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Serving Low-Income Households

Credit Union :Alternatives
Assets :$63,850,000
Address :125 N. Fulton St | Ithaca, NY 14850

Details :

Start Date: Since January 1979

Key Credit Union Data:

  • Loan/share ratio: 68.5%
  • Return on average assets: 2.5%
  • # Members: 9,100
  • Avg. shares/member: $6,197
  • Avg. loan balance: $16,978
  • Yield on average loans: 6.9%
  • Membership growth in 2009: 3.2%


Alternatives Federal Credit Union was chartered in 1979 to assist small businesses that couldn’t get capital from the banking system in order to expand. The original field of membership was limited to members of area coops and employees of worker-managed businesses. Alternatives was designated a low income credit union from its beginning. Micro-enterprise lending is its specialty. Individual financial empowerment is its goal. Its mission is to build wealth and create economic opportunity through education and asset building programs.


Today Alternatives is a regional credit union, but its mission and goal remain the same. It uses a Credit Path model to describe where people are situated at various points along a continuum between poverty and self-sufficiency. As a community development financial institution, it sees its job as helping members move along that continuum by empowering them to make decisions and offering opportunities to move them towards financial self-sufficiency. Alternatives has used the Credit Path model as a guide in designing products and services to meet members’ needs at their different points along the path and to help them progress towards successful asset ownership.

Products/Services Offered:

  • Fresh Start Checking Accounts – for those members who do not qualify for the CU’s traditional checking because of prior account management difficulties.
  • Individual Development Accounts (IDAs) – an asset building program for low income participants. Savings are matched to provide assistance in paying for a home, education or small business.
  • Money Wise® – a 7-week financial education course that is open to the public for a small fee but is required for those in the IDA program. Participants track their expenses, assess spending habits, set financial goals and review credit reports.
  • Opportunity Lending – which makes credit available quickly to as many members as possible with rates based on credit scores and terms.
  • Credit Builder Loan – for low income and 1st time borrowers. Maximum loan amount is $1,000 and rate includes discounts for direct deposit or automatic payment.
  • Alternative Mortgage Programs – for those members who may not qualify for traditional mortgage loans such as:
    • Flexible Plus Mortgage – more flexible qualifying terms with a minimum 15% down payment (5% must be borrowers own funds), low closing costs, and no Private Mortgage Insurance and Title Insurance required.
    • 10-Year Swing Variable Rate Mortgage – with a fixed interest rate for 10 years and with 15% down payment of which 10% can be a gift or loan; after 10 years, loan becomes a one-year ARM.
  • Student Credit Unions – at 9 area schools, the school branches offer deposit services and hands-on teller training for people under the age of 19
  • Volunteer Income Tax Assistance (VITA) services – free tax preparation for any member or non-member who qualifies based on income
  • Business CENTS (Community Enterprise Networking and Training Services) – a small business development program offering education, counseling and support services to micro-entrepreneurs
  • Business Loans – a variety of business loans to meet small business needs
  • Community Partnership Lending – a partnership with non-profits to make loans to clients of non-profits that might otherwise be considered “unbankable.” The non-profit deposits funds with Alternatives, who in turn, funds loans to a maximum of double the funds on deposit. The non-profit decides on loan policy and makes the loan decisions. Any losses are covered by the non-profit deposits.
  • Financial Counseling – through BALANCE, a confidential financial counseling and education service, or through a credit counselor on staff.

Additional Information:

Karl Graham, director of community relations & development at Alternatives, provides the following examples of Alternatives’ commitment to the community:

  • Living Wage – In 1994, Alternatives FCU did its first Living Wage Study to address internal staff concerns about compensation levels. Rather than looking at what competitors paid or what the statutory minimum wage was, the credit union wanted to look at what it took to support a person above the poverty level, Graham explains. It has continued to update this study every two years. The Living Wage has become a local indicator. The Tompkins County Workers Center has initiated the Living Wage Employer Certificate Program to publicly recognize and reward those who pay a living wage. Any employer in the private, public and non-profit sectors is eligible to apply. To date, 67 local employers (private and public) have received the certification.
  • Support for Business Members – Many of the credit union’s members derive some or all of their income through self-employment. “In addition to our business lending, training and support programs,” says Graham, “we support these members by publishing a ‘Business Yellow Pages’ and hold holiday markets in our lobby.” The on-line and paper editions of Business Yellow Pages allow business members a free venue for advertising their services to the overall membership and general community. The Holiday Markets are held during business hours in November and December. “In the spirit of the cooperative movement, credit union members are able to support their fellow members’ businesses,” states Graham.
  • Community Education – Credit union staff partner with community organizations to present workshops on personal finance, business basics and homeownership classes. Working through not-for-profit organizations, the credit union is able to target low income or other underserved populations. Staff-Paid Community Service Hours – Credit union staff are eligible to receive up to three paid hours per month for volunteering with community organizations. The volunteer work must be compatible with the credit union’s mission and goals. Service Partnerships – Partnering with community organizations gives the credit union access to the partner’s clients, staff and facilities, to the benefit of both organizations. Both partners are able to expand their service offerings at little additional cost. Graham cites the following examples of service partnerships: ATM placements, community partnership lending, VITA sites, financial education sites, school credit union branches and IDA sponsorships.

In 2009, the credit union’s community development efforts were recognized by the Treasury Department’s Community Development Financial Institution Fund. “Alternatives was one of nine CDCU’s awarded funds for economic recovery,” concludes Graham.