WECU Leverages Funding from Washington State to Launch Diversity Loan Program
Other Washington credit unions may want to check out this opportunity.
Minorities, women, and veterans who own small businesses in western Washington will have access to better funding options, thanks to the new Diversity Loan Program launched by WECU. In addition to offering existing products such as lines of credit and term loans, WECU will extend a more lenient credit policy for qualifying small businesses.
“When we are assessing every loan application, we are putting an emphasis on inclusion,” said Kent Bouma, VP of Business Banking. “Our focus is ensuring these loans are approved and not declined.”
WECU is also taking a holistic approach in working with the business owners, providing webinars and making sure borrowers know about resources available to them.
One such resource offers the borrowers the opportunity for an interest rate reduction of up to 2%, through the state’s Linked Deposit Loan Program.
The program’s resources may be an opportunity for other credit unions.
The Linked Deposit Program is operated by the Washington State Office of Minority & Women’s Enterprises. It “links” up to $175 million of the state’s surplus fund deposits to the commercial loans financial institutions make to certified minority and women owned businesses. Up to 2% of the interest earned on the state’s certificate of deposit in participating financial institutions is passed onto the borrower.
WECU is currently the only credit union participating in the fund.
“Now that Senate Bill 5106 passed allowing credit unions to accept unlimited public funds statewide, this is an opportunity for more credit unions to consider launching a loan program similar to WECU’s and leveraging the Linked Deposit Program,” said Joe Adamack, NWCUA’s Vice President of Legislative Affairs for Washington. “Before credit unions were able to accept public funds deposits, this opportunity was not possible.”
The need for diversity loans is great; WECU has identified 1,700 businesses in its area alone which could qualify.
“WECU is committed to supporting our community,” Bouma said. “We hope this new program makes a meaningful difference for these small business owners.”
Editor’s note: WECU’s Diversity Loan Program is an example that credit unions could consider in their “People Helping People” missions. In recent months, the Northwest Credit Unions’ Diversity, Equity, and Inclusion Task Force has examined similar potential for the Credit Union Movement. Hosted by NWCUA and the Northwest Credit Union Foundation, the Task Force is led by credit union professionals from across the region who are committed to the principles of DEI. The Task Force has collaborated to identify DEI-related tools and practices, and will soon share a comprehensive resource guide of actionable strategies credit unions could deploy to advance their work as employers, financial institutions, and community partners.