Sustainable & SELF-RELIANT

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Cliff Rosenthal is an honest-to-goodness example of the principle of teaching someone to fish rather than giving them a fish dinner.

He's been toiling at the cooperative effort for 35 years, 25 of them at the National Federation of Community Development Credit Unions. There have been times when fighting for the cause of empowering low-income and minority communities has been front and center and has resulted in strong support, and there have been times when there was silence and he had to dip into his own pocket to keep it going-including going without a salary to keep the dream alive.

For those efforts and more, Rosenthal will be honored this week in Washington with a Herb Wegner Award. Rosenthal's hope is that it will focus attention once more on the cause to which he's dedicated his life's work: sustainable, self-reliant cooperatives that champion democratic financial opportunity.

Rosenthal is no stranger to the fight and acknowledges the vulnerability of the cause in a society that more often pays tribute to wealth and fame.

"There are so many things in the credit union movement that make me optimistic. The industry is successful and mature, assets are growing, and I like to believe it is more sensitive to outreach to the poor than it has ever been," he said. "I'd like to see it extend that reach."

'Little Room For Optimism'

Given the short memory span and low staying power of what moves people in the America of 2005, Rosenthal acknowledged that the "overall economic situation leaves little room for optimism, especially the lack of attention to growing poverty in our country."

Every generation has to rediscover its own roots, and the shared experience of the Civil Rights Movement (and the economic and social justice gains that followed it) is mostly lost or unlearned on today's young, he admitted. "The distractions of wealth and advancement are so great now."

Rosenthal wonders if there are young leaders in the credit union movement who have the determination, bravery and staying power of people like Joy Cousminer, president of Bethex FCU in the Bronx, and Rita Haynes, president of Faith Community United CU, Cleveland, Ohio. Both are longstanding members and former chairwomen of the NFCDCU board of directors. In truth, Rosenthal did not place himself in that pantheon, but others certainly have put him there; it's one reason he'll be honored with the Wegner.

Rosenthal believes that if there are such visionary leaders in the pipeline, now would be a good time for them to burst out, shout their allegiance and continue the work that has been so lovingly laid out for them. There is still much to be done, Rosenthal said.

"Thousands of non-profits are formed every day, but low-income organizations are dedicated to serving the poor and razing the economic barriers that hold them back. I think that ethnic-based organizations can emerge in this climate. Maybe a parallel organization for Latinos is an idea to be realized. Maybe there are others," suggested Rosenthal. The ideal needs a nurturing culture, however.

And "it's too easy to dwell on the past and too many people don't appreciate it; that's life," he said. The point is to go on, keep on, and keep on keeping on.

You can find friends in unlikely places. In 1986, Rosenthal remembered getting a call from an elderly man in the White House. "Reagan was the president and we were struggling. The man was on the Low-Income Opportunity Board and they were cutting programs. But he was taken by our commitment to self-help. I co-authored a major study of CDCUs titled 'An Analysis of the Role of Credit Unions in Capital Formation and Investment in Low- and Moderate-Income Communities' that made the case for national policies to ease credit union chartering and business lending, as well as investing in CDCUs and other low-income community lenders. So you see, self-help has no enemies."

Strange Bedfellows

Politics can make for strange bedfellows, indeed, and Rosenthal is a firm believer that "a principle of the cooperative movement is to be above partisan politics. The weakness of so many causes is an opportunity for us to market our cause. You can't just speak to your ideological friends. We have to appeal across the spectrum and I'm reasonably hopeful we can continue to do so. The (community development credit union) movement will survive."

He worries about demutualization of credit unions that become mutual savings banks, because it takes cooperatively owned wealth out of the system. "I'm not encouraged by that," he said. "It's inimical to what we stand for and it needs to be a high priority educational task to fight against it." He also worries that great success in the movement may bring it farther from its foundation.

"It seems that the more successful you are, the more dilute the connection to members." The looming danger, he believes, is that credit unions may be seen as "just another financial institution."

Rosenthal developed his organizing skills early on, starting in 1970 with a food co-op in a New York City apartment building. In 1972 he moved to Hartford, Conn., and organized co-ops in his own and other low-income neighborhoods. He made ends meet by translating an encyclopedia into Russian, at two cents per word. Trained as a Russian scholar, Rosenthal, with a colleague, published a collection of nineteenth-century Russian memoirs, Five Sisters; favorably reviewed in Time magazine, the New York Review of Books and elsewhere. It has been reissued repeatedly (even re-translated into Spanish) for the last 30 years, and it is used as a college textbook in history and women's studies courses.

In the mid-seventies he was hired by American Indians for Development, a nonprofit social service organization that served tribes across the state to organize co-ops, emergency food pantries and energy assistance.

He came to Washington in 1977, where he joined the National Association of Farmworker Organizations, a coalition of agencies serving migrant and seasonal farm workers. That proved to be his credit union baptism. They chartered a credit union to serve the staff and clients of member organizations and Rosenthal became the first president of NAFO FCU, which joined the National Federation of CDCUs.

Returning to New York City in 1980, he married and started a family and volunteered at the federation's headquarters, later joining the staff as director of training and technical assistance. "I developed training programs, organized conferences, supervised field staff, and wrote proposals until a shift in federal policies eliminated virtually all our revenue in 1982."

Hard Times

Hard times had hit. There was no money for staff or rent, he said, so the federation moved its skeleton operation to Rosenthal's house. They had an answering machine and a mailing address and "preserved at least the appearance of an organization." Rosenthal credits then-Executive Director Jim Clark's effort here as well, but Clark left the next year. Now unpaid, Rosenthal supported himself and the federation as a Charles Revson Foundation Fellow at Columbia University, where he obtained graduate training in the management of financial institutions.

Now at rock bottom, small grants enabled Rosenthal to recruit a part-time associate, former NCUA examiner Annie Vamper (after whom the Federation named its annual award) to work at building the Federation. They worked in borrowed space from Union Settlement FCU in East Harlem until they relocated office space in pre-trendy lower Manhattan in 1984.

"For the next six years, I led the federation through a gradual rebuilding process," said Rosenthal. "Our cause was aided by the changing banking system, which brought a massive wave of branch closings, especially in low-income communities. Over 1984-86, we worked with a community group to take over an abandoned bank branch and established a community development credit union, the first conversion of its kind. We set out to demonstrate to regulators, community activists, donors, and researchers that credit unions could service the most pressing financial needs of poor communities. Today, that credit union is a $15-million institution, the Lower East Side People's FCU, and serves thousands of residents more effectively than any bank could."

Working with Cousminer, Rosenthal developed a Community Credit Union Job Training Program that trained public assistance recipients and displaced workers for credit union careers. And later, a housing program, the first loan-participation consortium to finance a low-income housing cooperative, was born.

Rosenthal also sought to raise capital for asset-starved low-income credit unions. He helped design the Capitalization Program for CDCUs in 1982, which grew dramatically during the decade, raising several million dollars of low-cost loans from foundations and religious organizations. He also designed model state legislation to support investments in CDCUs.

The NFCDCU had arrived, and in 1989, Rosenthal was appointed to the Federal Reserve Board's Consumer Advisory Council. "I pressed for a coherent national policy to facilitate the delivery of financial services to low-income people and promote federal investment in CDCUs," he said. The federation's efforts help to reinvigorate the Community Development Revolving Loan Program (established in 1979 through the Federation's advocacy) and helped in the formation of the Community Development Financial Institutions Fund of the U.S. Department of the Treasury.

The federation kept going full blast into the roaring 90s, with the AmeriCorps*VISTA project, Individual Development Accounts, matching savings accounts to help people escape poverty and build assets, and supplied hundreds of thousands of dollars in matching funds for CDCUs. In 1994, they started a Latino credit union network.

The federation kept up its chartering efforts (the Episcopal Community FCU in Los Angeles, the Binghamton Housing Authority Residents CD FCU, Neighborhood Trust FCU in New York, and others) and added to its publications with "Organizing Credit Unions: A Manual," in 1995, which Rosenthal co-authored and edited. "It has remained the most comprehensive guide of its kind ever produced," he said proudly.

With other like-minded people, Rosenthal helped form the Ad Hoc Coalition of Public Policy Lenders to lobby for the creation of a new federal fund. They coined a name to capture their shared characteristics: community development financial institutions, or CDFIs, and renamed the organization the CDFI Coalition. "When The Wall Street Journal adopted the term, we knew we had a foothold in the public consciousness," said Rosenthal. President Clinton became the strongest proponent for the new initiative and Rosenthal stood in the White House Rose Garden with other CDFI advocates when the president announced legislation creating the fund, which became a reality in the fall of 1995. In 2002, Rosenthal was elected its first chairman.

In 1996 Rosenthal joined a World Council of Credit Unions delegation to Moscow to attend a national congress of the newborn Russian credit union movement. "It was struggling in the uncertain post-Soviet economy. It's an amazing place, but what was so awful were the number of people begging. Now, it's changed. They have consumerism and Gucci stores, but the pensions are bad and there is very high inflation. While a degree of stability is good, the softening of gangster capitalism is a dangerous thing. They have no free press anymore and there is still no uniform law for credit union development."

Rosenthal recalled wistfully a toast a comrade credit unionist in Russia gave at the farewell WOCCU banquet. "An elderly university professor learned of my Russian interest and gave me a directive for my retirement: "Before 1917, we had so many cooperatives in Russia," she said. "There is such a rich history. You must come study it."

Rosenthal keeps working hard in the American credit union movement so that in the future it won't be recalled wistfully in a similar historical toast.

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