Sunday, April 18, 2010

Goldman as Al Capone, the Credit Union Which Fled the Bronx and the CRA


We have reported on the banks which left The Bronx, snooping for example around old Chase Manhattan branches turned into churches. But it's time to mention Melrose Credit Union, which runs radio advertisements during Yankee games. Perhaps you've seen their sign, if you drive to or from JFK airport. The institution says, right on its website, that


"since 1922. Melrose was initially established to provide financial resources for individuals and small business owners from the Bronx, NY. Through the Credit Union, community residents were afforded the means to pursue their American Dreams. The success of Melrose Credit Union has not diminished its original mission statement: Empower the community by offering affordable financial products and services. Today that community commitment has helped transform Melrose into an over $1 billion credit union with over 20,000 members residing across the country and around the world."


Melrose is a neighborhood in the South Bronx, which this "successful" credit union left behind. It has no branch in The Bronx; it left the borough but speaks about empowerment of (presumably other) neighborhoods. What was that again, about there being no need for a Community Reinvestment Act on credit unions?\

Footnote on high finance: In the wider world, Goldman Sachs has finally been accused by the SEC -- not for enabling predatory lending, for which it should be charged, but for setting up for John Paulson to short a pool of dubious subprime securities and then selling it to others as a legitimate and objective investment. Well, just like Al Capone's Achilles Heel was tax evasion, perhaps misrepresentation is Goldman's. But we doubt the SEC's stomach to follow this fight through. We'll see.