How a CU Is Literally Rolling Out Financial Services to the Underserved
Lower East Side People’s Credit Union launches a new mobile branch and plans to operate a permanent location in the Bronx.
Seven banks closed 17 branches from 2018 to 2021 in the Bronx, which has the highest rates of unbanked and underbanked households, the lowest concentration of bank branches per household, and the highest percentage of Black and Latino residents (who are among the poorest people in New York City), according to the Association for Neighborhood & Housing Development (ANHD).
About half of the branch closures happened in 2020, the ANHD, an affordable housing advocate, recently reported. In response to these alarming trends, the Bronx Financial Access Coalition was organized, and it teamed up with the $86.1 million Lower East Side People’s Federal Credit Union to help low-income people who live in neighborhoods where branches have been replaced by check cashers and pawn shops.
On Tuesday, the Coalition officially introduced a mobile branch of the Bronx People’s Federal Credit Union, a subsidiary of LESPFCU, that will deliver financial products and services to borough neighborhoods. What’s more, the Coalition negotiated a deal with Sterling Bank – one of the banks that closed a local branch, merged and changed its name to Webster Bank – to fund the Bronx People’s FCU’s mobile branch. The credit union plans to open a permanent branch in 2023.
“Our goal is to call the new branch the Bronx People’s Federal Credit Union, a division of the Lower East Side People’s Federal Credit Union,” LESPFCU President/CEO Aissatou Barr-Fall said. “These communities don’t just need financial services; they need affordable financial services.”
In addition to its main branch in Manhattan’s lower east side, the financial cooperative also operates branches in East Harlem and Staten Island’s North Shore that serve nearly 9,000 members.
“Community development financial institutions like LES People’s Federal Credit Union are designed to meet the needs of historically redlined communities, with affordable and convenient products that build wealth and community ownership,” LESPFCU Board Chair Jorge Luis Vasquez, Jr. said. “We don’t extract resources or perpetuate poverty.”
Jumelia Abrahamson, an LESPFCU board member, noted there were many, and sometimes difficult conversations with Webster Bank, but they were always guided by a mutual commitment and understanding.
“We negotiated a strong agreement with the bank that seeks to make up for the harm done by the recent branch closing,” Abrahamson said. “We believe that their investment in our efforts will impact the banking game in the Bronx by bringing access to affordable and solid banking to neighborhoods beyond the largest commercial districts, and in particular for residents who feel they don’t need, trust or could afford mainstream products and lending.”
Karina Saltman, a senior managing director for the office of corporate responsibility at Webster Bank, said the financial institution was proud to be the premier bank sponsor of the Bronx Financial Access Coalition and its partnership with LESPFCU.
“We heard from our community partners that bringing a community development credit union to the Bronx would make a big difference and we listened,” she said.
Organizations that become selected partner groups with LESPFCU can schedule regular bi-weekly or monthly visits of the mobile branch.
As a community development credit union, LESPFCU said it has invested more than $126 million into the community and expanded financial access to 90,000 underbanked families. Nearly 80% of its members are low-income.