North Coast Credit Union’s Terry Belcoe: ‘Not for Profit, Not for Charity, But for Service’

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.

Gonzalo Huitron calls his restaurant on wheels Taqueria El Milagro – The Miracle Taqueria – and for the Mount Vernon business owner, the name is probably not much of an exaggeration.

Huitron was born in the small Mexican town of Vincente Guerrero. He began working in the fields there at the age of seven before finally emigrating to the U.S. and settling in the Skagit Valley, where his dreams of owning his own business took hold. But without collateral or established credit, Huitron had few options.

Then he found the Latino Business Retention and Expansion (LBRE) program. LBRE, which was created by the Economic Development Association of Skagit County, worked with Huitron to develop a business plan while he saved every penny he could.

And then the “miracles” started.

Huitron saved $8,000 to buy his food truck, only to have one given to him as a gift. A propane tank explosion burned his face and scarred his hands, but he healed quickly. He was able to continue his business thanks to two micro loans he acquired through LBRE, totaling $9,500. And when he recently hit some financial bumps in the road, he was able to turn to LBRE and one of its key financial partners for help.

Today, Huitron is the proud owner of a successful taco truck business. He’s even thinking of expanding. And that partner, North Coast Credit Union, is helping him to do that.

“The people at North Coast don’t look down on somebody who has a problem,” says LBRE Director Diana Morelli. “That’s a huge difference from the way banks have dealt with my clients. And I think that has a lot to do with Terry Belcoe’s leadership. Terry is out there in the community every day, doing a lot of good things for people.”

Belcoe, North Coast’s president and CEO, has been doing a lot of good things for the people of Whatcom and Skagit counties for quite awhile. He was born in Mount Vernon, grew up on a small farm north of Bellingham, went to school and started his career in the area. He’s held his current position since 2001.

Belcoe is a past two-term board chair of the United Way of Whatcom, and he now serves as board chair for Community Action of Skagit County, treasurer of United Way of Skagit County and chair of the Oversight Committee for the Leadership Skagit program. He is a member of the advisory councils for the Western Washington University MBA program and the Northwest Career and Technical Academy.

And he’s now playing a major role in the collaboration between LBRE, North Coast and the Northwest credit union movement at a key point in the program’s development.

Hispanic-run small businesses across Washington range from one individual offering a table of handmade wares to product-focused enterprises with dozens of employees, but many beginning Latino entrepreneurs remain unfamiliar with the language of business success in the U.S. and still lack access to mainstream financial institutions. “For years, I’ve had to be reactive,” Morelli says, “but now we have a chance to be proactive because of the products that Terry has developed to help low-income people and the connections he is helping us make across the state.”

Says Morelli: “Terry has heart.”

United Way of Skagit Valley recently honored Belcoe with its Ted Reep Award, the agency’s highest individual honor, for his “exceptional service to the community” and called him “a true Superman.” In a recent interview with Anthem, Belcoe talked about the programs and projects that have helped him earn that accolade.

Q: “Ending poverty” is written into North Coast’s mission statement, and fighting hunger is one of your passions. You’ve also worked to develop micro-lending options for business startups and a loan program for people seeking a path to U.S. citizenship. Can you talk a little bit about the community that North Coast serves, and why these efforts are so important to the Skagit Valley?

Terry Belcoe is “a true Superman to United Way,” agency Director Debra Lancaster says.

The Skagit Valley is one of the most productive agricultural areas in the world, but the supporting population here faces significant economic challenges. Here are some stats that give a picture of why the work we’re doing is so important:

  • In Washington State, 11.7 percent of the population is Hispanic/Latino; 12.9 percent live below the poverty line.
  • In Skagit County, 17.3 percent of the population is Hispanic/Latino; 12.6 percent live below the poverty line.
  • In the city of Burlington, 31.4 percent of the population is Hispanic/Latino; 16.7 percent live below the poverty line.
  • In Mount Vernon, 33.7 percent of the population is Hispanic/Latino; 18 percent live below the poverty line.

In addition, the eastern portion of Skagit County has been identified by the U.S. Department of Agriculture as a “food desert,” which means residents there have minimal access to fresh fruit, vegetables and other healthful whole foods. This is largely due to a lack of grocery stores, farmers’ markets and healthy food providers.

In 2007, North Coast partnered with Community Action of Skagit County in starting the “Skagit Food Share Alliance” project. This initiative has more than doubled the amount of healthy, locally grown fruits and vegetables in the Skagit County food bank system, and contributed to a successful capital project to significantly expand the Skagit County food bank distribution system, which is now able to channel more than 2 million pounds of food to county food banks. North Coast’s annual “Bite of Skagit” event continues to fund these efforts.

Q: One of your new initiatives is designed specifically to help aspiring business owners in the Hispanic community. How did you learn of the Latino Business Retention and Expansion program? How does the program work? Has it been tried elsewhere, or will it first be piloted in the Skagit Valley?

I’ve worked closely with the Economic Development Association of Skagit County (EDASC) on a number of community development efforts over the years. For example, I served for several years on the EDASC Foundation board of directors, and I now serve on its Leadership Skagit advisory committee. Through these collaborations, I’ve learned the many challenges faced by Hispanic/Latino families and small businesses.

In 2013, I met Dr. Diana Morelli, the director of the Latino Business Retention and Expansion (LBRE) program for the economic development association. She asked whether North Coast would be willing to consider her clients for small-business loans.

Current or aspiring Latino business owners come to LBRE for help in obtaining financing for their businesses. Dr. Morelli and her colleagues work with these clients to evaluate their businesses and educate them on the requirements of running a business in the U.S. They then help prepare the necessary business plans and documentation that will be necessary in applying for a business loan. Finally, Dr. Morelli works with these clients and financial institutions to facilitate the application process.

Since 2004, LBRE has worked with a varied group of businesses, including an automotive shop, a new/used car dealer, an insurance company, a bilingual newspaper and a Mexican grocery store. In addition to Huitron’s taco truck, the program has helped launch three restaurants, two construction companies, a painting company and a childcare facility.

Terry Belcoe works the line at the Bite of Skagit, which provides funds for the Skagit County food bank system.

But what Dr. Morelli told me was that, although several local banks had expressed interest in doing this type of financing, in practice the results had not been good. Since many of these prospective borrowers don’t have an extensive history with financial institutions and traditional American business practices, they often did not fit into the boxes that commercial banks were looking for and, therefore, the banks would not do the deals. She was looking for a financial institution that would look at these entrepreneurs in a different way.

We agreed to work with Dr. Morelli to provide access to small-business credit for the Latino business owners she works with in Skagit County. And I told her that, through the kind of collaboration that is so typical in the credit union movement, I would work to develop a network of other Washington credit unions that could connect with LBRE clients elsewhere in Washington.

The program has been up and running for several years in Skagit County. Just recently, however, the Washington Association of Hispanic Chambers of Commerce obtained a grant from the Northwest Area Foundation to replicate the program in the Yakima Valley, another area identified as having a significant need for credit access for Latino business owners. Discussions for forming a network of interested credit unions are under way.

Q: Credit unions have always championed the underserved and/or unbanked; does that make North Coast a natural partner for something like this?

With our existing commitment to serving the underserved and unbanked members of our community, particularly our Hispanic/Latino neighbors, this was a very easy fit for us. We do all forms of lending on a very personal basis, avoiding those lending “boxes” completely. For us, it is easy to adapt how we lend to this kind of model.

The LBRE program vets and trains these prospective borrowers before they even bring them to us. With that level of assurance from a business partner, it makes the process of structuring and underwriting these loans much simpler and of lower risk, since someone we trust has already analyzed their situation.

Q: North Coast is a Low Income Designated credit union and just recently received its CDFI certification, which opens up the possibility of major grants from the NCUA. How will you leverage those certifications to move LBRE forward?

Both of these designations will be critical in our ability to serve these new markets. We were right up against the statutory MBL cap, and the relief from that — which came with our LICU designation — opened the door for us to move ahead with this new business lending program. And of course, with both the LICU and CDFI certifications, we now gain access to potential grant funding to help us greatly expand our efforts. We have big plans for any grant funds that we will be able to obtain.

First, our CDFI grant request includes a provision for loan-loss reserves sufficient to enable us to fund up to $10 million in business loans for Hispanic/Latino entrepreneurs over the next three years. Those are loans that we might not otherwise have been able to make.

Second, that grant request also includes a provision for loan-loss reserves sufficient to enable us to fund up to $5 million in consumer loans for this market, again with an emphasis on providing access to credit for borrowers who we might not have been able to help otherwise.

Finally — and this is something I’m personally excited about — our grant request provides for some staffing and training to enable us to focus more fully on how we best serve the underserved and unbanked members of our community. This includes funding for a full-time position to take ownership of all of the various initiatives we are launching so that we can capitalize on them to the fullest extent possible. I’ve been doing a lot of this work on my own, but with little time and even less expertise in the subject matter, it isn’t the most efficient or effective way to get things done.

Q: Do you have specific goals for your collaboration with LBRE — in other words, what will make this program a success for North Coast? For the Hispanic community? For the Skagit Valley in general?

Debra Lancaster, executive director of United Way of Skagit County, presents Terry Belcoe with the 2014 Ted Reep Award for exceptional service to the community. Belcoe’s “One Community, One Voice” concept for community impact has shaped United Way’s future, Lancaster says.

Our primary objective in our collaboration with the LBRE program locally is to get $10 million in small business and micro-enterprise lending into the Hispanic/Latino community over the course of three years. In the long term, however, our goals are a bit more ambitious.

We are very excited to be working with Sharon Hall and her team at Express Advantage, Kim Vu at the Northwest Credit Union Foundation and a number of other credit unions on both sides of the Cascades to take this program statewide. Our hope is to establish a formal network of participating credit unions that can act as one voice in meeting the financial needs of the Hispanic/Latino small-business community in Washington State — and, eventually, maybe even in Oregon.

With a replica of the LBRE program already launched in the Yakima Valley, we have significant credit union coverage in our start-up areas. Now we’re hoping we can link them all together to share information, best practices, loan participations and, most of all, a reliable and receptive source of credit for this rapidly growing segment of our economy.

Q: You mentioned the time and expertise required to launch and maintain programs like LBRE. What other initiatives will have North Coast’s attention in 2014?

Pity my staff.

In addition to this broad initiative to better serve both Hispanic/Latino business owners and consumers, we are also working closely with our partners in the Skagit Asset-Building Coalition to expand access to financial education, products and services for the unbanked and underserved members of our community.

We are also partnering with the Latino Education and Training Institute to sponsor its Latino Leadership Program, which provides leadership training and community service opportunities for Hispanic/Latino students at the community colleges in Whatcom, Skagit and Snohomish counties.

And, of course, we’re also busy running a credit union.

Q: When you were named Advocate of the Year by Community Action of Skagit County in 2013, you advised other advocates to “follow your heart.” What does your heart tell you about the role of credit unions in the communities they serve, and how does that inform what you do every day?

I know it is old-school, but I was raised in this industry under the mantra of “not for profit, not for charity, but for service.” Credit unions were formed, in part, to provide financial services and access to credit for those who the banks weren’t interested in.

I believe those same realities exist today. We have entire new populations of Americans who desperately need what we have to offer. By finding ways to serve them, we are simply fulfilling what this credit union was formed to do — for an entirely new generation, the next generation of our movement.

There’s nothing all that new and innovative about the idea, but then there was nothing wrong with the old idea to begin with.

Up Next: Look for the next “CEO Perspective,” featuring Numerica President and CEO Carla Altepeter, in the May 20 edition of Anthem.

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

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