CDFI Launches New Credit Union – Credit Union Times | Vette Leader

Access to the Community First Fund FCU. (Photo: Community First Fund FCU)

Community Development Financial Institutions (CDFIs) are notorious for being formed out of financial need, particularly in low-income communities. They’re not known for creating anything significant enough to spawn new credit unions out of their existence.

But that’s exactly what the credit union industry saw in early June.

Since its beginnings in the 1990’s as a CDFI in south-central Pennsylvania, the Community First Fund has grown into a leading economic development organization, providing more than 5,600 loans and totaling $355 million in investments to businesses and programs for municipal and affordable housing.

Founded nearly 30 years ago by a coalition of black, Hispanic and white community leaders, the Community First Fund has abided by its Social Justice Statement, which says, “We have been quiet with others in recent days, months and years.” marches to advance the economy and social justice for disenfranchised individuals and communities. We work in solidarity with our brothers and sisters and are committed to balancing capital and equity so we can improve opportunities for economic prosperity for all.”

Through the passionate work of the Community First Fund’s 70-strong team and what appears to be a firm community belief in the organization after three decades of existence, the Lancaster, Pa.-based Federal Credit Union of the Community First Fund opened im June their doors for members ; it has been described as a “transformational moment” for the growing community 80 miles west of Philadelphia.

Daniel Betancourt

“It was just the culmination of a lot of hard work and a passion for serving the community, and realizing that the moment has finally arrived when we can open,” said Daniel Betancourt, President/CEO of Community First Fund FCU. “And it sounds dramatic, but we can open forever — once we open our doors, I believe those doors will stay open beyond my lifetime, but also hopefully serve the community for the next hundred years and more.”

Betancourt helped create a unique credit union and co-op world in Lancaster. While he is the leader of the new credit union, he has also served as President/CEO of the Community First Fund for the past 23 years. He selected six CDFI employees to become credit union employees, and both organizations share the same leadership team.

“We have been serving Lancaster for 30 years by providing access to credit for entrepreneurs who want to make positive change in the community,” said Betancourt. “With the credit union, our mission is to provide a path to financial stability for families. We are excited to expand our service to the community and celebrate this milestone.”

This mission of the new credit union began in December 2020 when the Community First Fund announced it planned to launch the low-income credit union using a portion of a $10 million philanthropic gift from MacKenzie Scott. A portion of these funds, along with an additional $1 million raised by community partners, helped move the credit union’s charter application forward—and fast.

According to Betancourt, the charter application was filed in January 2021 and was approved by the NCUA five months later in June. “We know that’s a record time,” said Betancourt proudly. He added he understands why the process was happening so quickly, even in the early months of the pandemic.

“She [the NCUA] knew they were dealing with a demanding organization and for every question they had, not only did we have an answer, we had the result they were looking for and we got it to them within minutes or hours . We were able to move forward with our bid just by being ready and having an organization and staff that could respond immediately,” he said.

Such efficiency may have brought NCUA Board Chairman Todd Harper from Washington, DC to Lancaster to cut the ribbon at the grand opening.

Community First Fund FCU staff support members. (Photo: Community First Fund FCU)

“This is a wealth-building facility,” Harper said at the time. “Founded by the community and for the community, it is at the heart of our nation’s credit union system, built on the principle that people help people.”

In the decades of living and working in the area, Betancourt has seen the real economic struggles of parishioners. The impact of the pandemic on low-income communities, and now rising interest rates and inflation, has put even more strain on his community.

“We all know that being poor is expensive. So it worries us that someone who has an $800 car repair bill simply has less money to spend on it because they would have met the rising cost of inflation. So I think credit unions can help here — where we can offer advice, financial advice and those small loans and emergency loans that community members are going to need,” he said.

But being a numbers person, he didn’t want to rely on anecdotal information in his decision to open the Community First Fund FCU. He wanted real research to back up what he and his team saw every day.

“We hired Franklin Marshall College and their research showed that about 27% of Lancaster was unbanked, and that was across the country and underbanked,” he said. “And then for African Americans and Latinos it’s over 50%. So with this research and a strong application with the money available, we were not only able to show that there was a demand, we were able to show that we can be successful when it comes to serving this low- to middle-income community.”

Currently the credit union has more than 200 members and Betancourt aims to have 500 members within the first year.

Tom Koppmann, a longtime partner of the Community First Fund, was present at the opening of the new credit union. His bank has actually pledged $1 million to the credit union over the next five years to help with operational support.

“It’s a transformative moment that could help strengthen the entire community,” said Koppmann.

Santander Bank was the first banking partner to provide significant funding to set up the credit union.

“Investing in projects that help build strong and healthy communities is a top priority for Santander Bank and we are proud to be a long-time supporter of the Community First Fund,” said Seth Goodall, Santander Bank Executive Director, Corporate Social Responsibility. “The establishment of the Community First Fund Credit Union in Lancaster is a significant addition to the community and we congratulate Community First on reaching this important milestone.”

Koppman added, “This moment is about more than opening the Community First Fund Credit Union in Lancaster. It’s about expanding access to banking and other financial services for communities in the region that have been underserved for years.”

And that is Betancourt’s broader and incredibly serious goal: to provide financial access and education for the unbanked and the underbanked for years to come.

“Our vision is to grow the credit union to $100 million in seven years. So we raise capital. We have a capital campaign to strengthen our balance sheet. We have already raised approximately $10 million in capital and intend to raise $20 million on our balance sheet for our retainer growth. We also hope to serve other low- to middle-income communities outside of Lancaster over the next 5+ years.”

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