Union Baptist Church FCU Reflects Credit Unions' Origins

FORT WAYNE, Ind. — Fifteen people form a credit union. A year later the credit union has grown to 288 members and assets have reached $281,000. One of the next steps, perhaps in another year, will be offering loans.<p>In an age of billion-dollar credit unions and mergers aimed at achieving the economies of scale needed for extensive service menus, that story may sound like something from the 1930s.</p><p>But it’s a 21st Century tale backers of Union Baptist Church Federal Credit Union said proves it’s still possible to start small and pursue large dreams.</p><p>Herb Singleton, UBCFCU president/CEO, credited the pastor of Union Baptist, the oldest black Baptist church in Ft. Wayne, with the idea of forming the credit union. Rev. Dr. Sylvester Hunter, Singleton said, had the vision of a financial institution for the church but didn’t have the time to follow through on day-to-day details such as obtaining a charter.</p><p>He asked Singleton to help. Singleton has a master’s degrees in business and finance, spent about 30 years in computer technology and has experience in private placement of investments.</p><p>As part of the groundwork, both Sylvester and Hunter visited First African Baptist Church in Savannah, Ga. The oldest black Baptist church in the nation, the church has also operated a credit union since the early 1900s.</p><p>Then it was time to work through the process of getting a charter.</p><p>”The biggest challenge,” Singleton told Credit Union Times, “was the fact nobody [from Union Baptist] had actually chartered a credit union before. In 2006, only eight new credit unions were chartered in the entire nation. No credit union had been chartered in Indiana for 30 years. In addition, our people were working on a part-time basis.”</p><p>”Since 9/11, requirements are much, much stiffer. So credit unions that were chartered 25 or 30 years ago probably didn’t have to do a lot of the things we had to do just because of the environment we’re in today.”</p><p>That meant, even on what was considered an expedited basis, the process took five years. Although Singleton praises the “tremendous assistance” offered by both the NCUA and the Indiana Credit Union League, it didn’t help that the NCUA’s regional staff was going through the process of relocating.</p><p>But a charter was granted in late 2006, and in April 2007 UBCFCU actually began operating with 33 members and $33,979 in assets. The field of membership includes all members of Union Baptist Church and their relatives. There are currently 30 relatives who are members of the credit union although they don’t belong to the church.</p><p>As efforts to charter the credit union were underway, other Fort Wayne religious institutions heard what was happening and asked about participating. At this point membership is restricted to Union Baptist Church. Singleton indicated plans do call for eventually petitioning NCUA to expand the field of membership to include other churches.</p><p>However, UBCFCU first needs to prove it can effectively serve its existing membership. The credit union is operating under specific NCUA covenants. For the first two years UBCFCU can only offer savings. Then the credit union can begin offering loans.</p><p>”We’re really going after a niche market,” Singleton said. “Many of our members do not qualify for mainstream financial products. They don’t want to go out and buy a $200,000 home, and they’re really not starting a lot of businesses that require large investments.”</p><p>”They might need a refrigerator or a washing machine. They might need a used car so they have transportation to an employment opportunity. That’s what our initial foray is going to be. Simultaneously they can build credit–credit scores if you will. We want to offer financial literacy, such as understanding what a credit score is and how it impacts you. We also want to educate members that you don’t have to be Donald Trump before you can leave something to your family members, your sons and daughters and grandchildren.”</p><p>In addition, Singleton continued, UBCFCU aims to teach young people about thrift. Already the credit union has 68 youth accounts for members up to 18 years old.</p><p>The church has donated office space in the church administrative office. Office hours are limited–3:30 p.m. to 5:30 p.m. Monday, Thursday and Friday.</p><p>If you’re thinking of forming a credit union, “It’s doable, but it will not be easy,” Singleton said. “It’s a very heavily regulated industry, as it should be. You need someone who is dedicated and determined.”</p><p>On a positive note, he added, “The help is out there. I’m always receiving words of encouragement that we illustrate the founding philosophy of the credit union movement, which is members helping each other.”</p><p>”One of the hardest things for me to do was to approach other credit unions, share what we were doing, and ask for their support. I was encouraged to do that by the NCUA and was told they would be helpful. I thought, ‘You want me to ask another credit union to help me get started and become a competitor?’” </p><p>”I have to tell you want a wonderful, wonderful pleasant surprise it has been to get such support from our sister credit unions. That alone has made a tremendous difference.”</p><p>–[email protected]</p><p> </p><p> </p>