Frenchtown credit union opens, makes history

Frenchtown, a tight-knit community dating back to the 19th century, was once dotted with robust businesses such as grocery stores, restaurants and drug stores decades ago.

The predominantly black neighborhood sits in the shadow of downtown Tallahassee and the state Capitol, where power plays are exchanged and multi-million dollar projects take shape. The opposite is true in Frenchtown, an area besieged by crime, drugs and poverty. Many left, leaving behind vacancies and opportunity for economic development.

For the first time, a new credit union has opened in Frenchtown after two prominent financial institutions — Envision and Florida State University credit unions — forged a unique partnership with Bethel Missionary Baptist Church.

A soft opening for the Frenchtown Financial Opportunity Center took place June 10. It's located on West Tennessee Street across from the church in a small plaza with other Bethel-owned businesses. To date, a smattering of residents opened accounts. But those backing the project said the center represents a gateway to financial literacy and access to capital that could be transformative for Frenchtown residents hoping to buy a home, start a business or simply have an account.

"It’s huge," said Keith Bowers, project manager representing Bethel. "There’s never been a financial intuition in Frenchtown that offered financial services without implementing outrageous rates or predatory lending practices."

According to a 2012 report called "Profiting from Poverty: How Payday Lenders Strip Wealth from the Working Poor for Record Profits," state regulators found that payday loans cost borrowers a minimum of $43.4 billion in fees every year. A vicious cycle of poverty begins and such businesses are common in economically strapped neighborhoods, such as Frenchtown.

"All of these things have a negative impact on individuals who are typically in low-income areas,” Bowers said.

A ribbon-cutting for the center is scheduled for July 11. Last week, city and county commissioners on the Community Redevelopment Agency board heard a presentation on the financial center that's nearly a decade in the making.

Bethel, one of Tallahassee's largest and most prominent black churches, has been a major developer in Frenchtown. Its current and future projects include a senior living facility; a housing community, a family counseling center, a recreational facility, a charter school and proposed mixed-use development with housing, retail and green and office space.

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While Bethel is the first entity, let alone a church, to facilitate a credit union in Frenchtown, Florida Conference AME Church Credit Union has served Tallahassee's south side for three decades. It's located on South Adams Street.

The Rev. R.B. Holmes Jr. said the Frenchtown credit union will help people rebuild and repair their credit and strengthen businesses. He and others are hoping the partnership model can be duplicated in other low-income areas and stimulate economic recovery.

"It’s a tremendous move in closing that economic gap in the heart of inner cities,” Holmes said.

The partnership developed after Holmes discussed with FSU President John Thrasher the church's hope to construct a credit union. Thrasher recommended a meeting with officials at the university's credit union, Holmes recalled. Several talks took place involving leaders from both credit unions.

Existing members at FSU and Envision credit unions will be able to use the Frenchtown center. But it will also be an outlet for Frenchtown residents to open accounts and learn essentials of financial literacy.

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Bethel owns the center's land. Envision and FSU credit unions are splitting the costs and sharing resources, including personnel in order to operate the center. It will operate as a credit union service organization, which is a registered business that can be owned by one or more credit unions.

CUSOs are common if credit unions want to, for example, share resources to create more ATMS or access to services across a network, FSU Credit Union President Bradley Blake said.

"This is unique because we are going to form a (Credit Union Service Organization) that is an entity that will perform financial transactions on behalf of the FSU and Envision credit unions,” Blake said. "We just thought this was a great opportunity for us to portray the model of “people helping people.”

Contact TaMaryn Waters at tlwaters@tallahassee.com or @TaMarynWaters on Twitter.