The pullout by banks in financing nonprofit charities opened the door to Alabama's largest credit union, the $2.5 billion Redstone FCU, for a linkup with a local YMCA.
Officials of the Huntsville-based CU forecast that the YMCA tie-in, which includes a $15 million construction and bridge loan plus the CU member benefit of lower group rates for those who join the YMCA, could become a model for other relationships.
"We're very pleased that we're able to fill a void at an important charity in our community," said Joseph Newberry, president/CEO of Redstone.
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Scott Mounts, president/CEO of the Heart of the Valley YMCA serving five north Alabama counties, said he "never would have thought of seeking out a business loan from any credit union" until last October when a Birmingham banking group withdrew from the financing of the YMCA's expansion in suburban Madison.
"We were caught right in the middle of our campaign when the economy collapsed, but we had already collected $6 million in pledges and so we were stuck," said Mounts, noting that lending officials from the CU contacted him about forging a deal. As part of the agreement, Redstone members get a 6% discount in membership fees when they flash their ATM or debit card.
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