A small credit union in the Lower East side defending its residents against the effects of gentrification
When you look up New York’s Lower East Side, these days you’re most likely to find a top-ten list of the best bars in the area, or suggestions for what fancy new gastropub is the coolest place to take an Instagram pic. In the past 20 years, the area has exploded in growth, with a huge boom in the number of trendy businesses, galleries, and luxury apartment buildings. One could look at this growth as a come-up for the neighborhood, and many might, but the problem arises when the (predominantly black and brown) low-income population that resides in the neighborhood is unable to either profit from or participate in the new “improvements.” For those unfamiliar, this process is called gentrification.
Gentrification has been an issue in the country for as long as its best friend redlining and relies on the relegation of African Americans and immigrants to the most outdated and underinvested neighborhoods in our metropolitan areas. Once these areas have been defined by banks and our housing associations as unsafe to invest in, the only people able to obtain land in these redlined neighborhoods are large corporate entities or individuals with enough personal wealth to secure a loan. They’re able to move into and build businesses in these areas for a fraction of cost it would be in an affluent, white neighborhood, driving up the cost of living for long-term residents and forcing them to vacate any property they might have owned only to be snapped up by those same developers and rented to young white liberals looking to get out of the suburbs. Banking institutions, especially those in areas currently experiencing gentrification, should be careful not to encourage gentrification by being conscious about who they lend to, and for what.
Lower East Side People’s Federal Credit Union (LESPFCU) is a small, locally minded credit union in the Lower East Side neighborhood working in the interests of its long-term residents rather than careless growth promotion. Their mission is to “to promote economic justice and opportunity in NYC neighborhoods, by providing high-quality financial services and community development investments in low income, immigrant and other underserved communities.” While being a CDFI, they’re also a LICU and a DCCU, designations for credit unions essentially meaning they prioritize providing service to low- and moderate-income families. Their board of directors is primarily women, most of whom have a long background in working for economic justice for New Yorkers. Founded by activists, the bank has stayed small at just $55 million in assets, but has made a big impact in their neighborhood, making more than $100 million in loans since their 1986 inception. They also received $700,000 from the CDFI Fund last year to “expand its work in low income and immigrant communities.”
Membership eligibility is limited, with them primarily serving those who live, work or attend school in the neighborhoods where they have locations: the Lower East Side, Central and East Harlem, and the North Shore of Staten Island. However, they demonstrate their commitment to low- and moderate-income populations by also extending membership to any resident of NYC who earns less than $48,500 annually. You can also bank with LESPFCU if you’re involved in any of the organizations they work with, whether that’s a community-based organization or one of their select partner groups such as the New Economy Project or the Urban Justice Center.
Their products and services also reflect their commitment to underserved populations; they provide a wealth of services to their immigrant members regardless of immigration status and offer free tax preparation and financial literary classes to their members. Although we’re currently unable to get housing loan data for credit unions (we’re working on it!), we can see their portfolio also aligns with their values, as LESPFCU does a significant amount of small business lending with it making up 28.3% of their lending portfolio.
While their membership is limited, it’s worth figuring out whether you are eligible if you live or work NYC, especially if you are unfamiliar with banking processes or struggling to keep up with costs of living in the city. They offer both online and mobile banking and recently update their online banking system. While they do have marginal fees for keeping a checking account with them (if you keep more than $75 in your account, they’ll only charge you five bucks a year), your deposits are going to be much more impactful in the lives of low- and moderate-income families than if you bank at any mega-bank, which will probably charge you more for a checking account.
If you want to make the conscious choice to defend residents from the effects of gentrification in the Lower East Side of NYC, this is the Better Banking Option for you. Check out their website to get started today.