The Minneapolis City Council has agreed to provide up to half a million dollars to a local organization that plans to establish a credit union to help minority residents.
The city council’s Ways and Means Committee has entered into a contract with the Association for Black Economic Power to provide an interest-free 10-year forgivable loan of up to $410,000, according to a notice on the Minneapolis government website. The money will be for occupancy costs for retail space in northern Minneapolis, improvements made to that space and equipment.
The Association for Black Economic Power is a nonprofit that is forming Minnesota's only black-led financial institution, the Village Financial Cooperative. Village Financial received approval in late 2018 from the state to form. Its application for insurance and authorization from the National Credit Union Administration is currently pending.
Under terms of the agreement, there are a number of criteria Village Financial needs to meet to have the loan forgiven. For example, it must open a physical location in the northern part of the city, provide a financial literacy program with at least 30 classes and 300 attendees and enroll at least 500 members in checking or savings accounts this year.
The credit union will also get $90,000 in a grant for operating expenses associated with helping unbanked and underbanked members in economically disadvantaged communities in the city and providing financial literacy.
Once Village Financial is granted approval from NCUA, it plans to open the credit union on June 19 to coincide with Juneteenth. Juneteenth commemorates the announcement of slavery being abolished in Texas on June 19, 1865, and celebrates the freeing of slaves in the former Confederate states.
Me’Lea Connelly, director of development at Village Financial, told Credit Union Journal that the funding from the city will “absolutely be a great help” with the emerging credit union, by providing necessary infrastructure, hardware and ATMs, among other items, that members will need.
Connelly also said that Village Financial is currently in the nomination phase for its board of directors.
