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CREDIT UNIONS
Re: Formation of a Locavore Credit Union
In order to become sustainable, our community needs, inter alia, a strong, local, economic base, especially in food and energy. In order to have that base, such businesses and individuals need to generate sufficient income to have savings. The savings offer these services: (a) Reserves against economic down turn, accidents, theft of assets by insiders, and (b) funds for expansion of services/products.
In order to have savings, the enterprises must be profitable, yet offer a high ratio of value to price to their customers/members of local green products and services.
Profits by these businesses, in terms of cash, can be placed in a credit union and draw interest/dividends. The credit union exists to serve the financial transaction needs of the enterprises and their workers as well as the general membership.
Credit unions are supervised by states or the feds. In Oregon, the supervision is by DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, DIVISION OF FINANCE AND CORPORATE SECURITIES. Memberships and equity subscriptions are not considered corporate securities, which avoids a huge expense in complying with the Oregon public issue, securities laws.
Many credit unions have been formed by poor folks and have succeeded. See: NCMSC SUPPORT CENTER. There is no reason why we cannot follow the same path laid down by the credit unions mentioned in the article.
I recently read an article that one of the major banks created an exclusively online bank. There is no reason why we cannot start our credit union as an exclusively online bank. All we need is a server, some computers, an office or garage, some heat, light, office equipment (used), and a coffee pot, a refrigerator and microwave. We will also need telephone service and DSL.
When those are in place or at hand, I can do the paperwork and apply for all of the permits and licenses. We will need a name, a location and a Board of Directors (3 or 5). We also need a Council of Advisors of about 25 folks to act as or outreach team and vet the Board's proposals. The 25 become our first members when our permits are issued.
We can the issue debit cards which are really our own currency which, in a sense, honors the work done by the folks supporting Hour Trader. The card will allow local merchants to honor the credit union and its members by affording us discounts on locally produced items and local services.
In return, our membership chooses to do business with the local merchants and service companies, thus avoiding the Big Boxes and national corporations and their franchisees. The card would need to be shown to the cashier, but not necessarily used for payment. Thus the CU can drive customers to each member merchant, who also will have as page off our wikiweb or a link to the merchant's website, or both.
Over time, the Credit Union will have assets from its profits, it can use for small, mini-equity investments. The members' deposits can be loaned, but, under the prudent person rule, probably cannot be used for equity funding small, start-up innovative businesses. I am also against buying listed stocks and bonds of "blue chip" companies. Those companies are seldom truly "local" and the point of the CU is on businesses which are "local".
So, when the CU has a line of equity investments, it will need to monitor them. To do so, it will need volunteer "monitors" who are appointed to work with the small business in which the CU has an equity stake. This is how KIVA works. Thus, we keep the small business in view at all times and can help out when needed with loans or advice.
We can also act as a source of information for our members on what companies are "green" by publishing their data on our wikiweb and getting feedback from the customers/members of the CU. Thus we keep in touch with our members who constantly "vet" each merchant member. This will keep our losses down -- and there will be equity and some loan losses for which we need to prepare and attempt to prevent.
We can get started anytime we can get a steering committee together. I suggest we meet at a local coffee house and discuss some of the matters mentioned in this memo. Basically we need:
- A decision that we need a green credit union to serve as part of our sustainability drive for the local community.
- A name.
- A definition of the community which, because of our online status, could be all of Oregon
- Membership qualifications
- A physical, rent free location until we get our permits
- Office furniture and equipment, including software.
- Bylaws which meet the Oregon Revised Statutes
- Initial Board of Directors.
- A website
- The initial formation of the Council of Advisors.
- Selection by the Board of the members who will operate and manage the CU (we will use the limited liability partnership as a model and thus all working in the CU are “partners” not employees, thus no FICA, no UI, no Work Comp costs)
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CDCUs, Federation Awarded 4.7 Million from Federal CDFI Fund
Federation to Assist Credit Unions with Certification, Application
(August 29, 2008, New York, NY)
The U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund yesterday announced $54.2 million in awards to 89 community development financial institutions around the United States. Twelve credit unions and the National Federation of Community Development Credit Unions (Federation) were among the winners.
Two credit unions, ASI FCU (Harahan, LA; $1.097 million) and Latino Community CU (Durham, NC; $1.0 million) were the biggest credit union winners. Other awards ranged from $39,000 to nearly $600,000. (See attached chart for complete list.) The larger awards are part of the CDFI Fund’s “Core” and “SECA: (Small and Emerging CDFI Assistance)” Financial Assistance (FA) programs, while the amounts of $100,000 or less come under its Technical Assistance (TA) program.
To read the full press release please click here.
Back-up copy of full article on this wikiwebsite.
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PARTNERSHIPS BETWEEN CREDIT UIONS
| Development Exchange Participants Announced |
 | ||
 | (November 27, 2007 – New York, NY) The National Federation of Community Development Credit Unions (Federation) and the National Credit Union Foundation (NCUF) have announced the first four partnerships in the Credit Union Development Corps, an exchange program between Credit Union Development Educators (CUDEs, or DEs) and the Federation’s network of community development credit unions (CDCUs). In this new program, participating DEs will visit a CDCU for one week to learn first-hand how it effectively serves its low-income members. Subsequently, a representative from the CDCU will then spend one week at the DE’s institution learning about that credit union’s programs and operations. During each exchange, the visiting representatives aim to use their expertise to help their hosts, while at the same time learning about each credit union’s operational strengths. The first credit union pairings in this program are
The Lower East Side Peoples FCU, for example, applied to the program looking for assistance in learning more about mortgage secondary markets and Small Business Administration loans in order to provide additional services to spur economic security and growth in the communities they serve. Program organizers hope that pairing Claire Ippoliti, CUDE, Vice President of Lending at Philadelphia FCU, with the Lower East Side Peoples FCU, will provide New York City’s largest CDCU with the requested expertise during their exchange. | |
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| Federation Members Return Millions to Low Income Communities Through Vita |
| http://www.cdcu.coop/i4a/pages/index.cfm?pageid=1351 | ||
| | (June 26, 2008 – New York, NY) This past tax season, credit unions worked closely with low-income people across the country to help members and their communities file their taxes for free. As part of the IRS’s Volunteer Income Tax Assistance (VITA) program, 37 community development credit union (CDCU) members of the National Federation of Community Development Credit Unions (Federation) and 8 Community Development Partner credit unions helped low-income residents keep millions of dollars in their communities. “The Federation is proud to partner with the IRS to support VITA sites at credit unions across the country,” said Federation President/CEO Cliff Rosenthal. “Our member and partner credit unions work hard to provide their communities with access to affordable financial services, and the VITA sites help ensure low-income people get the tax money they deserve.” In New York City, one of the premier locations for the VITA and Earned Income Tax Credit (EITC) programs, CDCUs teamed up to prepare 6,681 returns and bring New Yorkers $7.8 million in refunds and between $2 million and $4 million in Economic Stimulus Payments. In addition, VITA users who deposit their tax refund in a savings account are eligible to receive up to a $250 match after twelve months. In Upstate New York, Alternatives FCU (Ithaca, NY) was busy with their own VITA program, helping low-income residents receive more than $2 million in refunds. With the help of 79 dedicated volunteers, Alternatives FCU’s Community Tax Program filed over 1,200 federal tax returns, returning an average of $1,514 to clients served. Over 1,200 state tax returns were also filed, putting an additional $403, on average, back into the pockets of working families in our community. ASI FCU (Harahan, LA) has been helping Louisianan’s with their taxes for the past six years. Shannon Cian, ASI FCU’s VITA coordinator, explained that “ASI continues to be a VITA sponsor because the program helps residents avoid predatory lenders and brings much needed money into the community.” Without the VITA sites and credit union’s low cost refund loans, many filers would pay as much as 700% APR for a 7-day Refund Anticipation Loan. | |
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CLEAR POINT COUNSELING SERVICE
http://www.clearpointcreditcounselingsolutions.org/about_us/commitment.aspx
Our Commitment to Service When it comes to making financial choices that affect your future, you never have to be alone again. Our Financial Specialists are certified through the National Foundation for Credit Counseling (NFCC) and the Consumer Data Industry Association (CDIA). They will work closely with you to assess your financial situation and then give you the personalized support you need to make sound financial decisions. You can be sure that we'll be there with you every step of the way.
We are passionate about providing objective, personalized and confidential service to our clients.
Our professional Financial Specialists provide step-by-step guidance and are committed to providing only confidential and unbiased consultation. In fact, it is our personalized service to our clients and our unwavering commitment to education that makes us unique from other advisory and credit counseling agencies.
We want to be your financial partner for life - whatever your goals may be, we will find a way to help you achieve them.
ClearPoint is a Department of Housing and Urban Development (HUD) Certified National Intermediary, providing nationwide Loss Mitigation (housing delinquency) counseling, as well as pre-purchase housing counseling sessions, all free of charge.
ClearPoint Financial Solutions is a well-established, national non-profit organization with offices serving communities around the country. Find out which solution is right for you or contact us to learn more.
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Effective immediately, the National Credit Union Administration (the equivalent of the FDIC for credit unions) has raised the insurance limit on credit union savings. Your savings at Self-Help Credit Union and Self-Help Federal Credit Union are insured by NCUA to at least the new $250,000 limit.
http://www.selfhelp.org/invest-with-us
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WORLD COUNCIL OF CREDIT UNIONS
http://www.woccu.org/bestpractices/is
The Information System (IS) is the foundation for all credit union operations. It is critical that the decision-makers in credit unions have a framework for evaluating their existing systems, determining present and future IS needs and weighing costs versus benefits when purchasing upgrades or new systems. Aspects to consider include functionality, flexibility and expandability, usability, reporting capabilities, standards and compliance, administration and support, security, technical requirements and costs.
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http://www.woccu.org/publications/savings
Written by practitioners for practitioners, Striking the Balance in Microfinance will benefit a full array of microfinance players—MFIs, technical assistance providers, donors and policy makers. Any institution that is serious about mobilizing and protecting client savings should read and use this book.
Edited by Brian Branch and Janette Klaehn
Chapter 1: The Keys to Striking the Balance: An Introduction to Savings Mobilization Brian Branch and Janette Klaehn
Chapter 2: Institutional Preconditions: Testing Readiness and Achieving Sustainability Mark Cifuentes
Chapter 3: Savings Product Management: Establishing the Framework Brian Branch
Chapter 4: Product Development and Marketing: Meeting the Local Demand José Linares Fontela
Chapter 5: Counting the Costs of Savings Mobilization David C. Richardson and Oswaldo Oliva V.
Chapter 6: Nicaragua: Putting the Framework Into Place José Benito Miranda Díaz
Chapter 7: Ecuador: Stability in a Time of Crisis César Izurieta Moreno
Chapter 8: Ecuador: Savings Mobilization in 14 Credit Unions Oswaldo Cabezas Paredes Toolkit
- Management Evaluation Jesus R. Chavez
- Calculating Interest on Savings Jesus R. Chavez
- Evaluation of Internal Control in the Deposit Cycle Mónica Valenzuela Bravo
- An Introduction to Liquidity and Asset-liability Management Monnie M. Biety
- Monitoring and Projecting Cash Flow Hector Noriega
- Calculating the Net Margin Hector Noriega
- Risk Analysis in Savings Mobilization Nelson Aldana Arroyo
- Profit and Loss Simulation Model José Linares Fontela
- Creating a Marketing Campaign Gerardo Morales
- A Guide to Designing Surveys José Linares Fontela
- Model Surveys Gerardo Morales
- Model Surveys Juan Altamirano Obregón
- Calculating the Costs of Savings Mobilization David C. Richardson and Oswaldo Oliva V.
[JEM NOTE: I do not see any item expressing a need for green or sustainability investing by shareholders or making socially significant loans.]
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Latest page update: made by jimmiller5418
, Oct 14 2008, 2:08 AM EDT
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