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Wis. CU receives 1.6M to help struggling families
MILWAUKEE (9/10/10)--Brewery CU in Milwaukee found out this month that it will be receiving more than $1.6 million in federal funds--a $600,000 grant and $1 million in secondary capital at a 2% interest rate--for eight years to help struggling families, according to the Wisconsin Credit Union League. The $32.4 million-asset Brewery CU was among 180 community development financial institutions (CDFIs) nationwide-- 20 were credit unions--which received financial assistance in August as part of the U.S. Department of the Treasury’s CDFI Fund. The fund was created in the 1980s to administer federal help to financial institutions tackling the challenging work of community development (The League News Sept. 8). “It was just the help we needed to continue doing what most other financial institutions don’t even attempt, and that is to help families that have nowhere else to go during challenging financial times,” Brewery CU president/CEO Jim Schrimpf, told the league. A large number of the credit union’s members--about 55% of whom come from low-income designated zip codes--lost their jobs during the past two years and were struggling to make payments on their loans and mortgages with Brewery and other lenders, he added. The credit union had been doing all it could to help them by modifying loan terms, for example. However, the credit union felt it was hitting the wall in terms of how much help it could extend or for how long. The infusion of $500,000 to the loan loss reserve will allow Brewery CU to continue to lend to its target market at competitive terms and rates. Part of the CDFI grant will be put toward Individual Development Accounts--matched savings accounts that he says will help as many as 40 families achieve homeownership, Schrimpf said. All of these funds, Schrimpf added, are just the latest his credit union has qualified for and received after becoming a low-income credit union, as designated by the National Credit Union Administration, and a CDFI, as designated by the U.S. Treasury. Brewery’s Finance Manager, Mikal Gilliat, completed Brewery’s CDFI grant application with the help of fellow graduates of the National Credit Union Foundation’s Development Education (DE) program, which he describes as a credit union philosophy immersion program. “DEs from around the country really supported us. I can’t thank them enough,” Gilliat told the league. “The entire DE experience focuses on the need for credit unions to challenge themselves to do what for-profit lenders won’t in how they serve individuals, families and communities. So going after these grants was just an extension of the commitment our credit union has always had for how we serve our members.” While credit unions hold only a 10% market share for financial services in Wisconsin, they operate 40% of all financial branches in low-income areas. About 94% of banks have no branches in these areas, according to the Credit Union National Association. The National Federation of Community Development Credit Unions, representative to the majority of the 192 CDFI certified credit unions, reports that since its inception in 1986, the CDFI Fund has provided more than $100 million in grants to credit unions serving economically distressed communities.
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