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Perspectives: 3rd Edition
Perspectives | 3rd Edition
Written by Carl Mellor
In this essay, I’m going to discuss community development credit unions. Like any credit union, they are owned by the members and provide services such as savings accounts, share drafts (checking) and car loans or personal loans. In addition, they play a community reinvestment role, assisting people with low and moderate incomes who have little access to financial services. Far too many Americans have no relationship to a financial institution and are forced to rely on check-cashing shops or payday loans.
It’s worth noting that there’s a network of CDCU’s extending across the United States: from New York City to the rural community of Franenmuth, Michigan, from Athol, Massachusetts to southwestern Texas where Borders Credit Union serves a 13-county area. In upstate New York, the network includes our own Cooperative Federal Credit Union, Alternatives in Ithaca, Genesee Co-op in Rochester, and two Buffalo-based credit unions.
Thirty-four years ago, our credit union was founded with a three-point agenda: operating as a cooperative, serving communities with little access to capital, making sure that our assets were invested locally. Indeed, our founders wanted to insure that their money wasn’t invested in banks or companies doing business with South Africa, a country then ruled by an apartheid regime. They soon expanded the list of investment restrictions to include companies involved with nuclear weapons or nuclear power, violations of sound environmental practices, and employment discrimination.
At the same time, Cooperative Federal works from a set of positive goals. In response to bank branches being closed in Syracuse neighborhoods, we stepped in with our own offices. Today, we have branches in the Westcott, Southwest, Northside and Southside neighborhoods. Our newest office, at 516 Burt St, inside the Syracuse Housing Authority’s headquarters, opened during the first week of March, 2017.
And we provide various tools for financial empowerment. In some instances, members have no credit history. That’s particularly true for recent immigrants who settled in Syracuse. Our Credit Builder Club facilitates a small loan, with the loan proceeds being deposited into a savings account that’s not accessed until the loan is paid off. When that happens, the member not only has savings built up; she or he now has a credit history.
Similarly, we offer an enhanced mortgage program. On one hand, we make mortgages to individuals, families, couples of all kinds, and cooperatives. On the other, we have Matched Savings programs for eligible first-time homebuyers. Eligible participants can receive between $7,500 and $9,500 in matching grants toward down payments on a mortgage.
Over the years, we’ve made a slew of small-business loans. Recipients have included the Syracuse Cultural Workers, Beer Belly Deli, located in the Westcott business district, and others. We have definitely served folks who are self-employed.
Our credit union has also emphasized financial education. It’s a multi-level program, starting with the financial-information classes we teach at three city high schools—Nottingham, Fowler and Henninger. Beyond that, people who take part in the first-time homebuyer program must attend an education course within one year of the initial purchase date for the home. In addition, we received certification from HUD, the federal Housing and Urban Development agency, so that we can provide counseling for people facing a mortgage foreclosure.
Most importantly, we assist members who owe money on a credit card or line of credit. They are given information on alternatives to that kind of debt, to debt typically associated with a high interest rate.
Finally, our credit union isn’t segmented by either neighborhood or household income. We have members who make a minimum-wage salary in the service industry and those with a middle-class income. We welcome various kinds of members—contractors with variable incomes, teachers and lawyers, retirees, and people who work but don’t make a living wage. As a community development credit union, we welcome all of them.