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Wednesday, September 06, 2006

NCUD Press Release Re: Credit Union Project

Stanford Federal Credit Union
1500 Page Mill Road
Palo Alto, CA 94306

Sept. 5, 2006
For Immediate Release
Contact: Margaret Wold, 650-842-6031 or margaret@sfcu.org


EAST PALO ALTO WINS PRELIMINARY FEDERAL APPROVAL:
COMMUNITY MOVES TO CREATE FINANCIAL INDEPENDENCE

East Palo Alto, a struggling city filled with leaders who believe in its potential, scored a victory in the fight for community reinvestment.

Preliminary federal approval has just been granted to build a credit union that will serve the people of East Palo Alto, many of whom lack access to a bank. The new not-for-profit financial institution is scheduled to open in 2007. All profits remain in the community.

“A credit union, which is owned and operated by the people who bank there, inherently generates trust. This is about providing financial resources as well as a platform to talk to people about becoming financially independent rather than being victims to predatory lending institutions,” said John Liotti, CEO of the Northern California Urban Development Corporation which submitted the application to the federal agency that charters federal credit unions.

The project is modeled after successes in Modesto, Calif., Mississippi and North Carolina. “We know that many people are ‘unbanked’ and lack access to money for purchasing a home or car,” said John Davis, CEO of Stanford Federal Credit Union. “People who live in a cash society cannot get credit and they often pay outrageous fees just to cash paychecks.”

Stanford Federal Credit Union, which serves 44,000 members of the Stanford community with assets of some $640 million, will mentor community leaders and create a framework for proper policies, procedures and financial goals. It will also coordinate efforts to build the financial base needed to serve the community. Outreach efforts will include Spanish-language services.

Preliminary approval for the credit union charter was won in late August from the National Credit Union Administration. Credit unions throughout the region ~ including Patelco in San Francisco and Community Trust in Modesto ~ are working to coordinate efforts and build a $10 million asset base for the project.

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