HENDERSON, N.C. – When the $1.5 million Gateway Community Development Credit Union formally reorganizes and opens its doors as Generations Community Credit Union on November 1, its officers and those of its reorganization sponsors, hope it does so as a powerful vehicle for spreading credit unions even further across the state. "Everywhere we go across the state we meet groups who want to found a credit union, who recognize the need for a financial institution like a credit union," said Daniel Broun, director of development for the Durhum-based North Carolina Minority Support Center (NCMSC) "And we are willing to help them found one if they like. But our hope is that, with the new Generations Credit Union, they will be able to get access to credit union services without having to actually found an institution," he said. The NMSC is the largest single organization sponsoring Gateway's transformation into Generations. The Support Center acts at the state level in much the same way as the National Federation of Community Development Credit Unions (NFCDCU) does at the national level, providing technical assistance and support to North Carolina's 16 community development credit unions; founding new credit unions; and helping improve the services of the existing ones. It was the possibility that Generations will provide greater CU access that helped convince the center to back the reorganization of the disappointing Gateway with $350,000 in grants and $100,000 in secondary capital loans. "It's not that Gateway failed or was closed or anything like that – and I want to stress that," said Broun, "but they were definitely interested in making a change." Broun explained that Gateway's original organizers had not founded a financial institution content with offering only limited services and loans to their members. The Gateway organizers had wanted to offer their lower income members a full-range of services that would really help them improve their financial situations. "If they wanted to just offer share accounts and maybe one type of loan they probably could have just kept going on doing that," Broun said, "but they wanted to offer more." The Support Center got involved when, as part of the reorganization, the credit union decided to change its field of membership to allow members of the Support Center, both institutional and individual, to join the credit union. Aside from making it easier for the Support Center to facilitate the distribution of loans and grants from public and private sources to its credit union members, the possibility of allowing new groups to gain access to credit union services more easily is what really got the Center's attention, Broun said. "It can take more than two years, and a lot of organizational effort, to get a credit union started," Broun noted. "But once the Generations Credit Union is started we will be able to offer groups interested in starting a credit union membership in the Center and, through that, membership in Generations and access to those services," he said. Large enough groups of new members could facilitate Generations opening new branches around the state to serve those members, he said. Generations could also expand by merging with other credit unions that are already Center members, but Broun downplayed that possibility as something which might happen but would still have to overcome significant obstacles in order to do so. Broun said the Support Center officers are focusing more on Generations' possible role in providing credit union services to new populations than on any possible mergers. Clifford Rosenthal, executive director of the NFCDCU, also downplayed speculation about mergers, calling the possibility an "experiment" and not the beginning of a trend. "We will be looking at it and examining what happens," Rosenthal said. Rosenthal pointed out that there had been an ongoing discussion among CDCUs about different strategies they could adopt to help cut the cost of operations and reserve more money to serve their members. Consolidation is one such suggestion for how to address the problem, Rosenthal said, but it is not necessarily the best one or even the most recent one. When it formally opens its reorganized doors on November 1, Generations will have assets of more than $3 million. Gateway will have $1.5 million on hand for the reorganization and the balance coming from fellow North Carolina Self-Help Credit Union, the Ford Foundation, the North Carolina based Z Smith Reynolds Foundation and the NFCDCU in addition to the Center's support. Former banker and community credit union leader Harvey Heartley will be at the helm of Generations when it opens formally on November 1. Heartley said he migrated to working in community development credit unions after he began to experience a "passion for helping people" that he described almost as a "calling" for his life. His combined banking and credit union experience stretches back a quarter of a century and he is especially proud that Generations will open November 1 with over 1,200 original Gateway members. He anticipates adding others who join through the Support Center. Heartley stressed that Generations will offer a full slate of services and that the credit union in particular will offer cash advances that members will be able to use, at a much reduced cost, to tide them past a tight financial spot instead of payday lenders. The cash advance product will have a relatively low one-time fee and, since one of the conditions for the advance will be that the member have their wages deposited directly to the credit union, it remains a fairly safe one as well, he said. Heartley also wanted to thank North Carolina's credit union division administrator, Jerrie Lattimore, for her help and interest during the reorganization process. North Carolinians have such a high degree of interest in credit unions, Broun said, because so many credit unions started among poor blacks in previous decades who were barred from access to banking services. [email protected]