The city’s council and mayor have approved the plan, which remains in limbo in the face of California law governing split votes and the opposition of banks and other lenders and regulators.
The credit union in nearby Berkeley, Calif., contended in a press statement Tuesday that the goals of the program outweighed its risks.
“We believe that modifying heavily underwater mortgages to keep residents in their homes, instead of foreclosing and kicking them out, has a tremendous benefit to the community, Cooperative Center CU wrote in the statement.
“Whether these principal reduction modifications are achieved through the straight purchase or eminent domain of these loans at market value, Cooperative Center FCU intends to continue lending to its Richmond-based members,” the credit union said.
“And we plan to continue lending even if the big banks refuse to lend in Richmond, as they indicated they would do.”
The credit union was chartered in 1942 to serve the members of a local food and grocery cooperative that has since gone out of business. It has also merged in two other nearby credit unions.
“Our members see the credit union as their primary financial institution. This inherently stable "core’ membership has provided a solid foundation from which to build,” the CU said on its website.