Helping Banks Stay Open on Main Street

Early this year Wells Fargo Bank pulled out of Vaughn, New Mexico, forcing the town's 500 residents to drive over 50 miles for financial services. The mega-bank with $500 million in assets claimed market conditions made it unprofitable to remain open in rural New Mexico towns.

With no local bank, the future for Vaughn looked dismal until a local telecommunications cooperative stepped in. ENMR Plateau Telecommunications, a co-op that provides wireless and telephone services to small towns in New Mexico, formed a partnership with Tucumcari-based Everyone's Federal Credit Union to provide space in its building for a credit union branch office. In October, Everyone's FC formally announced their plans to open in Vaughn by January 1, 2007.  

On hand for the event, Governor Bill Richardson and New Mexico Secretary of Economic Development Rick Homans used the occasion to announce a proposal to keep financial institutions operating in the smallest and poorest New Mexico communities, and to attract financial institutions to communities that lack them.

The proposed legislation would allow the State Treasurer's Office to accept a rate of return on deposits that would be one percentage point below the market rate. The maximum deposit allowed per institution would be $10 million, which means the value of the single percentage point would be capped at $100,000.

This program would help provide operating capital to credit unions or banks that are in communities with a population under 1,000 with either declining population or a median household income less than 80 percent of the state level.

For more information on this legislation or ENMR's successful partnership, please contact NREDA member Ray Mondragon, director of economic development, ENMR Plateau Telecommunications, at raym@plateautel.com, or call office: 505 389-5100, ext. 225