President and CEO, Reading Cooperative Bank
Julieann Thurlow remembered the young woman's story well. In telling the banker how proud she was of her mother for buying her first home, the 20-year-old shared a surprising detail: At 12 years old, she had translated for her Spanish-speaking mother throughout the entire lending process.
It was something of a wake-up call for Thurlow, the president and chief executive of Reading Cooperative Bank in Massachusetts. She recognized that if she wanted to get serious about reaching the unbanked in her community, she needed to meet people where they were. That meant providing financial products they actually need and giving them access in their native language.
That conversation was one of many Thurlow had over the course of an eight-month program hosted by Harvard Business School. Reading Cooperative joined other members of the private, public and nonprofit sectors from the city of Lawrence to collaborate on spurring economic development in the city. Those discussions helped the $578 million-asset bank shape its approach to the city — and the issue of getting more people into the mainstream banking system.
"We recognized early on that if we took Reading Cooperative Bank as it does business in Reading, and plunked it in the middle of Lawrence, we'd be no different than any other bank that's there," Thurlow said.
A former mill town on the Merrimack River near the New Hampshire state line, Lawrence is the poorest city in Massachusetts. The city is predominantly Hispanic and has a large immigrant population. Reading Cooperative is currently negotiating for a downtown site where it hopes to open its first branch there.
Some local, regional and national banks already have branches in Lawrence — including Citizens Bank, Eastern Bank and Santander — and they collectively hold roughly $458.3 million of deposits in the city.
But even so, Lawrence had 75% fewer branches than the other communities that Reading Cooperative serves, Thurlow said.
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Besides, Thurlow isn't really interested in stealing deposit share from those institutions. She wants to go after the people using alternate financial services, such as check cashers and payday lenders. Reading Cooperative can offer them cheaper and safer financial products than such firms, she said.
Many of the people she wants to serve are blunt about the fact that they don't trust banks. So Thurlow plans to staff the branch with people who live in Lawrence, know the city and speak Spanish. She also plans to offer check-cashing services at the new branch and eventually small-dollar loans and other credit-building products.
She thinks about the issue partly within the context of the Community Reinvestment Act. It may have originated mainly as an anti-redlining law, but before someone can even think about buying a home, they have to have access to banking services in the first place, she said.
The proposal to offer check-cashing posed some challenges, including that it complied with the Bank Secrecy Act and other anti-money laundering laws. Thurlow brought on a former regulator to craft the bank's policies and procedures for the check-cashing service and design a transaction monitoring system.
She also had to sell the plan to her board of directors, who were reluctant about getting into the check-cashing business. The bank added Abel Vargas, a former economic development director for the city, to its board. That additional perspective helped, but Thurlow said she still needed to dispel the misconception that there's no money in low-income communities.
To do that, she took them on a tour of the city. She showed them the mill buildings being redeveloped into loft apartments, the stores and art galleries popping up along the main drag, and the blossoming restaurant scene.
She said she also kept hammering home another important piece of context for her directors: As a cooperative, the bank is not bound to quarterly earnings and can there take a bit of a longer view on projects like the forthcoming Lawrence branch. Moreover, it fits with the bank's mission, Thurlow said.
"It's not out of bounds for our type of bank," she said. "We're a cooperative and we were actually founded so that working people could own homes."
