Black-Led Credit Union to be Established in Minneapolis to Address Racial Inequality

May 1 — Arlington, Va.-based Capital Impact Partners has awarded $25,000 grants to the Association for Black Economic Power and the Sustainable Economies Law Center, co-winners of its fourth annual Co-Op Innovation Award. The two organizations were recognized for leading initiatives that address racial inequality and create social impact through economic empowerment for residents in low-income communities.

The Association for Black Economic Power will use its grant to establish a Black-led financial cooperative credit union on the north side of Minneapolis called Village Trust Financial Cooperative. The credit union will provide consumer loans (i.e., payday loans and check cashing services) to area residents as a way to disrupt the predatory lending that exists currently and build a cooperative membership base by meeting the immediate financial needs of community members. Additionally, the new entity will support efforts to provide technical assistance and financial support for emerging Black-led cooperatives in Minnesota.

According to a release from Capital Impact, the concept is in response to the July 6, 2016 shooting of Philando Castille in Falcon Heights, Minn., a suburb of St. Paul. The ABEP hopes to create economic power as a form of resistance and strengthen the financial resilience of communities of color. The grant will build on initial support from The Jay & Rose Phillips Family Foundation of Minnesota.

“We are honored to carry a vision of equity for our local community while creating scalable solutions for economic challenges facing people of color across the nation,” said Me’Lea Connelly, Village Trust director. “The establishment of a fund for small-dollar lending, Black-led credit union and igniting a local cooperative movement are not possible without brave organizations like Capital Impact Partners that believe local communities have the power to solve global problems.”

The Sustainable Economies Law Center was also awarded $25,000 to increase technical, educational and operational support for the East Bay Permanent Real Estate Cooperative, which SELC is now incubating. EBPREC hopes to bring together communities of color, indigenous peoples and housing justice organizations in Oakland, Calif., to pilot a model of land and housing ownership that disrupts root causes or racialized inequality and makes housing and commercial real estate affordable in the long-term. The organization is collaborating with more than 20 organizations across the country to replicate this model with the goal of building a broader movement and national impact.

It is hoped that this model of land ownership will engage people to organize, finance, acquire and steward land and housing. Unlike a conventional housing cooperative, which is formed to provide housing to a defined group of residents, this approach is designed not only to provide housing, but also to build a large membership base and serve members’ collective goal to transform systems for land ownership. As Oakland is experiencing rapid gentrification, if the program succeeds, it could mean less displacement for long-term residents.

“Both of these community-led, local initiatives have potential for national replication,” said Alison Powers, co-op program officer at Capital Impact. “They demonstrate how the cooperative model can address problems, train leaders and build wealth in communities of color.”

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