Toledo Urban Federal Credit Union has opened a branch in a building on Monroe Street near downtown that Fifth Third Bank closed last year to some controversy.
The credit union, designated a community development credit union to serve low and moderate-income customers, has moved most of its offices to the new branch at 3053 Monroe St. in central Toledo, said founder and President Suzette Cowell.
Its long-time location at 1441 Dorr Street in central city remains open, including with a loan officer on-site for patrons, Mrs. Cowell said.
She said the financial institution hopes to be a beacon in its new neighborhood by offering banking within walking distance of many homes and loans at market rates to many local homeowners today paying exorbitant interest rates on their mortgages and loans, she said.
Mrs. Cowell said other banks have moved from the area in recent years, in addition to Fifth Third. She said Toledo Urban Federal Credit Union stepped forward to fill a gap.
“It’s a banking desert and the services are needed,” she said. “If we weren’t here, people would be going to predatory lenders. They would not have an ATM. When we were on Dorr Street, there was no ATM in the area and if they used one, it would cost them $5.”
Fifth Third currently is operating the ATM at the new Toledo Urban Federal Credit Union branch under an agreement with the credit union, Mrs. Cowell said.
The new branch held a grand opening Friday, with nearly 200 dignitaries. Mrs. Cowell said she expected 35 people in the chilly weather.
The credit union paid Fifth Third $300,000 cash for the building. None of it came from credit union coffers. The City of Toledo and Lucas County each contributed $75,000 and an anonymous private donor the other $150,000, she said.
That means both branches are fully paid for and using their cash to support loans and services in the community, she said.
Lucas County Commissioner Pete Gerken said the money was a good investment in the community.
He said the underserved population near the branch needs fair and accessible banking services as much as more affluent patrons.
“When banking interests walk away, we need a partnership like this to walk back in,” Mr. Gerken said.
Toledo Mayor Wade Kapszukiewicz said the neighborhood needs a financial institution like Toledo Urban Federal Credit Union given the city’s big plans to redevelop the area around Swayne Field, which was home to the Toledo Mud Hens minor league baseball team from 1909 until 1955. The Swayne Field Shopping Center is directly across Monroe Street from the credit union.
The mayor said the Toledo Police Department may take expanded space in the area along with other commercial plans that are being developed.
Mr. Kapszukiewicz said he would have liked to see Fifth Third donate the building rather than sell it. Ms. Cowell said behind-the-scene efforts to do just that were unsuccessful.
Instead, the anonymous donor stepped forward to make the branch rebirth a reality, Mr. Kapszukiewicz said.
“Toledo Urban is an anchor in its neighborhoods and it enjoys the trust of the African-American community,” he said.
Fifth Third said in a statement that the bank donated $100,000 to the credit union for interior renovations to customize it for its purposes.
Customers of the credit union are not charged for using the ATM on-site that the Fifth Third operates, the statement said.
And the closure of the branch before the credit union purchase was based on several factors that are frequently monitored.
“We regularly review our banking center traffic and locations,” the statement said. “Consumer banking behaviors are a significant consideration, as we strive to meet the needs of customers in the time, place and channel they desire.”
Jim Hoffman, who retired in July as president of KeyBank Northwest Ohio Market, said bank branches are closing as customers turn to cellphones and electronic devices to do their banking, including moving cash and depositing checks.
“People just aren’t going to bank branches to get cash and pay bills like they used to,” Mr. Hoffman said.
Without customers coming in the door, corporate offices are taking a hard look at whether keeping a branch open makes good business sense, he said. “They’re trying to serve customers and stay competitive,” he said.
Mrs. Cowell, an avowed Christian, said the credit union has been blessed with assistance from a City of Toledo program and a $100,000 grant late in 2023 from the nonprofit Fair Housing Center in Toledo to provide down-payment assistance to people looking to purchase a home.
“We want to promote home ownership,” she said.
As a community development credit union, Toledo Urban Federal Credit Union is able to receive large deposits of up to $250,000 from bigger banks so that it can turn around and loan it at market rates to an underserved population of low-to-moderate income patrons.
By law, a majority of the credit union’s 4,241 members fit that designation
Those bigger banks, which, in this case, include Fifth Third, Waterford Bank, Signature Bank and Huntington Bank receive Community Reinvestment Act credit for their support.
Loans from Toledo Urban Federal Credit Union tend to be small. The average balance on loans, including mortgages, last year was $12,692.
And despite reaching an underserved population, strong underwriting on loans has allowed the credit union to keep its loan-loss percentage at about 2 percent, low for community development credit unions that can have a loan-loss rate of up to 4.5 percent, she said.
That underwriting is backed by knowledge of members and their families, many of whom are known by name by staff, Mrs. Cowell said.
Clarence Jones, a Toledo resident and long-time Toledo Urban member, said he stopped by the new branch to do some banking.
The new branch is closer to his residence in the Old West End neighborhood than the location on Dorr, he said.
He said he’s taken out small loans from the credit union for home improvements and he likes the friendliness of staff. The new branch has 10 employees and the Dorr Street location is left with seven.
“My dealings at credit unions are more intimate, more friendly than major banks,” Mr. Jones said. “They know you by name and who you are. I just feel more comfortable dealing with them.”
First Published January 17, 2024, 10:31 p.m.
