Nearly one-third of the seed money needed to open a credit union on the West Side has been raised.
The Leaders Network, which is leading the effort to open a credit union, has raised $43,850 out of $150,000 needed to get a match from Chicago’s philanthropic community to cover the $300,000 startup cost.
The Leaders Network is asking others to join their founders circle and commit to making a $5,000 contribution.
“There are a lot of people who want to see this succeed. It’s like an idea whose time has come,” said Rev. Marshall Hatch Sr., pastor of New Mount Pilgrim Missionary Baptist Church and Leaders Network co-chair.
Hatch said he sees opening a credit union as a tool for community development, and the Leaders Network is well situated to raise the funds because of its collaboration of different churches and community organizations.
The idea to open a credit union on the West Side has been in discussion for years.
“To see how African Americans have been marginalized and have experienced so much red-lining in the banking industry, it’s disturbing,” said Rev. Ira Acree, pastor of Greater St. John Bible Church and Leaders Network co-chair.
“We had this desire to see what we can do. We had done a lot of marching, done a lot of protests. This has been an option that we looked at a few years ago, but just last year we got the courage to pull the trigger.”
Part of that courage, Acree said, came from having Michelle Collins, a former community development banker and native West Sider, join the network.
“I’ve been a credit union advocate for a long time. I’ve been a member personally, and I see the value of those,” Collins said. “It’s very much needed — access to capital, affordable lending, quality loans, even deposit products. The West Side has been victimized with subprime and predatory lending, and a lack of access to small business loans and small home loans. I think a credit union can fill that space.”
In 2020, WBEZ Chicago and City Bureau reported on the wide disparity between the amount of money banks lent in predominantly white neighborhoods compared to predominantly black and Latino neighborhoods.
“We found 68.1% of dollars loaned for housing purchases went to majority-white neighborhoods, while just 8.1% went to majority-black neighborhoods and 8.7% went to majority-Latino neighborhoods,” reported WBEZ.
“In other words, for every $1 banks loaned in Chicago’s white neighborhoods, they invested just 12 cents in the city’s black neighborhoods and 13 cents in Latino areas. That’s despite the fact that there are similar numbers of majority-white, black and Latino neighborhoods in the city.”
While the Leaders Network hopes to fill a gap with the credit union, they believe banks do play an important financial role.
“We’re not anti-bank or competing against banks,” Collins said. “We can all be in partnership. Sometimes people that come into the bank that are not bankable yet, maybe they can send them to us. And we can help them to get to that point and then send them back. There’s a role for everybody.”
One of the primary goals of the credit union is to be a vehicle to enhance financial literacy for residents of the West Side and help people become better money managers.
“Your goal is to develop people and to develop communities, in your lending, in everything you do. And so that’s where we want to be,” she said.
The Leaders Network hopes to assume an existing credit union — which will allow them to get up and running quicker. A definite location has not yet been determined but one possible site: along the Soul City corridor on West Chicago Avenue.
“This credit union is an example of us doing for ourselves,” said Rev. Marshall Hatch Jr., co-founder and executive director of the MAAFA Redemption Project, which has joined the Founders Circle and pledged to raise $5,000. “This is the time to do it, we have the energy, and we have the focus.”
Updates on the credit union are given at the monthly Leaders Network Zoom meetings the second Tuesday of the month.
To get more information, donate to the fund and/or express interest in becoming a member of the credit union when it opens, visit the fundraising page at: https://leadersnetworkchicago.org/news/2021/3/8/leaders-network-credit-union-fundraising-campaign.