Loving the San Francisco Bay Area... Community development, urban ministry, trying to defeat poverty, faith, religion, politics, good music, the quest for the perfect pizza, the Yankees, motorcycles... All in a 'day's life'

Tuesday, March 25, 2008

Recent Press Release

Branch Is First Credit Union in Area Currently Served By One Community Bank, Several Check-Cashing and Payday Lending Establishments

March 21, 2008

From coast to coast, several credit unions have banded together to help Community Trust Credit Union in Modesto, CA open up a branch in East Palo Alto.

The community of more than 40,000 residents, mostly low-income and Latino, is currently served by one small community bank as well as a number of check-cashing and payday lending establishments. Many banks left the 2.5-square-mile city in the 1980s. On March 15, Community Trust Credit Union of East Palo Alto held its grand opening celebration with more than 150 members, community and credit unions leaders, residents, and legislative officials in attendance.
Palo Alto, CA-based Stanford Federal Credit Union and Addison Avenue Federal Credit Union, and San Francisco-based Patelco Federal Credit Union joined up to serve as the mentor credit unions and underwriters of the branch, officially called Community Trust Credit Union of East Palo Alto. Each, along with the Northern California Urban Development (NCUD)—a non-profit organization that works on economic empowerment and community development in East Palo Alto—contributed a total of $120,000 in initial capital. And the three credit unions have pledged to contribute interest-free deposits of $100,000 for the next three years. Each also provided staff, resources, and worked to raise capital from other credit unions and affiliated organizations.

So far, 10 credit unions and credit union affiliates from throughout the country—including Bellco CU in Colorado, Bethpage CU in New York, NuUnion CU in Michigan, University FCU in Texas, and PSCU Financial Services, a St. Petersburg, Fl.-based credit union service organization that serves more than 1,100 financial institutions nationwide—have contributed $100,000 each in interest-free CDs. Contributing California credit unions include LBS FCU in Long Beach, Orange County’s CU in Santa Ana, KeyPointCU in Santa Clara, Meriwest CU in San Jose, and Star One CU in Sunnyvale.

“This is a unique collaboration of credit unions helping each other to try to bring services to an underserved community,” said Joe Duran, Community Trust Credit Union CEO.

“We couldn’t have opened up the branch without the support of both the community and these credit unions,” said Sandy Smith, Community Trust Credit Union vice president of branch development.
The need for more financial institutions in the East Palo Alto community led NCUD founder John Liotti to seek out Duran and his credit union three years ago for assistance. Community Trust Credit Union, a designed community development financial institution since 2002, has served its membership, which include low-income, Latino populations in the Central Valley. Liotti wanted to use Community Trust’s model to start a credit union in the city. But upon finding out that would take too long, it was decided to open a Community Trust CU branch instead.

Duran credits three people in particular for their assistance during the process: Stu Fisher, vice president of business development and retail sales for Addison Avenue FCU; Anita Macias, senior vice president of corporate planning and communications for Patelco FCU; and Keith Troup, vice president of branch operations for Stanford FCU.

“Addison Avenue believes in economic empowerment; we wanted to do something in this space that showed leadership in the community. The support we’ve given to the community of East Palo Alto is one of the many ways Addison Avenue goes the extra distance to demonstrate this,” Fisher said. He has been deeply involved in the development of the institution and served as its interim CEO for a time.
“It's a pleasure for Patelco to partner with these credit unions to help bring needed financial services to the residents of EPA, this venture is truly representative of the cooperative sprint of credit unions,” said Andy Hunter, Patelco Federal Credit Union president and CEO.

Stanford Federal Credit Union CEO John R. Davis said: “We know that many people are 'unbanked' and lack access to money for purchasing a home or car. People who live in a cash society cannot get credit and they often pay outrageous fees just to cash paychecks. This community needed a credit union that understands its needs, and that's what they got.”

Since the branch’s soft opening in December, Duran, Smith, and other CTCU staff have made the three-hour round-trip trek (double if there’s traffic) to East Palo Alto at least once a week. For the first month and a half, other employees traveled to the Bay Area city to provide training. The branch—currently opened four days a week—is staffed with two employees, both hired from the local area. It has now opened more than 150 accounts, mostly through word of mouth, according to Duran.

No comments:

Post a Comment