February 18, 2023
Alpha Kappa Alpha Sorority Inc. Rolls Out Digital Credit Union For Its Membership, Aiming To Help Build Wealth
The For Members Only Federal Credit Union in Chicago is being launched by the prominent organization. The institution has gained its federal charter and share insurance coverage from the National Credit Union Administration (NCUA) and is expected to begin operations this year, based on this news release.
Founded in 1908 at Howard University in Washington, D.C., Alpha Kappa Alpha (AKA) is an international services organization with 355,000 members, 1,061 graduate and undergraduate chapters in the United States and in 11 countries. per its website.
The credit union reportedly plans to offer safe, fair, and affordable financial products and services digitally. It will serve members, future members, and their communities. It plans to provide members various savings and loan services its first year, including checking accounts, online banking, debit cards.
“As the first Black-owned, woman-led, sorority-based (and) 100% digital financial institution, we are poised to deliver innovative financial solutions that drive economic growth for our members, chapters, families and employees of Alpha Kappa Alpha Sorority,” AKA International President Danette Anthony Reed shared in a letter written to members and reported by the Atlanta Journal Constitution.
Unlike banks, credit unions often are non-profit institutions serving members. Being member and cooperatively owned, they can sometimes offer higher rates on savings accounts and lower rates on loans because they have lower operating costs and don’t pay profits to shareholders.
NCUA Chairman Todd Harper said among his comments, “This charter is also in keeping with AKA’s current initiatives to assist members in building economic wealth, promote social justice, and uplift communities, all of which are fundamental to the statutory mission of credit unions.”
Other Black, Greek-letter organizations have previously or now operate credit unions. Reportedly, the Kappa Alpha Psi fraternity closed its credit union in 2010. And the Omega Psi Phi and Phi Beta Sigma fraternities purportedly launched credit unions in 1986.
Banking analyst William Michael Cunningham says the AKA credit union launch is a significant development that will have a positive impact on the Black community. He says he believes anyone can join a credit union if they are within the credit union’s field of membership.
He says relative to the overall Black community, their common bond membership has higher income, is wealthier, has more stable employment, and are better educated. “This is a very attractive demographic around which to base a bank or financial institution.”
He says the among the biggest challenges will be getting members to join and deposit money.