Candidate Confirms $1M Credit Union Pledge
A multimillionaire vying for the Illinois’ governor’s seat has pledged to invest $1 million of his personal fortune in South Side Community Federal Credit Union to show his support for the $3.3 million dollar Chicago cooperative and its micro-lending program.
Republican gubernatorial candidate Bruce Rauner, founder of the Chicago-based investment firm GTCR, issued the $1 million promise during a recent community meeting in response to a question from the audience. When Rauner’s campaign office was contacted by the CU Times, spokesperson Lyndsey Walters said the candidate plans to live up to his pledge and is “working on getting it done within a month.”
“Bruce pledged to invest $1 million in the South Side Community Federal Credit Union,” Walters stated in an email. “He thought of it on the spot in response to the question asked. He hopes it will help provide start-up capital to community businesses, allowing them to grow and create more jobs.”
The offer has prompted the Democratic incumbent, Gov. Pat Quinn, to hurl accusations of vote buying, which Rauner has denied in the national media, saying his motive was to demonstrate his commitment to the community.
Rauner made the pledge at a meeting hosted by National Black Wall Street - Chicago, a non-profit economic development group.
Both gubernatorial candidates were invited to the gathering, but Quinn did not attend, according to Mark Allen, chair of National Black Wall Street - Chicago.
Gregg Brown, president/CEO of South Side Community FCU, said the credit union is pleased about the pledge and plans to avoid any political controversy.
“The credit union is very appreciative of Bruce Rauner’s pledge to invest in our work and what it potentially means to our community, particularly in the area of job creation, retention and small business expansion,” Brown said. “To his credit, it is a demonstration of the credit union movement motto ‘People Helping People.’”
“However, our credit union is a non-partisan, not-for-profit community development financial institution whose primary mission is to economically empower the community we serve,” Brown continued. “Therefore, our acceptance of this mutually beneficial investment should in no way be misconstrued as a political endorsement.”
Brown pointed out that Gov. Pat Quinn, while serving as Lt. Governor, was the keynote speaker at the credit union's grand opening ceremony in November of 2003.
"They both seem to understand the plight of credit unions that are working to help their members," he added.
Plans are moving forward to turn Rauner’s promise into reality, Brown said.
“Discussions are underway between Rauner’s private equity firm and the credit union to determine how the pledge can be fulfilled in a way that meets federal regulatory guidelines and can be used to the maximum benefit of the credit union, its members and the expansion of our micro-loan program,” he explained.
South Side Community FCU is the only community development credit union on Chicago’s south side, Brown said.
The institution has reinvested $4.1 million back into the community in low-interest rate small dollar loans, including auto, payday alternative, credit builder, debt consolidation, residential and micro-business loans, he said.
“When you’re serving one of the most hard-to-lend-to populations in Chicago, it does require additional financial assistance,” Brown explained. “It’s a tough market to lend to, but not impossible.” “We are grateful for the extra capital from Rauner's pledge that could help offset the risk associated with making loans in a credit challenged environment,” he added.
Brown, who helped launch South Side Community FCU almost 11 year ago and serves on the board of the National Federation of Community Development Credit Unions, said he thinks this situation offers a teachable moment for anyone interested in investing in a community development credit union.
He hopes the $1 million pledge will set a precedent and serve as a catalyst for greater infusions of capital in these institutions.
“Hopefully this message is received by the funding community, other individuals of high net worth and even people of modest means across the country: That Community Development Credit unions are a good place to invest your money if you really want to make a positive difference in your community,” Brown said. Often the smallest financial institutions in the industry, CDCUs specialize in financial education, housing counseling and micro-business lending, and offer a variety of traditional and non-traditional products, services and programs that aim to reverse the cycle of poverty in underserved neighborhoods throughout the U.S., Brown said.
“They do the heaviest lifting with the least of resources and yet have the greatest impact,” Brown explained. “They are a unique category of not-for-profit organizations that are truly worthy of investment dollars because they have a proven track record of economically empowering America from the inside out.”
The person who posed the $1 million question to Rauner was Otis Monroe, executive director of The Monroe Foundation, a non-profit economic development organization that partnered with the credit union to host a micro-lending workshop.
"I came to the meeting to listen to Mr. Rauner’s views on philanthropy and helping the community,” Monroe said. “After listening to him speak, I asked what he would be willing to do in the next 30 days to show his commitment to the community.”
“I asked if he, as a private businessman and venture capitalist, would invest $1 million into the credit union’s micro-lending program,” Monroe continued. “When he replied, ‘I will put up more than $1 million,’ the room erupted. Everyone jumped up to give him a standing ovation.”
Monroe said he’s glad that his put-your-money-where-your-mouth-is approach seemed to pay off.
“This was about helping the community,” he added. “I’m an activist and we’ve grown weary of politicians making promises that they’ll do something down the line. Most of the time, those big promises don’t usually come through. So, I was looking for something more immediate and concrete that would benefit the entire community.”