NY CUs Unveil $100M Mortgage Plan
A group of New York credit unions agreed last week to create a $100-million pool to finance affordable mortgage programs, the largest such fund ever provided by credit unions.
"The goal of these loan funds is to reach more of the underserved families in New York," said Sen. Clinton, of two separate funds aimed at mortgage lending and aiding renters her office helped develop.
Sen. Clinton announced the initiatives during last week's PALS conference here, which was organized by NCUA board member Deborah Matz.
The fund, modeled after a similar initiative unveiled by New Hampshire credit unions earlier this year, will target first time homebuyers, low-income members, underserved neighborhoods, and others in need of mortgage assistance, according to Michael Vadala, president of Rochester's The Summit FCU, who created the idea for the fund. "This will be loosely structured. Each credit union will administer its own commitment," he said. "We don't want to tell them how to do it."
Plans call for the initiative, tentatively called the New York Credit Union Fund for Underserved Neighborhoods, to provide $100-million for mortgage loans and another $2 million to finance small repairs for rental properties.
Credit unions pledging to the fund so far are: Bethpage FCU and SEFCU, $10 million each; Xerox FCU, $5 million; The Summit FCU, $2 million; and First Source FCU, $500,000.
Vadala, a member of the NAFCU board of directors, said he will be soliciting credit unions affiliated with NAFCU and CUNA, either in New York or outside of the Empire State, for their help building the new fund. "I would love to see other states jump in," he said.
Sen. Clinton, an early advocate of community development banking, told the group of about 310 attendees at the PALS conference she sees an important and expanding role for credit unions over the next few years, including lending to small micro-business enterprises, which often have trouble obtaining credit from big banks, she said.
"It's clear to me, although credit unions have been around for a long time, that the future is filled with the potential in new and powerful ways." Clinton said, adding she was glad to be part of the conference aimed at expanding CU services to the underserved. "We need to do everything we can to strengthen credit unions."
That's why, she said she and her Senate colleagues intentionally carved out an important role for credit unions in a new bill they introduced that would restructure the market for international remittance payments. "We're working very hard to include credit unions so that credit unions can be involved in the transmission of these monies," said Clinton. "Credit unions have this incredible opportunity to step forward and be part of this multi-billion dollar business. We need your help so that credit unions can be active participants in sending and receiving of remittances."
Clinton also said she will support a credit union regulatory relief bill in the Senate next Congress.
Matz said she developed the PALS workshops as an opportunity for credit unions to discuss ways of helping the underserved. "We started these workshops with the intent of bringing credit unions together to share their success stories," she said.
More information on PALS workshops can be accessed through the PALS section at www.ncua.gov. NCUA is also offering CD-ROMs with additional content from CUs.