African-American churches see credit unions as `lifeline' for most financially vulnerable

FT. LAUDERDALE, Fla. – At last count, Broward County here had 117 check-cashing stores and pawn shops, many of them dotting the corners in African-American, Caribbean and Hispanic neighborhoods. Community activists admit for many, the stores fulfill a need long neglected by banks, but local ministers concede that there has to be another outlet that would not only promote financial literacy but also provide traditional services at affordable rates and promote long-term savings. Enter the credit union. Every Monday morning, Black churches typically deposit $1 billion in banks across the nation according to Claud Anderson, author of PowerNomics: The National Plan to Empower Black America. Some church leaders are hoping the credit union can serve as a choice for bank-neglected, financially vulnerable areas here and tap into that enormous mountain of deposits for start up. A number of religious leaders spanning several cities in the Ft. Lauderdale area have taken concrete steps to explore the credit union concept in low to-moderate income neighborhoods. At least one is set to file an application for a federal charter by the end of August. More than 70 pastors attended credit union seminars held in June and July. In Ft. Lauderdale, Mount Bethel Baptist Church is weeks away from filing a federal charter application for New Horizons Credit Union, Inc. For the 3,500 members of the church’s congregation, this is a “financial lifeline for those vulnerable to predatory lending,” said Rev. G. Vincent Lewis, executive pastor. “We’re talking about people who’ve literally been locked out of the financial process and those who are most vulnerable to predatory lending,” Lewis said. The new credit union will operate as a low-income institution and will initially offer check-cashing services at lower rates than its counterparts. The church also hopes to start a youth-run credit union to introduce the economically disadvantaged to financial literacy. The planning and research has been a year in the making for Mount Bethel but church officials wanted to be sure all their ducks were in a row before filing with NCUA. They completed an extensive survey using Congressman Alcee Hastings’ district as the boundary the credit union will serve. Since the beginning of the process they’ve consulted with a former bank examiner, a consultant who’s had extensive experience working with government-based funding and their champion, Carol Aronjo, president/CEO of Edward Wells Federal Credit Union in Springfield, Mass. At press time, all involved were scheduled to meet one last time to discuss location and infrastructure logistics before submitting the application to NCUA. Rev. Harry Hoston of Merrell United Methodist Church has mulled over the idea of starting a credit union for a number of years, but conversations with members of the congregation on trying to make ends meet, pay bills and having ongoing concerns about being able to pay for their children’s college costs became the driving impetus. “There’s pretty much a desperate need for an alternative in our community,” Hoston said. “Unfortunately, the circumstances have been that many will put their money into a bank, but the banks have not reciprocated by investing in our community.” Hoston is in the initial stages of conducting a feasibility study to assess how the credit union can serve the surrounding areas. Meanwhile, church officials have gotten their feet wet by starting an informal credit union for the house of worship’s 500 “active” parishioners who’ve agreed to contribute $5 per month to a seed fund. While Hoston would not say how much money has been collected, every cent is already earmarked with $2 going to a new scholarship fund, $2 towards expenses to cover expanding the church’s facility and $1 pooled for a community development fund. “It’s still early but it’s critical that we communicate that the members’ money is insured and should the credit union go out of business for any reason, they will recoup,” Hoston emphasized. A number of churches including Ebenezer Baptist Church, Kononia Worship Center in Hallandale, Mount Bethel Baptist and Mount Olive Baptist in Fort Lauderdale and Hopewell Baptist Church in Pompano Beach have expressed interest in participating in Merrell United’s credit union feasibility study, Hoston said. While the momentum is energetic, having strong leaders committed to staying the course is the key to not losing steam, said Marc Villain, founder and past president of Little Haiti-Edison Federal Credit Union in Miami. Villain, a former banker, is president/CEO of Metro Broward Capital Group. “When we started in Little Haiti, everything was on a shoestring. It was discouraging in the beginning but we took it all the way to the charter process,” Villain recalled. “It’s so important to have the right organizers or people will lose interest.” Today, the Little Haiti credit union has 666 members and $1.3 million in assets. Georgia Robinson, a lawyer and community activist, echoes Villain’s view. In June, she conducted a seminar on the new role of the Black church. A session on how to start a credit union sparked such overwhelming interest that a follow-up meeting was held in July. More than 70 church officials attended the session to hear presentations from Villain, Sharon Daigle, director of insurance and Carl Windom, economic development specialist – both from NCUA-Atlanta’s regional office. “Church leaders are in a position to build the infrastructure to grow on because the next generation, financially, will have nothing to build on,” Robinson said. “There is tremendous power coming from the pulpit – staff, volunteers, access to grants. If every church would say I’m going to focus on the needs of everyone within a two-block radius, just imagine the impact that would have.” -