PITTSFIELD — When Greylock Federal Credit Union renovated its Kellogg Street branch to include its first Community Empowerment Center three years ago, it put its financial literacy services in one place.
The branch was chosen because it sits in Pittsfield’s Morningside neighborhood, one of the city’s most impoverished areas, where financial literacy services are needed the most.
According to the credit union’s recent impact report, Greylock provided $4.5 million last year in affordable loans, supported by financial coaching and education, to its member-owners to fill emergency needs, build members’ credit and help them avoid high rates set by predatory lenders.
That’s up from the $1.8 million in community development loans Greylock granted members in 2020, when loan volume was affected by the pandemic.
“COVID shut down a lot of things,” said Cindy Shogry-Raimer, Greylock’s vice president of community development. She expects this year’s figure to be more in line with what the credit union granted in affordable loans in 2021.
“I’m at $1.1 million right now, and we’re only three months in,” she said. “I think we’ll be on track with last year.”
Greylock is certified as a community development financial institution. The designation from the U.S. Treasury that allows financial institutions to specialize in lending to individuals, organizations and businesses in under-resourced communities that mainstream financial services don’t traditionally reach.
The certification allows institutions to offer clients financial education, business coaching, and low-interest rate loans that increase economic potential and help build wealth.
“The need is great,” Shogry-Raimer said. “With credit-challenged people with low incomes, you’ve got a lot of predatory lenders out there that really take advantage of people.”
Greylock provided 469 so-called “new road” loans last year to members who might have turned to national subprime lenders, according to the impact report.
“When I’m looking at someone who is paying interest of 600 or 700 percent on one of those fast internet turnaround loans, that’s a trap that they just can’t escape from and it’s crippling,” Shogry-Raimer said.
Greylock provides assistance to members who find themselves in those situations by getting them out of those lopsided deals. The institution buys those other contracts and instead offers loans at lower rates.
The credit union then follows up with progress reports on their member’s financial standing, giving information to the three credit bureaus.
“Not only have they freed up money during the month on a loan that they will never, ever pay, but they’re actually paying on time. And, by paying on time they’re improving their credit score,” Shogry-Raimer said.
Nearly all of the affordable loans Greylock grants through the program are based on members’ ability to pay them, not on their credit scores.
When Greylock opened its center three years ago, 66 percent of the credit union’s almost 90,000 members met the federal criteria for low-income customers who lacked proper access to financial products or services.
Nearly half of potential customers in the area had scant access to money in case of emergency, Shogry-Raimer said. “When you see that, there’s a problem. We opted to do something about that.”