Ohio Credit Union League steps into Nueva Esperanza fray
By Kevin Milliken for La Prensa
Dec. 12, 2011: The statewide trade association that is helping Nueva Esperanza Community Credit Union (NECCU) establish itself in Toledo has stepped into a disagreement between the credit union’s board chairman and one of its board members. The Ohio Credit Union League maintains any dispute is a non-factor in where the credit union is headed.
Patrick Harris, director of media and public relations for the Ohio Credit Union League (OCUL), stated the credit union already has begun to make an impact on the lives of local Latino families and individuals. OCUL and credit union officials are concerned that a recent story in La Prensa would cause potential members to shy away from the financial institution.
Harris emphasized that NECCU will remain at its present location, 1232 Broadway, well “into the foreseeable future,” despite recent claims from board member Hernan Vásquez that the credit union should have moved into the former South branch library by now. Vásquez is the former president of the now-dormant Viva South Community Development Corporation, which worked to renovate the former Carnegie-era building near South Ave. and Broadway.
Adam Martínez, chairman of the credit union board of director, stated the board has made a strategic decision to remain where it is until it signs up enough members for it to be financially viable to move. He stated the credit union’s plan all along has been to ensure there are other tenants in the former library building “to share the utilities” and other expenses.
Martínez also called an outstanding $45,000 debt to a contractor who performed those renovations “Viva South’s problem” and refused further comment on the matter. Both sides in the dispute acknowledge the renovations were done by verbal agreement and there is no written paperwork establishing who is responsible for paying the contractor.
The dispute has left contractor Salomon Aguilar caught in the middle. He’s hoping the issue can be resolved before he is forced to consult a lawyer, because the situation has caused cash flow problems for his business and his family.
“It took a lot to fix it up. Just seeing it sit there empty really makes it worse,” he said. “If they want trust in the Spanish community, why are they doing this to a Latino? It’s a sad situation.”
Aguilar stated his wife has had to start working to help make ends meet at home, after doing all kinds of “extra work” inside the building, and trying to do it in a timely fashion.
“It hurt me bad. I’m in a slump because of it. I’m not a really big company and it took all my profit and I’m hurting for this whole winter and I’ve got young kids,” the contractor said. “I don’t want to bad mouth anybody, but I haven’t recovered yet. It’s really overwhelmed me right now and I’m frustrated.”
“There was at least ten months of intense discussion about the building, what it would look like, and plans got continually pushed back to the point where we had to make a decision to find an alternative location,” Martínez said. “It was a continual, ongoing discussion that never materialized.”
Martínez also maintained there are still outstanding “ADA compliance issues” at the site. He stated the board won’t even entertain a move until any accessibility issues for the disabled are addressed. Until then, the credit union will continue to be a tenant at a former insurance agency.
“It’s just uninhabitable right now for a credit union,” maintained Harris. NECCU is a state-chartered financial institution, but its deposits are federally insured.
“The credit union doesn’t have any ownership of that building, no written agreement with Viva South Toledo,” echoed Becky Hart, OCUL vice president of advocacy.
“There was at least ten months of intense discussion about the building, what it would look like, and plans got continually pushed back to the point we had to make a decision to find an alternative location,” said Martínez.
Membership in Nueva Esperanza
NECCU currently has 185 members who have opened savings accounts at the fledgling credit union. That is well below the 500-member figure that the business plan calls for in its first year of operation. But credit union officials pointed out the first year won’t be complete until May.
“I foresee that we are going to come pretty close,” said Sue Cuevos, NECCU president and CEO.
“The business plan anticipated the credit union being open in a physical location and operating well before it eventually got open because of the issues with trying to find a spot to be in business permanently,” explained Barry Shaner, president and CEO of Directions Credit Union, who is providing technical assistance to NECCU. “Eventually you have to be in a spot where people know you’re going to be and can find you if you’re going to be effective in the community and operate as a business.”
Prior to that, the credit union operated out of temporary quarters provided by other credit unions in South Toledo and Sylvania. Now Nueva Esperanza is open three days each week at its present location.
“There remains a commitment to move into that building when a viable landlord is found,” said Martínez. “We as a board have collectively decided that it’s appropriate for us to grow and move to that location. We’ve never said that we won’t move there. It’s always been a matter of when. Our biggest focus right now is growing our membership.”
Members helped by NECCU
Ms. Cuevos pointed out several anecdotes of Latino individuals and families who have been helped with small loans, as well as financial literacy courses for the unbanked and underbanked—people who either don’t trust traditional financial institutions or have no credit.
Ms. Cuevos stated the fledgling credit union provided one member with a “citizenship loan” after opening a savings account. That member’s temporary immigration status had expired and applied for a loan to cover the cost of receiving full U.S. immigration. The woman, her husband, and two children now can fulfill their dream of visiting relatives in the Dominican Republic without worry.
Another couple received a “home maintenance” loan after a bank turned them down for financing due to their lack of a credit history. NECCU was able to fund the loan, which the couple used to add central heating to their home after previously using hazardous space heaters during the winter months.
“Most of it is just to establish credit. They don’t have any credit. A lot of the Latino culture is cash-only,” explained Ms. Cuevas. I had someone come in and they put $4,000 down on a car. He asked if he could pay the rest off in three months. I told him he had to pay me over one year so he can establish credit. They don’t want to owe anybody anything, so they don’t have any credit.”
Most of the loans are small—between $200 and $500. Members are then put on a monthly payment plan to build their credit. NECCU even has offered qualified members small student loans to help them bridge the gap during semesters, so members can continue their education without interruption. A loan committee looks at each individual situation to determine whether the member has the ability to repay the money. In three or four cases, the credit union even has referred reputable contractors to members so they don’t get ripped off by a fly-by-night repairman when they take out a home improvement loan.
“We have helped a lot of families,” said Ms. Cuevas. “We’ve given those educational loans for some of our members to improve their profession, increase their pay, and help their families. We are making a difference, we’re seeing some traffic.”
“It’s already started to change people’s lives here in the South Toledo community,” said Harris.
Ms. Cuevas stated the credit union’s availability is spreading through the Latino community by word of mouth. She estimated 85 percent of NECCU’s current members are unbanked or underbanked. Financial literacy is a big part of the credit union’s mission.
“When they come in, we teach them how to fill out a savings account deposit slip or how to make a withdrawal,” she said. “We don’t do the work for them; we teach them how to do it.”
“Our message to them is simply this is a place where you can find trust with bilingual employees who speak your language, who understand your culture, who understand your fear of what a traditional financial institution may or may not be doing with your money,” said Harris.
Vásquez expresses disappointment
Vásquez, one of the original backers of the credit union, has expressed disappointment in what he termed a lack of progress by NECCU in establishing a larger portfolio of services to the Latino community.
“I don’t think there’s any discrepancy in the vision and the need for the credit union or where we’re going,” said Martínez. “I think what’s happened is there were some expectations that just haven’t been met when some of the founders got to this point.”
“Chartering a new credit union is something that doesn’t happen very often anymore,” said Shaner. “This is the first one in 16 years in the state of Ohio. It’s new for everyone. Credit unions can only raise capital through their current holdings.”
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.
“It is a slow process, because you have to be realistic about how long it takes to build a balance sheet and get the business up and operating,” said Shaner. “I think the board is doing that.”
Keila Cosme, former Ohio Sixth District Court of Appeals judge and a private attorney, was recently added to the credit union board of directors. Deb Ortiz-Flores, director of Lucas County Job and Family Services and the county’s child support enforcement agency, had been nominated to serve on the credit union board, but had to decline because of her dual role related to the ongoing merger of the two county social service agencies she now oversees. That still leaves one opening that must be filled on the credit union board.
Martínez pointed out the credit union board is “diversified” with lawyers, business owners, civic leaders, and people with a financial background.
“All of us are very much committed to this community and making sure the credit union succeeds and that we’re being very responsible in making good fiduciary decisions,” said Martínez. “It’s important to know there is a wealth of experience and a breadth of knowledge in what we’re doing and the direction we’re going.”
To that end, NECCU is reaching out to other Latino organizations throughout Northwest Ohio in order to sign up new members. The financial literacy programs are being done in partnership with Adelante, Inc. Most of the staff at the Farm Labor Organizing Committee (FLOC) are credit union members and have information on the programs offered to pass along at migrant farm worker camps. Credit union staff also set up a table at a variety of community events, including First Fridays at the Sophia Quintero Art and Cultural Center.