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Nueva Esperanza (New Hope) Community Credit Union (NECCA), which received its state Charter last year, began operations last April in a former insurance agency at 1232 Broadway. The credit union signed a month-to-month lease, hoping to eventually move to the renovated library space. Backers of the credit union originally targeted a June 2009 move-in, which has been delayed time and again by renovation problems.
There is disagreement among members of the credit union’s board of directors on how to proceed, especially in light of unpaid bills, including nearly $45,000 owed to a contractor for interior renovations at the former library building. There also is an $115,000 loan still outstanding, owed to the Toledo-Lucas County Port Authority.
Other renovations still need to be done, including a $12,000 wheelchair lift to improve handicap accessibility within the former library. Vandals also have broken two outside windows and a small leak has developed in a corner of the library building’s roof. Neither is expected to cause further damage from the onset of cold weather. Officials plan to “winterize” the building next week.
While Nueva Esperanza does offer walk-in banking and bilingual services, the long-term plan involves financial literacy and other education programs to provide increased banking access for residents in the Old South End. It is believed that many Latino residents in Toledo don’t have accounts or don’t trust traditional banking systems and keep large sums of cash, making them targets for crime.
Directions and Champion credit unions have provided technical assistance and advice to help the Latino credit union get started. Nueva Esperanza actually started operating last year from offices each credit union provided while signing up new members and securing individual deposits.
NECCA currently has nearly 150 members and assets totaling more than $1.5 million. Even though the credit union is focusing on Latinos, it is registered as a community credit union: meaning anyone that lives, works, or worships in the Old South End is eligible to join.
Hernán Vásquez, immediate past president of the now-dormant Viva South Toledo community development corporation and a member of the credit union’s board of directors, stated he has grave concerns about the immediate future of the financial institution and the building it is intended to inhabit.
“When they see it is unoccupied, that is a problem,” Vásquez said, maintaining that he has brought the occupancy issue up at credit union board meetings, only to be put off by board president Adam Martínez.
Viva South obtained a temporary occupancy permit last February, but months later, the credit union board still has not decided whether to move into the former library.
“I guess that wasn’t enough,” complained Vásquez. “I guess it’s a moving target. The target moved and then it wasn’t just an occupancy permit—it was a permanent occupancy permit.”
According to Vásquez, Martínez threatened to resign from the credit union board and even started to leave a meeting just before a vote on such a move. The remainder of the board then put off a decision, which has never reached formal consideration since then. Martínez also has missed three recent board meetings.
Vásquez is one of the original backers of the credit union idea several years ago, traveling with a local contingent to North Carolina to see how a Latino-based credit union is set up. Years of fund-raising and regulatory approvals later, the credit union’s viability appears to be in doubt.
Now, the credit union is short two board members, preventing NECCU from moving forward with long-term planning. The amount of time needed to devote to credit union business is preventing volunteers from remaining on the board, as well as hampering the recruitment of new board members, according to Vásquez. The credit union board currently consists of: Martínez, Vásquez, Jessica Hernández, Joe Balderas, and a representative from Fifth Third Bank.
“We have had many board members resign because of the work that is required,” said Vásquez. “There is a tremendous amount of volunteer work that must be done and a lot of people didn’t realize the amount of volunteer work that is necessary.”
Martínez confirmed the credit union board is short members, but he disputes the future of NECCU is in doubt.
“We’re looking for creative ways to expand our service and loan portfolios,” said Martínez. “We’ve been doing pretty well. The community has openly embraced the credit union.”
Currently, NECCU is limited to a service territory that encompasses the boundaries of the Viva South CDC—essentially the Old South End. The credit union only is permitted to offer savings accounts and small personal or auto loans. NECCU is prohibited by state regulators from enhancing its service portfolio to include mortgages, checking accounts, and credit card services.
“Because we’re a new credit union and because of the regulations, the State of Ohio doesn’t want to see us get too big and then fail,” Vásquez said. “We are limited in the products we can supply.”
“We are a brand-new organization, so they want to make sure we are taking baby steps and not getting ahead of ourselves,” agreed Martínez.
Port authority officials toured the former library branch last week, but were reportedly surprised to learn that no one was occupying the building.
“The port authority is very concerned at the present time, because they have had many other buildings they have funded and the buildings are empty and totally destroyed,” said Vásquez. “They’ve lost a lot of money.”
Vásquez alleges that Martínez favors turning the former library branch over to another entity, presenting a conflict of interest. Martínez also is an elected member of Toledo City Council. Vásquez called it “a political problem.”
“He definitely has a conflict of interest, if he is going to bring in the city and mix the city with this volunteer organization,” said Vásquez, who also alleges Martínez was behind an effort to keep Viva South from receiving the city’s financial support through Community Development Block Grant (CDBG) funds.
Martínez dismissed such assertions as “hearsay,” and stated the credit union board remains committed to being a tenant at the former library branch.
“Assuming there is a viable organization to be a landlord and be responsible with all the things that go with that,” Martínez said. “Right now there is no organization with the capacity or capability to do that. I and the board are not willing to jeopardize the ADA [Americans with Disabilities Act of 1990] compliance issue in meeting the needs of our customers. We are certainly willing and able to move once the landlord is found.”
The Toledo city councilman raised the possibility of placing the former library branch in the hands of the Lucas County Land Bank to keep it from falling into disrepair. The land bank was set up under a change in state law last year as a means to obtain, fix up, and resell properties suffering from tax delinquencies. There currently are back taxes owed on the library property.
“I’d like to see it put into productive use and if the land bank is a viable option, then absolutely,” said Martínez. “The credit union has no affiliation with Viva South. They have nothing to do with the ownership (of the building).”
Vásquez sent the city’s Dept. of Neighborhoods a letter last December, informing Toledo officials that Viva South’s board had approved a “suspension of operations.” The letter blamed a default judgment sought by Martínez for an outstanding lawn care bill as “the last nail in Viva’s coffin.” The two sides reached agreement on a lesser amount earlier this year.
“That’s petty and shallow and has nothing to do with the viability of the credit union,” Martínez fired back.
While Martínez acknowledges he heads a city council committee that “is in charge of CDBG funding allocation, he pointed out Viva South’s status would have prevented any such funds being awarded in 2011. Dept. of Neighborhoods official Mike Badik confirmed the CDC had not applied for any 2012 CDBG funding.
“It was my understanding that the group as a whole was disbanded and no longer functioning,” said Martínez. “I know there is interest from other non-profits (taking over the former library branch) at this point, but nothing has been formalized. I’m not even sure what discussions have been had.”
The Toledo city councilman also stated there is a possibility another community development corporation could be formed in the Old South End to replace Viva South.
Vásquez would prefer to see overtures made to local credit unions to buy the library branch for $150,000, which would allow for the repayment of the port authority loan, make the contractor whole, and still leave $135,000 worth of historic tax credits to the eventual owner who would provide a full range of financial services to the greater Latino community. But such an effort would mean the end of Nueva Esperanza, still in its infancy as a credit union.
“That is financially supporting our community tomorrow and any other packages that need to be met financially,” said Vásquez. “That would be my first concern: making taxpayers whole. We would be leaving the taxpayers holding the bag for $115,000.”
Vásquez also believes the credit union board owes accountability to several community foundations and local credit unions that issued grants to NECCU as “seed money” for its operations. Vásquez also feels the board owes the greater Latino community the full range of financial services it has been promising for years.
“How do we explain to The Andersons Foundation, the Toledo Foundation that donated funds to build that credit union that we walked away from the building?” Vásquez openly wondered. “How will we look with the community that helped us when we asked for the help? We did not do what we told them we would do. The Latino community takes a black eye for something like this. We must fulfill our responsibilities.”
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