WILMINGTON, Del. (7/8/15)--In a move to strengthen the local community it serves, a 3-year-old Wilmington, Del.-based credit union, with $1.3 million in assets, recently became a member of the Federal Home Loan Bank (FHLB) of Pittsburgh.
Stepping Stones Community FCU, only the second credit union in Delaware to join the FHLB, plans to leverage this new relationship to sponsor grant applications on behalf of local nonprofits working to provide affordable housing in the east Wilmington area.
The east side of Wilmington is a working-class neighborhood, Rashmi Rangan, Stepping Stones director, told News Now, and one of the core tenets of the credit union’s work is to create more homeownership opportunities for locals.
More than two-thirds of the area’s resident are renters, Rangan said.
One of Stepping Stones’ goals is to turn that two-thirds of the population into homeowners, Rangan told News Now. “If we could have impacted that many lives, it would feel really good.”
But the benefits of membership only start with affordable housing for the community.
Rangan said membership with the FHLB of Pittsburgh will further foster Stepping Stones’ legitimacy in the eyes of community members, many of whom are unfamiliar with traditional financial institutions.
Additionally, FHLB membership will help Stepping Stones manage liquidity, as it will be able to borrow from the FHLB of Pittsburgh. It also will allow the credit union to provide services it previously could not afford, such as direct deposit and ATM cards.
“Joining [FHLB] lays a strong foundation for the growth and stability of the credit union and Wilmington’s east side, particularly in our ability to offer financial services,” Rangan said.
Discover Bank, which helped capitalize Stepping Stones by contributing $250,000 in startup funding and $150,000 in grant funding and technical assistance, helped the credit union pursue membership in the FHLB.
The relationship between Stepping Stones and Discover was recently recognized by U.S. Sen. Tom Carper (D), who spoke during the ceremony announcing the credit union’s membership at the FHLB.
“A home is the cornerstone of family life and the hard-working people of Wilmington deserve access to affordable financing,” Carper said. “FHLBank, Stepping Stones CFCU and Discover Bank have made these opportunities possible.”
Stepping Stones was not the only credit union to join the FHLB of Pittsburgh recently. Bellco FCU, Wyomissing, Pa.; Pennsylvania State Employees CU, Harrisburg, Pa.; and Hershey FCU, Hummelstown, Pa., all joined in the second quarter this year.
CUNA supports FHLBs as a low-cost source of liquidity for financial institutions.
"During the latest financial crisis, FHLBs served as a key liquidity source for credit unions--ensuring that their service to their members was uninterrupted,” said Sam Whitfield, CUNA's deputy chief advocacy officer.
Further, CUNA backs a bill that would mandate that eligibility requirements for credit unions and banks of the same size to be the same. If signed into law, credit unions would also receive an exemption to the requirement that it must hold 10% of assets in residential mortgages on an ongoing basis to maintain FHLB membership.