Improving Lives: Award Honors Founder of Credit Union Serving Low-Income Southerners

Expanding economic opportunity in rural areas of the Deep South is at the forefront of the work of the latest recipient of a prestigious annual award that recognizes the achievements of individuals who make lasting community contributions.

The recipient, William (Bill) Bynum, received the Heinz Prize for Economics for his work with HOPE Credit Union, a full-service financial institution with branches in Alabama, Arkansas, Louisiana, Mississippi and Tennessee. HOPE serves low-wealth communities that lack access to the tools necessary for financial success.

“The jurors considered candidates whose work has the potential for ‘generational reverberations,'” said Kim O’Dell, director of the Heinz Awards. “They noted Mr. Bynum’s commitment to improving economic opportunity by moving capital to historically marginalized populations, and the scale and replicability of his work.”

The Heinz Family Foundation honors several individuals each year for their contributions to the arts, the environment, public policy, the human condition and the economy. The award was started in 1993 by Teresa Heinz to honor people working in the fields most valued by her late husband, H. John Heinz III, who represented Pennsylvania in the United States House and Senate.

“Mr. Bynum has an unwavering commitment to improving the lives of others,” O’Dell said. “His work personifies Senator John Heinz’s belief that people have the power and responsibility to make the world a better place.”

Many HOPE members are using a traditional bank for the first time.

“Nearly half of our members didn’t have a bank account before joining the credit union,” Bynum said. “They’ve relied on high-cost check cashers and payday lenders who take advantage of those who can least afford to pay.”

“In an increasingly diverse country, the majority of the population cannot be left out of the economy.”

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HOPE is opening branches in low-capital communities to stimulate the local economy and improve financial conditions for people who have been unable to accumulate savings or assets due to generational wealth extraction by entities such as than predatory loan companies. HOPE works to empower people to get out of debt, improve their quality of life, own homes and businesses, and influence economic policy.

For Bynum, these initiatives are essential to advancing economic justice for disenfranchised communities.

“In an increasingly diverse country, we cannot leave the majority of the population out of the economy,” Bynum said. “It undermines the stability of the whole economy and it is against our collective interest.”

Between April 2020 and April 2021, HOPE issued over 5,000 Paycheck Protection Program loans that have allowed companies to retain their employees during the pandemic.

According to Bynum, HOPE provided loans to businesses unable to obtain paycheck protection loans through banks with which they already had existing relationships. Many of them were black-owned small businesses that were less likely to receive loans through traditional banking institutions, according to a recently released report. case study from Purdue University and Harvard Business School on the Paycheck Protection Program. If these companies have received any, it is from non-bank lenders like fintechs, which provide loans online.

The loans distributed by HOPE kept black-owned businesses afloat at a time when they were facing closures at an extremely high rate: 41% of all black-owned businesses in the United States closed between February and April 2020, according to a report by the House Committee on Small Business.

“Each of these loans helps stabilize jobs in very low-income communities,” Bynum said. “We were in a very lucky position to extend the lifeline to these entrepreneurs. ”

HOPE Third Quarter Impact Statement report from 2021.

HOPE has also launched a Transformational Deposit Program. This program imports capital into wealth-starved communities through deposits funded by individuals, institutional depositors, financial advisors, banks, and any other entity wishing to participate in the program.

Unlike traditional banks that use funds from their customers’ low-cost or no-fee checking and savings accounts for loans, accounts with HOPE do not have enough funds to draw on to provide loans to local businesses and initiatives such as housing and health. Instead, that money has to come from somewhere else. In the spring of 2020, Netflix made a $10 million deposit, and companies like Dick’s Sporting Goods and Paypal followed suit.

“We have raised over $100 million in transformational deposits over the past year, allowing us to fund many homes, small businesses, grocery stores, schools and health centers in the rural Deep South,” said Bynum.

It was accomplishments like these that prompted the Heinz Family Foundation to present Bynum with the Heinz Award.

“The enormity and timeliness of the issues addressed by Mr. Bynum made the celebration of his work extremely important,” O’Dell said.

The prize includes $250,000 with no restrictions. Bynum plans to use some of the money to continue work at HOPE, with some of it already allocated to the institution’s policy center. He also hopes to build an endowment that would allow HOPE to raise the voices of the people they serve and ensure that their views are taken into account when policy makers decide how to allocate resources.

“It’s certainly been an incredible honor to be associated with the Heinz family and they’ve given me the opportunity to dream a little about how best to put resources to work,” Bynum said.

To read The Daily Yonder’s full interview with Bynum, click here.