De Novo Institution Will Focus on Underserved Communities
The National Credit Union Administration (NCUA) recently announced the chartering of Community First Fund Federal Credit Union. The NCUA has granted a federal charter as well as National Credit Union Share Insurance Fund coverage to the de novo institution to be located in Lancaster, Pa.
The new credit union is born of and will be sponsored by The Community First Fund, a nonprofit Community Development Financial Institution (CDFI), which focuses on helping underserved communities. The organization’s website details its mission “to create financial equity through wealth building opportunities for individuals, families and business owners, especially persons of color, women and immigrants.”
NCUA Chairman Todd M. Harper stated, “Supporting underserved communities and providing capital for community development is at the core of the credit union mission. This credit union is opening in a time when the expansion of safe, fair, and affordable financial services and local investment is essential to the nation’s continued economic recovery from the COVID-19 pandemic.”
The chartering of a de novo credit union is never simple, but the already arduous road has only taken on more potholes since the increase in regulations following the 2008 Financial Crisis and subsequent enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act. For example, Community First is just the fifth institution to receive a new charter since 2019, and many of those that have succeeded shared dismay at the often laborious and circuitous process.
Such numbers and feedback have clearly not gone unnoticed by the NCUA and were even addressed directly in the official announcement by the administration’s Vice Chairman Kyle S. Hauptman. “It’s a priority of my office to reform the de novo process. We can’t credibly talk about ‘access’ and ‘inclusion’ unless we’re doing all that we can do to allow new, stable charters,” he said. “I’m gratified that Community First, a nonprofit CDFI, saw the benefits of forming a credit union.”
The nation’s newest credit union’s charter went into effect on June 30, and the institution plans to be up and running by the end of 2021. Initially, Community First will serve an estimated community of 550,000 in Lancaster County, providing an array of services including regular share and share draft accounts, youth accounts, money market accounts, share certificates, direct deposit, vehicle loans, personal loans, overdraft lines of credit, online banking and ATM access.
Plans for the future include offering credit cards and first mortgages, as well as further development linked to the institution’s attaining a low-income credit union designation, currently under review by the NCUA. For the time being, however, Community First serves as the latest reminder of the vital role a credit union can fill, especially within an underserved area. As Mr. Hauptman concluded: “I hope other CDFIs will explore the credit union option, which is one reason we are publicizing this latest successful de novo charter.”
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