Mendo Lake Credit Union was one of 59 community development financial institutions (CDFIs) across the country that was awarded almost $90 million in funding through a competitive grant process, according to Congressman Mike Thompson's office.
“In this tough economy, ensuring that families and small businesses have access to the capital they need to stay afloat is extremely important,” said Thompson. “Credit unions provide important services to the underserved in our community, and this funding will allow the Mendo Lake Credit Union to continue their important work.”
Mendo Lake was one of only two credit unions in California, and nine across the United States, considered for the funds, said Richard Cooper, Mendo Lake Credit Union's president and chief executive officer.
The grant is “very exciting for us,” said Cooper, who explained that ARRA doubled funding for the US Treasury's CDFI program from $50 million to $98 million.
The CDFI fund's mission is to expand financial services to underserved populations in the United States and promote economic revitalization and community development through investment in and assistance to CDFIs, according to its Web site, www.cdfifund.gov . The fund was created in 1994.
This year marks the 50th anniversary of Mendo Lake Credit Union's chartering.
The nonprofit financial institution is insured by the federal National Credit Union Administration, and is owned and controlled by members. It serves more than 13,000 community members in Lake and Mendocino counties. Mendo Lake has 33 employees in three offices – six in Lakeport, five Fort Bragg and 12 in Ukiah.
Cooper said the funds will provide an important boost. He explained that Mendo Lake Credit Union is the No. 1 auto loan lender in Lake County. It also works with many small businesses – including many “mom and pops” – and offers free checking services to businesses and individuals.
The funding will allow the credit union to expand its operations back into real estate lending, he said, explaining that the credit union has had first-time homebuyer and manufactured housing loan programs for many years, and has been successful in getting people into their own homes.
“We had actually been out of the real estate market for a good 12 or 14 months due to the current situation,” he said.
Cooper said Mendo Lake does a lot of financial literacy and community work, and reaches out to people who don't trust traditional banks and have used high-interest check cashing and payday lending programs instead– including immigrants, tribal communities and some low-income residents. The goal is to bring them into the mainstream.
Unlike a for-profit bank, credit unions do not generate gains for shareholders. “We have to grow our capital as we grow our organization,” said Cooper. “It would take us years and years to save $2 million out of current earnings.”
This is the second time Mendo Lake Credit Union has received a sizable federal grant.
In 2005 the institution was awarded $1.3 million, said Cooper. That funding helped provide the credit union with the capital needed to grow from $50 million in holdings in 2005 to $75 million in 2007-08.
As a size comparison, he pointed out that Savings Bank of Mendocino – which he said shares a good relationship with the credit union – has $800 million in assets.
The 2008 funding cycle was the first time that Mendo Lake could reapply for more funds. Cooper said it's a “pretty arduous process,” with a six-inch notebook worth of paper as part of the federal application and reporting requirements.
He said the government was looking at organizations and institutions, like Mendo Lake, that offer core services to underserved, urban and rural poor populations.
The current economy has created challenges for the people Mendo Lake serves, particularly with auto loans, said Cooper. Delinquency was once very low and part of a strongly performing portfolio.
Now, delinquency has increased 100 percent, with it becoming a common occurrence to see people coming into the credit union with their car keys and a sad look on their face, Cooper said.
Cooper said the credit union has listened to peoples' needs and tried to work with them. That includes negotiating interest rates and modifying payment plans with a couple hundred of its car loan customers in order to help keep them in cars so they can search for jobs or keep the employment they already have.
“We have worked very hard and I'm so proud of the loyalty and the good intentions of so many of our credit union members,” he said.
In addition to its regular business functions, Cooper said Mendo Lake seeks to be a good corporate citizen through community involvement and support of nonprofits and education.
Their work locally includes offering scholarships for local at-risk students at Mendocino College. Cooper sits on the Mendocino College Foundation's board.
Cooper said Mendo Lake can do a lot with the federal funding.
“It provides that little extra that we need to maintain a really small bottom line,” he said.
For more information visit Mendo Lake Credit Union online, www.mlcu.org/ .
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .
