In it for the long haul and innovating in Eastern Kentucky

Owsley County, Kentucky (red outline) is in the midst of a large
region afflicted by persistent poverty, (Source: Urban Institute)

Last December, Owsley County, Ky. mayor Cale Turner told the Lexington Herald-Leader’s Bill Estep “there’s not enough jobs, definitely not.” Estep was interviewing Turner for a story highlighting the fact that nine of the country’s 30 poorest counties are in Eastern Kentucky. Owsley County ranked as the country’s third-poorest. The county’s unemployment rate is more than double Kentucky’s rate.

Owsley County native Lisa Botner, a Community Development Program Specialist for Appalachian Community Federal Credit Union, agrees with the jobs assessment. “The people that live around here that are doing well have kind of absorbed all those better-paying jobs in the area, or they’re leaving out every Sunday night and not coming home until Thursday,” says Botner. Others drive a couple of hours each way to Richmond or Lexington, or nearly two hours to the Toyota plant in Georgetown.

Lisa Botner and ACFCU's virtual teller machine, which
can perform most banking functions remotely.

Into this challenging situation ACFCU deployed Botner to join efforts at breaking a generational cycle of poverty. She joins other business leaders, educators and officials who, as the Herald-Leader’s Estep put it “work to diversify the economy and counteract the downturn.”

For its part, ACFCU – a Community Development Financial Institution – installed a “virtual teller machine” funded in part by a 2016 grant from the Opportunity Finance Network grant. ACFCU added Botner and the VTM in 2017, hoping as a mission-driven credit union it could play an important role in a community with just a couple of banks and a heavy reliance on predatory lenders.

 Previously, Botner spent several years conducting family engagement activities with Partners for Education, a non-profit affiliated with Berea College (learn about PFE and ACFCU’s collaboration here). Now her role – not a typical position for a financial institution – illustrates ACFCU’s heavy commitment to Owsley County.

That commitment extends to financial coaching, combined with fair lending products, designed to help members stair step their way to greater financial health and stability, regardless of income.

Owsley County, Kentucky's unemployment woes are well-documented.

Yet the journey hasn’t been easy. “It’s been hard getting through to people that there’s something different,” she says. “They now have an option for financial services that they’ve never had, but it’s actually a struggle earning trust.

“At first people were confusing us with payday lenders. Getting people to understand we don’t just hand out money and charge you horribly high interest rates has been a challenge.”

“It’s the same challenges I envisioned we were going to have,” Botner says. “But word’s getting out, people are figuring out what we’re really about and we’re actually starting to earn people’s trust a bit.”

JoAnne Richardson was an early adopter of the
credit union's services in Owsley County.

In addition to working with adults, Botner is focusing heavily on Owsley County High School, where she hopes financial literacy courses and relationships with high school seniors can help yield a break in the generational cycle of poverty.

“We’re trying to show these kids the real world doesn’t have to be struggling with drug addiction or seeing how quickly you can get on disability,” she says. “It can be, ‘go to school, get a job and budget your money.’ That’s my mindset and what I’m putting quite a bit of focus on.”

Botner is also reaching out to those who are slowly finding work within the county, including with Teleworks, a work from home customer service company that’s hired about 100 Owsley Countians.

ACFCU is working to establish trust in the community.

“Teleworks is definitely helping and people are getting jobs. You can tell by the traffic in town (Booneville, the county seat) – some days are busier than you’ve ever seen it. They may not pay great, but a job’s a job and people need to make a living.”

It all leaves Botner wondering whether she’s coming or going sometimes. “I’m tryin’,” she says. “Sometimes I feel like a hamster in a wheel. But I know we’re the good guys and it’s worth the effort.”

(Jeff Keeling is vice president of communications and community relations for Appalachian Community Federal Credit Union.)

Project Reinvest is people

The Peeler family are home owners thanks to
down payment assistance from Project Reinvest.

A current project has put me deep into data on ACFCU’s “Project Reinvest” down payment assistance program. Spending time seeing the names of 194 families who are now building wealth and creating brighter futures for themselves and their children was really gratifying. It was also great to see all the communities that benefited.

The project’s Excel data contains some impressive numbers. Since April 2017, Project Reinvest has contributed to roughly $20 million in home sales. The program has aided those 194 families with more than $2 million in down payment assistance awards ($10,500 each). Realtors, other financial institutions, mortgage title companies and other businesses have benefitted from home sales that were possible largely because of Project Reinvest.

Numbers, though, are not what Project Reinvest is primarily about. It is about the hard-working families like the Peelers who have done it right – they’ve taken homeownership education courses, their credit scores are strong and now they’ve achieved the American Dream. Without the down payment assistance and other supports ACFCU and its many great partners offered, many of these families would still be renting – and in some cases paying more in rent than they’re paying for their mortgages. It’s been a great thing all the way around.

Realtor Lauren Clemson
has enjoyed working
with participating families.

Lauren Clemson, an area Realtor, developed a special bond with her Project Reinvest clients. “Each person I’ve dealt with has overcome a struggle to get where they are and they’ve worked their way up,” Clemson said. “They’re very proud and very careful with their money.”

Clemson helped one single mom who was working two jobs. When that woman bought her house, she told a friend who also works two jobs and is raising kids on her own. Now the two are neighbors and home owners. “They’re just thankful that someone believed enough in them to offer them this chance,” Clemson said.

Clemson can relate first hand. “At one point in my life, I was a single mother who had to work hard to get my credit score up, I had a child in daycare, I was working full time – it’s a struggle, and I wish I would have had this opportunity.”

Dustin and Amanda Wooten with the keys
to the home they bought through
Project Reinvest.

ACFCU is reaching out to Project Reinvest families even now to make sure they know they can turn to us for financial coaching and other benefits that most institutions don’t provide. And we’re continually partnering with other organizations in the affordable homeownership sector so we can layer our work as a financial institution into their efforts. We’re constantly learning through our partnerships, which also extend to the real estate sector.

A good number of decent houses are still quite affordable in this region. Mix in all the help that’s available for low- and moderate-income families and you have a recipe for more life-changing stories.

(Jeff Keeling is vice president of communications and community relations for Appalachian Community Federal Credit Union.)

Rolling the boulder uphill in Appalachia

Appalachian Regional Commission's FY2019 County Economic
Status report shows continued challenges in Central Appalachia

Working to provide opportunity in Appalachia can feel like a Sisyphean task. Like the mythical Sisyphus, we at ACFCU – and others who strive to push back against challenges including poverty, economic shifts and geographic isolation – can easily feel like the boulder keeps rolling back downhill. Sometimes those challenges’ weight can seem crushing, especially when we see their direct effects on families who struggle just to achieve a decent quality of life.

ACFCU President and CEO Ron Scott

Our task is laborious and it can seem futile – but it isn’t. ACFCU’s President and CEO Ron Scott sounded an important note of hope this week in the wake of recent news from the Appalachian Regional Commission (ARC). It’s a truth that applies not just to the credit union’s work but to that of non-profits, businesses, churches and schools that genuinely strive for this region’s flourishing. “We are making a difference,” Ron said in reference to an article about ARC’s updated “County Economic Status” report. “We are learning every day new ways to address the overall challenge of providing those of modest means with a pathway toward better living.” He went on to thank everyone affiliated with ACFCU “for your care and help in this important mission.”

ACFCU operates in some of the region's hardest-hit areas.

Such thanks can and should be extended to all who are working toward the same end, through whatever fair and just means are at their disposal. ARC’s annually updated report reveals much. ARC’s index-based county economic classification compares Appalachian counties with a national index of three indicators – three-year average unemployment rate, per capita market income and poverty rate. Counties in the lowest 10 percent nationally are deemed “distressed.” Those in the 11^th to 25^th percentile are deemed “at-risk,” while those in the middle 50 percent are “transitional.

With its many partners, ACFCU serves parts of the “reddest” area on ARC’s map. Out of 29 counties we serve, just a few are transitional, several are at-risk and the majority are distressed. As a Community Development Financial Institution (CDFI), ACFCU’s work and partnerships reach into numerous distressed counties in Kentucky. Even within our transitional counties we focus much attention on distressed census tracts as measured by ARC.

Even within less challenged counties, ACFCU focuses on
providing opportunity in distressed census tracts.

ACFCU’s fledgling “Aspire to Own” program is among numerous partnership-dependent efforts to bring opportunity to underserved areas such as Washington County, Tenn.’s Census Tract 609. Washington is a transitional county, but the 6,380 people living in tract 609 have a median family income ($23,083) just 34 percent of the national average and a poverty rate (45.6 percent) three times the national average.

The proverbial boulder in these efforts presses hard against our uphill climb. More than occasionally, though, a family’s life is transformed at least in part through ACFCU’s commitment. That can happen through home ownership. It can happen through financial coaching and the improvements that yields. It can happen through access to affordable transportation, free tax preparation or the provision of virtual financial services in remote areas where providers typically aren’t willing to invest.

Seeing “the stone rolled away” in peoples’ lives is a gift and a motivator to continue. Knowing such positive stories invariably involve collaboration is humbling. If you’ve walked through rugged Appalachian woods with the thin fall sunshine illuminating red, gold and orange leaves overhead and glinting off a rushing stream below, you probably have some idea of why Appalachia is worth our commitment. If you haven’t had that experience, make some plans – peak fall season is on its way, and we could use the tourism dollars!

(Jeff Keeling is vice president of communications and community relations for Appalachian Community Federal Credit Union.)

Financial coaching helps couple achieve American Dream

Jennifer and Stacy Black in front of the home they purchased in June.

Two years ago, Stacy and Jennifer Black had more than $35,000 in debt, past due medical bills and credit scores that mainstream lenders wouldn’t want to touch.

Today, the Blacks are proud homeowners thanks to two keys: financial coaching from Appalachian Community Federal Credit Union’s Member Development Director Candy Craig, and their own discipline in following Craig’s guidance. And they’re sold on financial coaching, even though the process is difficult.

“Whatever goal you have that’s brought you in to start the process, make sure the reason you’re doing it is strong enough to keep you going,” Jennifer said from the kitchen of her three-bedroom home in Fall Branch, Tenn. “Because it’s gonna be hard. It is gonna be hard.”

Jennifer had her reason. “Once I had my kids, I didn’t know how long it was going to take, but I wanted to leave them something so they’d be able to pass it on to their kids,” Jennifer said.

ACFCU Member Development Director
Candy Craig helped the Blacks on their
path to homeownership.

On Labor Day, late morning sun beamed brightly through the kitchen window of the Blacks’ home. A day earlier the couple – for the first time in 22 years of marriage – had hosted a holiday gathering at a place they can truly call their own. Sons Sean, 22, and Cody, 19, and Sean’s girlfriend had enjoyed grilled steaks while the couple’s four dogs ran around the yard.

In 2016, after a rent-to-own effort went south, Jennifer checked into Eastern Eight Community Development Corp. hoping the couple might be eligible to buy. An agency representative told the Blacks they probably needed some financial counseling and recommended ACFCU and Craig.

“We were living paycheck to paycheck, and it was like, ‘do I feed the kids or do I pay a bill,’” Jennifer said. “We were barely getting by.”

Craig, who became a mentor and advocate as well as a coach, saw hope. The Blacks had decent income but they needed guidance.

The beginning of the process wasn’t easy. “I had a box of bills that were mismatched,” Jennifer remembered. “We were probably here about three hours going through my stuff, because I was very mismatched and disorganized.”

Stacy said Jennifer seemed overwhelmed after some coaching sessions. Like Jennifer’s focus on their sons, though, Stacy had a strong motivation. “I wanted my wife to have her own house,” he said. “Her own kitchen that she could be proud of. I knew she deserved it, and she’s a beautiful woman. She works hard. I made sure this was something I would not fail on.”

Craig helped the Blacks work through a complex array of issues, but budgeting was the bedrock for their ultimate success.

“There were times when money was tight but together we stayed with the game plan,” Stacy said. “We didn’t go in making excuses as to why we couldn’t do something, we just did it.”

Once budget discipline was established, the couple added a small revolving credit card and began using it wisely so that it raised, rather than lowered their credit scores. “We didn’t consolidate, we didn’t get extra loans – we paid everything through our own savings,” Jennifer said.

In February, they took their nearly $3,000 tax refund to Craig’s office, called some creditors and cleared the last debts that were keeping them from qualifying for a mortgage. The process had taken 18 months at that point. The Blacks closed on their home in June. Jennifer said her credit score continues to increase and she said her new goal is to pay the house off early.

And coach Candy? She’s not out of the picture by any means, Jennifer said. “We bought the house and Candy reached out to me and was like, ‘we need a new budget.’”

 (Jeff Keeling is vice president of communications and community relations for Appalachian Community Federal Credit Union.)