CFLA Fellows Meet in NYC for Training
Day 5: August 13, 2015
Becoming Part of Inclusiv Family
With our fellows armed in knowledge of the credit union industry and community development, the final day of the CFLA 2015 training was dedicated to learning about Inclusiv, what we do as an organization and how we are a resource to the fellows and their respective credit unions. Various Inclusiv staff took turns to make presentations about Inclusiv’s programs designed to support low-income and immigrant communities, how to effectively market their credit union products and services, how Inclusiv/Network consulting services can help credit unions’ operational strategies, as well as a suite of investment products that Inclusiv offers to its members. While many participating credit unions are longtime members of Inclusiv, the presentations provided an eye-opener for our fellows who were not familiar with our organization prior to the fellowship training. The presentations made clear that credit unions and their staff do not have to operate in isolation, and that help is readily available in all aspects of credit union operations. It was a seminal moment that illustrated why we were all together for the last 4 days, as our fellows grew to understand the circle of colleagues and friends of the credit union world that they are now a part of.
With the morning passing by swiftly and the inevitable close of the training dawning on all of us, fellows looked across the table to exchange contact information with other fellows and make arrangements to keep in touch. Inclusiv is equally pleased to have our fellows take up their roles at their respective credit unions; our CFLA fellows are as valuable resource of information and camaraderie in our collective efforts to advocate for economic prosperity. Our fellows represent the diversity of the CDCU movement with many being first generation US citizens.
While the NY training officially ended at 2:00 pm, the many photos of fellows working together to understand and apply the foundations of community development finance will serve as a source of inspiration for us all. We sincerely hope that our fellows found the training to be informative and fun experience and we hope to hear about them and from them in the coming months as they become the next generation’s Cooperative Finance Leaders of America.
Day 4: August 12, 2015
Rules, Regulations and Brooklyn! Oh my!
With a change of place and pace, the fellows transitioned over to Inclusiv office for their third day of training, this time around meeting with small credit union consulting specialist, Nick Sanimarco. Over some danishes and mini-bagels, the fellows dove right into a breakdown of NCUA’s rules and regulations and the critical considerations NCUA examiners review in regards to compliance during the annual inspection. Going into detail on the organization and operations of federal credit unions, Nick highlighted how detailed examinations can get and that any CU’s management must be demonstrate how they are effective and efficient while also encouraging stable growth and a trend towards self-sufficiency. Moving forward, Nick and the fellows went in depth on the essentials of credit union liquidity and solvency. Balance was the main principal Nick tried to drive home to the fellows, emphasizing a diversity of assets versus liabilities to help drive business but keep a stable cash stock within the credit union. Elaborating another major part of credit union stability, Nick went on to the essential factors and benefits of supervisory committees, noting suggested procedures as well as recommended duties for sound internal controls. Highlighting different operational styles, the fellows discussed how their own credit unions functions and their hope to engage more with the supervisory committee (and for some how to create and sustain one). With an intensive morning, the fellows enjoyed some New York-style pizza to chow down on as they continued onto credit union numbers. Finishing off his sessions, Nick ending with a debrief on financial statements, key ratios and financial trends. As many really wanted to understand the numbers to credit union operations, the fellows really appreciated the detail explanation and example Nick provided, noting the immediate relevance for when they go back.
To start off the early afternoon, the fellows then met personally with Cathie Mahon, Inclusiv’s President & CEO, to discuss their goals and visions for their respective credit unions and how those align with Inclusiv’s programs and services. Many wanted to improve on their credit union’s operations and bring the best practices (including new products and services) they have heard from each other and the classes they’ve taken back to their own organizations. Cathie then highlighted the structure of support and guidance Inclusiv offers in enhancing what the fellows’ credit unions do in terms of community development and outreach, looking at long-term impact. The fellows then went on to a site visit to Brooklyn Cooperative’s original Bushwich branch where they drew a lot upon what they had learned earlier in the day. Meeting with Brooklyn Coop’s President and CEO, Samira Rajan, the fellows asked a great deal about the credit union’s everyday operations, including product suite, as well as their relationship with their non-profit affiliate, Grow Brooklyn. Many of the fellows were inspired by what Brooklyn Coop has been able to offer and shared how they too wanted to establish VITA and credit builder loan programs at their home credit unions. After a packed day, the fellows dispersed to explore and enjoy Brooklyn’s neighborhood scene.
Day 3: August 11, 2015
In-depth Community Development Finance
Heading into their second day of training at the New School, the fellows were not deterred by the New York downpour, going straight into the day’s presentations and discussions. Building off focused discussions on community development credit unions with Professor Allison, the fellows looked at the bigger picture, learning about the context of community development finance and lending, with Professor Kevin McQueen.
Going from the early 19th century to 2000 and beyond, Professor McQueen elaborated on the history of community development, looking at shifts from progressive, federal to local and market movements. The fellows then explored the reasoning for community development finance and the role intermediaries play in the community development capital markets via a multilayered process from investors to end users. McQueen introduced the concept of community development financial institutions (CDFIs) from their conception and roots as well as high-level certification criteria.
During the second half of the morning, the fellows familiarized themselves with the basics of community development lending versus that of traditional lending. Professor McQueen went on to explain real estate loan origination and underwriting. The fellows were guided through the process, from the basics of creating a development budget to identifying how much equity can be attracted and evaluating potential returns. Theythen put these concepts to use, looking at the case of a long term affordable housing development for low income residents, going back and forth, and breaking down development costs, available financing and subsidies. Following up with another case, the fellows broke out into discussion groups to tackle a community real estate project on their own, tasked with analyzing the search process for developers, conducting a property assessment and providing an investment decision.
Moving on, Professor McQueen expanded on the nature of business lending from a not-for-profit standpoint. For their next case, the fellows assessed the case of a non-profit multi-service social organization based in Florida who was in need of major investment for their renovation needs. As they broke down the numbers, while they concluded that a loan was viable, further discussions needed to be made for the non-profit to diversify their assets, which consisted mostly of grant funding secured. As it hit late afternoon, the fellows sat down to one last case study, this time focusing on neighborhood development in Chicago that was in need of funding streams and confronting staffing deficiencies. The case proved eye-opening as it showed how a non-profit organization faces many of the challenges, including those beyond their control, such as the financial crisis of 2008.
Looking at takeaways from the past days, the fellows appreciated the in-depth look at financial statement calculations and analysis as well as the larger philosophies around non-profit organizations’ sustainability and self-sufficiency. After two days of intensive community development fundamentals, the fellows and professors got to see each other in a more relaxed light as they were treated out to Vietnamese dinner by Union Square.
Day 2: August 10, 2015
Basics of Credit Unions and Beyond
CFLA training kicked off at the New School for day 2 with Professors Charles Allison and Kevin McQueen returning to CFLA for a third straight year and guiding the coursework. While many were weary from traveling and soaking in all the sights that NYC has to offer, the fellows, a studious bunch, got through a set of exercises and practice exams overnight and still managed to make their way to Union Square bright and early for their training.
For day one with the Professors, our fellows became intimately familiar with the credit union industry, including how credit unions are different from banks as well as the different types and sizes of credit unions that exist. Fellows became familiar with the differences between federally chartered and state chartered credit unions, the role of CUSOs, as well as learning common industry language such as field of membership, asset size, short-term loans and the concept of risk.
The foundations set by our professors paved way for group discussions in the afternoon, as our fellows worked together to take on real life case studies of credit union operations and decision making: for their first case study, the fellows discussed the decision-making approach for a credit union that was interested in opening a student-run credit union at a local high school; for their second case study, the fellows discussed the pros and cons of a credit union acquiring a check cashing company. Through the simulated exercises, fellows were able to put on the hat of a CEO to make high-level decisions. While much emphasis was placed on the outcomes of these real-life examples, our professors were quick to point out that what was important was the decision-making process that went into such scenarios, providing a systematic approach. Through these exercises, our fellows demonstrated a balanced approach of both idealism and pragmatism when making decisions and had a better understanding of how certain decisions were made as well as the rationale behind them.
While the day went by quickly and left many fellows tired, they were nonetheless eager to learn more and tackle their homework. Day 2 with the professors will focus more on community development finance. On day 3 the fellows will become familiar with nonprofit finance through more real life examples and will put on the hat of a loan officer to understand a lender’s approach to decision-making. These applications of real life case studies will enrich the fellows’ understanding of their respective credit unions’ finances and the decision-making process that goes into loan applications. Our past experience has told us that these case studies can provide a challenge for even the most seasoned lenders. It is our hope that this discussion will continue for the months that fellows will be spending in their respective credit unions as they become leaders in the credit union movement.
Day 1: August 9, 2015
Meet the 2015 Fellows!
As all the fellows arrived safely from all over the country, CFLA 2015 got off to a great start as everyone settled in for a set of icebreakers and introductions, getting to know each other, CFLA and Inclusiv at large. Grounding the whole training and fellowship, fellows were asked to articulate, visualize and share what they say their role were in the CDCU movement and how they envision accomplishing their goals through the CFLA program – big questions and ideas to carry with them for the next four days. Despite being weary from their travels, the fellows shared their selfies of their experiences around New York City, documenting their training with #CFLA2015. To top off their day before diving into intense training, the fellows were treated to an authentic Italian dinner at the South Street Seaport.