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Community Development Credit Unions: Securing and Protecting Assets in Black Communities

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  • Jessica Gordon Nembhard

Abstract

Credit Unions, with a hundred year history, and Community Development Credit Unions (CDCUs), with a 30–40 year history of serving the under-served, have only recently begun to be recognized by some of the media and the progressive community as “safe havens” and fair lenders. There is little independent, academic research, however, that investigates and evaluates the ways that credit unions are community-rooted and responsive to local needs, and/or their achievements in this area. This paper reports on preliminary qualitative research this author has conducted to help us understand how community development credit unions in Black communities in the U.S. provide affordable financial services, and especially help their clients/members to preserve assets. Major findings include: all CDCUs note that they charge lower rates for their products, and provide higher interest or dividends when possible; both which enable members/customers to save money and build assets. CDCUs work closely with their members to personalize services, to help them avoid loans they cannot afford, and to educate them enough to make sound financial decisions and preserve their assets. Many give some direct options to their members to avoid “payday loans” with check cashing and other predatory lenders. In addition, most CDCUs are deeply involved in their communities, and the bigger ones actually provide donations, encourage their employees to volunteer in the community and are generous employees (creating jobs with benefits and job ladder opportunities). Some are able to help finance affordable housing and contribute to other community economic development projects. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Jessica Gordon Nembhard, 2013. "Community Development Credit Unions: Securing and Protecting Assets in Black Communities," The Review of Black Political Economy, Springer;National Economic Association, vol. 40(4), pages 459-490, December.
  • Handle: RePEc:spr:blkpoe:v:40:y:2013:i:4:p:459-490
    DOI: 10.1007/s12114-013-9166-6
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    References listed on IDEAS

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    1. Ian Galloway, 2009. "Peer-to-peer lending and community development finance," Community Development Working Paper 2009-06, Federal Reserve Bank of San Francisco.
    2. Isbister, John, 1992. "The Lending Performance Of Community Development Credit Unions," Research Reports 140050, University of California, Davis, Center for Cooperatives.
    3. Ian Galloway, 2009. "Peer-to-peer lending and community development finance," Community Investments, Federal Reserve Bank of San Francisco, vol. 21(Win), pages 19-2339.
    4. Naanwaab, Cephas B. & Hartarska, Valentina M., 2008. "Efficiency In Community Develpoment Loan Funds," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6726, Southern Agricultural Economics Association.
    5. Eduardo A. Haddad & Jaime Bonet & Geoffrey J. D. Hewings, 2023. "Introduction and Overview," Advances in Spatial Science, in: Eduardo A. Haddad & Jaime Bonet & Geoffrey J. D. Hewings (ed.), The Colombian Economy and Its Regional Structural Challenges, chapter 0, pages 1-16, Springer.
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    Cited by:

    1. Jessica Gordon Nembhard, 2014. "Community-Based Asset Building and Community Wealth," The Review of Black Political Economy, Springer;National Economic Association, vol. 41(2), pages 101-117, June.
    2. Haoxuan Sa, 2021. "Urban Village Shareholding: Cooperative Economic Organization in Northeast China," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 665-697, March.
    3. Rodney D. Green & Sue E. Houchins, 2017. "Black Progress Through Business Improvement: Two Articles by Joseph R. Houchins, 1900-1989," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 393-401, December.
    4. Megan M. Burke, 2014. "Analysis of Small Credit Union Trends and Opportunities for Accountants," Accounting and Finance Research, Sciedu Press, vol. 3(4), pages 1-15, August.
    5. Esther Yin-Nei Cho, 2024. "A qualitative investigation of financial decision-making and enabling factors among ethnic minority young adults in Hong Kong," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.

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