Denise Wymore, Chairman, CU De Novo Collective

The NCUA recently released its 2023 Annual Report, and one of the highlights listed was the granting of three new credit union charters. The NCUA website also confirmed that we finished last year with 149 mergers. When searching “How to start a credit union” on Google, one is met with disappointing results. The NCUA stands as the only significant resource, offering limited assistance, information or guidance, while state and national trade associations remain notably absent. How did these folks find out about the credit union model, then? The bigger question is how and why they persisted in creating a new credit union when so many gave up. Each of the four credit unions has a similar story, and at the center is financial inclusion, closing the racial wealth gap and social and economic justice.

Generations United Federal Credit Union

In 2017, the General Synod of the United Church of Christ (UCC) adopted a resolution that identified the need for financial services to the historically underbanked or unbanked, as well as to victims of what the UCC called the "extortionate alternative financial-service industry models."

The resolution identified credit unions as important contributors in the quest for economic justice and called upon the UCC National Setting to explore a community development credit union relationship that can serve UCC settings nationwide. The organization has 4,700 churches and approximately 745,230 members. John Linzey, EVP of Corporate Development for The Pension Boards – United Church of Christ Inc., will also serve as the President/CEO for the newly formed credit union.

For Members Only Federal Credit Union

This is the first black-owned, woman-led, sorority-based, digital banking financial institution in the history of the United States. The Alpha Kappa Alpha Sorority Incorporated (AKA) is an international service organization founded in 1908 at Howard University in Washington, D.C. It is the oldest Greek-letter organization established by African American, college-educated women.

The AKA members pledge to be of “Service to All Mankind.” Their mission is to assist members in building economic wealth, promoting social justice, and uplifting communities, all of which are fundamental to the statutory mission of credit unions.

Young Community Federal Credit Union

“Young Community will open doors to insured financial services in an area where more than one in four residents do not use a federally insured financial institution regularly,” NCUA Chairman Todd M. Harper said. “The organizers of this new credit union have deep roots in their community, and they will address economic disparities and provide financial education to their members.”

In 2022, there were four charters granted, all serving minority and low-income underserved populations:

New York Episcopal FCU in the Bronx - The Episcopal Diocese of New York, after almost 20 years of work by faithful laypersons and clergy, has guided the creation of an independent, federally accredited credit union to support parishes, parishioners, and participants in Diocesan programs across New York. The newly founded credit union will open banking services to the underserved while providing low-cost emergency loans and financial counseling. 

People Trust The Barber of Little Rock: The Documentary of Arlo Washington follows his quest to fight economic inequality in Arkansas by founding the People Trust CDFI Loan Fund, which eventually became a credit union. The documentary short was nominated for an Academy Award.

WeDevelopment was founded out of a need arising from the subprime lending crisis. When banks began to retreat from the community, payday lending, check cashing, and title loan companies filled the void. Folks were getting trapped in that cycle, and at that point, the support for a credit union became even stronger.

Morning Star FCU in Lame Deer, Mont., was founded in 2022 to increase access to safe, fair, and affordable financial products in an underserved, primarily Native American community.

One new charter in 2024! Arise Community Credit Union

Just this month, the FIRST credit union charter in 2024 was granted. Arise Community Credit Union is Minnesota's first black-led credit union and the first state charter in over two decades.

Arise hopes to fill the gap left behind by other, more conventional banks and even other credit unions. Predatory lenders have jumped into the gap left behind by the retreat of the mainstream banking system from certain communities. African Americans are twice as likely to live within 2.5 miles of a payday lending storefront, compared with all Minnesotans. The Association for Black Economic Power (ABEP) spearheaded the new credit union to address systemic financial challenges impacting Minneapolis residents, especially people of color. The credit union will be led by CEO designee Dan Johnson, who has been working on the effort and previously worked for Wells Fargo.

According to Inclusiv, a network of credit unions that focus on community development, minority credit unions across the country are closing at a rate of one per week, making the new Arise Community Credit Union’s chartering even more urgent if that trend is ever to be reversed.

I sincerely hope these stories will deeply connect with credit union leaders committed to enhancing the credit union mission of promoting financial inclusion, well-being and dignity for all individuals. Clearly, we are not there yet, and these volunteers should inspire us to do more to create a growth engine for the future by making it easier to start a new credit union, more challenging to merge a healthy one and work together to help small credit unions gain economies of scale without merging.

To learn how you can help, visit www.cudenovocollective.org.