The news: For Members Only Federal Credit Union, launched by Black sorority Alpha Kappa Alpha (AKA), aims to build generational wealth for Black women, per American Banker.
People helping people: The National Credit Union Administration (NCUA) granted the Chicago-based credit union a charter on February 3. The credit union expects to be fully operational by the end of 2023.
The sorority decided to start the credit union as part of its mission to build economic wealth, promote social justice, and uplift communities. The founders believe the core purpose of a credit union—people helping people—aligns with this mission and will empower Black women to take control of their financial lives.
AKA was founded in 1908 on the campus of historically Black college Howard University. It touts alumni such as Maya Angelou and Vice President Kamala Harris.
A spin on affinity banking: Affinity banks, which cater to a specific group of people and provide tailored solutions that aren’t found at traditional banks, have become widely popular in recent years. Typically, the bank is formed first, then it sets about creating a supportive community for its members.
But AKA took the reverse approach: It used its social network of members to inform and build a financial institution that would best support its members’ financial needs and goals. This fits with the core definition of a credit union.
Will it succeed? For Members Only isn’t the first credit union backed by a Greek-letter organization.
But there are instances where this type of organization did not last.
For Members Only will need to stick to its core mission of lifting up the community and developing Black wealth to ensure that it lives on to serve generations of AKAs.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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