MADISON, Wis.–We Own It, a nonprofit organization that says it was founded in part to bring member-owners back into their democratically-owned cooperatives, said it has sent a letter to more than 1,000 credit unions asking that excess capital be used to make emergency loans to help keep people in their homes.
In addition, the organization said one of its organizers has launched a petition drive calling on Richmond-based Virginia Credit Union to start an emergency anti-eviction lending program.
We Own It said its executive director, Jake Schlachter, sent the letter to the 1,430 credit union CEOs with more than $100 million in assets and that it said have “excess reserves of member-owned capital on their books.”
In the letter Schlachter specifically asks the credit unions to "strive for five percent" of their capital to be made part of an emergency lending program.
“This level of lending would create nearly $10 billion in emergency loans overnight across every community in America and still leave most credit unions with plenty of excess capital to do more,” organizations.
We Own It said its analysis of 5,200 credit unions shows a combined $185 billion in retained earnings, or capital. Of that, We Own It said $56 billion is in “excess” of what is required by regulations.
“This is capital owned democratically by 120 million Americans that they need now to keep themselves and their neighbors in their homes during an unprecedented eviction crisis in the midst of the COVID pandemic, in the absence of federal action or a functioning moratorium on evictions,” the organization said in a statement.
‘Empty Seats in a Lifeboat’
"Credit unions and their member-owners didn't cause this eviction crisis, but we have the power to keep people in their homes - $56 billion in available capital - and with that power comes the responsibility to act," said Schlachter in a statement. "Credit unions have empty seats in our lifeboats, and there are people in the water all around us. We can't take in so many that it sinks the boat, but as long as we have empty seats, we should be pulling in as many people as we can."
In announcing its initiative We Own It cited an Aspen Institute estimate that without a new moratorium on evictions and foreclosures, 30- to 40-million Americans -- 80% of them people of color -- would face eviction in the coming months due to unemployment caused by the COVID-19 pandemic.
We Own It alleged federal prohibitions on evictions of homeowners with certain loans are full of loopholes and are not being enforced due to “burdensome paperwork requirements.”
We Own It said 360 credit unions of more than $1 billion in assets show many have “matured beyond their founders’ wildest hopes,” and that the 10% average capital held by credit unions is well in excess of the 7% minimum required by NCUA, and should be returned to members.
The organization has published a spreadsheet at https://i.weown.it/cu_info with detailed information on “each credit union’s financial outlook and capacity to make emergency loans.”
Petition Drive at One CU
Meanwhile, We Own It said Daniel Mintz, a Virginia-based organizer affiliated with the organization, has begun a petition drive calling on Richmond, Va.-based Virginia Credit Union to start an emergency anti-eviction lending program.
"Richmond has the second highest rate of evictions in the country. We need Virginia Credit Union CEO Chris Shockley to put $20 million of the co-op's excess member-owned capital towards emergency loans and keeping people in their homes now,” Mintz said in a statement.
A copy of the letter sent to Chris Shockley, CEO of Virginia Credit Union, is available here.