Community First Fund officially opens credit union 

Community First Fund officially opened the first branch of its Community First Fund Federal Credit Union in Lancaster. PHOTO/PROVIDED –

Community First Fund, an independent nonprofit community loan fund, hosted an official grand opening and ribbon-cutting ceremony Tuesday for the first branch of its Community First Fund Federal Credit Union.  

The goal of the credit union at 51 S. Duke St., Lancaster, is “to create financial equity and economic mobility for individuals and families, especially African Americans, Latinos, immigrants and women,” according to a release. “The credit union’s mission is supported through access to consumer financial products and education that improve personal financial stability and provide opportunities to obtain quality, affordable housing.” 

Community First Fund started the credit union because national research shows 27% of U.S. households are unbanked or underbanked, including nearly 50% of African American and 46% of Latino households. In addition, almost 50% of Americans live paycheck to paycheck and cannot come up with $2,000 for a financial emergency.  

Unbanked people are those without a savings or checking account, while underbanked people possess bank accounts but also rely on alternative financial services such as money orders, check cashing stores or pawn shop loans.  

Daniel Betancourt, president and CEO of Community First Fund and the credit union, added, “We’ve been serving Lancaster for 30 years by providing access to credit to entrepreneurs who want to make a positive change in the community. With the credit union, our mission is to provide a pathway to financial stability for families. We’re excited to expand our service in the community and celebrate this milestone.”  

Community First Fund Federal Credit Union was chartered by the National Credit Union Administration in June 2021 and is one of few credit unions to have been established in the last five years.  

To launch the credit union, Community First Fund has received funding from private donors; local foundations such as the Calvin and Janet High Foundation, Lancaster County Community Foundation, the High Foundation and Feree Foundation; and national partners such as Santander Bank and M&T Bank.  

Community First Fund has offices in Philadelphia, Lancaster, Reading, York, Harrisburg and Allentown.

Paula Wolf is a freelance writer 

Community First Fund gets $3M grant to help small business recovery

Wells Fargo has selected Lancaster-based Community First Fund to receive a $3 million grant as part of its Open for Business Fund, a nationwide small business recovery effort.

A community development financial institution that serves central and southeastern Pennsylvania, Delaware and Camden County, New Jersey, Community First Fund will use the money for a new “Rebuilding Communities Loan Fund.”

An approximately $420 million small business recovery effort, the Open for Business Fund helps entrepreneurs recover and rebuild across the U.S. The focus is on increasing access to capital, technical expertise and long-term resiliency programs especially for racially and ethnically diverse small business owners who have been impacted by COVID-19.

“We are incredibly fortunate to receive this generous donation from Wells Fargo, which will allow us to provide small businesses in our region with much-needed financing to help them recover and rebuild,” Daniel Betancourt, president and CEO of Community First Fund, said in a release. “This partnership with Wells Fargo will drive our efforts to support local entrepreneurs and help our communities bounce back from the pandemic.”

Community First Fund’s “Rebuilding Communities Loan Fund” will initially target existing small business clients who took losses during the pandemic. They will now have access to low-cost capital. Lending efforts will be focused on businesses that add to the vibrancy of their communities, the release said, such as restaurants, retail stores, child care centers, barbershops/salons, grocery stores and bodegas.

Community First to use $10M gift to open credit union

Community First Fund plans to open a credit union in Lancaster County this summer for those underserved by other lending institutions.

Helping to get that started will be money from a $10 million gift from philanthropist MacKenzie Scott, which the Lancaster-based lender just announced. The donation also will underwrite several other initiatives coming soon.

Dan Betancourt, Community First Fund president and CEO, called the gift “a game changer.”

Over the past four months, Scott has given more than $4.15 billion to 384 organizations across the U.S. In a post on medium.com, she wrote that a data-driven approach was taken to identify organizations with strong leadership teams and results, with special attention to those operating in communities facing serious food insecurity, high measures of racial inequity, high local poverty rates and low access to philanthropic capital.

The credit union will be the fund’s first experience providing consumer services. Typically, the community development financial institution has approved loans to entrepreneurs and small-business owners.

The goal, Betancourt said, is for credit union members to build up family wealth, whether it’s buying a home, setting up a college fund or saving for retirement. Members will have access to credit builder loans, such as car loans and mortgages, as well as financial education workshops.

Many of the unbanked or underbanked rely on check cashers, which cost money. But as Lisa Servon wrote in “The Unbanking of America,” check cashing works for them because they know the cost in advance, Betancourt said. In contrast, with a bank they may not be aware of what an overdrawn account would cost, he said.

Community First Fund Federal Credit Union is targeted to them. And the need is there.

Surveys by the Center for Opinion Research at Franklin & Marshall College show that about a quarter of Lancaster County residents are unbanked or underbanked, Betancourt said.

As a nonprofit, the credit union has members, not shareholders, and “its purpose is to serve its members,” he said. “All profits go back to the members.”

Anyone who lives, works, worships or attends school in Lancaster County can join the credit union, Betancourt said.

Community First Fund submitted its application Dec. 16 to federal regulators and hopes to secure approval by spring 2021.

Projections are for the credit union to open this summer at the lender’s 51 S. Duke St. headquarters, with five employees and startup capital of $3 million.

Betancourt said $150,000 of that $3 million, over three years, is being provided by Lancaster County Community Foundation. Sam Bressi, president and CEO of the foundation, said opening a credit union “is a natural next step” for Community First Fund.

“They’re perfectly suited to do this and be exceptional,” he said. “… We’re really proud to be part of it.”

The fund also has $600,000 in commitments of institutional deposits from the City of Lancaster, United Way of Lancaster County, Everence Federal Credit Union in Lancaster, Community Action Partnership of Lancaster County, Hope Credit Union from the Mississippi Delta area, and a credit union in New York City.

Betancourt said Everence is sponsoring the application and planning to provide back-office services to get things up and running.

If the startup goes smoothly, the credit union could expand into the York and Harrisburg areas in two or three years, he said.

Eventually, it could operate wherever Community First Fund is.

In addition to Lancaster, the lender has offices in Philadelphia, York, Reading, Harrisburg and Allentown.

Lancaster’s Community First Fund forms $101M merger with Philly-based peer

Effective July 1, Lancaster-based Community First Fund is forming a partnership with FINANTA, a community development financial institution in Philadelphia, that officials say will allow them to have a greater economic impact across their combined 20-county region in Pennsylvania, New Jersey and Delaware.

Combined assets between the two community development financial institutions, which will be organized as a single entity under the name Community First Fund, will total $101 million, and $129 million by 2024, Community First Fund officials said in a Tuesday announcement.

“Working with FINANTA as a partner in Philadelphia has made it clear we can achieve much more in the market when we join forces,” said Daniel Betancourt, president and CEO of Community First Fund. “Together we are stronger, and our combined resources can only increase the number of businesses and nonprofits we can serve in the future.”

As community development financial institutions, Community First Fund and FINANTA offer flexible lending opportunities to small businesses they say are underserved in financial services. However, there is little overlap between the array of products the two institutions offer, allowing them to complement each other’s programs.

During the coronavirus pandemic, the institutions have worked together to close nearly 300 Small Business Administration Paycheck Protection Program loans, providing approximately $15 million in emergency loans to small businesses who struggled to achieve financing at other lending institutions, Community First Fund officials said.

“As we watch the economic challenges stemming from COVID-19 unfold, we are deeply committed to helping businesses that historically have been unable to access sufficient capital – small businesses owned by low-income people, people of color and women,”  Betancourt said in a statement.

Community First Fund expanding executive team

Expecting a record year for lending and more growth, the Lancaster-based Community First Fund has been adding staff and restructuring its executive team.

The nonprofit economic development organization recently hired Michael Carper, the former CEO of the Housing Development Corp. MidAtlantic, to be its chief credit officer.

Community First Fund also contracted with a finance expert from Chicago to serve as CFO until it hires someone to the post full-time.

“We’re adding and growing dramatically,” said Dan Betancourt, the organization’s president and CEO.

Community First Fund provides financing for small businesses, affordable housing projects and nonprofit organizations located in low-income communities and serving disadvantaged groups, including Latino and African-American entrepreneurs.

And the need for services is rising.

The organization, which started out serving Lancaster, now covers 15 counties in Central Pennsylvania, the Lehigh Valley and suburban Philadelphia. Its staff has grown from 20 to 40 over the past five years and it is making more direct loans to businesses, with volume rising from about $10 million to $30 million in the past three years.

The nonprofit also has opened new loan offices in Allentown and Philadelphia where it would like to add more people to expand lending.

“We expect to go deeper into markets we are in,” Betancourt said.

But depth, he said, requires a bigger team. That starts at the executive level.

In addition to adding new execs, the nonprofit has made some internal promotions.

COO Joan Brodhead was recently named senior executive vice president and chief strategic initiatives officer, while senior vice president of lending James Buerger was elevated to executive vice president and chief lending officer.

Community First also has hired staff to work under each of the C-suite executives.

Opportunity knocking

The growth comes at a time when Community First has been positioning itself as a go-to resource for investors and developers interested in the federal opportunity zone program, in which investors can get a tax break on capital gains by investing in projects in qualified distressed areas, dubbed opportunity zones.

The investments typically will flow through what are known as qualified opportunity funds. Community First has been working to develop such funds, which could work in combination with other state and federal incentives.

Among the most notable of those is the New Markets Tax Credit program, a federal tax credit program operated by the U.S. Treasury Department that helps support large urban redevelopment projects.

Community First did not get any credits this year but hopes its clients still can take advantage of the incentives.
“We plan to work with clients and try to help them find an allocation through another organization,” Betancourt said.

And it has snagged other kinds of funding. Community First recently received a $1.5 million federal grant from the Treasury’s Capital Magnet Fund, a grant program that helps finance low-income housing projects.

Betancourt said the plan is to use that grant as seed capital in the form of low-interest loans to support developers who receive Low-Income Housing Tax Credits from the Pennsylvania Housing Finance Authority in Harrisburg.

Community First, meanwhile, will kick in $4.5 million of its own funds, bumping the total to $6 million. Betancourt said he hopes to be able to help finance about 400 affordable housing units across the organization’s footprint.

Community First also has rolled out an online application for small businesses looking for loans. Betancourt said this will help the organization process applications more quickly and at a higher volume, hopefully steering some small businesses away from predatory online lenders that charge higher interest rates and fees.

Community First is looking to cut a 60-day application process down to about 30 to 45 days, Betancourt said.

“I think we will be able to work with more clients,” he said.