This post was co-written by Samira Rajan, chief executive officer of Brooklyn Cooperative Federal Credit Union.
This Saturday, November 5 is "Transfer Day." Around the country, inspired by Occupy Wall Street's focus on the need to hold financial institutions accountable, people are moving their bank accounts from behemoths like Bank of America, JP Morgan Chase and Citibank into community development credit unions (CDCUs).
We hope you'll join them. If you're in Brooklyn, we hope you'll consider joining us at Brooklyn Cooperative Federal Credit Union.
This Transfer Day, we hope you'll recognize both the reasons to withdraw, and the reasons to invest. While the reasons to withdraw (i.e. holding Wall Street financial firms accountable for the mess they've made) have gotten more attention, we believe that the reasons to invest (i.e. supporting the great work of CDCUs) are even more compelling.
Reasons to withdraw: Much of the support for Occupy Wall Street comes from anger over bad incentives and worse behavior at banks, hedge funds and financial firms -- which invested in predatory loans, collateralized debt obligations and credit default swaps that were extremely likely to fail. The resulting crisis stripped millions of their life savings, caused the financial meltdown of 2008 and cost millions of jobs around the world.
If they had only set up homeowners, bilked investors and taken a taxpayer bailout, maybe we could put our anger in the past. Unfortunately, lobbyists for Wall Street continue to block financial reform, leaving our financial sector vulnerable to speculation. Meanwhile, despite the bailout, big banks have failed to extend loans to many responsible borrowers, leaving students, small businesses, consumers and would-be homeowners struggle to find access to affordable credit.
Reasons to invest: But you don't have to have even an ounce of anger at Wall Street to believe in moving your money to community development credit unions (CDCUs).
CDCUs are not-for-profit, member-owned financial institutions that specialize in meeting the credit needs of communities. The cooperative structure ensures that the priorities of the depositors are the priorities of the credit union. As a result, they offer fairly-priced loans, including to community members with an imperfect credit history (and really, who else is there?). They invest in small business and affordable housing. They provide a safe place to save, and affordable financial services (i.e. they don't charge monthly debit-card fees, just to get your own money). CDCUs especially serve low-income communities, like Bushwick and Bedford-Stuyvesant, where Brooklyn Cooperative is located.
Brooklyn Cooperative is a great example. We just celebrated our 10th anniversary as the only community development financial institution serving Central Brooklyn. We have almost 7,000 members and $13.5 million in community assets. Our lending is up 20 percent since 2008. Small business lending is up in particular, and we are finding excellent mortgage borrowers turned down by banks for no reason. We know people are crunched, and we are responding. Apart from fair and affordable financial services, we also offer free tax preparation annually to households earning less than $40,000 (the coop is Brooklyn's biggest non-commercial tax preparer), free foreclosure prevention counseling, free credit counseling, and we are the only non-profit in New York City to offer affordable tax preparation for small business-owners and the self-employed.
You don't have to give up safe, secure, convenient banking to move your money. Credit unions are government-regulated and fully insured, and located in communities around the country. If you're in Brooklyn, check out Brooklyn Cooperative (www.brooklyn.coop). Beyond Brooklyn, check out yourncu.org (in NYC) or natfed.org (around the country) to find one near you. Many will have extra staff working this Saturday to help out with "Transfer Day."
CDCUs were founded on the belief that those who work hard deserve the opportunity to achieve financial security. Whatever you think about Occupy Wall Street, moving your money to a community development credit union is a great way to bring that belief a little closer to reality.
Brad Lander is a New York City Councilmember from Brooklyn, a co-sponsor of the NYC Responsible Banking Act, and a member of Brooklyn Cooperative Federal Credit Union. Samira Rajan is the chief executive officer of Brooklyn Cooperative. Brooklyn Cooperative will have extra staff at its Bushwick Brooklyn branch at 1474 Myrtle Avenue from 9 a.m. to 4 p.m. this Saturday, November 5. Check out www.brooklyn.coop for information on how to join.