A financial institution has reached a milestone in its effort to open a black-led credit union in north Minneapolis. Village Financial Cooperative received notice from state officials this week that it is expected to receive approval to operate the credit union once federal depository insurance is secured.
It would be the first state-chartered credit union to be approved in Minnesota in at least 15 years, according to the state Department of Commerce.
Me'Lea Connelly, director of development for Village Financial, said the credit union hopes to open by Juneteenth, the annual holiday marking the abolition of slavery in the United States. One of the goals, she said, is to give people who don't have access to banks an alternative to using payday lending or check cashing services, which are costly and can charge very high interest rates.
"Big banks are becoming less and less accessible and less and less equitable for everyday people," Connelly said. "There's a large desire for folks across the country to start developing these institutions themselves, and we're really proud to be leading that movement."
• 'Astronomical and unaffordable': Payday loans get low cost competition
Village Financial has gathered more than 1,600 members, which Connelly said represents $4.25 million of pledged deposits.
"When we first started this effort, the professionals and the experts in the industry told us you can't have a credit union of have-nots," Connelly said. "We've shown that the black community has the power, the black community has the resources to create an institution for and by them."
Village Financial would be the only black-led credit union currently operating in the state, Connelly said. But there's a vibrant history of black-led financial institutions and cooperatives in Minnesota, including a black-led credit union that was based in the Rondo neighborhood of St. Paul in the 1920s.
"Black folks have known how to cooperate and create cooperative entities since the turn of the century," Connelly said. "So we're really walking a well-beaten path and standing on the shoulders of our ancestors and all that they've been able to accomplish."
The effort to establish the credit union came shortly after Philando Castile was killed by a St. Anthony police officer in 2016.
"This is a movement whose origins lay at our deepest sorrows," Village Financial posted on Twitter. "We dedicate this moment to Valerie Castile and all of the mothers who have lost their loved ones to the violent systems meant to silence and destroy us."
The credit union will start with banking basics like checking and savings accounts and some loans, Connelly said, but will also partner with other community organizations that help connect people with financial resources.