Village Financial, whose creation was spurred on by the death of Philando Castile in 2016, seeks to financially support Black residents in north Minneapolis and counter predatory lending by payday loan companies and check cashing services in the region. (The Minnesota Star Tribune)

With help from the city of Minneapolis, Minnesota's only black-led credit union expects to open checking and savings accounts by the end of the year.

A City Council committee approved new details Tuesday on its contract with Association of Black Economic Power, the nonprofit behind Village Financial Cooperative, stipulating that the credit union open a brick-and-mortar location and at least 500 accounts in 2019.

Me'Lea Connelly, development director for Village Financial, said the location will be in north Minneapolis, but she wasn't ready to say where.

"It is radically powerful to have an organization named the Association of Black Economic Power here leveraging public investment, being seen, being recognized in these institutional halls of power that have been used against our community for generations," Council Member Phillipe Cunningham said.

The city will invest $500,000 in Village Financial this year. Of that, a $410,000 loan will be forgiven contingent upon the credit union passing performance benchmarks on opening and enrolling members on time, providing financial literacy classes and holding community meetings to recruit customers. That money will go toward costs such as building renovations and hardware, Micah Intermill, the city's budget director, told the council's Ways and Means Committee Tuesday.

The city also awarded the credit union a $90,000 grant to help fund operating costs in 2019, such as staff time, marketing and hiring outside professional services, Intermill said.

The idea for a black-led financial institution came out of a community meeting in 2016. After a St. Anthony police officer killed Philando Castile, community members came together in north Minneapolis to discuss how activism could help black communities prosper economically, according to the organization's website.

In February 2017, the Association of Black Economic Power began holding community events, procuring pledge deposits and raising money, allowing the organization to secure charter approval from the Minnesota Department of Commerce, Connelly said. With a goal to eliminate racial disparities in the Twin Cities, Village Financial will serve anyone who lives, works or worships in Hennepin or Ramsey counties, she said.

The institution gave out 20 loans last year, with 100 percent repayment, Connelly told the council members.

Village Financial fits into a rich history of black-led cooperatives in the Twin Cities, said Connelly, citing a black-owned grocery store in St. Paul in the 1920s.

"Credit unions are important vehicles in creating and maintaining equitable communities," she said. "While banks prey on vulnerable communities like the North Side, or ignore them all together, a credit union circulates wealth, is controlled by its member owners and can be people- and mission-driven — not driven by profit."

Mayor Jacob Frey has been among the supporters of Village Financial, and last fall he allocated funding for it in his 2019 budget.

In unanimously sending the plan to the full council for final approval, several council members praised the work of the Association of Black Economic Power and the investment in north Minneapolis and other underserved communities.

"It's just a monumental vision and accomplishment," Council Vice President Andrea Jenkins said.

"I can't wait to open an account myself," Council Member Andrew Johnson said. "I hope and I believe you will inspire other organizations that are community focused as well to help take our future into our own hands here."

Andy Mannix • 612-673-4036

Correction: Previous headlines of this article incorrectly stated that Village Financial Cooperative is the first black-led credit union in Minneapolis.