The Unmatchable Credit Union Spirit

This is a story of a credit union led by an extraordinary CEO.  It is so heartening that the writer prepared two articles to describe fully her accomplishments.

The headline says it all:  The Tiny Credit Union Powering Brooklyn’s Economy.  The author’s writeup illustrates the power of passion and commitment in service to a community.

This account is a beautiful gift for all who believe credit unions can do something special.  It demonstrates the good will created with a small amount of resources and dedicated leadership.

My summary is to encourage you to link to the full accounts.

Part I: How it Got Started

“With just $50 million in assets, Brooklyn Cooperative Federal Credit Union is a rounding error compared to the nation’s largest brand-name banks. But in terms of impact on marginalized communities, this tiny institution punches well above its weight.”

In this first segment, the writer, Oscar Abello, describes how the current CEO Samira Rajan -a graduate of Harvard’s Kennedy School of  Government became involved.

She joined the startup in 2001 in a catch-all position as an AmeriCorps VISTA volunteer program.  This paid her a stipend as the new credit union didn’t yet have enough income to offer her a salary.  She became a loan officer.  First loan she made, went bad.

In 2008 she became CEO.

The founding CEO Jack Lawson was a PhD student in economics at the New School in the late 1990s.  He was looking for a part-time job related to his research.  He received a grant from a local foundation to support his goal of organizing a credit union for the Ridgewood-Bushwick Senior Citizens Council.  Over time this startup evolved to become Brooklyn Cooperative.

Until his departure in 2008 he focused on seeking grants from local sources and the CDFI Fund to underwrite the startup expenses and “build the runway” for sustainability.

This process continues. Since Rajan became CEO, the credit union has received eight grants from the CDFI Fund, totaling $11.3 million.

Part II Focusing on Character Lending

The credit union today can underwrite loans with little to no collateral, to members with an average credit score below 650, and to members without social security numbers.

Residential mortgages for one to four family homes are more than half of Brooklyn Cooperative’s current loan portfolio.

But its small business lending efforts are especially critical for the credit union’s local impact.

Counting by the number of federally-guaranteed the Brooklyn Cooperative is ranked fourth, behind only TD Bank, Chase and M&T Bank.    The  cooperative’s average 7(a) loan size is $24,000.

The writer’s description of the CEO’s relationship with NCUA is also enlightening. This is Rajan’s candid opening comment:

“Every three years, we have literally a new examiner come in and they’d be like, we’ve never seen this before. Yeah, I know you’ve never seen that before. New examiners have to get their whole head wrapped around the fact that you’re going to be doing lending which is non-conventional, that you’re deliberately going to be lending, knowing that your loss rates will be higher than the normal and you’re going to be lending to borrowers who on paper don’t qualify. … It flies in the face of what apparently you’re supposed to be doing, which is lending only when you definitely have a 700 credit score.”

For the full account of this remarkable institution, read both articles.  At the close the author asks the following of his readers and those who work in the cooperative system:

Brooklyn Cooperative is proof that it’s possible to build a financially sustainable institution that provides credit for a variety of purposes to people and communities like those it serves — Black and Brown, immigrant, low-income. . .it raises the question: should there be more credit unions like this one across the borough? Or across New York? Or across the country?

Serving Strangers

During this season, the mail brings more requests for donations than Christmas cards.  There are two broad categories of asks.  One is the multiple nonprofits serving the arts or education-choral groups, museums, Chautauqua and public television.

More plentiful are the organizations serving human need:  Hope Hospital in Seattle, Achungo Community Center (Kenya), World Kitchen and dozens of local efforts to assist others, often strangers,  this time of year.

A carol that recognizes this ever present reality of human suffering is Christ in the Stranger’s Guise.   This arrangement by Karen Marrolli is from a summer choral workshop in Montreat, NC, and includes the words.  They portray for me, Rajan’s example of service to her community.


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