Getting his face cut by another homeless man trying to steal his shopping cart was just another setback for Kurt (name changed), who regularly contends with what he calls "demonic attacks" and aliens taking over his body. But Kurt, 49, who has lived in San Francisco’s residential hotels between bouts of being homeless for the past 20 years, has been managing his savings by going to the Tenderloin Branch of the Northeast Community Federal Credit Union (NCFCU) at least once a week for the past five months. He has set up a direct deposit of his $765 Social Security check as a first step in getting on his feet again. "It had come to the point I simply could not function in the way I needed to," said Kurt, who has a goal of establishing a permanent residence.

Kurt is considered part of the "unbanked"¾ people who, for reasons ranging from economic hardship to drugs or mental illness, are left out of the conventional financial system. Besides lacking the funds to maintain an account at a traditional financial institution, many of the "unbanked" simply do not have the needed financial education.

That’s where Northeast Community Federal Credit Union steps in. NCFCU serves an important role as an alternative to high-cost check cashing services, payday loans, and other predatory practices by providing free or low-cost services and financial literacy education to members like Kurt. As a homeless man who may be vulnerable when carrying cash, Kurt also benefits from having a safe place to keep his money.

Northeast Community Federal Credit Union established its first branch in Chinatown in 1981. Seeing an opportunity to serve the unmet financial needs of Tenderloin residents, NCFCU opened the Tenderloin branch in 1999. Today, NCFCU has 1,100 members and total deposits of approximately $6 million. NCFCU has made more than 2,400 loans totaling over $15 million, benefiting hundreds of member households. In one innovative program, if a customer is a bank member for over a year and has direct deposit, the bank allows emergency loans of up to $300 without charging a fee. On average the bank approves twenty of these loans each month, with more approvals during the holiday season. Because there is an established relationship between the bank and its membership, the payback on these loans is very high.

Realizing that the traditional financial system leaves out not only individuals, but also minority owned businesses, NCFCU, in collaboration with Southeast Asian Community Center, started the Asian Pacific Islander Business Information Services Program two years ago. By bringing together the combined expertise of the sponsoring agencies, as well as the skills and networks of other participating Asian and Pacific community organizations, the program is able to provide business assistance which focuses on the specific language, cultural, and technical needs of Asian and Pacific Islander ethnic-owned small business. These services include business plan development, loan packaging assistance, loans and financing, marketing assistance, licensing and permit assistance, business purchase and sale assistance, accounting advice, and management consulting. - M.Yuan

See the Fall 2003 Cutting Edge Companies feature for another example of a California based bank serving Asian communities.

Mark Yuan is Business Analyst at Northeast Community Federal Credit Union. For more information about NCFCU or its programs, please contact Lily Lo, CEO/Manager, at (415) 434-0738, email info@necfcu.org, or visit the web site at http://www.necfcu.org.