BUFFALO, N.Y. (8/21/15)--A proposed credit union in Buffalo, N.Y., is moving closer to becoming a reality.
The pending Good Neighbors FCU has collected more than 700 surveys from area residents, of which 79% said they would be interested in joining a credit union, said organizer Emma Smalley (Buffalo Business First Aug. 13).
Accumulating the signatures was “a long process, but we’re happy with the results,” Smalley told News Now. “The west side of Buffalo is extremely diverse and in some cases there were literacy barriers.”
Among the challenges in overcoming the language, cultural and literacy barriers was educating residents on what credit unions are, their structure and how they benefit underserved communities.
The neighborhood is heavily populated with immigrants who distrust financial institutions, preferring to pay a fee to cash their checks and keep the money at home. Those cash-heavy households are prone to theft, and state estimates say Buffalo's "unbanked" or "underbanked" pay an annual average of $900 in fees (News Now Aug. 18, 2014).
“This is grassroots,” Smalley said. “It’s why credit unions exist. The people in this community need a safe place to put their money.”
Smalley, who served as manager of Niagara Falls Penn Central CU before its merger with Boulevard FCU earlier this year, said Good Neighbor FCU’s organizers are focused on raising more money for startup operational funds and drafting its business plan, which it must submit to the National Credit Union Administration as part of its application to receive a credit union charter.
Smalley said there has not been a primary financial sponsor involved in the development of the new credit union and added that raising money without a sponsor is a real challenge.
Good Neighbors FCU organizers have signed a memorandum of understanding with PUSH Buffalo Inc., a membership-based community organization that addresses affordable housing, living wages and poverty issues. Through the partnership, Good Neighbors will be able to apply for grants and donations under the Internal Revenue Service’s 501(c)(3) tax exemption.
“It’s a tough spot when you’re organizing a credit union without a sponsor because you’re not a 501(c) (3), and you’re not yet a credit union,” Smalley said. “That makes it tough to bring in money.”
Good Neighbors FCU is seeking a community development financial institution (CDFI) designation through the U.S. Treasury. Organizers will also launch a crowdfunding campaign and use the funds to enlist a consultant to assist with the CDFI application process and with additional fundraising.
Smalley also hopes for cooperation and assistance from other credit unions.
Good Neighbors organizers hope to attract 500 members with total assets of $1 million to $2 million initially.