(May 12, 2009 - New Orleans, LA) In a city that is still struggling to rebuild from the devastation of Hurricanes Katrina and Rita nearly four years ago, a new beacon of hope is rising in one of the most affected low-income neighborhoods in New Orleans, the Upper Ninth Ward. On Tuesday May 5, more than 100 leaders of the credit union and community development movements joined local residents for the grand opening celebration of the Clifford N. Rosenthal Community Resource Center located at the intersection of St. Claude Avenue and Desire Street in a central corridor of New Orleans' Upper Ninth Ward.
|Left to right: Mignhon Tourné, President & CEO, ASI FCU; Jeffrey Dekro, Jewish Funds for Justice; Sarah Taylor, Executive Director, ASII; James Ross, NeighborWorks America; Sister Clarita Bourque; and Federation President/CEO Cliff Rosenthal.
The grand opening was much more than just a building dedication, however: it was also a celebration of perseverance by ASI Federal Credit Union (ASI FCU) and its non-profit affiliate, A Shared Initiative, Inc. (ASII), who have been working on this project since immediately after the storms. It was indeed a celebration, and in true New Orleans fashion, with musical entertainment from the Free Agents Brass Band and a buffet of local Cajun fare.
Named after National Federation of Community Development Credit Unions (Federation) President/CEO Cliff Rosenthal, the new community resource center will offer free first-time hombuyer classes, one-on-one credit counseling, financial literacy education, and other asset-building products from ASI FCU, which will have a branch onsite, and from other community development non-profits, including NeighborWorks and ACORN, national housing non-profits that have been very active in New Orleans since the hurricanes.
"To me, this building represents three very simple things that tie us together: partnership, sharing and possibilities," said ASI FCU President and CEO Mignhon Tourné. "This new community resource center is a concentrated effort on the part of A Shared Initiative, Inc. to revitalize the Upper Ninth Ward, and no one in the credit union movement represents those ideals better than Cliff Rosenthal," she added.
During his remarks Rosenthal echoed this sentiment, "If all you had done after Katrina was to restore the thriving, vibrant institution that ASI FCU was before [the storms], we would have celebrated your achievement. But you aspired to so much more. And you have accomplished so much more, to which this new community center stands as testimony."
"This city respects myth and legend, and visitors can't help but be charmed by the street names of the Greek muses of the arts and culture, found nowhere else in America: Erato, Thalia, and others," Rosenthal continued. "In a re-imagined New Orleans, a new set of street names would be added: Persistence, Fortitude, Courage, and Hope. And ASI's headquarters would be located at the intersection of Vision and Determination."
A Challenging Time in the Wake of the Flood
ASI FCU is one of the largest community development credit unions (CDCUs) in the nation with more than $260 million in assets, and serving 70,000 predominantly low-income and minority members across the greater New Orleans metropilitan area.
However, despite its size, ASI FCU faced major challenges following Hurricane Katrina. With a number of its branches destroyed, and much of its staff displaced across the country, the credit union was challenged to reopen operations in the wake of the hurricane. The credit union's situation grew even worse as millions in Federal Emergency Management Agency (FEMA) monies for its members began flowing into the credit union's coffers, thrusting their net worth ratios into unsustainable levels. This soon brought NCUA examiners to the credit union under the aegis of Prompt Corrective Action, which could have forced the credit union to be merged or liquidated.
It was at this point that the Federation stepped in, expanding its existing investment of secondary capital in ASI FC U and lengthening its term in order to aid the credit union's recovery. Secondary capital, which is deeply subordinated debt that can be counted towards a credit union's net worth, is a complex, high-risk financial product developed by the Federation in the 1990s in conjunction with the National Credit Union Administration. "It was the best investment we ever made," commented Rosenthal. "ASI FCU was simply too important to the community to allow it to fail, particularly at a time when the CDCU's services would be so critical to helping low-income neworlinieans resettle their communities."
|Federation President/CEO Cliff Rosenthal outside the newly dedicated Community Resource Center, following the ceremony.
The Federation soon began accepting donations from its Board of Directors, staff, and member CDCUs to help low-income credit unions affected by the storms. What began as a small pool of funds from the CDCU movement eventually grew to nearly $1 million thanks to major donations from the John D. and Catherine T. MacArthur Foundation, the Jewish Funds for Justice, and the National Credit Union Foundation.
These donations allowed the Federation to make $150,000 in grants to ASII for the purchase and rehabilitation of the building in the Upper Ninth Ward, plus $250,000 in grants to ASI FCU for reserves to promote mortgage lending among their members, many of whom have been struggling to return home.
While reconstruction efforts in more affluent parts of the city have progressed steadily since the storms, large sections of the Ninth Ward remain in disrepair, with boarded-up and gutted homes still a common sight. ASII hopes the new resource center will help the community to thrive once again.
"This center not only represents an extension of the credit union's mission to serve the underserved," said Sarah Taylor, Sr. Vice President of Marketing and Community Development at ASI FCU and Executive Director of ASII, "but also an opportunity for our nonprofit to expand vital community services to promote homeownership to restore this once-vibrant community. We are deeply grateful to everyone that helped make this vision a reality."
© 2009 National Federation of Community Development Credit Unions.