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NFCDCU Barrier to new charters too high
NEW YORK (1/7/09)--The newly chartered Georgia Family FCU in Atlanta is one of only a handful of credit unions chartered last year, a trend the National Federation of Community Development Credit Unions (NFCDCU) says it would like to change. “During the 1980s and ’90s, the National Credit Union Administration (NCUA) was especially active in chartering new credit unions across the nation,” said federation President/CEO Cliff Rosenthal. “Some of those institutions did not make it, but others have become some of the nation’s premier credit unions serving people of modest means. “In the past, communities could come together, develop a basic business plan, pool together their limited resources, and they could start a credit union,” Rosenthal said. “These days, it is virtually a requirement that organizing groups raise hundreds of thousands of dollars of start-up funds in order to satisfy NCUA requirements. We think the barrier to chartering has become too high.” Rosenthal said this is a major challenge, given the current economic downturn with a marked decrease in philanthropic activities. Georgia Family FCU was fortunate because in addition to pledged deposits from the proposed membership, it raised nearly $1 million in combined cash and in-kind donations to start up, with major funding from Atlanta-based Marcus Foundation, he added. The federation has seen an increased interest by groups seeking to organize their own community-controlled financial institutions. “Nearly 50% of our technical assistance is now being devoted to helping organizing groups across the nation, but the process is extremely difficult and time consuming,” Rosenthal said. He added that NCUA’s recent announcement that it would centralize the chartering process at its Alexandria, Va., headquarters, provides some hope. In 2008, the federation assisted these CDCU organizing groups:
* Casa de Maryland, Silver Springs, Md.; * Collaborative Support Programs, Clifton, N.J.; * East River Development Alliance (ERDA), Long Island City, Queens, N.Y.; * Express CU, Seattle; * Fondo Internacional para el Desarrollo de los Migrantes (FIDMI), Washington, D.C.; * Georgia Family FCU, Atlanta; * Haitian Evangelical CU (proposed), West Palm Beach County, Fla.; * Inspire FCU (proposed), Battle Creek, Mich.; * NCI Community CU, Houston, Texas; * Bergen County CU (proposed), Bergen County, N.J.; * Kalamzoo CDCU (proposed), Kalamazoo, Mich.; and * Pascua Yaqui Tribe, Tucson, Ariz.
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