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<p>ALEXANDRIA, Va. – NCUA has sent a letter to federal credit unions asking them to get involved with local reinvestment efforts chartered by a relatively little known federally funded organization, the Washington D.C-based Neighborhood Reinvestment Corporation (NRC). Currently at least 23 credit unions around the country help the local efforts in a number of different ways that NCUA wants to expand. Chartered under federal law in 1978, the Neighborhood Reinvestment Corporation seeks to “to revitalize older urban neighborhoods by mobilizing public, private, and community resources at the neighborhood level,” according to the NRC. It does that primarily by chartering and supporting so-called “Neighborworks” organizations, local public and private partnerships that seek to revitalize not only urban areas but also suburban and rural areas as well. In addition to examining their 225 local organizations, the NRC supports them through funding their capital projects, providing management and technical assistance and conducting training sessions and seminars around the country, any of those activities having room for credit union involvement, Burneko said. But in its letter, NCUA specifically suggested that credit unions that have added underserved areas to their fields of membership to partner with Neighborworks groups help their members build wealth for down payments on homes, become more financially educated or obtain down payment, closing cost or home improvement loans. Low income designated credit unions can get training from NRC as well as provide credit union services to Neighborworks clients, the letter said. Although NRC is relatively little known, credit unions already have a link to the organization through NCUA Board member Debbie Matz, who also sits on the NRC Board with representatives from other federal financial regulators and the Department of Housing and Urban Development (HUD). NRC is so little known, Matz said, that even though she has been involved in community development issues for some time, she had not known of the group’s existence or its work until she got on the Board. “Now I am just very impressed,” Matz said. “These are individuals and groups working on the ground around the country to make real changes in their communities,” she said, adding that she hoped credit unions would be open to the many different ways they could partner with NRC organizations. In her capacity on both boards, Matz said she has been beating the drum about Neighborworks efforts around the country, she said. Matz’ efforts on behalf of both credit unions and the NRC has led her to appeal for help promoting the message from NAFCU as well. NAFCU President Fred Becker was traveling at press time but NAFCU public relations manager John Zimmerman said that “NCUA Board member Debbie Matz made a personal appeal to the NAFCU Board to get more involved with NRC and we look forward to exploring those possibilities.” According to Burneko, NRC is currently conducting a survey of its groups around the country to determine to what extent and how credit unions are involved already with its reinvestment efforts. So far about 23 credit unions around the country are known to have some involvement with the Neighborworks organizations, ranging from formal partnerships with the organizations to allowing credit union officers and staff to sit on the organizations’ boards and various committees, Burneko said. One of the more active partnerships between credit unions and a Neighborworks group can be found in Pocatello, Idaho, where credit unions became involved with the Neighborworks group from its very beginning. Lonnie Nelson, CEO of the $47 million Idaho State University Federal Credit Union based in Pocatello, Idaho, said that when the NRC chartered the Pocatello Neighborhood Housing Services (PNHS) in the early 1990′s, the mayor of Pocatello asked area banks and credit unions to pool some money that the newly chartered PNHS could use to help its clients get mortgage and home improvement loans. Five credit unions agreed and three have continued in the loan pool for over a decade. “We definitely saw where our help could really make a difference,” Nelson said, “and that is we came to get involved.” The credit unions’ only requirement was that folks who got the loans be credit union members. “But since among the five of us we pretty much had the area covered,” Nelson said, in effect the rule did not block anyone from getting credit union funds, although if it had there was money available from banks as well, he said. Participation in the loan pool was so strong, Nelson said, that often a credit union would only have to pick up three or 4 or 5% of a loan. “PNHS took care of the book keeping so that the we just got a payment each month, Nelson said. The credit unions and banks contributed the underwriting the loans needed, although Nelson admitted that the loan standards were sometimes more “flexible” for these loans than they would be in more traditional lending. Spreading the loan among more financial institutions was one way to manage the increased risk, he said. Joe Tintone, lending and collections officer for the $61 million First Bristol FCU in Bristol, Conn., presents another sort of credit union involvement with a NRC organization. Although First Bristol does not have a formal partnership with the nearby Neighborhood Housing Services of Waterford, it does allow him to participate on the organization’s revolving loan fund that seeks to help low income people with essential loans they need for home repairs or other needs. Tintone and other organizers are trying to convince area financial institutions to commit to a loan pool arrangement similar to that built in Idaho, but admitted that he had missed the last meeting and that he was unsure where the effort stood. Tintone said he was unsurprised that First Bristol allowed him to continue his work with the Waterford NHS when he started with the credit union since such “giving back” is what credit unions are all about.</p>

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