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Ohio Credit Union
League steps into Nueva Esperanza fray
By Kevin Milliken for La Prensa
Dec. 12, 2011: The statewide trade association that is helping
Nueva Esperanza Community Credit Union (NECCU) establish
itself in Toledo has stepped into a disagreement between the
credit union’s board chairman and one of its board members. The
Ohio Credit Union League maintains any dispute is a
non-factor in where the credit union is headed.
Patrick Harris,
director of media and public relations for the Ohio Credit Union
League (OCUL), stated the credit union already has begun to make
an impact on the lives of local Latino families and individuals.
OCUL and credit union officials are concerned that a recent
story in La Prensa would cause potential members to shy
away from the financial institution.
Harris emphasized that NECCU will remain at its present
location, 1232 Broadway, well “into the foreseeable future,”
despite recent claims from board member Hernan Vásquez
that the credit union should have moved into the former South
branch library by now. Vásquez is the former president of the
now-dormant Viva South Community Development Corporation,
which worked to renovate the former Carnegie-era building near
South Ave. and Broadway.
Adam Martínez,
chairman of the credit union board of director, stated the board
has made a strategic decision to remain where it is until it
signs up enough members for it to be financially viable to move.
He stated the credit union’s plan all along has been to ensure
there are other tenants in the former library building “to share
the utilities” and other expenses.
Martínez also called an outstanding $45,000 debt to a contractor
who performed those renovations “Viva South’s problem” and
refused further comment on the matter. Both sides in the dispute
acknowledge the renovations were done by verbal agreement and
there is no written paperwork establishing who is responsible
for paying the contractor.
The dispute has left contractor Salomon Aguilar caught in
the middle. He’s hoping the issue can be resolved before he is
forced to consult a lawyer, because the situation has caused
cash flow problems for his business and his family.
“It took a lot to fix it up. Just seeing it sit there empty
really makes it worse,” he said. “If they want trust in the
Spanish community, why are they doing this to a Latino? It’s a
sad situation.”
Aguilar stated his wife has had to start working to help make
ends meet at home, after doing all kinds of “extra work” inside
the building, and trying to do it in a timely fashion.
“It hurt me bad. I’m in a slump because of it. I’m not a really
big company and it took all my profit and I’m hurting for this
whole winter and I’ve got young kids,” the contractor said. “I
don’t want to bad mouth anybody, but I haven’t recovered yet.
It’s really overwhelmed me right now and I’m frustrated.”
“There was at least ten months of intense discussion about the
building, what it would look like, and plans got continually
pushed back to the point where we had to make a decision to find
an alternative location,” Martínez said. “It was a continual,
ongoing discussion that never materialized.”
Martínez also maintained there are still outstanding “ADA
compliance issues” at the site. He stated the board won’t even
entertain a move until any accessibility issues for the disabled
are addressed. Until then, the credit union will continue to be
a tenant at a former insurance agency.
“It’s just uninhabitable right now for a credit union,”
maintained Harris. NECCU is a state-chartered financial
institution, but its deposits are federally insured.
“The credit union doesn’t have any ownership of that building,
no written agreement with Viva South Toledo,” echoed Becky
Hart, OCUL vice president of advocacy.
“There was at least ten months of intense discussion about the
building, what it would look like, and plans got continually
pushed back to the point we had to make a decision to find an
alternative location,” said Martínez.
Membership in Nueva Esperanza
NECCU currently has 185 members who have opened savings accounts
at the fledgling credit union. That is well below the 500-member
figure that the business plan calls for in its first year of
operation. But credit union officials pointed out the first year
won’t be complete until May.
“I foresee that we are going to come pretty close,” said Sue
Cuevos, NECCU president and CEO.
“The business plan anticipated the credit union being open in a
physical location and operating well before it eventually got
open because of the issues with trying to find a spot to be in
business permanently,” explained Barry Shaner, president
and CEO of Directions Credit Union, who is providing
technical assistance to NECCU. “Eventually you have to be in a
spot where people know you’re going to be and can find you if
you’re going to be effective in the community and operate as a
business.”
Prior to that, the credit union operated out of temporary
quarters provided by other credit unions in South Toledo and
Sylvania. Now Nueva Esperanza is open three days each week at
its present location.
“There remains a commitment to move into that building when a
viable landlord is found,” said Martínez. “We as a board have
collectively decided that it’s appropriate for us to grow and
move to that location. We’ve never said that we won’t move
there. It’s always been a matter of when. Our biggest focus
right now is growing our membership.”
Members helped by NECCU
Ms. Cuevos pointed out several anecdotes of Latino individuals
and families who have been helped with small loans, as well as
financial literacy courses for the unbanked and underbanked—people
who either don’t trust traditional financial institutions or
have no credit.
Ms. Cuevos stated the fledgling credit union provided one member
with a “citizenship loan” after opening a savings account. That
member’s temporary immigration status had expired and applied
for a loan to cover the cost of receiving full U.S. immigration.
The woman, her husband, and two children now can fulfill their
dream of visiting relatives in the Dominican Republic without
worry.
Another couple received a “home maintenance” loan after a bank
turned them down for financing due to their lack of a credit
history. NECCU was able to fund the loan, which the couple used
to add central heating to their home after previously using
hazardous space heaters during the winter months.
“Most of it is just to establish credit. They don’t have any
credit. A lot of the Latino culture is cash-only,” explained Ms.
Cuevas. I had someone come in and they put $4,000 down on a car.
He asked if he could pay the rest off in three months. I told
him he had to pay me over one year so he can establish credit.
They don’t want to owe anybody anything, so they don’t have any
credit.”
Most of the loans are small—between $200 and $500. Members are
then put on a monthly payment plan to build their credit. NECCU
even has offered qualified members small student loans to help
them bridge the gap during semesters, so members can continue
their education without interruption. A loan committee looks at
each individual situation to determine whether the member has
the ability to repay the money. In three or four cases, the
credit union even has referred reputable contractors to members
so they don’t get ripped off by a fly-by-night repairman when
they take out a home improvement loan.
“We have helped a lot of families,” said Ms. Cuevas. “We’ve
given those educational loans for some of our members to improve
their profession, increase their pay, and help their families.
We are making a difference, we’re seeing some traffic.”
“It’s already started to
change people’s lives here in the South Toledo community,” said
Harris.
Ms. Cuevas stated the
credit union’s availability is spreading through the Latino
community by word of mouth. She estimated 85 percent of NECCU’s
current members are unbanked or underbanked. Financial literacy
is a big part of the credit union’s mission.
“When they come in, we
teach them how to fill out a savings account deposit slip or how
to make a withdrawal,” she said. “We don’t do the work for them;
we teach them how to do it.”
“Our message to them is
simply this is a place where you can find trust with bilingual
employees who speak your language, who understand your culture,
who understand your fear of what a traditional financial
institution may or may not be doing with your money,” said
Harris.
Vásquez expresses disappointment
Vásquez, one of the original backers of the credit union, has
expressed disappointment in what he termed a lack of progress by
NECCU in establishing a larger portfolio of services to the
Latino community.
“I don’t think there’s any discrepancy in the vision and the
need for the credit union or where we’re going,” said Martínez.
“I think what’s happened is there were some expectations that
just haven’t been met when some of the founders got to this
point.”
“Chartering a new credit union is something that doesn’t happen
very often anymore,” said Shaner. “This is the first one in 16
years in the state of Ohio. It’s new for everyone. Credit unions
can only raise capital through their current holdings.”
Currently, NECCU is limited to a service territory that
encompasses the boundaries of the Viva South CDC—essentially
the Old South End. The credit union only is permitted to
offer savings accounts and small personal or auto loans. NECCU
is prohibited by state regulators from enhancing its service
portfolio to include mortgages, checking accounts, and credit
card services.
“It is a slow process, because you have to be realistic about
how long it takes to build a balance sheet and get the business
up and operating,” said Shaner. “I think the board is doing
that.”
Keila Cosme,
former Ohio Sixth District Court of Appeals judge and a private
attorney, was recently added to the credit union board of
directors. Deb Ortiz-Flores, director of Lucas County Job
and Family Services and the county’s child support enforcement
agency, had been nominated to serve on the credit union board,
but had to decline because of her dual role related to the
ongoing merger of the two county social service agencies she now
oversees. That still leaves one opening that must be filled on
the credit union board.
Martínez pointed out the credit union board is “diversified”
with lawyers, business owners, civic leaders, and people with a
financial background.
“All of us are very much committed to this community and making
sure the credit union succeeds and that we’re being very
responsible in making good fiduciary decisions,” said Martínez.
“It’s important to know there is a wealth of experience and a
breadth of knowledge in what we’re doing and the direction we’re
going.”
To that end, NECCU is reaching out to other Latino organizations
throughout Northwest Ohio in order to sign up new members. The
financial literacy programs are being done in partnership with
Adelante, Inc. Most of the staff at the Farm Labor Organizing
Committee (FLOC) are credit union members and have
information on the programs offered to pass along at migrant
farm worker camps. Credit union staff also set up a table at a
variety of community events, including First Fridays at
the Sophia Quintero Art and Cultural Center.
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