Left to right: Abel Nunez, associate producer, Centro Romero; Maria Noriega, the first immigrant to qualify for one of the credit union loans; State Rep. Harry Osterman (D-14th); State Treasurer Alexi Giannoulias; State Rep. Gregory Harris (D-13th); U.S. Rep. Jan Schakowsky (D-Ill.); and Ed Jacob, chief executive officer, North Side Community Federal Credit Union.

February 19, 2007

State Treasurer Alexi Giannoulias will commit $1.7 million to low-income designated credit unions throughout Illinois to assist state residents who don’t have access to services offered by traditional banking institutions.

The Treasurer’s Office will offer discounted deposits of up to $100,000 to 17 low-income designated credit unions at a 3.5 percent interest rate (1.5 percent below the market rate) for a 12-month period.

“This money can help provide the necessary resources these credit unions need to help low-income residents who might otherwise be forced to turn to payday lenders,” said Giannoulias, who made the announcement outside the North Side Community Federal Credit Union in Chicago’s Uptown neighborhood with Congresswoman Jan Schakowsky and State Represenative Harry Osterman.

“The credit unions offer low-cost alternatives to high-interest-rate loans and fees so families won’t end up in an endless cycle of debt,” said Giannoulias, adding that these financial institutions offer low-interest loans that enable customers to pay off debt, afford housing, build credit and receive financial counseling.

Low-income credit unions serve customers who make less than 80 percent of average wage earners, a figure established by the Bureau of Labor Statistics. In Chicago, the average is adjusted by 7 percent to account for the increased cost of living. Most are low-income minorities or immigrants.

The Treasurer’s Office is following the lead of other financial institutions, like LaSalle Bank and Northern Trust, which deposit money in credit unions to serve the financial needs of those who cannot get help from mainstream banks.

“We depend on the support from outside sources to offer these programs to community residents,” said Ed Jacob, Manager/CEO of North Side. “The State Treasurer’s commitment is important from a financial perspective but it also shows a commitment to improving people’s lives.”

The state will require North Side and other credit unions that receive state-backed deposits to document how they were used.

Since 2002, North Side has offered Payday Alternative Loans, which allow low-income families to borrow up to $500 for six months to make ends meet. These loans have an interest rate of 16.5 percent, as opposed to 400 percent or more for payday loans. Only 28 of North Side’s 2,200 loans have been written off.

“Our investment in 17 low-income designated credit unions throughout Illinois will pump $1.7 million into the local economy of communities that need it most, while helping working families meet their needs responsibly,” Giannoulias said.

State Representative Osterman applauded Giannoulias’ efforts, saying “I appreciate Treasurer Giannoulias’ leadership in helping Illinois residents gain access to critical financial resources. This will not only improve the financial health of families but our neighborhoods as well.”

The 17 Illinois credit unions eligible to receive funds from the
Treasurer’s Office are listed below:

Ambraw Lawrenceville
Berean Chicago
Canaan Urbana
Community Chicago
Cosmopolitan Chicago
Imperial Springfield
Israel Methcomm Chicago
Jeff-Co Schools Mt. Vernon
Life Carterville
MWPH Grand Lodge of Illinois Chicago
Members "First" Quincy
Metro Fellowship Chicago
North Side Community Chicago
Shiloh Englewood Chicago
South Side Commuity Chicago
St. Mark Chicago
St. Martin De Porres Parish Chicago