By José A. Giralt
When Sonya Ferguson started to do the math on how much it was costing her to fill up her pre-paid debit card, she wondered if there was a better way. Her main method of banking consisted of check cashing outlets and pawn shops. Recalling a recent experience, she said, “I asked for a pre-pay card, and they said ‘$10.’ I said ‘Ok, I want to put $100 on it.’ They said ‘$5, you have to pay to put $100 on your pre-pay card.’ I said, ‘But it’s my card!’”
Ferguson said she realized she didn’t have enough money for the next day, so she went to an ATM to withdraw cash and had to pay an additional $5 for the privilege. “So, when we do the math, I lost out on $20,” she said.
Experiences like Ferguson’s are not uncommon in areas that have more check cashing stores than established banks. Ferguson, 62, was born and raised in The Bronx and has seen her community neglected for too long when it comes to banking services. On July 19, she attended the launch, outside the Bronx campus of Boricua College, of the Bronx People’s Federal Credit Union which, for the moment, is operating out of a modified van, bringing banking and other financial services to neighborhoods that are underserved by the bigger banks.
The Bronx Financial Access Coalition (BXFAC) made up of Banana Kelly Community Improvement Association, University Neighborhood Housing Program, We Stay/Nos Quedamos, and Women’s Housing and Economic Development Corporation (WHEDco) has teamed up with The Lower East Side People’s Federal Credit Union (LES People’s FCU), Webster Bank, and partners including The Drivers’ Coop, The Association for Neighborhood and Housing Development, New Economy Project, and Boricua College to bring the project to fruition.
Webster Bank is providing the funding for the new mobile credit union. The deal was originally initiated by Sterling National Bank, but it recently merged with Webster. LES People’s FCU CEO, Aissatou Barry-Fall, expressed optimism for the partnership in a press release. “We are excited to expand to the northern borough and create the Bronx People’s Federal Credit Union in partnership with the Bronx Financial Access Coalition,” she said.
“These communities don’t just need financial services, they need affordable financial services,” she added. “Today, we proudly announce our goal of establishing a permanent branch in The Bronx by the end of 2023.”
A major difference, one that affects affordability between a traditional bank and a credit union is that banks are for-profit institutions, while credit unions are nonprofit organizations. This distinction plays a large role in why banks need to charge fees for some of their services while credit unions either charge no fees or nominal fees for services, and charge lower rates for loans. As stated in Forbes Advisor, “Banks are in business to make a profit. This means banks are focused on making that profit, rather than specifically centering on the needs of the account holder.”
The website newamerican.org maps financial opportunity to show the ratio of alternate/mainstream financial services across America.
A specific location for a permanent brick-and-mortar credit union branch has not yet been announced, but the van has made several stops in the South Bronx and was on the Grand Concourse and East 196th Street on Aug. 11.
Closer to home in the north Bronx, Norwood News has covered multiple bank branch closings in recent years. As far back as 2008, stories about bank branches described the Bronx as “the most under-banked borough in New York City.” A number of bank robberies and ATM break-ins, have not helped matters, such as the one that occurred at the Bank of America ATM location on Jerome Avenue in Norwood on Friday, Nov. 6, 2020.
Norwood News also just recently reported on a bank heist at the Capital One Bank at East Fordham Road and East 190th Street in Fordham Manor on Friday, October 14, 2022. Earlier this year, on Feb. 10, we also reported how a man experiencing homelessness used a hammer to break the window of a Capital One Bank branch located at Bainbridge Avenue and East 206th Street in Norwood with a hammer.
There have been some openings, however, such as the opening of a new Norwood branch of Ridgewood Savings Bank at 320 East 204th Street on September 14, 2021. As reported, the bank was named America’s Best-In-State bank by Forbes for a third consecutive year. There was also relief when the Ridgewood Savings Bank’s Sedgwick Avenue branch finally remained open, and when the Chase bank on Burnside Avenue reopened. A rally was also held on Aug. 24, 2020 to reopen the Amalgamated Bank branch located on Burnside Avenue in Mt. Hope.
Results of a survey covering the neighborhoods of Crotona Park East and Morrisania published in May 2019 by WHEDco, found that 24.2 percent of respondents did not have a U.S. bank account. One of the most common reasons given was, “I can’t maintain the minimum balance required.” Another was “There is no bank in my neighborhood.” The study went on to identify The Bronx as having “the lowest concentration of bank branches per household in the country, and the largest concentration of unbanked households in NYC.”
Making banking services more affordable through a credit union is seen as a much-needed option in neighborhoods deemed underserved by local community leaders. Kerry McLean is vice president for community development at WHEDco and spoke at the launch event. “I’m an immigrant to The Bronx, myself, and have been here for decades,” she told the crowd. “I’ve seen it for myself with my own family, just how the lack of access to convenient branches can really impact your ability to keep your hard-earned dollars in your pocket.
Referring to the new mobile credit union, she said, “More people, especially low and moderate-income people, will be able to keep more of their dollars in their pockets and not have it taken out in maintenance fees, overdraft fees, unfavorable credit, and inflexible loans.”
As president of the Banana Kelly Block Association and a Bronx Community Board 2 (CB2) member, Ferguson is painfully aware of how a community suffers when banks are scarce and check cashing stores proliferate. She welcomes the arrival of affordable financial services in her neighborhood and wants others to know about the benefits of a mobile credit union. “I signed up for the credit union because it’s for the people, and I like the idea of belonging to something,” she said. “The part about fixing your credit is great, and a free ATM is even better. Now, I can say I’m a member of a financial institution.”
*Síle Moloney contributed to this story. Photo: © José A. Giralt.