Northeast Community Federal Credit Union
Northeast Community Federal Credit Union Helps San Francisco’s Unbanked
Fowler’s mother died and so did his once-comfortable lifestyle. For more than two years he lived on the streets of the Tenderloin in San Francisco, homeless and unemployed. He would frequent check cashers in order to cash his disability checks, paying at least $25 a month to get his money. Eventually, he went to St. Anthony’s Foundation for the homeless to seek help and was referred to Northeast Community Federal Credit Union. It changed his life.
Northeast Credit Union has branches in San Francisco’s poorest neighborhoods (Chinatown, the Tenderloin, Visitation Valley and soon in the South of Market) and serves 1,200 members, many of whom are homeless and surviving on a very small fixed income.
“Ninety percent of our members are low- to very-low income people,” said Lily Lo, CEO and manager of Northeast. “The majority of them do not have bank accounts.”
Northeast offers its members savings accounts, second-chance checking accounts, low-interest emergency loans with no fees and loans to build credit. The credit union also hosts free monthly workshops on budgeting, credit and small business ownership. And during tax season, Northeast operates a Volunteer Income Tax Assistance (VITA) site at its branches, where members earning less than $38,000 a year can go to get their taxes prepared for free. The credit union processed almost 1,000 tax returns this year.
Members are first encouraged to open a savings account where they can have their money directly deposited. They are given five free certified checks a month to pay their bills, and have unlimited access to the credit union’s tellers.
“We encourage them not to carry too much cash on them and to come in when they need money,” Lo said. “They can get up to $50 a day in cash. We encourage them not to take more than what they need because they can get robbed on the street, especially if they are homeless.”
Six months after opening an account and attending the credit union’s budget and credit workshops, a member can qualify for an emergency loan of up to $300, which is Northeast’s alternative to payday lending. The credit union’s loan does not carry a fee, but rather comes with an 18 percent interest rate as opposed to payday loans, which carry at least a 500 percent interest rate. And members aren’t forced to pay the loan back within two weeks, as they would have to with a payday loan. Repayment is often stretched out for three to six months, taking into consideration that most members live check to check, and cannot afford to pay off a loan that quickly. Members are encouraged to only take these loans out in times of emergency, and cannot use them every month.
Northeast tries to be an alternative to the predatory financial services that litter the streets where its branches are located. “Ten years ago, there were no check cashers in the Tenderloin and now they’re everywhere,” Lo said. “We would like to grow large enough to be able to reach out to more of the unbanked who go to those places, and be able to provide more services to them.”
Robert Fowler has become a strong advocate for the credit union. Since opening his account there, he’s been able to save enough money to afford an apartment and he is on the track to owing a small business again. During his free time, he volunteers at the credit union, and helped to prepare taxes for their VITA program this year.
He said Lo and others at Northeast really care about their members and work hard to help them become financially secure again. Craig Mason, a 49-year-old member at Northeast agreed. “I had a lot of problems until I met Lily,” he said. “I am low-income and was just starting to get my life together when I met her. Now she’s my financial advisor and she’s put more self esteem in me.”
For more information about Northeast call:
Chinatown Main Office: (415) 434-0738
