116 3rd St SE
Cedar Rapids, Iowa 52401
A global pandemic and disasters like the derecho storm have ravaged Iowa since last March. While these have created short-term emergencies, they have also propelled underlying community issues into the spotlight. Community challenges like access to child care and affordable housing, along with the need for a financial safety net, have never been greater.
It's time to come together as a state to address these issues holistically, and Iowa's credit union industry stands ready to help.
When the pandemic hit last March, the Iowa Credit Union industry rallied together. Through August, Iowa credit unions provided:
' $6.8 million in emergency loans to Iowans and small businesses
' $882 million in loan relief through:
' 2,373 mortgage payments deferred.
' 33,671 consumer loan payments deferred.
' 798 business loan payments deferred.
' 1,300-plus grants to Iowans and small businesses through the Iowa Credit Union Foundation.
' $2.6 million in charitable donations.
' $93 million through 2,217 small business Paycheck Protection Program loans.
This support has only grown through August, and we know the need still is great. While this help can serve as a short-term band-aid for relief, we need to come together to work on long-term cures.
As we head into the 2021 legislative session, it is important to focus on priorities that can directly help struggling Iowans and small businesses, including access to affordable housing, improving child care access and affordability and helping Iowans save with Prize-Linked Savings.
Here in Cedar Rapids, the derecho underscored the need for more affordable housing options in our community, especially in the immigrant communities.
The most valuable asset for Iowa families is often their home, providing financial stability and often serving as the primary means to accumulate wealth. The high cost of housing is a barrier to financial well-being for Iowans and a detriment to communities, both urban and rural, working to grow their workforce.
The State Housing Trust Fund (HTF) was created by the Iowa Legislature to leverage existing federal, state and local efforts to increase and preserve the supply of affordable housing for lower-income households. One hundred percent of all HTF funds must be used for projects that serve people at 80% or less of the local median income. The HTF dollars are distributed to the 27 local housing trust funds around the state for new construction, down payment assistance and homelessness assistance programs. Credit unions support increasing the state appropriate to the HTF to provide more funding for these importance needs in local communities.
In addition to affordable housing, Iowans need a financial safety net for unforeseen expenses. Even pre-pandemic, we knew Iowans struggle to save. A Pew study from 2020 showed that only 23% of lower income households have enough savings to cover three months of expenses. Combine that with the rising costs of child care, housing and a global pandemic, Iowans are constantly facing the burden of expenses.
We need to help Iowans become better savers so they can weather unforeseen disasters, and prize-linked savings (PLS) programs can be a means to that end. PLS is a tested, successful concept in which savers earn chances to win a cash prize by saving at insured financial institutions. By injecting the prospect of winnings into the savings experience, PLS not only rewards successful savers, but attracts unbanked customers into the financial mainstream. Credit unions in Iowa are interested in offering PLS to help their members and teaching them to save in moments of crises.
While the effects of 2020 will be felt for years to come, a new year brings a new chance to push our state forward. Iowa credit unions are committed to working with state leaders on solutions that help Iowans and businesses recover from the pandemic and set them up for future success.
Stefanie Rupert is president and CEO of Collins Community Credit Union.