BROOKLYN, N.Y. — If community development or low-income-designated credit unions are forced to hold board seats for people of certain income classes, it would be counterproductive.
That is the message from Samira Rajan, CEO of $17.4 million Brooklyn Cooperative FCU here.
Rajan said it is not practical to dictate board composition based on the candidates being "low income" for several reasons, starting with the fact such a designation is not easily quantifiable.
"There are various measures of low-income and/or poverty, depending on where someone lives," she explained. "The other difficulty is someone's status can change over time. We are not pulling people's tax returns on an annual basis. The board members are volunteers, and the NCUA has financial literacy requirements, so you are already asking for a significant commitment. If there is another restriction, that narrows the pool of board candidates even more."
Brooklyn Cooperative FCU opened its first branch in the predominantly Latino immigrant neighborhood of Bushwick in 2001. It later added a second branch in Bedford-Stuyvesant, and today is one of New York City's fastest-growing credit unions.
The credit union want to represent its membership on its board, according to Rajan, noting there are currently board members who run non-profits in its geographically defined service area, and it has had other representation from non-profits.
"We feel by using these criteria the board represents the community," she said. "We also look for people who have lived here their whole life."
Strong Response to Products/Service
To those who maintain CDCUs such as Brooklyn Cooperative should be required to hold board seats for specific income levels, Rajan argues the "proof is in the pudding" and that her credit union is, in fact, serving the membership, as measured by the community's responsiveness to its products and services.
"We see the number of people who use our free tax preparation service — we do 4,000 tax returns per year, making us the largest non-commercial tax preparer in the borough of Brooklyn — so we clearly are serving the community. And based on the incomes we see on the tax returns, we definitely are serving low-income people."
The CDCU also reports strong attendance at its financial literacy workshops, counseling services and community events. Rajan said this shows "it is not so important who exactly is on our board, clearly the board and the credit union is getting the job done. The results are more important than labels."
In an effort to add more representation from the local area, Brooklyn Cooperative started an advisory board this year. Rajan said it provides community insight and serves as a "sounding board" to the board of directors on certain areas.
"The members of the advisory board do not know about compliance or the business side, but they provide a voice of the community," she said. "They provide insights and suggestions as to how the credit union might improve its impact in the area."
