GENESEE CO-OP FEDERAL CREDIT UNION
REGENERATIVE QUALITIES OF GENESEE CO-OP FEDERAL CREDIT UNION
Robust Circulatory Flow / Innovative, Adaptive, Responsive
Robust Circulatory Flow / Innovative, Adaptive, Responsive
Founded in 1981, Rochester, New York-based Genesee Co-Op Federal Credit Union grew out of the desire of members of a local consumer food cooperative to bank with a financial institution aligned with their social values. Over the years GCFCU has evolved to serve a much broader constituency, as it lends with increasing intentionality, sophistication, and inventiveness to support a more regenerative, interconnected regional economy.
GCFCU exemplifies the Goldilocks Rule in banking – the need for banks that are “just right” to serve the commercial needs of a particular scale. GCFCU’s work helps build the healthy human networks so essential to regenerative vitality in two key ways. First, increasing access to credit for people of modest means increases local circulation and local vitality along with it. Secondly, building trustworthy relationships and nourishing local businesses are critical to building the community-serving regional networks we so desperately need. |
GCFCU shares a history with three other upstate New York credit unions — those based in Syracuse, Buffalo, and Ithaca — founded by members of their local consumer food co-ops. It received its charter to operate from the National Credit Union Administration (NCUA) in 1981, at a time when a credit union could be started up with little more infrastructure than a table, chair, and cash box. Also, like many credit unions of that era, GCFCU’s first staff members had no previous banking or finance experience. “If you go back to the original chartering of credit unions in the 1930s it was very organic,” Melissa Marquez, GCFCU’s CEO explains, “they were all about very dynamic people leading the way to access to credit for people of modest means.”
For almost twenty years after its founding, GCFCU remained a relatively small financial institution with only about $4 million in assets. But 1998 represented a turning point for the credit union. In that year GCFCU received CDFI accreditation and relocated from the second floor of the Genesee Food Coop and onto the main street of Rochester’s South Wedge, a low-income neighborhood where it became a more visible presence in the formerly bankless community. There it began to assume an identity distinctly apart from the food cooperative and with an increasingly diverse customer base. |
A Holistic Approach to Product Development
A holistic approach to product development is baked into GCFCU’s DNA. “It grows out of how we live our values and express them throughout our organization,” Melissa explains. For example, for the past 25 years, long before it became a popular offering with “green banking,” and before the day of hybrid vehicles, the credit union was offering a 50 basis point reduction in rates to members who purchased fuel-efficient cars. Melissa explains why the GCFCU began promoting bike loans a few years ago “out of a conversation we had around why was it that we only have car loans? What if people needed, or some members might like, a bike loan? We felt promoting biking as an alternative to car use would be important as an expression of ourselves as a responsible community… to get people to do more bike riding and to be less dependent on cars.” GCFCU sponsored "Ride It: Art and Bicycles in Rochester," a Rochester Contemporary Art Center exhibit sharing member artwork that celebrates Bicycle Art and Bike Culture. The GFCU board has also adamantly opposed providing a drive up window. "If we are going to look at other convenience services, they would be a walk up or a bike up, not a drive up window," Melissa maintains. |
The credit union is also considering extending solar installation loans, as the NYSERDA direct lending program to consumers has been curtailed. As part of that phase-out NYSERDA has instead begun providing a subsidy to lenders like GCFCU to enable them to offer reasonable rates to customers. For the moment, GCFCU is helping members “go solar” through HELOC lending.
GCFCU also began offering microenterprise loans in 1998 averaging between $3000 to $7000. Extended for everything from taxi purchases to website development, these loans are primarily offered to individual entrepreneurs while a smaller number is extended to businesses with between 3 and 10 employees. “We do a lot of startup lending because that is the hardest kind of microenterprise lending to do,” Melissa reports. “If the business is successful and grows we direct them to other sources of capital, since our cap is $25,000.” When GCFCU extends loans, it always looks at resourceful ways to minimize possible negative impacts on the environment. So, for example, the lending officer might have a conversation with an auto loan borrower about both the financial and environmental benefits of purchasing a high-fuel-efficiency vehicle. Recently, when a member asked for a loan to convert his gas vehicle to biodiesel GCFCU did the calculations to determine how to value this vehicle after the conversion, and made the loan happen. GCFCU has played a central role in the South Wedge neighborhood’s dramatic revitalization since its street front relocation in 1998. “We have played our part in helping support South Wedge business owners,” Melissa reports. “That has been one small part of a lot of people’s involvement in trying to create a walkable neighborhood that provides and meets the needs of the people who live there.” |
Supporting A Regional Economic Vision
GCFCU sees itself as participating in the revitalization not just of South Wedge but in the regenerative economic development of Western New York State. For example, with the support of Rochester’s Mayor Lovely Warren, who has encouraged the development of worker coops, GCFCU has pioneered a lending program for cooperative startups. “There had been a lot of discussion as to whether community development credit unions could lend to worker coops or not, so we said let’s figure this out,” Melissa reports. GCFCU has since been sharing its expertise in cooperative-lending structures—which have been approved by its regulators—with other credit unions. “The accepted wisdom had been that we can’t do these because these are non-natural persons and we can only lend to natural persons,” Melissa says, “but that turns out not to be the case. Now we can tell other credit unions that they can do these loans and how to do them. Hopefully as we have more worker coops through startups or through conversions and they need access to capital, we can be part of that initiative.” GCFCU’s regenerative mission goes deeper still. “We have a long history now of successfully doing start-up microloans but they are very isolated and individual dependent,” Melissa admits. “Any time there is a loss because a business has not succeeded or because a catastrophe beset it and it had to fold, it is very difficult for that entrepreneur." "So the idea of linking to strengthen the economy — the idea of weaving an economy and seeding the relationship connections inside it — has become something we are actively seeking to do."Lending is now done with this deeper intentionality. For example the credit union recently made a loan to Small World, a cooperative bakery and a food fermenter, that sources from local farms. “It is not just about one worker coop but a network of worker coops and that is a relational threading that strengthens the local economy,” says Melissa. “In a small community like ours, you can trace these relationships and nurture them in ways that are more obvious than in bigger places.”
GCFCU has been a member of the National Federation of Community Development Credit Unions since the 1990s. Cathi Kim, Director of Community Development Investments Program for the federation, has worked with GCFCU for several years and reports that she has been deeply impressed by how the credit union has evolved and grown, not just financially but in impact. "Their responsive and purpose-centered approach to financial services,” she reflects, “are a model for how credit unions—financial cooperatives—can help transform communities." |
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