Village Financial Cooperative cleared a major hurdle, becoming the first credit union in the past 15 years to be approved by the state.
The Dec. 12 approval from the Minnesota Department of Commerce clears the way for the North Minneapolis-based credit union to have its deposits insured by the National Credit Union Administration. Once insured, the credit union, which is already servicing the community, offering low to no interest micro-loans, plans to be in full operation at its 227 Colfax Ave. N. location, with a grand opening set for around the time of Juneteenth.
Village was born out of the Blexit movement, which began in Minneapolis following the police killing of Philando Castile. The term Blexit is a take on the word Brexit and originated more than a year prior to ultra-conservative commentator Canace Owens attempted to co-opt it for the purposes advocating Blacks exit to the Democratic Party. The credit union was the community’s answer to questions of how Black people can elevate in a system that seems designed against them.
The mission and message of Village has resonated with the community to the tune of 1,600 pledged members totaling $4.2 million in assets, said Village representative Samantha Pree-Stinson.
“A majority of those pledges are by Black people who are Northsiders,” said Pree-Stinson, who oversees Village’s organizational alignment.
Prior to Village, area residents in need of a short-term loan and with limited incomes were subject to becoming prey from a variety of payday lending companies charging as much as 300 percent (and more) in interest. With Village’s New Day micro-loans Pree-Stinson said members can borrow up to $500 at zero to eight percent interest. To date, the credit union has lent $13,000 to borrowers. Of those on the receiving end, she said 57 percent are Northside residents. Seventy-eight percent are women … 96 percent are Black.
“The loans are not given by credit score. We look at the borrower’s two most recent pay stubs and credit-to-debt ratio to determine if a person is qualified and at what percent,” said Pree-Stinson. “So, you can see how it’s closed the gap created by predatory lenders.”
Pree-Stinson said Village Borrower’s have a 100 percent repayment rate; meaning they have either fully repaid their loans or are paying on time according to the terms of their loans. Those payments are also reported to credit bureaus, thus offering the opportunity to improve credit scores.
“And we’re offering classes … free classes … on financial planning and paying off debt. We’re making sure our members have the tools they need to take control of their finances,” said Pree-Stinson.