Ncfcu: Serving the "Sinks" in the City by the Bay
21 Pages Posted: 30 May 2017
The CEO and manager of Northeast Community Federal Credit Union for over 20 years, Lily Lo was familiar with the financial needs of low-income people in the Bay Area, but the credit union's future was not as clear: She was considering whether to add another branch in the SOMA neighborhood.
Feb. 10, 2012
NCFCU: SERVING THE “SINKS” IN THE CITY BY THE BAY
As the bus crested one of San Francisco's iconic hills, Lily Lo could see it was a characteristically foggy day over the Bay. Like many in the city, she took the Bay Area Rapid Transit (BART) light rail train and the city bus daily to avoid the grinding traffic. As the CEO and manager of Northeast Community Federal Credit Union (NCFCU) for over 20 years, Lo's understanding of the financial needs of low-income people in the Bay Area was crystal clear, but the credit union's future was currently as opaque as the mists obscuring the Golden Gate Bridge.
After 30 years serving the Chinatown community, and later, the Tenderloin, NCFCU's management was considering adding another branch in the South of Market—or SOMA—neighborhood. For weeks, Lo had been discussing the options with NCFCU's board President Michael Chan. The credit union's expansion into the Tenderloin had shown early indicators of membership growth, but a third branch in Visitacion Valley had not proven sustainable and had closed.
Now with the opportunity to open a SOMA location, Lo and her board of directors faced a difficult choice, even with grant funds in hand. As a nonprofit financial institution, the credit union was partially reliant upon grant funding from philanthropies and government agencies to fund new ventures. After receiving the grant to fund the innovation, NCFCU then assumed the accompanying operational costs and executional risks. Would a SOMA branch attract the steady stream of members NCFCU had seen in Chinatown and the Tenderloin? Or would the gritty neighborhood make potential members wary of transacting their finances in an office located there? Another failed location could imperil the operations of the credit union as a whole, putting the financial stability of the union's 1,600 current members at risk. Lo knew there was need for regulated financial institutions in the district, but did the potential to bring in previously unbanked members in SOMA pose too great a threat to NCFCU's ability to serve its existing members?
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