Founders court investors in Northside revitalization
Near the end of 2018, the Association for Black Economic Power (ABEP) plans to offer North Minneapolis the opportunity to come together as a community and pool its financial resources. Village Trust Financial Cooperative received its name by consulting members of the community, where the words “village” and “trust” were used consistently. The cooperative will be organized as a traditional credit union.
Credit unions are financial institutions that serve their local communities. Each credit union consists of community members who form the union and have powers to vote on such issues as who represents them on the credit union board of directors.
On a monthly, quarterly or yearly basis, many credit unions give a percentage of earnings back to their members, which shows up in their bank accounts. Although similar to banks, credit unions give lower interest rates to their members on loans for housing, cars and luxury items. The base membership of a credit union is often supported through a profession such as transportation employees, teachers, postal service workers, military veterans and so on — the list continues.
The Twin Cities area has experienced an influx of credit unions supplying options to the masses. The mantra of not-for-profit credit unions is to serve the people and not capitalize on profits. Just as banks are Federal Deposit Insurance Corporation (FDIC) insured, credit unions are insured through the National Credit Union Administration (NCUA) created by the United States government to regulate charter and credit unions.
Me’Lea Connelly, the visionary behind the ABEP initiative, foresees much more than just a credit union for the Black community. As director of the ABEP, Connelly has built a committee of leaders devoted to helping the Black community. She hopes that more entrepreneurs capitalize on investment opportunities in Black communities in the Twin Cities to bring in ventures such as art spaces and fashion stores and to increase home ownership.
When MSR asked about the stereotype that businesses don’t survive in North Minneapolis, Connelly said, “We call it ‘hyboxing,’ which is a strategic five-to-10-year timeline across the country where a neighborhood will be redlined and resources will be stripped, the crime in the neighborhood will be highlighted by the media, and there will be a narrative created to discourage those of stronger or middle-class social economic statuses to leave that space.
“So, there’s usually a White flight that follows of businesses that fear they can’t survive without wealthier people,” Connelly continued. “We don’t adhere to stereotypes. Our goal is to support the Black community where the Black community is. We want to be an anchor in North Minneapolis where the people who have withstood this ‘hyboxing’ phenomenon can actually enjoy the benefit of this community being revitalized and being invested in.”
Connelly herself is an entrepreneur, having owned and started other companies. She has a background in small business management.
Such ventures are not unprecedented locally. Sam Grant started the Wendell Phillips Community Development Federal Credit Union in 1996 after hearing from the community about their need for a financial institution controlled by members. According to Grant, the core membership was African American, Somali American and American Indian, all of whom were of lower socioeconomic standing.
“We called ourselves ‘thin cats’ where the point was never as a financial institution to get rich off the backs of the people served, but the goal was the wealth of the people we served, not the wealth as an institution.” Grant, who volunteered at the credit union, said, “The bottom line was to increase the capacity to get more resources out the door to the members.”
He now regrets that he didn’t groom a leadership to take over the responsibility of the credit union. Due to new NUCA regulations, the credit union was eventually forced to merge into the City-County Federal Credit Union in 2001.
Grant noted how, in 2008, Fort Snelling Federal Credit Union, whose core membership was military veterans, merged with Hiway Federal Credit Union. He explained that many credit unions stay afloat by having a base member of professionals as members.
Grant said in hindsight, “We should have gone for an aggressive partnership with a lot of organizations committed to serving low-income people. It would have reduced our stress of operation. We should’ve done a partnership strategy in terms of organizing the membership base and collaborated in raising money, increasing the access to services the membership needed.”
Grant is now a professor at Metro State University teaching community development, and is the faculty director for the Higher Education Consortium for Urban Affairs teaching environmental sustainability.
The Jay & Rose Phillips Family Foundation of Minnesota has partnered with Village Trust Financial Cooperative, providing a $430,000 grant to help the new venture get started and focus on budgeting. It will also encourage the community to pledge financial support. Research, through website pledges, is tracking in North Minneapolis, where the Village Trust Financial Cooperative will establish its offices.
For more information or to make a pledge to Village Trust Financial Cooperative, go to www.abepmn.org.
Jonika Stowes welcomes reader responses to email@example.com.