Black Employees to Open Credit Union

The Black Employees Assn. plans to open the South Central Los Angeles Community Development Federal Credit Union next month in the Crenshaw area.

After a four-year effort to obtain a federal charter, the credit union was approved last month by the National Credit Union Administration.

“The disturbances in April and May had a lot to do with it getting approved,” said Clyde Johnson, who has been president of the Black Employees Assn. since the anti-discrimination labor organization formed 22 years ago. “The main thing now is we can put money back into the community, where it belongs.”

Johnson feared the credit union was dead when federal regulators turned it down earlier this year, saying the 49-square-mile South-Central area populated by 650,000 residents was too large to call a community. But during the riots South-Central suddenly came into focus, its boundaries drawn by initial dusk-to-dawn curfews.

Though the curfews expanded to include other parts of the city, the riots made a point that Johnson said led to a turnaround on the part of federal regulators.

“This will give us economic clout,” said Johnson, whose labor organization defends victims of age, sex and race discrimination.

“This is a co-op, where anyone who opens an account with a $5 minimum is a shareholder. Everyone will have a stake. It’s very different from traditional banks, which typically take your deposits and invest far outside the community.”

The association is now looking for a home for the credit union, which is scheduled to open Jan. 18--the official observance of Martin Luther King Jr. Day. The credit union’s administrative headquarters will be at the association office at 5462 Crenshaw Blvd.

The South-Central credit union, one of fewer than 100 community development credit unions in the country, will serve residents, workers, businesses and churches in an area bounded by Imperial Highway to the south, the Santa Monica Freeway to the north, Alameda Street to the east and La Brea Avenue to the west.

Credit union members must live or work within these boundaries. Services will include home-improvement and small-business loans, savings accounts, automated teller machines and a youth lending program. An on-site manager and treasurer will be selected by a committee.

Though it will offer loan services, the chief purpose of the nonprofit union will be to develop the community in ways that will be decided by members. After receiving pledges and donations from community groups and corporations, including the James Irvine Foundation and Union Bank, the credit union will start up with $5 million in deposits.

Johnson, who is chairman of the credit union’s board of directors, said he came up with the idea for the credit union in 1988 after a controversial decision by Bank of America to close a branch on Central Avenue, a trend that continued among large banking institutions in central Los Angeles.

“The bank closures made me think, ‘How can we utilize our money?’ ” said Johnson. “Now that everything’s in place, we can really address that.”