‘Moving individuals out of that payday loan cycle into a banking cycle’
The recent opening of a new credit union with a mission to serve residents of Kansas City’s east side marks a key milestone along “a long road” to build generational wealth for those historically disadvantaged.
Since 2007, Dee Evans has been part of a team working to create a financial institution that would generate economic growth east of Troost, particularly among Black residents, she said.
Dee Evans, WeDevelopment Federal Credit Union
“We found the need because we looked at the wealth of the residents here east of Troost and [said], ‘How could we bring money back into the community, help individuals create their own generational wealth, and restore and revitalize this community,’” said Evans, vice chair of the board of directors for WeDevelopment Federal Credit Union (WDFCU).
Led by Evans, CEO Gwendolyn Washington, and founder Ajamu Webster, the WeDevelopment team’s primary goal is to provide a banking alternative to predatory lending techniques that keep folks from achieving financial stability, Evans said.
“Our greatest mission is moving individuals out of that payday loan cycle into a banking cycle, offering them the opportunity to manage their own dollars, helping them rebuild their credit, and creating generational wealth within their families and within the community,” she said.
WeDevelopment is working to secure grant funding to offer payday rescue loans, Washington said, which would be a low-interest alternative to payday lenders, and would allow individuals to establish a relationship with reliable financial advisors who could provide them with financial literacy tools.
“Instead of going to a payday lender, we want people to come to us,” Washington said. “Then if we’re able to make that loan, we turn around and teach them how to start putting money aside so that in the event that they have another critical emergency, they don’t need a payday loan, because they can borrow against their own money. That’s just extremely vital.”
‘Let their money work for them’
Unlike a bank, WDFCU has a geographic field of membership, extending from Troost Avenue east to I-435, and from the Missouri River south to Bannister Road/95th Street.
Any individual who lives, works, worships, or attends school within those boundaries is eligible to join the credit union, which opened in January at 3123 Prospect Avenue.
Gwendolyn Washington, WeDevelopment Federal Credit Union
Credit unions are member-owned and not beholden to stakeholders; that focus on the member improves the customer experience, especially when it comes to financial literacy, Washington said.
“Oftentimes, I think when people make poor choices with their money it’s because they don’t understand the way money works,” Washington said. “We’re dedicated to teaching them how to take their money, let their money work for themselves — like paying yourself back — how to start a savings program, and then take that savings and borrow against that.”
Washington, who joined the WeDevelopment team in 2016 after working in both banks and credit unions, said the educational aspect is often absent in a traditional banking environment.
“A lot of times in banks, they don’t really talk about that, because that’s not what they do,” Washington said. “But credit unions, that’s what we do. We’re always about the members because we’re member-owned.”
In addition to the plans for payday rescue loans, WeDevelopment offers a unique loan program called the Neighborhood Impact Loan, designed to help community members make minor home repairs, Washington said.
Homeowners can apply for a loan that will be considered by WDFCU’s credit committee, and all approved applicants receive the same interest rate, regardless of their credit score.
“Even if your score is 550 and your score is 700, it doesn’t matter to us,” Washington said. “Our goal is to keep the community healthy and strong, and keep people in their houses, so that they don’t lose their houses.”
‘Oftentimes, when you see blight, that’s the problem that you’ve got,” she continued. “People have been in their homes for 35 years, now they’re on a fixed income, and they can’t afford to get a hot water tank, they can’t afford to replace the furnace, but it’s only $5,000. … That’s where we come in.”
Washington also noted that WDFCU offers auto loans, lines of credit, and personal “signature” loans, which are loans that require no collateral for individuals with qualifying credit.
WeDevelopment Federal Credit Union and city officials pose for a ribbon cutting at the credit union
Restoring wealth
While these unique lending solutions are critical components of WeDevelopment’s mission, simple deposits and checking accounts are still what makes it all possible, Washington said.
“When people are depositing money into the credit union, that allows us to make loans back to the community, and that’s what’s important, is giving back to the community,” Washington said.
“Oftentimes, we see those of us in this community who do have bank accounts, they’re generally not in the community, so they have to go farther out,” she added. “They’re putting their money there, and that money is not reinvested in their community — it’s invested in the communities they just left.”
She encouraged anyone who might qualify for membership to open an account — no matter how small — with no pressure to close any existing accounts at other financial institutions.
“We’re not asking anyone to close any other financial institution accounts,” Washington said. “It doesn’t matter where you bank, but just come to us and start a small deposit with us if you care about this community.”
WeDevelopment hopes to capitalize quickly on its growth potential, according to Washington, who believes the credit union could have three branches within five years, each with its own wealth coach.
Click here if you think you may be qualified to join WDFCU as a wealth coach.
For now, the credit union is focused on growing its first branch as it works to restore wealth for residents of the east side and reinvest in the community.
“It starts with one small drop in the river,” Washington said. “WeDevelopment, we’re that pebble. We’re in the water, and now we’re creating a ripple effect.”
