When traditional banks turned away Black Americans, credit unions welcomed them with open arms.

Different from a bank, credit unions are not-for-profit financial institutions. And Black-led and Black-serving institutions understand the nuances and history of being Black.

St. Louis Community Credit Union is a not-for-profit financial cooperative which is owned by its 60,000 members throughout the St. Louis region, most of whom are African American.

According to its website, “a sense of belonging helps members navigate difficult financial situations, seize opportunities, and build lasting wealth for them and their family.”

“Belonging is especially important as our region and nation recons with the historic impacts of the racial wealth divide, which has manifested in an America where Black and Hispanic households have roughly 10% the wealth of white households,” states SLCCU, which was listed by FORBES in February 2023 as Missouri’s only Black owned bank or credit union.

BusinessInsider.com states in review of SLCUU that it is certified as a community development financial institution (CDFI), which enables it to provide necessary financial resources to low-income and disadvantaged communities.

In 2021, 71% of all lending at CDFIs went to distressed or underserved communities, according to the CDFI Fund.

“Black-led financial institutions serve an integral role in providing services and products to Black Americans and underserved communities,” said BusinessInsider.

 “When banks would not take people, regardless of color, credit unions started to be a place where people of modest means could pull their money together and then loan it out to one another,” said says Renee Sattiewhite, president and CEO of the African American Credit Union Coalition.

A report from the Federal Reserve found that Black Americans are the country’s least banked racial group. They have the highest rates of being “unbanked” and “underbanked” at 13% and 27%, respectively, and were most often denied or approved for less credit than they requested, regardless of household income.

Black credit unions know their communities’ obstacles, says Dina Hairston, CEO of the Atlanta-based 1st Choice Credit Union.

“The benefit when you come to our institutions, or even just a credit union in general, is that a lot of those barriers are removed,” she says. 

“We look at the full person, the full picture, from the financial standpoint.”

Credit unions do not have “customers” like banks do. According to the National Credit Union Administration, they are member-owned — owned and controlled by those who use their services.

Each member owns a share of the credit union and can sit on their cooperative’s board. “That does not happen in a bank,” says Sattiewhite. 

Qualifications for joining a credit union differ by institution. Requirements depend on an employer, location, affiliation to a group like a union or association, or whether a family member is already a member.

Membership in St. Louis Community Credit Union is open to anyone who lives or works in St. Louis City and those in

Franklin, St. Louis, and St. Charles counties in Missouri; as well as St. Clair, Madison, Monroe, and Jersey counties in Illinois.

Membership is also open to relatives of existing St. Louis Community members – including spouses and children, parents, brothers and sisters, grandparents and grandchildren, aunts and uncles, nieces, and nephews, first cousins and legal guardians, as well as step, in-law, and legally adoptive relationships.

Sheila Montgomery, CEO of Florida A&M University Federal Credit Union, says traditional banking systems are “exclusive,” but Black credit unions “allow us to be inclusive for the communities we serve.”

Florida A&M University is a Historically Black College and University. Its credit union is one of the oldest in the state and the second largest HBCU credit unions in the nation. Members are alumni, students, employees, and local community members in Tallahassee, Florida.

Financial institutions rely on credit scores to determine interest rates and eligibility for some banking products. Montgomery says this is “risk-based pricing.” Black-owned and -operated credit unions know this factor disproportionately affects their members. 

According to Bankrate, Black communities have fair credit — one step above poor — and the median credit score is 627. Those with fair credit see higher interest rates, unfavorable terms, fewer loan options, more expensive security deposits for housing, and more.

Sattiewhite, Hairston, and Montgomery agree that credit unions seek ways to collaborate with their members instead of denying them opportunities. 

“Most credit unions will operate the same,” Sattiewhite says.

“You will find the same level of service or the commitment to be of service. At credit unions, you’re a person, not a number, not a dollar sign.”