our role as members of the credit union movement to address these issues, to embrace the opportunity to serve these needs, and to help guide these individuals on the road to financial success, whatever that may look like for them?

Often, LVCU is the only viable option for these borrowers, other than high-interest title lenders. We take care to reasonably price for risk, but our goal is to get members into vehicles they can afford. In doing this, we can provide members with a practical interest rate as compared to predatory lending options. And we can offer lending products that benefit our communities while sustaining LVCU’s relevance and viability.

Empowering members by providing the tools for their financial success is what we do. “People helping people” is what we do.

Q: You recently broke ground on a new branch – one sign that Lower Valley is growing. What else does the future hold for the credit union?

Breaking ground: Lower Valley’s new offices in Sunnyside will include a tech pod and a community conference/training room.

Our recent groundbreaking is the start of a project that we’ve been planning for a number of years. Those that know LVCU are very aware of our immediate need for space to serve our growing membership; we are all very excited for our membership and the overall community to see this project unfold.

We received word late last month that we’ve just been officially classified as a Community Development Financial Institution. CDFI certification is an essential building block for our future. Access to grant funds will increase our outreach in the communities we serve and make us an even stronger partner in our outreach efforts. The ability to leverage grant funds to lend deeper into the needs of our communities is a powerful tool, particularly when the majority of the loans we provide are aimed at the underserved.

As I mentioned earlier, we’ve recently partnered with One America on a pilot project that integrates naturalization assistance with accessible citizenship loans. And we are eager and open to partner with other community organizations in efforts to improve financial literacy and enhance awareness of the credit union difference.

Q: As CEO, what is #1 on your wish list – the one thing you most want to accomplish?

My primary goal as LVCU’s CEO is to ensure that we never lose sight of our vision. As long as we stay true to our vision, we will attain the highest level of relevance — to our communities, to our membership, and to our LVCU family.

Growth plays a significant role in my quest for LVCU relevance — not as a desire for grandeur but rather as a sign that we have the capacity to serve more individuals within our communities. With growth will come the capability to develop new projects and programs that can be tailored to serve our market.

Up Next: Look for the next “CEO Perspective,” featuring North Coast Credit Union President and CEO Terry Belcoe, in the May 6 edition of Anthem.

Questions about this story? Contact Gary M. Stein: 503.350.2216, gstein@nwcua.org.

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