A group of residents in the Harambee and Riverwest neighborhoods who are working to form a community credit union have collected more than $500,000 in pledged deposits.
Sponsored by the Riverwest Cooperative Alliance and led by resident Alex Brower, the member-owned, nonprofit financial institution would offer savings, credit and other financial services to those who live, work, attend school, are a member of a cooperative business, or have an immediate family member who worships in the 53212 zip code.
In order to gain approval, the potential credit union has to show it has garnered enough community participation.
“The trade association had initially recommended ($500,000 in pledged deposits), and during certain points in history, the federal regulators had required that,” Brower said, so the organizing committee decided to meet that threshold.
In order to garner interest and deposits, organizers have canvassed the Riverwest and Harambee neighborhoods over the past six months and gained insight from more than 462 people. Two-thirds of respondents pledged $500 or less.
Organizers also must raise the credit union’s first two years of operating capital through donations in order to submit their application for a charter to the Wisconsin Office of Credit Unions and insurance from the National Credit Union Administration. Brower said the plan is to raise those funds in the first half of 2016.
There’s a need for a hyperlocal credit union in the Riverwest and Harambee community to bring more credit into the area, serve low-income residents and spur economic development, Brower said.
“We are losing financial institutions,” he said. “The institutions that are there, some of them are predatory as well.”
A Chase branch recently closed at 2323 N. Martin Luther King Drive, but there are a couple of other bank branches and the Brewery Credit Union located in the neighborhood.
“There are financial institutions, but with Brewery being excluded from that list, none of them are community-owned,” Brower said.
There hasn’t been a new credit union formed in Wisconsin in about 10 years.
