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"Invest In Yourself Through Your Community Credit
Union"
 NORTHEAST
COMMUNITY MISSION STATEMENT
Northeast
Community FCU is a Community Development Chartered Credit Union that exists
to meet the unmet savings and credit needs of its membership. As a financial
cooperative dedicated to serving the underserved, Northeast is also an agent
for community revitalization and development within its field of membership
and for the larger community.
OVERVIEW
OF THE CREDIT UNION
Organized in 1981
as a community development chartered credit union, Northeast Community FCU
has made over 2,420 loans totaling over $15 million in credit benefiting
hundreds of member households. Northeast was created to address the unmet
credit needs of its members, particularly in the areas of small business and
mortgage lending.
INVESTMENT
AREA/FIELD OF MEMBERSHIP
Northeast FCU
serves a geographic field of membership that primarily encompasses Chinatown
and the Tenderloin neighborhoods, but also covers parts of the North Beach
and Nob Hill neighborhoods. Serving two of the most culturally diverse and
densely populated neighborhoods, it is not surprising that within a 1.4
square mile area of our Field of Membership, over forty languages are spoken.
Within our Investment
Area, the median family income ranges from 28% to 75% of San Francisco's
median family income, with the vast majority of census tracts falling below
50% of median family income. With over 94% of Northeast's Investment Area as
meeting the CDFI definition of "economic distress", our current and
future activities are designed to increase our support of financial products
and services in our Investment Area.
Chinatown
 Chinatown teems with banks, but
newer Chinese immigrants often find the shift into the American financial
mainstream confusing and alienating. Existing banks cater to more affluent
members, with high minimum balance requirements and sophisticated financial
products and service packages. Small businesses must establish an extensive
institutional relationship to secure financing. Northeast's Chinatown office,
located just one block from Chinatown's major commercial corridor, is very
accessible to community newcomers and provides the means for the less
affluent to achieve economic self-sufficiency.
Tenderloin
In contrast to
Chinatown, the Tenderloin has no other regulated financial institutions.
Northeast acts as the only mainstream financial service provider in the area.
Welfare recipients and other residents of limited economic means are easy
prey for makeshift financial operations, which regularly charge exorbitant
fees for their services. Average median income in this area is less than half
of that in the Chinatown area, both of which are below San Francisco's median
income level.
The need for traditional
banking and financial educational services is great; only 20% of Tenderloin
residents claimed "Interest, Dividend, and Net Rental Income" in
the 1990 US Census. Northeast aims to fee Tenderloin residents from predator
financial operations and act as a community-controlled financial and
educational institution that allows people to make better use of their money,
have more control over their money, and begin to climb the economic ladder.
 HISTORY AND
ACCOMPLISHMENTS
Product and Service
Development
Initial financial
support for Northeast Community FCU came from a Community Services Agency
grant. Our early operations were entirely supported by volunteers. With this
dedicated group, the credit union grew to $250,000 in assets within a year. A
Community Development Block Grant provided additional funding for staff
support. By 1983, Northeast began making loans, including those of small
businesses. We also offered basic passbook savings accounts.
Self-Sufficiency
Through a
combination of credit union member support, grants and nonmember deposits,
Northeast has gradually built up its base of deposits and earnings, to the
point that it became a self-sufficient institution in 1988. By achieving
self-sufficiency, Northeast was able to expand its community economic development
initiatives that addressed the credit needs of members who wished to start or
expand small businesses. Areas of focus included: printing, graphic design,
import-export, garment manufacturing, general construction, computer
assemblage, and a variety of retail businesses that included flower shops,
travel agencies and restaurants. Toward these ends, Northeast was a national
pioneer in the making of microenterprise loans to small businesses ignored by
mainstream financial institutions.
Small Business Lending
Almost since
our inception, we have provided financial assistance for small businesses. In
1990, Northeast developed a cooperative lending venture with the Center for
Southeast Asian Refugee Resettlement (CSEARR). Funded by the Ford Foundation,
this business incubator and loan guarantee program supports the establishment
and expansion of Southeast Asian businesses in the areas of printing,
import-export and garment manufacturing. In recognition of our successes, we
received grant assistance of $160,000 from the Office of Community Services.
In the CSEARR program alone, our financial assistance has exceeded $500,000,
supporting the creation and retention of more than 150 jobs.
Mortgage Lending
In 1988,
Northeast initiated a second mortgage program to assist members, particularly
Target Population Asian American households, in providing financing for their
small businesses or for furthering the vocational or academic education of
their children.
In 1997, Northeast began
to originate first mortgages. In recognition of the member interest in
affordable mortgage financing, Northeast developed a number of mortgage
products for fist time homebuyers, property owners in need of refinancing,
and those in need of home equity loans.
Tenderloin Branch
 As the last remnants of
traditional financial institutions withdrew their support from the Tenderloin
neighborhood, Northeast stepped in to fill this void. Working with a
coalition of Tenderloin activists, in conjunction with some large credit
unions, throughout 1997 and into 1999, Northeast opened the Tenderloin Branch
office in April of 1999. Mayor Willie Brown gave a speech of hope kicking off
the opening of our new branch, and since then we have provided over 200 loans
in the Tenderloin, totaling over $4 million in credit. Membership in the
Tenderloin has increased from 170 members in the first year to 377 today, and
demand for our services is still on the increase.
Besides these
accomplishments, an important day-to-day role that the branch plays is in
providing an affordable option to check cashing outlets that dominate the
market in the Tenderloin. By offering a safe and comfortable place for
cashing of payroll and government checks at a much lower fee, the community
has more income at its disposal.
Direct Deposit
Northeast
introduced this service in August 1999 in an effort to make member's income
more immediately accessible. This service has helped members to avoid fringe
"financial institutions" to cash their checks and to avoid
expensive wire services.
"Fresh Start"
Loans
Having good credit is an important component of "Fresh
Start" Loans" allowing members to start rebuilding their credit
history and get in a habit of saving.
Individual
Development Accounts (IDAs)
IDAs are
matched savings accounts designed to help low-income and low-wealth families
accumulate capital to invest in high return investments such as education or
job training, homeownership, and microenterprise. Individuals save monthly
from their own earned income over a one to four year period and will be
matched on a 2:1 basis by public and private funders. Participants not only
build regular savings habits in the process, but also learn invaluable,
life-long financial skills as part of the program through attending a
required twelve-hour financial literacy workshop as well as first-time
homeowner and microenterprise workshops. For more specific information about
our program call (415) 434-0738.
Links to IDA information on the web:
www.cfed.org (look under
"Individual Assets" and "CSD")
www.alternatives.org
(IDA FAQ)
 PROPOSED NEW DEVELOPMENT
SERVICES
Automated Teller
Machines
Most major
financial institutions utilize electronic banking machines to maximize
efficiency in operations and to increase convenience for the customer.
Northeast plans to install an ATM machine for its members so that they may
access their account during hours when the branch is not open. The ATM will
be able to be accessed at low or no cost to its membership.
Checking Accounts
Checking
accounts will provide an opportunity for our members to keep their cash in
the credit union while still being able to conduct expenditures. The
Tenderloin is mainly a cash-based economy. With cash as the primary form of
transaction in the community, the potential for crime and violence is
increased. Where check-cashing centers are numerous in the Tenderloin,
checking accounts will offer an affordable alternative. Members will be able
to keep their cash in a federally insured institution and manage their money
more carefully by writing checks, especially for major expenses such as rent.
In conjunction with ATMs, the introduction of checking accounts will allow
members to consider the credit union as their primary financial institution.
WHAT MAKES NORTHEAST
COMMUNITY TICK?
Member deposits
provide some of our capital. Public funding in the form of CDFI grants and
Mayor's Office of Community Development grants has also helped. But for the
balance, we depend on nonmember investors who hold over $1,600,000 in
federally insured Certificates of Deposit. They play an important role in our
efforts to return, retain, and build capital in our community.
Click here for membership and non-member details.
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