Wondering what’s going on with the effort to stand up a Black-led credit union on the Northside? Well, so was Northside Funders Group (NFG)! In early December 2021, NFG hosted a funder briefing for the Association for Black Economic Power (ABEP) to provide an update on progress towards opening Village Financial Credit Union. If you were not able to make it to the event, but are curious, you can: 1. Read this summary blog focused on action items to support the credit union launch 2. Watch the recording of the event (see link below) 3. Both (you overachiever!) 4. Reach out to Debra L. Hurston, Executive Director of ABEP ([email protected] ).
A 30 second history
The plan to open a Black led credit union is firmly grounded in a desire to build economic power. In 2016, in the grips of pain and anger after Philando Castille’s murder, a group of Black residents and activists came together and began to articulate actionable items to fight against racial injustice. A financial institution designed for the advancement of Black people in Minnesota emerged as a top priority. In 2017, the Association for Black Economic Power was incorporated as a 501c3 to birth the credit union, Village Financial. Village secured well over 2,000 pledge deposits totaling $5.5M, underscoring the need and excitement for this initiative. While the project attracted incredible support from residents, the philanthropic and governmental sector, a difficult leadership transition in 2019 forced a pause in the work. Thanks to the efforts of dedicated Board members, a new Executive Director was hired in mid-December 2020 and now the work to launch Village Financial Credit Union is once again underway.
What is Happening Now and How can YOU help?
The team at ABEP is diligently working alongside an impressive suite of credit union technical assistance providers to re-submit the state charter application. As you can imagine, launching a credit union is easier said than done. In fact, a new credit union has not been chartered in the state of Minnesota for approximately seventeen years. This is indicative of a broader national trend tracking a decline in the number of new credit unions due to consolidation in this industry. If Village can launch in 2022, it will be the ONLY credit union to launch in that year.
You might be wondering, why is a credit union so important? Don’t we have enough of them already?
Yes, Minnesota has a strong credit union sector. Many people choose credit unions for their low fees, affordable loans, and customized financial services. But, there are no credit unions operating in North Minneapolis. This deprives Northsiders of easy access to a banking option that is nonprofit and member-owned.
North Minneapolis is also a hot spot for payday lenders. Village plans to draw business away from these extractive financial institutions with products that meet the neighborhoods needs without imposing high fees. One example is the QCash Life Event Loan, which can provide funds within 60 seconds. If you have a flat tire in the middle of the night and your credit cards are maxed out, this would get you the immediate help you need.
Village Financial plans to do big things in 2022. Here is a high-level timeline:
- State Application: Q1 2022
- NCUA Application: Q1 2022
- Credit Union CEO Hire: Q1 2022
- Technology Set-Up: Q4 2022
- Soft Launch: Dec 2022
So what can YOU do?
- INVEST IN WORKING CAPITAL: ABEP has identified a total need of $6M covering costs from pre-launch, post-launch and headquarter build out. The most immediate need is to raise $1.8M is pre-launch capital.
- PLEDGE DEPOSITS: To submit the Charter Application, Village needs to secure $5M in pledge deposits. $3M come from Institutional Partners (up to $250,000) and $2M come from individuals. Contact ABEP to find out more!
- BECOME AN AMBASSADOR: ABEP’s team is small, but mighty. Volunteers who can support securing individual pledges would help the team get closer to their goal.
Thankfully, this effort has a strong village of supporters all working to ensure project success. The Minnesota Credit Union Network is so committed that they have established a special purpose fund to support post-launch operations. A lead pledge of $250,000 has been made by Affinity Plus Credit Union and several more are being stewarded. MCUN aims to raise at least $1 million to help Village as it builds a base of depositors and other customers that can sustain its ongoing operations.
If you are committed to closing racial disparities gaps in MN, a Black led credit union is a vital addition to the growing network of organizations working towards this same goal.
We invite YOU to join or reengage in the VILLAGE. To learn more visit: www.LearnAboutVillage.org or contact Debra L. Hurston, CAE MBA, Executive Director, ABEP, Email: [email protected], Tel: 651.278.1926
NFG plans to host another virtual event at the end of Quarter 1 2022 for the ABEP team to provide a progress update. Stay tuned for more information.