Richmond Heritage Federal Credit Union

Creating and protecting ownership and economic opportunity for all is our mission at Self-Help. So when our neighbors to the north at Richmond Heritage Federal Credit Union (RHFCU) reached out in a crisis, we immediately offered some advice and technical assistance and then got to work.

RHFCU was formed by ten African American teachers in 1936 in the middle of the Great Depression, with the mission of serving African American teachers and community members who had been excluded from Richmond’s mainstream economy. It is currently the last Black-owned credit union in Richmond, Virginia, and serves over 2000 members at its single branch.  

When COVID-19 happened, many of those members were hit hard. The pandemic had a big impact on the Richmond area, which has a 48% Black population. Many local residents work in the hospitality and service industries and faced financial challenges as a result of the pandemic.

With its members and borrowers confronting tough times, RHFCU was struggling too. The impact of the pandemic compounded many of the challenges that small community financial institutions already face, such as decreases in lending activity, lower member balances, and outdated member experience technology, and RHFCU was no exception. By the end of 2020, RHFCU was at the brink of closure.

Rather than acting as a merger partner, we identified a path for RHFCU to remain independent. Although Self-Help has merged with several community banks and credit unions around the country, when at all possible, we work to help preserve the legacy and maintain access to African American and community development financial institutions by providing technical assistance. 

Self-Help first purchased RHFCU’s property for $1 million, which immediately brought RHFCU to well-capitalized status, and it raised its net worth ratio substantially. We then leased the property back to RHFCU for $1 per year in base rent with the option to repurchase for the selling price when they are able. 

Next, Self-Help made deposits of non-member funds into the credit union to further bolster their deposits and works with RHFCU to assist in raising secondary capital and adding mortgage lending to their portfolio.

Staff pose in front of the RHFCU Founders' Wall

Finally, we're working together to make a strong business plan that will help RHFCU recover and stay viable.

Together, we outlined a five-year plan that covers four key goals:

• Deposit growth
• Expansion of RHCU’s field of membership
• Increase home lending
• Increase RHCU’s secondary capital 

Our technical assistance relationship with this historic Richmond institution has blossomed into a mentorship program that will support RHFCU’s growth into a thriving institution with over $30 million in capital. Employees across every level of Self-Help Credit Union as well as community partners have all dedicated time over the past two years in support of Richmond Heritage.

Here are some of the key accomplishments we’ve made together:

• Raising $3.5 million in secondary capital.
• Introducing home lending for the first time in RHCU’s 86 years, focused on first-time home buyers and primary home refinancing.
• Raising $150,000 of critical operational grant funds to support two full-time employees over three years. We also secured several other grants to update information technology, equipment, website, marketing and staff training. 

The work is far from done, but we’re thrilled to see that Richmond Heritage is now well-positioned for growth in service to its community partners and members. 
Richmond Heritage and similar Black-owned financial institutions across the country continue to serve a critical role in their communities, and we at Self-Help are proud to support this vital legacy.