By Natascha Elbech
The Federal Deposit Insurance Corporation (FDIC) reports that Americans generally have a skewed perception of their financial security. Nearly 10 million households (7.7%) do not have a bank account, and another 25 million (20%) are “underbanked”, meaning they hold a primary bank account but manage finances outside of the traditional banking system. While bank accounts can provide structure and financial security, many Americans struggle to build savings or secure their assets without a sufficient income.
This is a particular reality for New York City, as New Yorkers are more likely to be unbanked or underbanked than the rest of the country. 11.7% and 25.1% of households are considered unbanked or underbanked, respectively, according to the NYC Department of Consumer Affairs. However, Community Development Financial Institutions (CDFI) like the Lower East Side’s Peoples Federal Credit Union are providing capital and much needed financial services to people who are not typically served by traditional financial institutions.
The Lower East Side People’s Federal Credit Union is a non-profit financial cooperative with a mission to promote economic justice and opportunity in New York City’s historically underserved neighborhoods. The FCU serves anyone who “lives, works, worships, volunteers, or belongs” to an organization in the Lower East Side or Harlem, or any NYC resident who makes less than $38,000 a year. As a credit union, individuals share ownership and control over their finances. This is an important distinction from private banks, as borrowers are distinguished as democratically represented members and are involved in making decisions for community reinvestment. Loans made by CDFIs enable members to purchase their first home or grow a locally-owned business, or assist nonprofits in developing affordable housing and expanding community programs. The LES People’s FCU specifically provides services like savings and checking accounts for individuals, businesses and organizations; online banking; personal and micro-enterprise loans; loan insurance; credit and debit cards; and mortgages and housing co-op loans.
The LES People’s FCU was founded by neighborhood activists in 1986 after the last bank branch closed in the heart of the Lower East Side. “The city has basically abandoned the community”, explained CEO Linda Levy in a 2014 interview with Grassroots Economic Organizing, “it was a very different place that is is now”. As a low income credit union, it has struggled in the past to meet the demand of all its members, and at one point was loaned out at 125% and was forced to borrow to continue to lend.
Now with a modest $54 million in assets, the LES People’s FCU continues to bring access to safe, secure and affordable banking services and representation to the credit invisible. Since 1986, it has served over 300 million individuals and reinvested over $100 million in housing, business, and consumer loans back into communities.
You can learn more about the Lower East Side People’s Federal Credit Union at https://lespeoples.org/.
