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Tongass FCU Serves Southeast with Community Microsites

by Jun 12, 2023Finance, Magazine

Tongass Federal Credit Union

 

In some Southeast Alaska communities, the pinch of not having a local banking option is significant. Need a vehicle loan or want to take out a small home improvement loan? For the 560 residents of Kake, that might require traveling to Juneau—a $541 round-trip plane ticket—to get to a bank to sign loan paperwork. Add in hotel room, meals, and other sundry costs, and the bank trip quickly escalates to nearly $1,000.

It’s no surprise, then, that residents of the Southeast towns that are home to Tongass Federal Credit Union (FCU) community microsites are excited to share how happy they are that Tongass FCU is nearby.

“We are very glad to have them here. On a monthly basis, I couldn’t tell you how much it saves the community members versus traveling to Juneau,” says Kake Tribal Corporation President Robert D. Mills.

Tongass FCU opened a community microsite in Kake in December 2019. It’s located on the first floor of the Kake Tribal Corporation building, alongside a tourism office, a car rental program, and a coffee shop. The space is offered by the tribal corporation, and two Kake residents work there part-time, year-round.

“Any extra jobs are going to be a big plus in the community right now,” says Ashley Padgett, Kake Tribal Corporation office manager.
The community benefit isn’t just about being able to more easily get a loan, Mills says. It also means members who need to cash a check can keep more money in their pocket—a valuable thing, especially for elders in the community.

“Taking a $1,000 check to the store to get cash, they charge you $80 to cash it; it adds an extra struggle,” he says.

Seeking Sustainability

Helen Mickel, president and CEO of Tongass FCU, says the idea of small community microsites was prompted after Thorne Bay’s Business Association approached the credit union to request a branch.

Thorne Bay, on Prince of Wales Island in Southeast Alaska, is home to about 500 people. Mickel says Tongass FCU leaders at the time weren’t sure opening a branch would be sustainable. “We told the community we would need to have a place to go that is either inexpensive or rent-free,” she says.

A member of the Thorne Bay Business Association offered space in his sporting goods store, in his basement. That’s where Tongass FCU opened in 2006, keeping its cash in a gun safe in the store and operating with volunteer help, recording transactions on paper.

Today, Tongass FCU is in space at the city building, where it pays the cost of utilities it uses. It’s the only community site where Tongass FCU pays for the space it uses; other community microsites use donated space.

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The CEO at the time did not push to open more community sites, but after Mickel became CEO, she says she looked around for more community microsite opportunities.

A community site opened in Hydaburg in September 2019, with one teller operating in a school. The Kake site opened a few months later, and Hoonah was the most recent location to open in June 2020.

“The goal for our community sites is to provide service where no one else will go. We also want to ramp up and provide community education where we can—Financial Reality Fairs in the high schools, for example. I think it’s really important for a healthy community to have a base where they can go to manage their money,” Mickel says.

She continues, “We also provide loans and services to the communities, including HUD 184 Tribal Lending Loans for tribal members,” which come with special provisions for housing purchases and renovations.

“The goal for our community sites is to provide service where no one else will go… I think it’s really important for a healthy community to have a base where they can go to manage their money.”

—Helen Mickel, President and CEO, Tongass Federal Credit Union

Valuable Services, Valuable Jobs

The microsites have evolved somewhat in the last decade. While space is still donated, the tellers are employees, trained by Tongass FCU. Members are able to tap into the full range of services at the site, Mickel says. One is set up to handle loans onsite, and most others help members complete the paperwork and send it to the lender. Tongass FCU also offers online banking options and mobile access, including mobile check deposit, and each has an ATM available as well.

“We are unique in that we are the only ones I’m aware of that do something like this,” Mickel says. “It’s not highly profitable, but as a not-for-profit financial cooperative, this is in our wheelhouse. We are here to serve our members. Tongass is rooted in the Southeast.”

And its members and employees share those roots. Carriah Childress, the microsite administrator in Hoonah, says she is thankful to have a year-round job in the community she calls home.

Childress has lived in Hoonah about six years. She grew up in Sitka and moved to Hoonah in pursuit of a tourism job. “I really fell in love with the wildlife and the people and decided not to leave,” she says.

The two-teller Thorne Bay office of Tongass Federal Credit Union, operated by Mikhala Hert and Monica Douglas, was the first community microsite to open. Since it opened in 2006, the credit union has added three additional community microsites and is considering adding more.

Tongass Federal Credit Union

She moved from tourism to teaching before taking some time to stay at home with her son, who was born during the pandemic. By 2021, she was ready to re-enter the workforce. An associate teller job opened at Tongass FCU in Hoonah, and Childress found she enjoyed it. When the site administrator position became available, she jumped at the opportunity.

Childress says Hoonah was at first dubious about the Tongass FCU microsite. Larger banks had previously opened space in Hoonah but pulled out, sometimes leaving community members in the lurch. The last time that happened was twenty years ago, she says, but frustration remained.

“It took us about six months to earn the community’s trust,” she says. “People tend to be pretty conservative about their money.”

But people came around, particularly members who had small businesses or were comfortable banking in other communities.

“It’s giving access to financial markets to the villages,” says Hoonah Indian Association Tribal Administrator Nathan Moulton. “This has allowed them to establish an account, to establish credit.”

Tongass Federal Credit Union offers banking services many small Alaska communities are unable to get elsewhere in their community. It also offers year-round jobs in communities where most employment is seasonal.

Tongass Federal Credit Union

Hoonah Indian Association provided space in its former canoe shed, where it shares space with SnowCloud Services, the local internet service provider. The two businesses have their own space, with separate locking doors, Childress says.

Moulton says the Hoonah microsite has helped the Hoonah Indian Association directly because it now has faster access to its accounts.

“We’re not… sending deposits through the mail. Sometimes they would take a few weeks to deposit; sometimes they would not even show up,” he says.

Another benefit is the ability to use money (or prepaid) cards, he says. Prior to Tongass FCU opening in Hoonah, people would get a money card through a large retailer, but those cards often have fees attached.

“[The microsite] allows convenience, less fees, and they’re able to enjoy their money at its fullest versus giving it away to those companies that are sometimes not even in Alaska,” Moulton says.

Employing local residents helps federal credit union members in communities with microsites feel more comfortable with the banking process and also increases employment.

Tongass Federal Credit Union

Shakeup Sparks Strong Support

The growth hasn’t always gone smoothly. Tongass FCU opened a branch at the school in Hydaburg in September 2019; four months later, Mickel says, two young men stole the ATM. Mickel says it caused her to doubt whether the microsites were a good idea or if they posed too much risk.

The men were quickly caught and charged for the incident. Mickel met with the community, who wrote letters, signed a petition in support of the credit union, and spoke at a public meeting, asking Tongass FCU to stay.

Tongass FCU’s board agreed to continue operating in Hydaburg. Security was heightened, yet the upset seemed to cement the community’s loyalty, and the credit union in return appreciated the outpouring of support.

Having bank access and then losing it was an eye-opener to its value to Hydaburg.

“Imagine not being able to go to a bank or even a cash machine in your community,” says Lisa Ka’illjuus Lang.

From Hydaburg, Ka’illjuus is a member of the Sealaska Corporation board of directors and serves as the elected Chief Justice for the Supreme Court, Tlingit and Haida Central Council Indian Tribes of Alaska court system. She is also executive director of the Xaadas Kil Kuyaas Foundation, a Haida nonprofit promoting culture and language.

Economic development in her hometown—and the hometown of her mother and grandmother—is important to her, she says, and she has been an ardent supporter of Tongass FCU since talks of opening the community site in Hydaburg began.

“Before, we would have to drive to the Klawock branch—almost 100 miles round trip—to put a check in the bank,” Ka’illjuus says. “It’s a long trip, especially if you do not have a car. There’s bus transportation, but you’re limited.”

Having a teller station in Hydaburg for three days a week is a game-changer, she says. And the fact that Tongass FCU hires locally, providing Hydaburg residents with help from people they know, helps immensely.

“The community is so appreciative,” Ka’illjuus says. “I’m more than happy to stand up for Tongass. They make you feel like it’s a caring bunch. There really is no measure for how important that is.”

“We are unique in that we are the only ones I’m aware of that do something like this… It’s not highly profitable, but as a not-for-profit financial cooperative, this is in our wheelhouse. We are here to serve our members. Tongass is rooted in the Southeast.”

—Helen Mickel, President and CEO, Tongass Federal Credit Union

Stronger Together

Tongass FCU recently expanded its membership when it merged with ALPS Federal Credit Union in February. Combined, the two credit unions have 13,163 members, eight branches (Ketchikan, Sitka, Petersburg, Metlakatla, Klawock, Wrangell, Haines, and Juneau) and four microsites (Hoonah, Hydaburg, Kake, and Thorne Bay).

Both credit unions opened in Southeast and specialized in responsive local service. ALPS was started in 1960 by employees of Alaska Lumber and Pulp because banks at the time were charging enormous loan rates, making borrowing difficult for young families in the Sitka area. Tongass FCU started in 1963 by a group of Ketchikan teachers and public workers whose financial needs were not being met by local banks.

Their similar roots and shared commitment made the merger a natural move, with “Southeast Strong” being shared as the guiding principle.

“We are so pleased to be combining two credit unions with rich histories serving Southeast Alaska since the early ‘60s. Together we are truly stronger. Our expanded resources will continue to enable our members to achieve their financial goals through the friendly, affordable, and convenient services they have come to expect from their local community credit unions,” Mickel says.

ALPS President and CEO Sandi Riggs says the partnership will afford members better service all the way around. “Combining the talented staff at our two credit unions will improve our service to all members and solidify our commitment to providing financial services and support to the membership. We are excited to see what we can accomplish together as we move forward,” she says.

The transition is expected to be complete by the end of July. When that wraps up, Mickel says, Tongass FCU will consider expanding to other sites. On the list of places to consider are Yakutat and Angoon.

“The merger has really added value to our community microsites. The added offices in Sitka and Petersburg provide important access to all our members needing local financial services. Our combined credit union serves twelve communities in the Tongass National Forest,” Mickel says. “We are proud to be ‘Southeast Strong’.”

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