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Credit union backers seek community input and support
The volunteers working to create a credit union on Vashon have tabulated the results from their recent community survey and have charted a course they hope will lead to the creation of a credit union on Vashon in 2011.
This group, roughly 15 members who have been meeting since January, believe a credit union — member-owned and operated — will benefit the Island in ways large banks cannot and respond to an array of social, financial and environmental needs on the Island.
“Our community, our money,” said Rex Stratton, one of the organizers of the group, stating the group’s motto. “That’s what we’re all about.”
While many people agree creating a Vashon credit union is a good idea, it is a tall order, with considerable state and federal requirements to follow, according to Stratton.
Recently, the group completed one of the first requirements: a survey of at least 500 Islanders. Six hundred thirty-five people responded and showed considerable support for a credit union on Vashon, according to Bill Moyer, another of the project’s organizers.
“The survey reflected the community is ready and wants an alternative financial institution,” Moyer said.
In fact, the results show that 87 percent of those who responded said they feel forming a credit union on Vashon is important or very important, and 87 percent also said they would join a basic credit union if one forms.
Also important, Stratton said, is that an economically diverse group of Islanders is interested in the services of a credit union.
According to Moyer, the focus of the group is now on informing the community about the results of the survey, educating the community about what is required to form a credit union, creating a sustainable business plan that fits the community’s desires and raising the capital to obtain a charter from the state.
Volunteers will have a booth at the Strawberry Festival, and they hope Islanders will stop by, ask questions and give feedback. The Vashon-Maury Island Community Council will host the group for a presentation on Aug. 16, and the credit union volunteers hope to host another forum this summer as well, Stratton said. Volunteers are also creating educational materials about credit unions to help with the forums and to assist with networking with other Island groups, Moyer said.
A business plan is in the works, too, shaped by legal requirements and the wishes of Islanders, Stratton said.
Come fall, the group hopes to launch a capital campaign to raise the necessary funds to open a credit union.
To launch the most basic of credit unions, one that offers savings accounts, limited loans and has only one employee, the group would need to raise $200,000, according to Stratton. A more complex credit union would require more start-up capital. This money would serve as initial operating capital, Stratton said, as new credit unions are not expected to generate enough of their own operating capital in their first two years.
Furthermore, new credit unions are required to have a certain amount of “core capital” on hand, Stratton said. Seven percent of deposits is required. From the group’s research so far, Stratton said he believes having $5 million deposited is realistic on Vashon, meaning the credit union would have to raise $350,000 for its reserves.
As the credit union grows more established, the need for fundraising would diminish, because interest and fees would come in, putting the credit union on solid financial footing
Stratton and the other Vashon credit union volunteers believe they can raise the funds, but will still be studying the issue closely over the coming months.
Stratton sums up the challenges ahead with a nod do banking’s days of yore: “To form a credit union on Vashon, instead of giving toasters with deposits, we have to ask for deposits and the toaster.”
Community support is essential, according to Stratton. “If you want a credit union, you have to support it,” he said.
Moyer agrees and sees the creation of an Island credit union as a “legacy project,” one that would benefit generations of Islanders in the years to come by redirecting interest and fees Islanders are paying to outside financial institutions to investment in the Island instead. But he is clear it will take a village to create it.
“I would love to give a full service credit union to Vashon, but the Island will have to give it to itself,” he said.
For more information about the proposed credit union, including the results of the community survey, see www.cuvashon.org. Or call Bill Moyer at 408-8058.