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An underserved region that’s long overdue for some help, North Minneapolis is welcoming a new credit union to its community, advancing the credit union mission to bring financial inclusion and improved economic health to banking deserts across the country.

Arise Community Credit Union enters the chat

Arise Community Credit Union is the first credit union to receive a charter in the state of Minnesota in nearly a quarter century, a state with the third-largest wealth gap in the nation. With a focus on the banking desert of North Minneapolis, Arise’s charter represents a major feat for the local nonprofit Association for Black Economic Power (ABEP), who’s been campaigning for Minnesota’s first Black-led credit union for years. In the banking desert of North Minneapolis, Arise hopes to address the systemic financial challenges that have impacted a dominant portion of the region’s residents, 40 percent of whom are Black, and 30 percent of whom live below the poverty level. 

We’ve written about this particular banking desert in the past, knowing its population could tremendously benefit from QCash’s digital lending technology. The only issue was, until Arise entered the chat earlier this year, there were no credit unions in North Minneapolis.  

“We want an option for what is really hurting our community, and that is payday lenders with interest rates all the way up to 300 percent,” Arise’s Chief Executive Officer Dan Johnson told Twin Cities Business. “We want to abolish that and offer our own same-day lending product with a very reasonable rate, while making a welcoming place for people that have been underbanked and underserved for decades. We will start helping people understand how to navigate the financial world.”

Banking Deserts

Reaching the underserved in banking deserts

Because many of the 12.3 million people living in low-income areas and banking deserts distrust financial institutions, a hybrid approach that includes both brick-and-mortar and digital services is crucial. Historically, many have assumed low-income individuals do not have smartphones or internet access, making digital financial technology inaccessible. However, new data from Pew Research indicates otherwise: 90 percent of adults have a smartphone and 95 percent of adults have internet access, a figure that’s likely to continue rising thanks to the Broadband Equity, Access, and Deployment [BEAD] Program, which will provide $42 billion to expand high-speed internet across all 50 states.

Furthermore, according to an American Banking Association survey conducted in September 2023, more consumers use mobile and online banking services (48 percent and 23 percent, respectively) than they visit branches (nine percent). In addition, research from PYMNTS found that digital and mobile-based offerings are gaining speed with consumers. Data shows that 80 percent of all credit unions report a positive return on investment resulting from their payment innovation efforts. Additionally, the report said 90 percent of top-performing credit unions witnessed an increase in member satisfaction with their mobile app in the last year, while 83 percent saw a rise in mobile app downloads. 

These findings bode well for the underserved in banking deserts, as credit unions like Arise bring both an increased physical presence to North Minneapolis but also a comprehensive digital banking experience.

“It will be a financial institution that is specifically designed to address the community’s needs,” said ABEP Executive Director Debra Hurston to the Minneapolis/St. Paul Business Journal. “This is something that the community said they want . . . to have a financial institution run by members of the community that can serve as a template for other ‘banking desert’ communities.”

And for the residents of North Minneapolis, Arise’s development offers the beginning of a new era of financial inclusion and economic health.

If you find your members requiring improved access to mobile small-dollar lending solutions, please go to our Contact Us page to speak to one of our QCash representatives or feel free to go to our Request a Demo page and see for yourself what QCash can do for your cooperative.