ARLINGTON, Va. – An anonymous donor has given the National Credit Union Foundation $1 million dollars so that nine Virginia, Maryland and Washington, D.C. credit unions can strengthen themselves and better serve their low-income members. NCUA has designated seven of the institutions as low-income credit unions while the Department of the Treasury has recognized the others as Community Development Financial Institutions (CDFI). "Having a donor request anonymity is not at all uncommon in the foundation world, and we are glad to honor that request," said Bruce Wheeler, spokesman for the Foundation. "After all, the source of funds isn't what matters; the use of the funds is what matters. In this case, the funds will be put to very good use helping nine low-income designated credit unions to better serve their members," he added. Gary Officer, Foundation executive director conceded that the idea of an anonymous donor runs counter to the credit union industry norm, which generally sees institutions take full responsibility for their donations. "But in the end, the donor has requested to remain anonymous and that is a norm we respect," he said. Under the terms of the arrangement, the Foundation will administer the loan fund on behalf of the donor and recipient institutions. The fund's assets are to be primarily loans, not grants, according to Officer and the bulk of them are meant for things like non-member deposits and other forms of secondary capital as well as funds to help the credit unions offer payday loan alternatives and other services to low-income communities. The arrangement is similarly structured to others where the Foundation administers other sorts of funds from private or government sources, Officer explained, and will receive a nominal fee, which he estimated to be $5,000 for its trouble. A three-member council, made up of a Foundation representative and two representatives from the recipient institutions will decide which projects the Fund will support, the Foundation said. For some credit unions, the additional funds cannot arrive too soon. The $1.3 million NCP Community Credit Union serves some of the most economically depressed areas in the Norfolk, Virginia area and CEO Jesse Fleming reported that pressing capital concerns had kept the credit union from moving forward with its plans to help residents of these economically depressed areas. "We aren't closed yet, but we aren't moving forward as quickly as we would like either," he said. "Some of that money would sure come in handy," he added. According to NCUA, as of September 2002, NCP had a capital ratio of 1.99% Although the Foundation played a role in helping create the fund for these nine low-income credit unions, much of the credit for conceiving the idea and seeing it through belongs with Joyce Jackson, a former NCUA administrator who now works for the Illinois Credit Union League. According to several CEOs from the nine credit unions, Jackson, who at the time served as CEO of the Hospitality Federal Credit Union, put the group of credit unions together and approached a donor that she thought might be interested in the idea of helping more than one institution at a time. "I happened to know that this donor was helping one institution that I knew of and I suspected that they would be open to helping others," Jackson said. "I thought of the loan fund idea as a way the donor could help many credit unions at the same time rather than just helping one at a time," she said. The introduction of the NCUF as the Administrator of the loan fund was the innovation that really helped the idea take off, she explained, because the donor hadn't wanted to do all the work of administering that much money and the task was far too large for any of the credit unions alone or even together, she said. Jackson, who helps Illinois credit unions with various technical problems became familiar with the possibilities and needs of the low-income credit unions when she served as director of NCUA's Office of Community Development Credit Unions, which has since become the Office of Credit Union Development. She brought that perspective with her to Hospitality where she began working on the loan arrangement, she added. Helen Godfrey, CEO of the $47 million Shreveport Federal Credit Union, based in Shreveport, Louisiana, echoed Jackson's experience and noted that even though the loan fund was only $1 million, it would play a powerful role for the credit unions. "The good news is that when credit unions are small, you don't need that much money to prime the pump," Godfrey, who also serves as vice-Chair of the African American Credit Union Coalition, said. But Jackson acknowledged that the loan fund's broader goal, which was to serve as a model for other, similar arrangements in the future, would be hampered by the donor's insistence on remaining anonymous. "We didn't really go into why they wanted to remain anonymous," Jackson said, "but it was clear that they wanted to do it that way. We will just have to go ahead and promote the parts of the model which are not directly related to the donor," she said. [email protected]

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.