A while back, affordablehousingaction.org reported on a credit union in Chicago. It was helping homeowners with low incomes to hang on to their homes in the aftermath of the 2008 mortgage crisis1. That story was about how unusual it was for financial institutions to care. This one is about how hard it can be to operate as a financial institution when you do care.
Meet Hope Credit Union, based in Jackson, Mississippi. It was set up to serve low income and black communities who were not being served by banks and other financial institutions. Following the murder of George Floyd, Netflix decided to deposit $10 million at Hope. The Netflix deposit is the largest that Hope has received in its 26 year history.
The following story in Wired explores why such large deposits rarely get made and why they are essential for Hope and other mission-oriented entities to thrive.
Essentially, the store of deposits dictates the amount of investment a financial institution can make. With a small deposit base, Hope might wish to make large, long term investments, such as deeply affordable housing. But it simply doesn’t have the resources to do it. The Netflix deposit of $10M (which for Netflix is small change) makes a huge difference to the number and size of investments Hope will be able to make. Read more at Wired: Weighing Big Tech’s Promise to Black America
