Persevering New Orleans CUs Receive Federation Money to Rebuild
NEW ORLEANS - Three credit unions which were among the hardest hit in New Orleans by Hurricane Katrina and subsequent flooding have received funds from the National Federation of Community Development Credit Unions. At a ceremony in New Orleans, NCUF Executive Director Cliff Rosenthal presented checks to the $1.3 million...
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NEW ORLEANS – Three credit unions which were among the hardest hit in New Orleans by Hurricane Katrina and subsequent flooding have received funds from the National Federation of Community Development Credit Unions. At a ceremony in New Orleans, NCUF Executive Director Cliff Rosenthal presented checks to the $1.3 million TCA (Total Community Action) FCU, the $18 million UNO (University of New Orleans) FCU, and the $208 million ASI FCU, as well as the African-American Credit Union Coalition, which has organized a mentorship and technical assistance initiative to support affected credit unions. To date, NCUF has raised more than $700,000 for its Community Development Relief and Rebuilding Fund. Contributions were raised from NCUF staff and board members and CDCU supporters across the country, along with major donations from the National Credit Union Foundation; the Jewish Funds for Justice, in partnership with the UJA Federation of New York; and the John D. and Catherine T. MacArthur Foundation. “Credit unions are a vital part of the financial infrastructure of any community, and in the wake of disaster, they can literally be a lifeline for low-income people” said Rosenthal. “Our goal is to help the affected credit unions return to health as quickly as possible, so they can in turn help their members rebuild their lives.” Recipients will use their awards to address a variety of needs – from reconstruction costs, to computer and technology purchases, to management assistance. While most of the awards were grants, NCUF also provided a seven-year secondary-capital loan to ASI FCU, an 80,000-member CDCU, one of the largest in the country. Secondary capital, which counts as regulatory net worth for low-income credit unions, is deeply subordinated debt that remains at risk until maturity. “We accept that risk, because we believe deeply in ASI and its leadership,” said Greenwald. “We urge other institutions to invest, as well.” Of the three credit union recipients, TCA has experienced the most sustained damage from the storm, NCUF reported. The credit union’s former office was located on the ground floor of a modest, two-story complex occupied in part by Total Community Action, Inc. TCA is a large anti-poverty agency, providing services that range from Head Start, to home weatherization, to neighborhood advocacy. In combination with the credit union it sponsors, TCA places strong emphasis on asset-building as a means to fight poverty. It operates an Earned Income Tax Credit (EITC) program that has helped more than 4,000 working people obtain more than $4 million in tax refunds and credits. The credit union’s storefront no longer exists, NCUF said. A seven-foot flood destroyed all the contents of the office, which is now completely gutted; what remains is a skeleton of studs stripped of their wallboards. One computer dangles loosely from its cord; other equipment sits in a small pile. A surviving teller window still displays the NCUA logo. Few other physical reminders of the credit union remain. The credit union’s safe was stolen, and with it a back-up disk. Months of records had to be painstakingly recreated. Many of the credit union’s members were evacuated to other states. Manager Rhoda Hundley had to relocate to Alexandria, Louisiana, up to four hours away by car from TCA’s New Orleans offices. But the essence of TCA FCU has survived, the Federation said. Hundley, along with board member Jackie New, and TCA administrator Faye Wooten has committed herself to the rebuilding process. Hundley reports that loans are being repaid, and occasionally, credit union members appear at TCA’s second-floor offices to conduct their business. Although new lending has been stalled, the 1,000-member credit union remains financially sound. Aided by a grant from the Federation’s Community Development Relief and Rebuilding Fund, the credit union has set a target date of July 1 to reopen its doors. Hundley said the $40,000 it had received from NCUF, combined with $4,000 it received from ASI, would go to replacing the credit union’s computers and office equipment and to helping to hire a part-time member service representative since the credit union’s previous employee had been displaced by the storm. “Right now I am just here by myself and while I can keep everything going I need some help to get growing again,” Hundley said. She said she also hoped to perhaps have some help from Office Depot or Staples or another large retail office supply firm to help the credit union’s office equipment. “I had thought of that but I just haven’t been able to get to it,” she said, “between replacing the records, closing the books out for the year, sending out 1099s. Life goes on, whether the credit union is ready or not.” She said the credit union’s landlord had received insurance money for the building damage and anticipates repairing the building in the coming months. Aided by the NCUF’s funding, the credit union has set a target date of July 1 to reopen its doors. -
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