Silicon Valley One - Fall 2007 - (Page 13)

The lack of banking services is “the huge gap in poor communities like East Palo Alto.” —Marc Prioleau, Northern California Urban Development founding member have already concluded that East Palo Alto desperately needed expanded financial services. His approval, however, was anything but pro forma. Bains, from one of East Palo Alto’s historic families, comes from a generation that believes respect is an essential social adhesive—and that respect needs to be earned. Bains likes to explain how, in an earlier generation, the East Palo Alto community “was so much like a family that Mama Wilson or any of the elders had the right to chastise a neighbor’s child for misbehavior.” His is a belief system that discounts many of the era’s flashy (and unsuccessful) antipoverty schemes because “outsiders who were not stakeholders tried to come into the community without doing their homework.” Liotti, however, was a known commodity and had done his homework. Even better, according to Bains, “John was willing to listen, get his hands dirty and put his blood, heart and soul into it.” This meant Sunday visits to many of the other East Palo Alto congregations that provided the spiritual glue holding the community together. Most of these pastors, as well as other East Palo Alto leaders, needed little convincing about the need for a suite of legitimate financial services in a largely “unbanked” community such as East Palo Alto. “A credit union enables a broader financial reach to people in the community,” says City Councilman Ruben Abrica. “In its most basic sense, the credit union is a highly important step in rebuilding the local economy.” Beginning in 2004, Liotti and his board began leveraging the backing of the East Palo Alto community to approach Bay Area credit unions, financial institutions and venture funds. These included San Francisco’s Patelco Credit Union, the Stanford Federal Credit Union and Hewlett-Packard’s Addison Avenue Federal Credit Union. Each was willing to invest in the East Palo Alto federal credit union—provided that Liotti and his board were able to win accreditation from the National Credit Union Administration or the state of California and raise the necessary minimum of $1.8 million in low-interest deposit capital, with the goal of getting local branch deposits up to $10 million in three years. This, Liotti discovered, was no slam dunk. “I’m not a banker,” he was forced to admit to himself when the federal credit union application proved problematic. “I’m a community guy.” Liotti, however, a man who carries around a Bible and the writings of St. Francis, was willing to continue taking “another of the steps of faith this project has been from the beginning.” Those steps grew slightly more certain in June 2005 when the East Palo Alto Federal Credit Union was incorporated. In March 2006, DLA Piper, one of the world’s largest law firms, agreed to act as pro bono counsel for NCUD, sponsor of the fledgling institution. DLA Piper was persuaded by existing client Stanford Federal Credit Union to provide assistance with nonbanking needs, including real estate, tax, employment, contract and corporate governance. In fall 2006, Stewart Fisher, a vice president at Addison Avenue Federal Credit Union, agreed to come on board as a volunteer interim CEO. The Addison Avenue, Patelco and Stanford credit unions agreed to put in a combined $100,000 a year, for up to three years, toward the start-up costs to get the new credit union going. Silicon Valley Community Foundation later agreed to assist with the launch effort by infusing deposit capital into the start-up at a discounted interest rate. Goodwill hunting In May 2006, Liotti felt confident enough in his progress that he quit his job to work full time East Palo Alto streetscape. photo courteSy mArc prioLeAu c www.siliconvalleycf.org http://www.siliconvalleycf.org

Table of Contents Feed for the Digital Edition of Silicon Valley One - Fall 2007

From Emmett D. Carson Home Run Back From the Brink Checking In on Corporate Giving Central Valley Air Gets a Breather Why I Give Five Minutes With ... Full Faith and Credit Giving and Receiving What If?

Silicon Valley One - Fall 2007

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