PITTSBURGH-A-K Valley FCU's recent to close a branch due to repeated robberies raises a question for some over whether operating branches in low-income or high-crime neighborhoods is a losing proposition.
But the data shows that's not the case, according to Cliff Rosenthal, president and CEO of the New York-based National Federation of Community Development Credit Unions. Rosenthal said he has not seen any definitive statistics showing more robberies happen in low-income areas compared to other urban areas.
"To have an accurate picture, you have to go to where the money is," he said. "I'm not aware that any of our credit unions, which are mostly in low-income areas, have had to close branches or facilities due to repeated robberies."
In the case of the Homewood branch of A-K Valley FCU, the credit union said it decided close that branch after four robberies in recent years, plus a New Year's Day burglary. The CU issued a statement via its website that the decision was made due to "concern for the safety of our employees and the members who use the credit union."
'No Longer Safe'
"The Homewood section of Pittsburgh is a high crime area and the Board feels it is no longer safe to have a branch of a financial institution in that area," the statement read.
Attempts to reach Janet Horn, A-K Valley's president and CEO, for further comment were unsuccessful. Through a credit union representative, Horn declined to speak with Credit Union Journal.
"A-K Valley is not one of our credit unions, so I am not familiar with its operations," noted Rosenthal, adding, "You would have to look at underlying profitability of the branch, in conjunction with security costs."
One CDCU near the soon-to-be-closed Homewood branch of A-K Valley is Hill District FCU. Its manager, Richard Witherspoon, told Credit Union Journal his location five miles away in the Hill District is celebrating its 40th year, and it has yet to suffer a robbery.
Witherspoon said he was disappointed in A-K Valley decision to close the Homewood branch, because it, "is a credit union that is near and dear to our hearts." Witherspoon noted the Homewood branch was originally a community development credit union called Citizens East FCU. In the early 1990s, a group with the local Presbyterian Church expressed interest in starting a CDCU in the area.
'Never Been Robbed'
"They approached me and said they wanted to use our credit union as a model," Witherspoon recalled. "Community development credit unions are very costly. We own our building, so we don't need to pay for an armed guard. We opened the building in 1981 with bullet-proof glass and security doors. The crime rate in our neighborhood is just as high, if not higher than in Homewood, but we've never been robbed. The police station being half a block away probably doesn't hurt.
"If NCUA permitted, I would have liked to take on the field of membership that Homewood served," Witherspoon added.
According to Rosenthal, the absence of violent crime at Hill District FCU is not unusual.
"Some of our credit unions have never had a robbery," he said. "Obviously, any credit union that is handling cash in a neighborhood that has crime has to take precautions. There are fixed costs for security, such as bullet-resistant barriers. Those costs are amortized over time, but they are a capital investment."
