Church-Owned Credit Unions Keep the Faith Despite Financial Challenges

Board members of the Greater Galilee Missionary Baptist Church Credit Union gather in the credit union’s office in Milwaukee on Oct. 21, 2018. Board members are Ed Murphy, from left, Jynette Hamilton, Gloria Neff, William Coffer, Ella Dunbar and Vinia Neal. The group runs the credit union on a volunteer basis. RNS photo by Katelyn Ferral

When Milwaukee’s Greater Galilee Missionary Baptist Church started a credit union in 1965, its predominantly African-American members were often denied loans, lines of credit and other basic financial services from banks.

More than 50 years later, in what is still one of the most racially segregated cities in the country, “not much has changed,” said Gloria Neff, a credit union board member and small-business owner.

Greater Galilee’s members, many of whom are elderly, still struggle to secure loans — even if they have the means to repay them.

“We’re still having the same challenges,” she said. “We’re still having the same problems.”

That reality drives board members, all volunteers, to keep the credit union going and to expand the financial services it offers.

Church members need what the credit union offers, Neff said.

“Although they pay their bills and they have the finances to pay, they still need to come to an establishment like this to get loans,” she said.

Greater Galilee Credit Union is part of a shrinking group of faith-based credit unions nationwide.

They are a distinct dimension of the credit union industry, offering a consumer-focused alternative to payday lenders and impersonal larger banks — along with shared religious beliefs.

As church attendance has fallen nationwide, some small, local church-based credit unions have shuttered.

According to the National Credit Union Administration, there are 133 active credit unions with a faith-based charter in the United States and 276 inactive ones.

Ones that remain open, like Greater Galilee, face obstacles in a rapidly changing consumer bank industry with more, costly government regulations. But Greater Galilee and other faith-based credit unions are finding ways to continue and adapt.

“At the end of the day that is the objective — to make sure the credit union is going at full force,” said Ella Dunbar, who also sits on the board.

Greater Galilee Credit Union has about 200 members, all of whom must be members of the church or related to a member. The credit union is run separately from the church though it is housed in two rooms in the basement of the congregation’s home on the north side of Milwaukee. It offers passbook savings accounts and personal and auto loans, along with funeral estate planning. The credit union also hopes to offer services for preparing wills and power of attorney documents for members, said Ed Murphy, board president.

Without its services, many credit union members would likely go to payday lenders and other high-interest-rate institutions, said Murphy, especially in a state that relaxed restrictions on the payday lending industry over the last decade.

“There is a lot of predatory lending that takes place in our community,” Murphy said.

Greater Galilee’s board rates are modest compared to those of a payday lender, Murphy said. And the credit union tries to educate borrowers on the “pitfalls of those institutions,” he said. It is also planning to offer workshops on sound money management and financial literacy.

To increase business, the credit union board is considering opening up membership to people outside the church and is working on offering debit cards and checking accounts.

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SOURCE: Religion News Service, Katelyn Ferral