Cooperative Banking Meets Cooperative Food

Local banking, much like local farming and milling, has always been a part of Maine. In the 1920s, Maine had over 200 locally headquartered financial institutions, and saw the emergence of the state’s unique credit union sector the following decade. But over the years, banking consolidated and by 2017 only 35 locally headquartered banking institutions remained in Maine.

In addition, most of these credit unions were not set up to lend to small farms and food producers, leaving Maine’s independent agricultural sector incredibly underserved. This served as the catalyst to create Maine Harvest Federal Credit Union.

Maine Harvest Federal Credit Union was chartered as Maine’s 55th credit union in August of 2019 specifically to support the growth of our local food economy. MHFCU understands small farms and food production businesses, sees their value, knows the challenges they face, and is on a mission to help more of them thrive by making responsible loans available to them.

MHFCU issued its first loan earlier this year to Misty Brook Farm, a diversified farm located in Albion that produces dairy products, meat, grains, livestock, and eggs. They distribute their goods to more than 50 wholesale customers (including the Portland Food Co-op!) as well as provides distribution services to several other small farms throughout Maine. Owners Katia and Brendan Holmes were experiencing difficulty securing financing to purchase an additional truck for delivery services, despite having a strong loan repayment record. With their options running out, they brought their loan request to MHFCU, who was able to see the strength of their entire portfolio, and not just the few points that made traditional banks balk. MHFCU was able to provide Misty Brook with financing that fit their needs and a quick turnaround that helped immensely as business operations shifted in response to COVID-19.

MHFCU acquires the money to lend to these farms and producers by raising deposits from people, businesses, and institutions that share this mission. Their deposit options are simple—just savings and longer-term certificates of deposit for 5 or 10 years. MHFCU need these types of deposits to make longer-term fixed-rate loans to farms and food producers. Like all of Maine’s credit unions, MHFCU’s deposits are insured by the National Credit Union Administrations up to $250,000 per individual or $500,000 per couple. This limited service deposit structure words in tandem with one’s current financial institution instead of replacing them. Since August, MHFCU has raised more than $600,000 in deposits and has welcomed many new members.

Individuals interested in joining MHFCU need to be a member of either MOFGA or Maine Farmland Trust.  This is MHFCU’s “field of membership” and both MOFGA and MFT welcome new members as part of becoming a member of MHFCU.   

When Food Co-op member-owners talk about why they choose to join a Co-op, they often focus on the sense of community they feel with other member-owners, as well as with local farmers and food producers. MHFCU wants folks to feel the same way about their financial institution!  

Learn more about Maine Harvest Federal Credit Union and deposits at www.maineharvestfcu.coop.  

If you have any questions, please reach out Scott Budde, MHFCU President & CEO at scott@maineharvestfcu.coop.