Minnesota’s first Black-led credit union is almost ready for business.
Last week, Arise Community Credit Union announced that it has received a charter from the National Credit Union Administration, capping the end of a years-long journey and bringing the organization one step closer to opening. The credit union will serve people in Ramsey and Hennepin counties, with an emphasis on North Minneapolis. Arise is also the first credit union to get a new charter in Minnesota in 23 years.
The Association for Black Economic Power (ABEP) spearheaded the new credit union as a way to address systemic financial challenges impacting Minneapolis residents, especially people of color.
The credit union will be led by CEO designee Dan Johnson, who’s been working on the effort since last September. Johnson, who previously worked for Wells Fargo, most recently served as a branch manager with Geico Insurance.
Though ABEP is handling the legal and logistical side of things, Arise is a largely community-driven effort. In the wake of Philando Castile’s murder in 2016, community members “decided that, in addition to addressing the policing injustice, they also wanted to address the economic injustice,” said Debra Hurston, ABEP’s executive director.
Since there haven’t been new credit union charters issued in Minnesota in over two decades, ABEP leaders had much to learn about the process. “It required not only the credit union organizers, but the regulators at the state and the regulators at the national level, all learning together, about this process,” Hurston said in an interview with TCB.
The first pivotal step for Arise: defining its “field of membership,” or the community it planned to serve. Everything played into that step, emphasized Hurston.
Arise’s field of membership is Hennepin and Ramsey counties and anyone who works, lives, goes to school, worships, or volunteers in those counties. It also includes anyone who’s related to anyone connected to those counties in any way, Hurston said.
Hurston added that being the first Black-led credit union offers a sense of pride to the community. “It does not, in any fashion, mean exclusion,” she said.
“Arise’s target market is North Minneapolis,” she added, “and it will offer consumer products at a rate that’s very attractive for our market. That is what would set us apart from anyone, not just credit unions, but banks as well.”
The Arise team also had to prove to regulators the level of interest in having an institution like Arise in the form of deposit pledges. Members of the community were required to fill out a survey to indicate where they lived along with their intentions to make a deposit.
To date, Arise has received more than $2 million in deposit pledges from the community, which surpassed the required amount from regulators, Hurston said. “That was a way for the public to lend their voice to this project. Their visible support comes through by filling out that pledge.”
Other local credit unions and those around the country also threw in support, raising more than $1 million in capital contributions and $4 million in deposit pledges. They also leaned in with volunteers, guidance, and even furniture. Affinity Plus Federal Credit Union, based in St. Paul, was an especially avid supporter of Arise from the very beginning, Hurston added.
“People embrace the story of North Minneapolis. They understood what was happening to North Minneapolis residents,” Hurston said. “They also understood that there was a void that had not been met and that historically there had been a challenging relationship with other financial institutions. They wanted to help.”
She added: “It was extremely heartwarming to just to tell the story and have people ask without hesitation, ‘How can I help? What can we do? What do you need?’ That’s been my experience with this project from the very beginning.”
Currently, the official paperwork for Arise is being processed by the Minnesota Department of Commerce. State-chartered credit unions are regulated by that department and insured by NCUA.
For the time being, Arise plans to only operate online with regulated consumer products. It is estimated that it will take six to nine months to onboard the necessary technology, training, and personnel to open the credit union virtually; it will initially offer deposit products, checking accounts, and home equity financing, according to a news release issued last week.
Arise is also currently working with ABEP on its financial empowerment center, which was another request from the North Minneapolis community. The center is already conducting monthly seminars on financial literacy topics, from credit management to home ownership.
Over time, Arise aims to envelope more business products into its fold for customers. The credit union also hopes that in two years it’ll be able to open its first brick-and-mortar location in North Minneapolis.
Arise comes nearly two years after Minnesota introduced its first Black-owned bank, First Independence.
“I’d often get the question, ‘Oh, you have a [Black-led] bank, why do you need a Black-led credit union?’ But, why not?” Hurston said. “I hope that there are more [minority-led financial institutions] and I do hope that other financial institutions see the value of minorities in general and can appreciate those interactions.”
