Director of Communications
Building a credit union to sustain and develop worker cooperatives
An interview with Mike Leung about the WCFCU
One of the things we are most excited about here at Community-Wealth.org is the way in which individual strategies of community wealth building can reinforce each other when they intersect. An explicit effort to create this kind of synergy is underway with the effort to start a credit union for members of worker cooperatives. We asked Mike Leung, one of the bottomliners of the new project, to share an update with us.
Could you explain a little bit about what the proposed Worker Cooperative Federal Credit Union (WCFCU) intends to do, and who is involved with setting it up?
The mission of the proposed Worker Cooperative Federal Credit Union is to finance worker cooperatives, in other words to lend to worker owned, democratically managed businesses. We will also lend to housing cooperatives and do consumer lending. Basically we will be providing standard financial services like savings, checking, ATM etc. in a way that benefits worker cooperatives.
Many well known figures in the coop community are backing the proposed credit union. Our subscribers, who will elect the first board of directors include: Melissa Hoover, the executive director of the US Federation of Worker Cooperatives; Dave Karoly, the founder and staff member of the Network of Bay Area Worker Cooperatives; Tim Huet, coop lawyer and Arizmendi Association developer; Newell Lessell, president of the ICA-Group; Thomas Butler and Mark Fick from North American Students of Cooperation board; and myself.
The proposed staff will include our CEO, Salvador Duran, who is the former CEO of Mission SF FCU and brings decades of community development credit union experience to the team; our loan officer, Margaret Lund, who founded the National Credit Union Agency (NCUA) and we also received a low income designation. We are currently surveying our members and beginning to raise startup funds.
Our field of membership approval was a bit tricky due to the nature of the democratic entities in our associations. It came out favorable in the end but it was a rather lengthy process. Overall the chartering process has been much longer than I originally anticipated. We are also trying to get chartered for the explicit purpose of business lending, and operate primarily as an online credit union, both of which are not common.
I noticed that you’re also including NASCO housing coops in the proposed field of membership: could you explain what’s behind this decision?
NASCO’s philosophy of cooperative education and its membership of both housing and worker cooperatives are well aligned with our mission. We also feel it is important to encourage student involvement in the cooperative movement by making it easily accessible. I feel it would be a major success if students today were able to join worker cooperatives upon graduation.
There are a few technical reasons NASCO is a good fit as well. Business lending requires a large amount of consumer lending to offset the perceived risk of business loans. There are not enough individual members in worker cooperatives (about 2000) to do the amount of business lending we anticipate. NASCO has about 8000 cooperative members, allowing for an expanded business lending capacity.
Regulations place a tight restriction on the amount of business lending a credit union can do. There is an exemption if a credit union has a low income designation. NASCO and its student membership helped us qualify as low income credit union.
NASCO also makes the credit union accessible to coop supporters who aren’t necessarily coop members. Unaffiliated individuals would be allowed to join NASCO as voting members and then be part of the field of membership. Neither the USFWC nor NoBAWC allow individuals to become voting members of their associations.
What can people do to help get this initiative off the ground?
We need people to make a non-binging pledge to open an account at the proposed WCFCU once we’re chartered. Our survey can be taken online here:
We are also fundraising. Please help support the proposed Worker Cooperative FCU by sending donations to our fiscal sponsor:
Mandela Marketplace - Proposed Worker Cooperative FCU
1364 7th Street
Oakland CA 94607