BROOKLYN, N.Y.– Inclusiv, which works with community development credit unions to boost prosperity in low-income neighborhoods, has announced what it said is an innovative partnership to help central Brooklyn residents access safe, fair, and affordable financial services, as well as to help grow the capacity of a historic African-American credit union.
The partnership is between Bedford Stuyvesant Restoration Corporation and The Concord Federal Credit Union, which was launched by the Concord Baptist Church of Christ in 1951. “It has the potential to triple the size of the credit union and offer access to affordable loans, credit building, savings accounts, and financial counseling to an additional 2,000 central Brooklyn households,” Inclusiv said.
The collaboration is part of the African American Credit Union Initiative, supported by Citi Community Development.
Keeping Money in Communities
“This important partnership builds financial empowerment and security for residents and keeps residents’ money in the communities they live in,” said Cathie Mahon, CEO of Inclusiv. “More than that, this kind of work is helping revitalize legacy African-American institutions to be more visible and effective agents of change in their communities.”
According to Inclusiv, nearly a million New York City households are un- or under-banked. In Bedford-Stuyvesant, approximately one-in-five households are unbanked and nearly 30% are under-banked, meaning they have a checking or savings account but still use alternative financial services such as expensive check cashing and high-interest predatory loans, Inclusiv said. The unemployment and poverty rates in the neighborhood are significantly higher than they are in Brooklyn and citywide.
“There is a great need in Bedford-Stuyvesant and in central Brooklyn for financial services and products people can trust, rely on, and afford. We are thrilled to be expanding access to our credit union to many more families who will benefit from our services to build a better future,” said Ronnie L. Brandon, board president with Concord FCU.
‘Exploding Racial Wealth Gap’
"This partnership will support Restoration's initiative to disrupt and close the exploding racial wealth gap,” said Colvin W. Grannum, Restoration's president and CEO, adding that over the past 25 years the wealth gap between black and white Americans has nearly tripled. In 2018, the median white household wealth in the U.S. totaled $140,000 vs. $3,400 for African Americans. "The partnership will elevate the prominence of Concord Federal Credit Union and give local residents greater access to financial services and products that will help them better manage their financial resources and build assets such as savings for emergencies, education or home ownership"
In addition to expanding financial services to residents, the partnership will also help boost the long-term success of the Concord Federal Credit Union, a central goal of the larger African-American Credit Union Initiative, Inclusiv reported.
Inclusiv said minority-owned credit unions, “lifelines for financial security and growth in minority neighborhoods, are closing at the staggering rate of roughly one per week. African American credit unions, which make up 50% of all minority-owned credit unions, are among the fastest to decline.”
These closures are particularly concerning given that Black and Hispanic households are five times more likely to be under-banked than White households, according to FDIC data cited by Inclusiv.
Inclusiv said the African American Credit Union Initiative helps African American credit unions grow and become more sustainable through:
- Access to a common back-office technology platform to help achieve greater efficiency and economies of scale
- Assistance with building networks and community partnerships to expand their customer reach
- Consumer outreach and marketing, including a new website - inclusivcommunities.org - that provides the first online presence for many of these institutions
- Training and strategic planning to help credit unions become stronger and grow
The African American Credit Union Initiative was launched in January 2017. Between January 2017 and December 2018, Inclusiv said the initiative resulted in African American credit unions in New York City:
- Growing assets by 9%
- Increase in lending by 23%
- Increasing deposits by 16%
- Opening 578 new accounts
The African American Credit Union Initiative is also working with credit unions in Chicago, Inclusiv reported. For info: www.inclusivcommunities.org.