NEW YORK CITY — The Federation, the shorter (and more to the point) name for the National Federation of Community Development Credit Unions, has seen some hard times, admits Executive Director Cliff Rosenthal, but like the Broadway song, "I'm still here" (from "Follies") it has rolled along, racking up accomplishments and defying doubters.
Early last week NCUA Board Chairwoman JoAnn Johnson attended the Federation's 6th Annual Financial Literacy Day: Best Practices Forum at the Federal Reserve Bank of San Francisco, the first time the event has been held outside New York City. The more than 100 attendees viewed the 17-minute High Definition video of the Federation's successfully brokered partnerships between large and small credit unions.
Titled Credit Union Partnerships: Building Bridges to the Underserved, the video documents the partnership between the $4.3 billion in assets Patelco CU and two San Francisco CDCUs, Mission Area FCU and Northeast Community FCU. An earlier, pre-edited version was shown during NAFCU's conference in Hawaii, said Rosenthal, but this version is the final cut. In it, Andy Hunter, CEO of Patelco says that he doesn't just believe in the cooperative approach among credit unions, but that it would be "arrogant" to think that large CUs can serve underserved populations better just because
they are large.
That lesson is critical, said Rosenthal, because forging the kinds of partnerships that truly work takes both the size and scale of a Patelco combined with the know-how provided by CDCUs that live and breathe service to the poor. Acknowledging as much, Patelco SVP of Corporate Planning and Communication Anita Macias said, "We've learned as much or more as we were able to teach our partners."
The film illustrates the combined strength that comes from helping CDCUs open branches in areas where banks have fled, like the city's Tenderloin District. According to the Federal Reserve, San Francisco has 50,000 people who have no banking relationship and represent 20% of the population. So Northeast Community's opening a branch there, and planning a "Green" building with a branch has made inroads to the goal of serving 20% of that population within two years, according to Michael Chan, board chairman of NECFCU.
The film also highlights the phenomenal success of the Latino Community Credit Union in Durham, N. C., made possible through its partnership with State Employees' Credit Union there, which provided all back office operations from the day its doors opened, and Self-Help Credit Union. Chartered de novo to serve immigrant farm workers, Latino CCU now has nearly 50,000 members, five branches and over $30 million in assets.
"Cooperation is our lifeblood; it's what we do," said Rosenthal. The film is but one tangible aspect showcasing how the Federation has persisted in winning small (and sometimes larger) victories for the vaunted credit union mission of serving people of "modest means." Rosenthal has always held that large CUs can and should do more to help struggling CDCUs, and not just because it's a healthy answer to bankers' charges that CUs have forgotten their mission. That contention does come in handy, though, whenever the taxation threat rears its head. But to Rosenthal, it's always been more of a question of balance. That, and simply doing the right thing.
He's watched the disappearance of too many CDCUs, and now, the growing number of smaller, plain vanilla and just plain small credit unions to mergers. While consolidation in the financial services industry is nothing new, and credit unions are not exempt from market forces, more can be done to allow those challenged CUs to survive, he believes.
"For credit unions to continue to grow their memberships and make inroads to serving the underserved they must keep helping small credit unions and community development credit unions. If they don't, they'll be increasingly perceived as being just like large banks," he says.
The pragmatic side kicks in, then, as Rosenthal added, "It's an effective way to promote the credit union mission as well as expand their own services. Remember, all these new branches that have opened are also shared service centers, so it also benefits their own members by providing more service locations."
The Look Back
Rosenthal remembers when the Federation was run by him and Annie Vamper, whose hard work and memory is now honored by an award bearing her name. In 1983-84 he ran the Federation out of his own house and at least once had to write a personal check to cover salaries. The '90s brought increased membership and expanded service offerings. "We've been at the same level for about ten years now, but our resources have grown," he said. The Federation has a staff of 16. Rosenthal will celebrate his 30-year anniversary with the Federation in 2010.
The 9/11 attacks affected the Federation's offices, which were then located at 120 Wall Street where it resided since 1992. "The area was largely vacant then and we had a special deal from Larry Silverstein, owner of the World Trade Center," he said. It was rent free for the first year, then carried "reasonable" rent increases for the length of a 15-year lease. But following the attacks, the financial district has been built up, many buildings have been transformed into high-priced condos and rents have skyrocketed. So the Federation downsized in square footage somewhat and is now headquartered some blocks away at 116 John Street.
"Of all things, I'm proudest that we've built a sustainable organization. This marks the 25th year that we've been the financial intermediary for reinvestment in CDCUs. We now have $35 million under management and our goal is to take that to $50 million. Most of the dreams I've had have been fulfilled," said Rosenthal.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
