First Charter Given Under New NCUA Provisional Charter Initiative

The Tribe Federal Credit Union (TFCU) in Minneapolis is the first African American federal credit union to receive a charter and share insurance fund coverage under the NCUA’s provisional charter initiative, the federal agency said Tuesday.

This pilot allows a credit union’s organizers to obtain a federal credit union charter and provides them 12 months to obtain the capital necessary to begin operations. A charter under the provisional pilot initiative does not authorize a credit union to accept member deposits or originate loans until the credit union obtains its targeted level of donated capital.

Some of the organizers are founders or cofounders of Sovereign Financial Investing (SFI), which was created in 2010 to pool their friends and families savings, invest in family businesses and to promote a debt free lifestyle among African Americans by servicing low interest loans from the pooled savings accounts, according to SFI’s website.

SFI requires all members to deposit a minimum of $20 each month into a savings account. After six months of active membership, a member has the freedom to borrow up to five times their savings amount. In compliance with bank practices, SFI issues monthly statements to each member. Under these parameters, SFI has been an active savings and loan institution for over ten years. In that time SFI has loaned more than $385,000, and of that amount, more than $330,000 has been paid back, according to SFI’s website.

“After 14 years, we decided to expand our dream to the greater Minneapolis community with TFCU,” SFI stated.

On its website, TFCU said its goal is to raise $600,000 in capital. So far, it has raised $75,000 in pledged support. Its website also showed it has a potential membership of 369, $10 million in potential deposits and $56 million in “potential loans needed.”

TFCU said it wants to continue on a mission to provide members with access to financial resources and invest in the financial health and well being of our “friends, families and extended African American community.”

The new credit union said there is a lack of exposure for African American people to have a banking experience that is sensitive to their needs and also would protect them from predatory practices.

“The Black community as a whole suffers from low home ownership, predatory lending, and is the largest underbanked community,” TFCU said on its website. “Practices like higher interest rates, payday lending, overdraft and late fees exasperates an already dire financial situation.”

TFCU is the second credit union this year that has opened to serve the African American community in Minneapolis.

In March, the Minnesota Department of Commerce granted a state charter for Arise Community Credit Union in North Minneapolis, which is the first Black-led financial cooperative in the state’s history. ACCU is also insured by the NCUA.

TFCU is a low-income-designated credit union primarily serving people who live, work, worship, or attend school in Minneapolis as well as serving those participating in programs to alleviate poverty or distress within the city. The credit union plans to offer members basic savings and lending services, including share accounts, share draft accounts, online banking, auto loans and personal loans.

The president/CEO of TFCU is Aris J. Burnett, who is an auditor for the Office of Inspector General of the United States Postal Service, according to her LinkedIn page. She holds more than 20 years of financial/accounting experience as well as an IT background. She earned an MBA and two undergraduate degrees in finance and IT. Burnett is a founding member of SFI.

The chair of TFCU’s seven-member board of directors is Jose Williamson, who is the founder of SFI. According to his LinkedIn page, he is a tennis professional at Life Time Inc. in Bloomington, a graphic designer and photographer for 37th St. Design and founder and head designer for 37th St. Brand Apparel

TFCU’s charter became effective on May 22, and it is the second federal credit union chartered in 2024. In March, the NCUA granted a federal charter and share insurance fund coverage to New Jersey State PBA Federal Credit Union in Woodbridge, N.J.