SAN JOSE, Calif.–Alliance Credit Union said a partnership between itself and a San Francisco-based national non-profit, and a youth employment program led to more than 300 San Jose area youth getting their first checking accounts.
The $400-million CU said it was looking for a way to make a difference in the community. The credit union decided it could outreach to foster teens, said CEO Brian Dorcy. Statistics show that around 80% of teens who age out of the foster system end up homeless. And many have credit issues.
In the meantime, Dorcy had met Margaret Libby, founding executive director of MyPath, a non-profit that helps promote economic mobility among low-income youth and young adults. The organization has launched several initiatives, including a peer-based youth financial capability initiative delivered through youth workforce program partnerships and a financial coaching program that combines financial guidance with financial products to (re)build credit, manage debt, and build savings.
At right, from left, Alliance CU SVP of Lending Deborah Sunderman; CEO Brian Dorcy; and AVP of Operations Pamela Vegas; MyPath Senior Program Manager Maya Oubre and Founding Executive Director Margaret Libby; and work2future Foundation Executive Director David Mirrione.
MyPath provided Alliance CU with technical assistance to adjust its financial products and enrollment processes using the organization’s National Youth Banking Standards, Libby said.
“Brian adopted the Standards and went a step further in making the onsite account enrollment the most advanced we've seen, where Alliance imprinted debit cards right there for youth and young adults, and provided the initial $5 deposit for each account,” she added. “MyPath had been building a relationship with work2future, the largest youth employment program in San Jose since 2015, so we were able to bring together work2future and Alliance CU, and support a planning process to deliver our MyPath Savings model.”
The MyPath Savings model includes youth access to youth-owned savings and checking accounts (with a credit union partner) and a tested curriculum that includes MyPath Money, a youth-friendly money management app, and incentives to set and meet a personal savings goal. MyPath provides planning and implementation tools, as well as personalized technical assistance for credit union partners regarding youth products and easy enrollment processes.
“It seemed like a great partnership for what we were trying to accomplish,” Dorcy said.
Alliance CU reported it opened accounts and provided financial education for more than 360 youth in the San Jose summer jobs program. The kids were 15- to 16-year-olds just getting their first jobs. Most saved between 50% to 55%of their paychecks. And about 340 of them have kept their accounts at Alliance open. The credit union is planning on reaching out to those teens to possibly serve as mentors for those participating in next year’s summer program, Dorcy said.
In addition to the summer program, the credit union has used a MyPath product to assist adults going back to work in North Carolina, where it has branches. Alliance is also working with The Hub in San Jose for foster kids, providing financial education and counseling on a monthly basis. And it plans to roll out its outreach program to foster teens in the spring/summer 2017.
MyPath, for its part, is providing technical assistance, training, and interactive financial curriculum in Los Angeles and San Diego through the Consumer Financial Protection Bureau's Youth Employment Success (YES) initiative. MyPath also partners with credit unions and youth employment organization in San Francisco, Oakland, San Mateo, as well as Las Vegas and Reno.