Affinity Plus Credit Union sees niche in St. Paul’s Midway, serving unbanked neighbors

Frederick Melo, Pioneer Press
·4 min read

During the dog days of the pandemic, as state employees began logging into work remotely, Affinity Plus Federal Credit Union shuttered its Rice Street branch near the State Capitol but for a drive-through automatic teller. The full-service branch, which has since relocated farther west, will host its official opening Monday just off Hamline and University avenues in St. Paul’s Midway.

Its arrival nine years after the debut of the light rail finally fills out a block of long-awaited retail, some of it almost equally fresh, on the ground level of the Hamline Station apartments across from the Green Line stop of the same name. In addition to a new Affinity Plus branch, the block is now home to the new Black Garnet Books, a Boost Mobile shop, a Jackson Hewitt Tax Service, the Ding Tea boba tea shop, a Pearle Vision location and the Master Noodle pulled Chinese noodle restaurant.

The opening of the Midway’s first and only credit union location also signals a bit of resurgence for the St. Paul-based financial institution, which last opened a new branch five years ago in New Hope and relocated a branch last year in Mahnomen, just outside the White Earth Tribal Reservation in northern Minnesota.

Following the worst of the pandemic, “we’re back to normal operations, if you will,” said Amber Shanley, director of branch services for Affinity Plus. “We’re trying to push ahead.”

The Mahnomen branch, previously located within the Shooting Star Casino, joined Affinity Plus during its acquisition last year of the White Earth Federal Credit Union, which maintained no more than the single location and previously did no home lending of its own.

If the White Earth Reservation and St. Paul’s Midway areas have something in common, it’s that both are home to high numbers of the unbanked, or residents who don’t maintain traditional bank accounts because of poor credit, lack of financial acumen or distrust of financial institutions. Rather than gloss over them, Affinity Plus, a member-owned credit union that surpassed $4 billion in assets this past December, has embraced a growth strategy that courts rather than shuns low-to-moderate income residents.

In the Twin Cities metro, some 65% of Affinity Plus members fall into that income category, earning the credit union special designation from the National Credit Union Administration. Among its services, members who qualify for “courtesy pay” can overdraw their accounts up to $100 without overdraft or insufficient funds fees. After that, financial penalties as of last July were $15 per overdraft, down from $35 previously.

Better lending rates, smaller footprint

Designated NCUA low-income credit unions receive exceptions from a statutory cap on business lending, they’re eligible for grants and low-interest loans from a Community Development Revolving Loan Fund, and they can seek supplemental capital. In short, they have extra leeway to offer unique services to the unbanked and the under-banked — members who might not otherwise be able to obtain loans, or even bank accounts, through other means.

Their structure has also allowed Affinity Plus to offer better rates than some much larger institutions for savings and home lending, even if other assets are far smaller, including their physical footprint. Affinity maintains its headquarters off U.S. 52, on St. Paul’s West Side, at 175 W. Lafayette Frontage Road, as well as a branch location on University Avenue and Huron Boulevard in Minneapolis by the University of Minnesota campus. Otherwise, it’s less visible than many for-profit banks.

Other banks and lenders in the Midway — including Bank of America, Huntington Bank and the UnBank Check Cashing and Loans on Lexington Parkway — are “philosophically a little different,” said Shanley, hours before the Midway location’s soft opening on Friday.

“We don’t have stockholders,” she said. “As a not-for-profit, we are beholden to make decisions that are best for our members — not for our profits. As a member, you are an owner.”

The Midway branch stands out in other ways. Four of the five branch clerks are bilingual in Spanish and English, and the fifth speaks Tagalog, the language of the Philippines. “That happened by chance,” said Shanley, who filled out the employee roster with four internal transfers and one new hire. “At this location, every employee is bilingual.”

In 2021, Affinity Plus teamed with the city of St. Paul to begin offering interest-free loans of up to $2,000 to assist St. Paul residents seeking U.S. citizenship.

Affinity now maintains 30 branches, all of them in Minnesota, and some 560 employees. Unlike larger banks, which have made a habit of laying off employees in their real estate division when the housing market cools, Affinity has managed to retain employees in its home lending division even as home sales have decreased, mostly by reallocating them to a “Solutions” division that functions like collections.

Affinity Plus is also a founding partner of Dora Financial, an all-digital, cooperative-owned credit union alternative targeted to unbanked members who might not otherwise qualify for credit-based accounts at traditional financial institutions.

The Midway branch, located at 1315 University Ave. W., will operate from 9 a.m. to 4 p.m., Monday through Friday. Video banking is available on Saturdays from 9 a.m. to noon.

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