(December 21, 2009 – Long Island City, NY) The residents of Long Island City, Queens have reason to celebrate this holiday season, now that a new community development credit union (CDCU) will be opening for business in their community. More than five years in the making, this project has finally come to fruition with the recent announcement from the National Credit Union Administration (NCUA) that it will issue a low-income charter to the East River Development Alliance (ERDA) organizing group.
The National Federation of Community Develoment Credit Unions (Federation), which supports credit union organizing groups nationwide, has been working with ERDA organizers since the project began, providing market analyses and feasibility studies; developing educational and marketing materials to secure deposit pledges; facilitating strategic planning and business plan development; and guiding organizers through NCUA’s extensive chartering process.
“ERDA is extremely grateful to Cliff Rosenthal and the Federation staff, with special thanks to Director of Technical Assistance Brian Gately, for the support and expertise they have provided to us as we advanced through our organizing journey,” said ERDA President/CEO Bishop Mitchell E. Taylor. “We are proud to be the first CDCU chartered in our region since 2000, and to be able to bring affordable and relevant financial services to the public housing neighborhoods where ERDA currently operates. We are very much looking forward to officially joining the ranks of CDCUs doing amazing work across the country.”
In addition to the organizing assistance that the Federation provided, it has also committed to making a $100,000 non-member deposit to assist the new CDCU.
The Need for Affordable Financial Serices Is Great
ERDA is a local nonprofit working to transform New York City public housing neighborhoods by providing residents with the tools and opportunities necessary for self-sufficiency and economic mobility. Its work is focused on the Woodside, Ravenswood, Astoria, and Queensbridge Houses. Queensbridge, the largest public housing development in the country, often referred to as a “city within a city”, spans 6 square blocks, includes 96 buildings and is home to more than 10,000 residents. Ravenswood, Astoria and Woodside Houses are home to an additional 15,000 residents.
With average incomes below $24,000 in each of ERDA’s target commmunities, ERDA’s members are well below both the New York City average income of $39,900 and the United States average income of $43,600. According to ERDA, only about half of families living in the various “Houses” are working families. These predominantly minority residents will be the credit union’s primary field of membership.
Located just one subway stop from Grand Central Station, and featuring spectacular views of Midtown Manhattan, Long Island City (LIC) experienced a construction renaissance over the past several decades, with major corporations and developers turning to this neighborhood as a lower-cost option to the saturated market across the river. However, development has primarily been high-end commercial and residental, which is beyond the means of most of LIC’s historic residents.
Despite this growth, much of the development has centered on the immediate areas surrounding the Vernon Boulevard/Jackson Avenue subway stop, while much of Long Island City has continued to languish with some of the highest proverty and crime levels in Queens, and New York City generally.
ERDA hopes the credit union will become a source of affordable financing to help promote local ownership of homes and small businesses.
“A cooperative financial institution has always been part of ERDA’s theory of change and revitalization. The launch of our credit union will embed a culture of ownership and savings in public housing neighborhoods in Western Queens. Moreover, we believe that this is a replicable model for change in other public housing neighborhoods nationwide.”
Too Few Charters Continues to be a Major Concern
The Federation has been working with the ERDA organizing group since the very beginning and was especially pleased to see the organizers' efforts finally pay off, but despite this success, they expressed significant concern over the barriers that have arisen to chartering new institutions.
“Chartering of new credit unions has unfortunately become a rare event -- only two new federal charters this year, both of them CDCUs,” said Federation President/CEO Cliff Rosenthal. “This is one of our major areas of concern, and one which we are vigorously advocating with the NCUA.”
“However, for the CDCU movement, this is all the more reason to celebrate ERDA's accomplishment and congratulate them on the years of hard work that they put into this effort,” Rosenthal added.
ERDA organizers are planning to hold a press conference, but the recent East Coast blizzard has made scheduling the various speakers difficult, so the exact date and time remains to be determined.
The only other credit union chartered this year was another CDCU that had also been working with the Federation, First Bergen FCU (Hackensack, NJ), chartered in January. With only two new charters, 2009 has been the slowest year on record for new charters since the signing of the Federal Credit Union Act in 1934.
© 2009 National Federation of Community Development Credit Unions.