ATLANTA — The NCUA has chartered a new community development credit union.
The Georgia Family Federal Credit Union will serve primarily lower income Latino community in metropolitan Atlanta, according to the National Federation of Community Development Credit Unions, which supported and helped the CU's organizers.
The credit union's CEO, Paula Diaz-Torres, said that that CU would work to “break down the cultural and functional barriers that stand between low-income immigrant residents and mainstream financial services. Our project aims to serve low-income individuals from the Hispanic community who struggle to build assets due to a lack of financial sophistication or access to affordable financial products.”
The credit union is looking to start up a sizable operation with the capacity to serve a significant portion of the largely underserved community. Organizers are currently looking for additional supporters to help spread the word about their efforts and to serve as conduits to leverage additional resources for the credit union, the federation said.
“I especially want to thank the federation for all the technical assistance it provided on this project. The knowledge and experience they shared with us, their support in developing our relationship with the regulators, and the networking opportunities they made available were indispensable to our success,” Diaz-Torres explained.
“The organizing process is so hard and discouraging that the friendship and support from the CDCU movement was instrumental in keeping our project moving forward.”
Diaz-Torres' comments resonated with one of the federation's burgeoning issues: the length of time and difficulty in chartering credit unions.
During the 1980s and 1990s, the NCUA was especially active in chartering new credit unions across the nation,” explained federation President/CEO Cliff Rosenthal. “Some of those institutions did not make it, but others have become some of the nation's premier credit unions serving people of modest means.”
“In the past, communities could come together, develop a basic business plan, pool together their limited resources and they could start a credit union,” said Rosenthal. “These days, it is virtually a requirement that organizing groups raise hundreds of thousands of dollars of start-up funds in order to satisfy NCUA requirements. We think the barrier to chartering has become too high.”
There seems to be some hope, as the NCUA recently announced that it would be centralizing the chartering process at its headquarters in Alexandria, Va. This is a recommendation Rosenthal made to newly appointed NCUA Chairman Michael Fryzel, and one he hopes will make credit union start-ups a realistic option for disenfranchised communities.
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