Buying back the block, one lot at a time
Village Financial Cooperative has announced a new initiative to purchase empty lots in North Minneapolis. Soon, they say they will release the location of their credit union.
By Abdi Mohamed Staff Reporter | Photos by David Pierini Contributor
In mid-June, members of the Northside community gathered at a vacant lot near the intersection of 3rd Street N and 26th Ave. N for a Juneteenth cookout organized by Village Financial Cooperative (VFC), the black-led credit union being formed in the community. Attendees were surprised to learn that the lot they stood on had been newly purchased by the cooperative as part of a new program that will develop community spaces on empty lots in the Northside.
Although the site is not the home of their future credit union, the organization, whose aim is to give Northside residents financial independence, announced their plans for an initiative to buy back empty lots all around North Minneapolis and ask residents what they would like to do with those spaces. According to Shiranthi Goonathilaka, VFC’s Engagement and Member Experience Lead, VFC has received ownership of part of the available space on 3rd street and shared that they are in the process of purchasing a neighboring property as well.
The group is set to announce the location of their much anticipated credit union in the coming weeks. Their certification process with the National Credit Union Administration and other federal regulators has slowed some of their plans, but they have already received a green light by the state’s regulators at the Minnesota Department of Commerce.
Me’Lea Connelly, VFC’s leader, urges supporters of the credit union to be patient during the accreditation process. “The reason why it’s taking a while is that everyone involved in this process has to go through two very rigorous background checks and that’s for our members' protection. So, it’s important to be patient and not gawk at that,” she said. “Each background check takes about 90 days which is standard.”
According to Connelly, the cooperative put in an application for accreditation last December with the National Credit Union Administration and have finally heard back six months later. The cooperative is also going through the process of certifying their credit union through the Federal Deposit Insurance Corporation in order to insure deposits made by future members of the credit union.
The idea of a black owned financial cooperative was born out of Blexit, an economic divestment movement that formed in the aftermath of the officer involved killing of Philando Castile in 2016. Following this tragedy members of the Northside black community met and identified financial independence rose to the top as a priority. Soon afterwards Village Financial Cooperative was launched, and today the organization has received nearly $5 million in pledges from potential members, half a million dollars from the City of Minneapolis and another $430,000 from the Jay and Rose Phillips Family Foundation all intended to help establish a credit union in North Minneapolis.
Pledged members like Tony Williams share an enthusiasm for the launch of the credit union. As part of a spotlight campaign by VFC, Williams stated that reforming systems in place are not the way out of oppression. “Megabanks and other institutions grounded in a profit motive will never value our humanity more than our dollar,” he said. “If we want to ‘vote with our dollar’ as the saying goes, we need to develop and invest in infrastructure built from the ground up that prioritize[s] our lived experiences ahead of our account balance.”
Shauen Pearce, Mayor Jacob Frey’s Economic Development and Inclusion Policy Director, attended the cooperative’s Juneteenth event and says the city is committed to supporting VFC’s vision. “We’re continuing to talk to other potential investors because we know that the long game is solvency. We don’t want village to be a flash in the pan but a long-term anchor for the community,” she said.
The City of Minneapolis is also engaged with VFC’s partnership with Square Inc, the mobile payment app company, who have pledged to donate point-of-sale hardware for business owners to handle electronic payments and financial educational programs to assist members in the Northside community. Although these resources are crucial, Pearce made sure to emphasize the importance of being attentive to what the community expresses as their needs. “At the city we have to be able to listen and allow communities to be at the forefront. We need to make sure we’re not trying to create solutions for people who have already told us what they want,” she stated.
The cooperative has also partnered with the nonprofit Building Relationships In Communities, more commonly known as B.R.I.C., to canvass neighborhoods near the purchased lots and gain input as to their vision for the spaces. VFC and B.R.I.C. have already been engaging those that live near their newly purchased lot.
There are about 20 black owned credit unions in the country, and although what the cooperative has done so far is unprecedented (thay have nearly $5 million from pledged members), they took the time to learn from these existing institutions while also innovating their own approach.
For example, on one visit to a black credit union in Eutaw, Alabama, Connelly was inspired by the community engagement and connection she witnessed. “The woman that runs that credit union talked about how she keeps a really low default rate. They’ve got about 1000 members, mostly black folks, and they have like 0.01% default rate meaning most of her members are good with their loans,” she said. “What she told us is that they’re one community, so when she goes to the church picnic, she’s like ‘Hey! When are you gonna come see us at the credit union? We got a situation!’ and that had everything to do with what we’re doing here today. Engaging with our community, having genuine relationships with our members and treating this relationship humanly and it’s not transactional.”
Another way VFC gathered information on how to run their credit union was to launch a few programs in the last year, such as the New Day Loan. The program helped participants receive loans up to $500 with little to no interest in order to deal with rent payments, settling debt or purchasing school supplies or children. The pilot proved successful as results showed a strong return rate, but as time went on it began to slip. “Up till November they were 100% paid back. We continued into December and in January we started to see our rates go down,” Connelly said.
The reason for this drop was due to recipients without existing bank accounts being unable to make timely payments on their loans. With this information the cooperative was able to verify that the existence of a bank account could help those in the community participate in a loan program like the one beta tested with the New Day Loan.
One reservation Connelly shared about her work is the conversation surrounding financial literacy in the black community. There is a pervasive stereotype in America that black Americans are not financially literate. “I talk a lot about this in white spaces,” she said. Although the cooperative has been providing financial education classes through their partnership with Square Inc, Connelly wants to make sure to “properly frame” the conversation around financial planning. “We’re talking about financial literacy to people who don’t have finances and that’s a problem. So, if we’re not going to talk about how to get people’s incomes up and if we’re not going to validate the ability that people have had to use the income they have to keep food on the table, then it’s a problem,” Connelly said.
When pressed about a specific location as to where the credit union would be located, Connelly was reluctant to share. But she assured the Juneteenth celebration attendees that they would find out very soon. “We’ve been very particular about where our home is going to be. We want our community to have the best, and I think we’re narrowing in. We’ve had a lot of starts and stops because the Northside has been full of speculation, and it can be a very difficult environment to navigate as a black organization. But I am very excited about what’s on the horizon and that we’ll be able to make an announcement in the next couple of weeks,” she said.