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Keep the money local, Bed-Stuy!

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Economic inequality has deep roots: there are historical reasons why certain areas and social groups have financial assets under their belt while others don’t.

But this is the 21st Century, and times have changed and continue to change. And though our nation is in an economic recession, there are ways that a community can build up its capital and achieve sustainable economic growth.

For one thing, it’s important to have a strong internal market in a community where goods circulate and jobs are created.

That means that if you can only do one thing to contribute to Bed-Stuy’s long-term economic sustainability, it’s supporting local businesses: restaurants, hardware stores, grocery stores, yoga studios, and realtors can all be found in Bed-Stuy, and when you give your money to these small companies you are keeping your money in the neighborhood.

But there’s another way to generate economic sustainability that more directly benefits you and your family. The Brooklyn Cooperative Federal Credit Union is a local bank with branches in Bed-Stuy, at 750 Myrtle Avenue, and Bushwick, at 1474 Myrtle Avenue.

Bed-Stuy and Bushwick are “underbanked neighborhoods,” whereas in Manhattan, there are two banks per block in some areas. In Bed-Stuy, the ratio is about one bank to every 30,000 people, according to the CEO of the Brooklyn Coop Samira Rajan. 

“What that means,” said Ms. Rajan, “in terms of economic development, the stability and financial security of families that live in these neighborhoods, is that there is a scarcity of affordable, fair financial services.”

People in Bed-Stuy or Bushwick, who want to do simple banking tasks, like opening an insured savings account or cashing a check without paying a fee, can’t do those things within walking distance of their homes.

“There is also a dramatic effect on economic development when you don’t have access to capital,” Ms. Rajan continued. “The closest competitor we have to our personal consumer loans is a credit card.”

And we all know that credit cards can lead to irresponsible use. But that’s not the only problem with using a credit card to purchase basic needs: “A personal loan is 11 percent fixed interest. Very few credit cards are below 20 percent,” said Ms. Rajan.

The Brooklyn Coop also offers small business loans, which many local businesses, such as the bar on Franklin Avenue formerly-known  as Sweet Revenge (and now One Last Shag), have taken advantage of. These loans are crucial to the process of economic sustainability because, Ms. Rajan said, they are part of “fueling an engine of local economic growth.”

“Without the Credit Union,” she said, “there is no small business lender, in Bushwick or Bed-Stuy. Period.”

The fact that the Credit Union is a cooperative means that members are also shareholders – so they have a say in running the bank. Members purchase their share for $5, and in exchange they are eligible to take on management responsibilities at the Coop.

“Members make up the board of directors; you can choose to run for vacant positions. There’s an annual meeting in which we disclose our financials with a report. We are responsive to any questions or concerns they may have,” explained Ms. Rajan.

Deposits in the Brooklyn Coop are insured up to $250,000. They also provide small business tax preparation. Checking account holders can withdraw money from Allpoint ATMs, which have locations all over New York City.

The Coop also has a partnership with Credit Where Credit is Due, a financial counseling organization, which holds workshops in Spanish and English – one, in English, is coming up soon and lasts about four weeks.

The workshop permits people to open a membership and a checking account with no fee. Additionally the Brooklyn Coop offers a Foreclosure Prevention Program.

For more information about the Brooklyn Cooperative Federal Credit Union, please see their website.

Original link: http://bed-stuy.patch.com/articles/sustainability-and-you-keeping-the-money-local

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2 thoughts on “Keep the money local, Bed-Stuy!

  1. Rachel

    Definitely a solution to developing a sustainable economy. Thanks for passing on a great topic and creative idea to share with my fellow residents in Weldon, NC.

    Michael

  2. Bed-Stuy and Bushwick may be underbanked, but I’m not sure we need more banks that will only nickel-and-dime residents. I think people across incomes are tired of ATM withdrawal fees, minimum balance requirements and $35 insufficient funds fees.

    I would appreciate more coops. Or at least, Brooklyn Coop opening a branch on Fulton Street.

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