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July 12, 2005
Appalachian Federal Credit Union Celebrates Silver Anniversary With New HQ
    by William Baue

With $16 million in assets, AFCU helps counteract poverty in one of the poorest regions of the US by providing fairly priced loans to low-income earners, even those with bad credit histories.

Appalachian Federal Credit Union (AFCU) recently celebrated its twenty-fifth anniversary, commemorating the past and simultaneously launching headlong into the future by opening a new headquarters in Berea, Kentucky. The ribbon-cutting for the new building hearkened back to the founding of AFCU by Jack and Connie McLanahan, who started laying the groundwork in 1976 for what was then called the Central Appalachian People's Federal Credit Union.

AFCU Board Chair Beth Yost (at center in black) and CEO, Marcus Bordelon (at center in red)
surrounded by board, staff, and volunteers just prior to the ribbon-cutting.
AFCU Board Chair Beth Yost (at center in black) and CEO, Marcus Bordelon (at center in red) surrounded by board, staff, and volunteers just prior to the ribbon-cutting.

AFCU, which is one of the most successful rural community development credit unions (CDCUs) with $16 million in assets, distinguishes itself through a unique tripartite affiliation structure that operates under the moniker of "Appalbanc." AFCU collaborates with the Federation of Appalachian Housing Enterprises (FAHE), which provides mortgages to low-income families, and the Human/Economic Appalachian Development Corporation (HEAD), which promotes economic self help for low-income community residents. These three community development financial institutions (CDFIs) leverage each other's resources to create synergies for helping inhabitants of one of the poorest regions in the US.

"Appalachian FCU, together with FAHE and HEAD, can meet a whole range of human and financing needs that the credit union alone could not necessarily address," said Cliff Rosenthal, executive director the National Federation of Community Development Credit Unions (NFCDCU). All 225 US-based CDCUs, which are cooperatively owned, tax-exempt nonprofits with a special mission to serve low-income people and communities, belong to the Federation.

The poverty of Appalachia makes it particularly vulnerable to predatory lending, or loans that abuse borrowers through overly high interest rates or terms structured to take advantage of financial inexperience. AFCU counteracts this problem by offering fairly priced loans to members, even those with imperfect, limited, or nonexistent credit histories, as well as by providing financial education. Other services include savings accounts insured up to $100,000 by the National Credit Union Administration (NCUA), a US government agency.

At the anniversary dinner, AFCU honored Mr. Rosenthal's work promoting CDCUs at the national level with the Jack and Connie McLanahan Cooperative Spirit Award. The award was named for the pioneering husband-and-wife team who were inducted into the National Cooperative Business Association's Co-op Hall of Fame in 1991, in part for their role in founding the three prongs of Appalbanc--AFCU, FAHE, and HEAD.

The AFCU anniversary dinner also posthumously honored Mr. McLanahan, who died in 2003 at the age of 92. Mr. McLanahan was appointed by President Truman in 1937 to represent the US cooperative/credit union movement on the national commission for the United Nations Education, Scientific, and Cultural Organization (UNESCO), where he met his wife and lifelong collaborator Connie Ablett. The anniversary dinner also honored AFCU volunteer, staff and board member Peter Reilly, who died prematurely this year at the age of 5


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