Mission SF Federal Credit Union is a federally-chartered nonprofit 501(c)(1) community development credit union that primarily serves low and moderate-income communities in San Francisco. Mission SF Federal Credit Union was chartered in 1971 and is organized under strict regulatory laws that are monitored and enforced by the National Credit Union Administration (NCUA), an agency of the United States Government. As a certified Community Development Financial Institution, or CDFI, Mission SF’s purpose has remained unchanged: to encourage fiscal literacy, asset building, and credit that contributes to the individual, commercial, and housing development needs of this predominantly low-income and underserved community.
Mission SF Federal Credit Union seeks to facilitate economic revitalization and community development by providing financial services to Mission Area small businesses, community organizations and individuals -- particularly lower-income individuals and other members of the community who are not served by mainstream financial institutions. Since its inception, Mission SF Federal Credit Union has reinvested millions in loans in the community, contributing to the overall development of the Mission District area.
More than sixty years ago, a small number of credit unions were founded with the specific mission of serving low-income and minority communities beyond the reach of banks and mainstream credit unions. These “community development credit unions” (CDCUs) specialize in serving underserved populations generally considered the hardest to serve, including low-income wage earners, recent immigrants, Native Americans and people with disabilities. Credit unions become CDCUs when they join the National Federation of Community Development Credit Unions and become part of a network of credit unions that share the same values of providing equitable and fair financial products and are committed to financial inclusion.
CDCUs Provide...
fairly priced loans, including to members with imperfect, limited or no credit history
a safe place to save
a place to conduct transactions at reasonable cost
financial education and counseling for its members
products, services and support that can help members to free themselves from high-cost and predatory debt, gain control over their personal finances, and achieve economic independence.
CDCUs offer an economic lifeline to low-income communities that have been abandoned by commercial banks and targeted by high-priced check cashers and predatory lenders. CDCUs also provide a platform to serve the broader community through outreach to disadvantaged populations and neighborhoods, participation in government programs, and partnerships with the private-sector in community revitalization efforts.
Every CDCU was founded in the belief that those who work hard deserve the opportunity to achieve financial security. Each CDCU can tell a story of beating the odds, helping the vulnerable, and pursuing a mission that is as large as the American Dream and as specific as the future of a single child.
CDCUs and "Low-Income Credit Unions"
Often, the term "community development credit union" is used interchangeably with "low-income credit union." The great majority of CDCUs have low-income designation -- however, most credit unions with low-income designation are not CDCUs.
Here's the distinction:
Designation as a "low-income" credit union must come from the National Credit Union Administration (or occasionally, a state regulatory agency). This designation gives a credit union certain special powers, such as the right to accept non-member deposits and secondary capital. Many low-income designated credit unions serve narrow fields-of-membership (for example, groups of employees), rather than their broader communities.
Only members of the Federation are "community development credit unions." Community development credit unions have access to the wide range of services and programs offered by the Federation. However, designation as a CDCU does not, by itself, give a credit union the legal power to accept non-member deposits or secondary capital; low-income designation is still required.
CDCUs and Community Development Financial Institutions (CDFIs)
CDCUs make up an important segment of the community development financial institutions movement. The Federation was a co-founder of the CDFI Coalition and played a key role in the establishment of the Treasury Department's Community Development Financial Institution (CDFI) Fund. The Federation regards all CDCUs as CDFIs within the meaning of the CDFI Act. All CDCUs are eligible to apply for CDFI certification from the United States Department of Treasury CDFI Fund, and most than have of our over 200 members currently enjoy that standing.
For more information on CDCUs and the National Federation of Community Development Credit Unions I invite you to visit our website www.cdcu.coop.
Mission SF Federal Credit Union Today: Management and Financials
Mission SF Federal Credit Union currently has over 1,600 members and assets of more than $8 million. Mission SF FCU is led by Salvador Durán, who has over 30 years experience in the credit union industry, including being a member, board member, and his current position as CEO. Through Mr. Durán’s leadership over the past 10 years, Mission SF FCU has built a history of solid financials, high asset quality, and extremely low loan write offs. For example, looking at our financial data from December 2008, 99.69% of our loans are paid back! For the same period, 92.59% of our borrowers are paying their loan payments on time! As a testament to our well-managed and financially sound institution, 2008 marks the 8th consecutive year of increased equity. While banks are failing and being bailed out by taxpayers due to poor asset quality and risky investments, Mission SF FCU prides itself on resilient asset quality and a core philosophy of prudence.
Mission SF Community Financial Center
The Mission SF Community Financial Center is the 501(c)(3) nonprofit affiliate of Mission SF Federal Credit Union. Mission SF Community Financial Center provides education and training for youth and adults, youth employment, new product development, program development, community awareness-building about the high cost of fringe and predatory financial services, and advocacy for improved financial services in the community. Through our youth programs, Mission SF Community Financial Center provides leadership and employment opportunities to 20-25 youth per year and savings accounts and monthly workshops to over 500 children and youth per year. The Center also has a youth alternative education outreach program, called Youth Trainers for Economic Power, where a group of youth trainers reach out to the local community to teach other youth about social justice, personal finance, economic justice, and community action. The purpose of our youth programs is to provide youth with financial literacy education, training, income, and experience managing their money so that they will be prepared to make sound financial decisions and avoid the financial challenges faced by their parents and family members. Our youth programs were recognized as "consistently pushing the envelope and leading youth financial literacy" in October 2007 at a national meeting on financial literacy held at the Federal Reserve Bank in San Francisco. Mission SF was also recognized with an award for Leadership and Excellence by the National Federation of Community Development Credit Unions.
Youth Credit Union Program (YCUP)
Mission SF Community Financial Center's Youth Credit Union Program (YCUP) Expands Programs, Continues to Earn Accolades
YCUP, California’s first ever youth-run credit union program, offers unique leadership and job development opportunities to all its members. If you are between 6 and 18 years old, live in the Mission, Excelsior, Bay View, Visitation Valley, or South of Market area, and are interested in learning about how to manage a youth credit union, consider becoming a member of YCUP staff. For more information about YCUP, stop by our office, at 3269 Mission Street or give us a call at 415-206-0846 x19.
Youth Trainers for Economic Power (YTEP)
YTEP is the newest program of Mission Community Financial Center, run in partnership with YCUP. YTEP is made up of youth trainers who train over 500 other youth per year in San Francisco on personal finance and social justice with a focus on how to increase youth understanding of how money, community economics, and policies affect our daily lives.
To apply for a Youth Savings Account or Youth employment at YCUP/YTEP, applications can be accessed here.
Click below to watch more YCUP member videos.
Mission SF's Background on Alleviating Poverty:
Mission SF Federal Credit Union (Mission SF) has been serving the Mission District of San Francisco for over 30 years by providing affordable community-based financial services and education to its members. Mission SF is a low-income designated community development credit union, serving a community that is largely Latino and immigrant, with a sizeable African American community and a growing Asian community. Our field of membership is home to many low-income families, many of them renters, many linguistically isolated, as well as geographically isolated in public housing that is located far from community resources. Many of Mission SF’s members have been turned away by other mainstream financial institutions and many have utilized fringe financial services which are so readily available in our area, which has the highest concentration of fringe outlets in the city. With support from our National Credit Union Foundation Innovation Grant, we were able to hire an Outreach and Education staff person that has conducted numerous presentations to raise awareness about our alternative payday loan program, as well as our services generally. Many members come to Mission SF because they have heard by word of mouth about our welcoming bilingual staff or the financial education and leadership development opportunities we provide adults and their children through the Youth Credit Union Program. For many members, Mission SF is their first experience with a financial institution in the U.S. and for many it is their first experience outside the fringe market.
The Need Statement for Mission SF:
1.High Concentration of Fringe Outlets:
The Brookings Institute estimated that the Mission has the highest concentration of high cost fringe financial outlets (e.g., payday lenders, check cashers, pawn shops and high cost international money wiring outlets) in the city of San Francisco. In addition to charging high fees, the fringe services do not offer standard financial services (such as savings accounts, checking accounts, IRAs, financial counseling services, etc) where residents can begin to develop their assets and financial literacy. Without alternatives, residents have little choice but to use these payday lenders and see their already precarious financial circumstances deteriorate. These businesses pose a serious threat to the economic development and health of our communities. In recent years, there has been a proliferation of predatory or “pay day” lenders, rent-to-own stores, high-cost money wiring stores and check cashers in low income communities and in communities of color across the United States and in our community in San Francisco. In the last two decades, the fringe financial services industry has exploded- there are more than 2,500 payday lenders alone in California-- more than McDonalds and Starbucks combined. In 1990 there were virtually none. These businesses pose a serious threat to the economic development and health of our communities. They exploit the lack of affordable financial services and strip hard-earned money from community members through exorbitant fees on check-cashing services and on payday loans in particular.
This past fall, Mission SF worked with a coalition of local organizations led by the California Reinvestment Coalition to pass a city and county of San Francisco ordinance banning new fringe outlet licenses within a major portion of the city, which included the Mission District. This was a great victory and means there will be no new outlets, but we still have a high number doing business here. For example, when you consider the relatively small population of the Mission (60,000), it is astounding that we have 13 payday lenders. California Reinvestment Coalition worked with Long Beach, CA last year to pass a similar local ordinance; Long Beach has 16 payday lenders and a population of 375,000. The Mission has more than five times more payday lenders per capita than Long Beach.
2.High Cost to Already Cash-strapped Residents:
[1]Payday lenders charge can charge up to 800% or more for their loans, with the average borrower paying $800 to borrow $325.[2] With Mission SF, borrowers pay no more than 18% APR. We estimate that annually payday lenders take $2.15 million in fees away from individuals and families in the Mission, as well as the neighborhood economy[3]. At a national level, U.S. families pay $4.2 billion in excessive fees on payday loans each year.[4]
3.High Fear of Accessing Services Among Undocumented and New Immigrants:
Due to increases in anti-immigrant sentiment, flared by the federal legislation debates, and the increase in ICE (Immigration and Customs Enforcement) activity, including raids, there is a great deal of fear among new immigrants and undocumented people to access financial services outside of the payday lenders and check cashers.
4.Little awareness about affordable financial services:
Just under half of our community is immigrants, hailing from Mexico and Central America. As newcomers to the country with limited experience with U.S. financial institutions, many members of our community do not realize that the fringe financial services are not their only alternative. For those that are familiar with financial institutions, many face barriers to accessing mainstream financial services. Examples include not knowing they can get approved for a payday alternative loan at a credit union, unaware of documentation status required, afraid of their impaired credit or little to no account balance, leaving many people in a position where they are forced to take out a payday loan or cash their paycheck at a check casher, since they cannot wait for their bank’s hold period. Too many people in our community are not aware there is an alternative to payday loans and check cashers. For Mission SF’s first 30 years, we operated out of a third floor office set back from the main commercial corridor. In February, 2008, we moved our main office to Mission Street and now are visible and accessible in our first-ever storefront retail location. In March, 2008, we hired our first Outreach and Education staff person.
PAYDAY ALTERNATIVE LOAN (Salva Vida/Lifesaver Loan) OVERVIEW:
Mission SF Federal Credit Union has launched a Payday Alternative Lending (PAL) program, called Salva Vida/Lifesaver. Our PAL has an interest rate of 18 percent, 20 to 40 times cheaper than traditional payday lenders, who often charge more than 460 percent. And unlike traditional payday lenders, Mission SF offers free individual financial counseling and an asset building component with every payday alternative loan.
The purpose of the LifeSaver/SalvaVida Program is twofold: (1) to assist people currently in the payday debt trap by providing ‘rescue’ loans, education and a savings incentive and (2) prevent people from using payday lenders in the first place by providing a payday alternative and educating the next generation to stay away from payday lenders and begin to save.
Low and moderate income borrowers need alternative sources of credit that not only provide access to funds at reasonable rates, but that also provide financial literacy training and incentives that help these borrowers join the financial mainstream. Mission SF Federal Credit Union partnered with its non-profit affiliate, Mission SF Community Financial Center, and the NationalEconomicDevelopmentLawCenter to research the features and performance of payday alternative loans (PAL) products provided by community development credit unions serving low-wealth communities. The results of the research assisted in the development of what we are calling our Lifesaver/Salvavida program. The Lifesaver program, when accompanied by financial literacy training, has the following objectives:
· Reduce the number of people who are paying exorbitant fees for payday loans by providing short-term consumer loans at a significantly better value than current vendors
· Build financial literacy and capacity among members and residents
· Bring current payday loan borrowers into the financial mainstream by establishing a relationship with them through Lifesaver/Salvavida
A key to Lifesaver/Salvavida is that it will be accompanied by financial literacy training provided through our non-profit affiliate Mission SF Community Financial Center (the Center). The Center is also implementing a youth peer-to-peer training program to prevent young residents from using payday lenders in the first place.
Our Payday Loan Alternative offers a significant value to borrowers compared to traditional payday lenders. See chart below for details.
LIFESAVER LOAN COMPARISION CHART
LifeSaver Loans Payday Loans Benefits
Loan Size
$300- $500
$300
More money
Loan Term
3 to 6 months
2 weeks to 4 weeks
More time to pay
Interest Rate & Fee
18% + $20 fee
459% on average
Less expensive and Builds credit history
Cost for $325 Loan
$374.25 (6 mo term)
$793 on average
Save $418.75!!
Finance Workshop
Free
Not available
More education
Deposit in account
$50*
$0
More to start saving - FREE Asset Building Component
*If you pay off your LifeSaver loan on time, Mission SF FCU will deposit $50 into your savings
Click here to see a video testimonial from a credit union payday loan borrower from Northside Credit Union in Chicago.
This member demographic analysis is generated from a sample of 100 members, which represents roughly 5% of our membership (our membership is currently over 1,600.) In this last year, Mission SF has begun to collect more data from new members. This member scan conducted in 2007 is the best data we have currently on our membership. Mission SF randomly selected 50 loan applications from 2005 and 50 from 2006 and pulled out the demographic data included in the application. Some of what is presented below is based on our own interpretation of the data. For example, we categorized the surnames of applicants as either Latino or non-Latino. Another potential limitation regarding the data presented is that these members, as loan applicants and in most cases loan recipients, may not represent the membership as a whole.
Demographic Summary of Mission SF Membership:
Gender
n
percent
Ethnicity
n
percent
Male
60
60%
Latino surname
86
86%
Female
40
40%
Non-Latino surname
14
14%
TOTAL
100
100%
TOTAL
100
100%
Income
n
percent
Age
n
percent
Less than 15K
9
9%
20-29
19
19%
15,001 to 20,000
5
5%
30-39
32
32%
20,001 to 25,000
5
5%
40-49
25
25%
25,001 to 30,000
16
16%
50-59
19
19%
30,001 to 35,000
18
18%
60+
4
4%
35,001 to 40,000
13
13%
TOTAL
99
99%
40,001 to 45,000
6
6%
45,001 to 50,000
12
12%
50,001 to 55,000
2
2%
55,001 to 60,000
3
3%
60,001 to 65,000
5
5%
65,001 +
3
3%
TOTAL
97
97%
As the table illustrates, nearly half of our members (47%) have incomes between $25,001 and $40,000. Approximately 1 in 5 have incomes between $40,000 and $50,000 (18%), while 1 in 10 have incomes below $15,000 (9%), between $15,001 and $25,000 (10%) and above $50,000 (13%). The average income of our membership is $36,858.75. The data presented for the Mission and City above is for the average household income so our members appear to be close to the average for the neighborhood, which is well below the City average.
The majority of our members appear to be Latino, with 86% of this sample having Spanish surnames. Our members are nearly equally divided between male and female, at 60% and 40% respectively. We believe that it is closer to 50% and 50% from other data sources. Our membership appears to be fairly young, with a third (32%) between the ages of 30 and 39 and another quarter (25%) between the ages of 40 and 49.
Overall, our member profile is a low-income Latino male or female in the age range of 30 to 49 years. This reflects the demographics of the community and thus, we could infer that our members’ are more likely to be renters, that many are immigrants and that many of them are linguistically isolated, which reflect what we know anecdotally.
1/ For periods before 2004, the Fixed Assets & Foreclosed and Repossessed assets did not include repossessed vehicles. * Annualization factor: March = 4; June = 2; September =4/3; December = 1 (or no annualizing)
Salvador Durán CEO
Claudia Gomez Assistant Manager
Jessica Lozoya Member Services Representative
Leidy Sanabria Member Services Representative 
Margaret Libby Executive Director
Ivan Barriga Outreach & Financial Education Director
Celina Ramos Youth Program Coordinator
Jessica Leal YCUP Program Assistant
John Luna Financial Counselor
Diego Pinto Financial Counseling Program Manager
