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Greenville Business Magazine

Self-Help Credit Union expands by serving the underserved

By Kevin Dietrich

Self-Help Credit Union, a relatively recent arrival in the Palmetto State, is an unusual animal.

Headquartered in Durham, N.C., the $1.3 billion credit union’s model is serving the traditionally underserved: those living in low-income neighborhoods, minority-owned businesses and rural residents.

“If you don’t have a financial institution willing to take a risk on the underserved, you can never break the cycle of poverty,” Self-Help President Randy Chambers said. “You need businesses, you need infrastructure – those are probably the most important – but a financial institution is a necessary component to bringing economic prosperity to any area.”

Self-Help has about 7,000 members in South Carolina. It entered the state in 2018 through acquisitions of Columbia’s Palmetto Trust Federal Credit Union and Greenville’s CommunityWorks Federal Credit Union.

Self-Help’s most recent acquisition in South Carolina came in December 2019, when it announced it would take over Turbine Federal Credit Union, which had approximately 2,900 members and $26 million in assets.

Turbine Federal, open to employees of General Electric, their contractors, vendors and family members, was formed in 1976 as Greenville Gas Turbine Employees Federal Credit Union to serve GE employees in Greenville. It changed its name to Turbine Federal in 2015.

Self-Help currently has six offices in South Carolina: four in the Upstate, with three in Greenville and one in Piedmont; and two in Columbia.

“Self-Help helped me start my lawn care business, and they’ve been wonderful,” said Sammy Woody, 63, of Greenville, who also works a full-time job at Miracle Hill Ministries. “Over a period of five years with Self-Help’s assistance I built my credit up from nothing to a score of more than 700. It’s really paid off because I needed credit to make purchases for my lawn business.”

“Self-Help gave me money to buy my truck when I had no credit, and I was able to pay the loan off a year early,” Woody added.

Self-Help Credit Union is one of several operations under the umbrella of Center for Community Self-Help, a nonprofit which characterizes itself as one of the largest community development financial institutions in the country. Begun in 1980 by Martin Eakes, Self-Help is made up of:

  • Self-Help Credit Union, which has offices in Florida, North Carolina, South Carolina and Virginia;
  • Self-Help Federal Credit Union, which serves California, Illinois, Washington and Wisconsin;
  • Self-Help Ventures Fund, a nonprofit loan fund which manages Self-Help’s higher-risk business loans, real estate development and home loan secondary market programs;
  • Center for Responsible Lending, which fights predatory lending practices; and
  • Center for Community Self-Help, which develops and coordinates Self-Help’s programs, raises resources and advocates for economic opportunity.

Since 1980, the Self-Help parent organization has provided more than $9 billion in financing to more than 175,000 families, individuals and businesses. Self-Help Credit Union alone serves more than 88,000 individuals through 33 branches.

Self-Help’s mission is “creating and protecting ownership and economic opportunity for all, especially people of color, women, rural residents and low-wealth families and communities,” according to the credit union’s website.

“We do this by providing responsible financial services, lending to small businesses and nonprofits, developing real estate and promoting fair financial practices,” it states.

In the Beginning

Self-Help began in 1980. Eakes, his future wife Bonnie Wright and a group of their friends had grown up during the civil rights era and had seen the dramatic social changes the end of segregation brought to society, Chambers said.

Eakes, Self-Help’s Chief Executive Officer who was unavailable for this story, was reared in a historically Black part of Greensboro, N.C.

“Their goal was to complement the civil rights movement by bringing economic access to people left behind by the financial system,” Chambers said, adding this included African Americans, those living in small rural communities, women and other people of color.

“We are only as strong as our weakest,” Eakes wrote in Self-Help’s 2019 Annual Report. “Let’s work to build more equitable systems and greater trust as we help each other along and navigate these challenging times.”

One of Self-Help’s main goals is building wealth, Chambers said.

“The average white family has $170,000 in net worth, while the average Black family has less than $15,000, and many have zero or negative wealth,” he said. “It explains a lot of what we experience as a society.”

An example of the disparity between white America and Black America can be seen in homeownership, Chambers added.

“Homeownership for Black Americans with college degrees is lower than that for white Americans without high school degrees,” he said.

The homeownership rate for white high-school dropouts was 60.5 percent while the rate for Black families with at least a bachelor’s degree was 56.4 percent as of 2017, according to the most recent U.S. Census Bureau data for that information.

Most recently, the Census Bureau reported that overall homeownership in 2020 for white Americans is about 74 percent, compared to about 45 percent for Black Americans.

Homeownership is a crucial stepping stone to getting out of poverty, Eakes said while discussing “inclusive capitalism” as a member of a 2016 Aspen Institute panel.

“Owning a piece of property makes all the difference in the world,” he said. “It lets people know that they can actually engage in education and get ahead.”

Last year was unlike any other in the credit union’s 40-year history. When the Covid-19 pandemic hit, Self-Help shifted its focus from in-branch service to remote services and from home lending to preserving homeownership for those who were suddenly unemployed, according to the institution’s 2020 annual report.

Self-Help officials reached out proactively to all its borrowers to offer options such as loan forbearance, no-interest periods and loan modifications.

In addition, the institution devoted considerable energy to making loans through the Paycheck Protection Program, which provided small businesses with the resources they needed to maintain payroll, hire back employees who may have been laid off and cover overhead. Self-Help focused its PPP efforts on helping nonprofits and small businesses. 

Playing it Smart

Some 54 credit unions are based in South Carolina. Between those and another 16 headquartered beyond state borders such as Self-Help, they serve more than 1.6 million S.C. residents.

“As we have seen though prior economic troubles, South Carolina’s credit unions answered again through 2019 and into 2020, working to ease pandemic pressures by modifying consumer loans and mortgages, providing emergency loans and cutting fees,” said Dan Schline, president and CEO of the Carolinas Credit Union League, which serves credit unions in both North Carolina and South Carolina.

“That focus on the member is at their cooperative roots, and they will continue to be invaluable partners with communities throughout the Palmetto State,” Schline added.

Although still relatively small in South Carolina, Self-Help Credit Union ranks among the 10 largest credit unions headquartered in North Carolina.

But Self-Help is dwarfed by a number of N.C.-based banks, including Bank of America, Truist and First Citizens Bank.

“We’re a flea compared to those guys, so we have to have the self-discipline to recognize that we can’t be all things to all people,” Chambers said. “To be financially successful we have to be strategic in what we do and in what we don’t. That’s more a function of size rather than finances.”

The credit union considers the Palmetto State a key part of its footprint.

“South Carolina Is important to us because it’s got the third-largest African-American population in the United States,” Chambers said. “If we’re going to serve and strengthen African-American communities, if we’re going to continue to serve and strengthen rural communities, states such as South Carolina are critical to our mission.”

Chambers described the credit union’s Palmetto State strategy as rather vanilla.

“We’re almost like a straightforward savings and loan,” he said. “We bring in deposits … and we supplement that by recruiting depositors who want to invest with us because they support our mission, and they will get a competitive rate of interest.”

Self-Help would like to be statewide in South Carolina, but that would likely mean moving into the Charleston and Florence markets and bolstering its presence in the Upstate, rather than opening branches all over the state.

Of the more than 5.1 million people living in South Carolina, an estimated 35 percent, or about 1.8 million, are categorized by U.S. Census data as non-white, including 27 percent who are African American.

Nearly 14 percent of state residents, or more than 700.000 individuals, are classified by the U.S. Census Bureau as living in poverty.

And approximately one in three state residents, or about 1.7 million, live in rural areas.

While there is overlap between two or more of these categories, it all adds up to a significant potential pool of customers for Self-Help.

“There’s a really critical opportunity in South Carolina where we hope we can be of value,” Chambers said.

Martin Eakes: A closer look

Martin Eakes isn’t your typical credit union CEO.

A graduate of Davidson College, Yale Law School and Princeton School of Public and International Affairs, Eakes in 1980 began helping North Carolinians hurt by textile plant closings to establish cooperatives, initially working from his Volkswagen Beetle.

Self-Help Credit Union was established in 1984 so that Eakes could provide those who might be turned away from a typical financial services institution with a range of financial services.

Self-Help President Randy Chambers said Eakes has an unrelenting commitment to economic equality.

“He fundamentally believes that if you give a family an opportunity to own a home, if you give someone with entrepreneurial knowledge a loan, they will pay you back,” Chambers said. “He has that steadfast belief in all of us, regardless of race, gender, sexual orientation or where you grew up. 

“He believes you are not defined by your family’s wealth or your credit report,” Chambers added. “That has been a principle that has guided us for a long time.”

Eakes could not be reached for this story, but as a member of a 2016 Aspen Institute panel discussing “Inclusive Capitalism” he stated that the disadvantaged are good “risks” when it comes to lending money. When Eakes started Self-Help, the credit union began making loans to single African-American mothers.

“My banker friends said you can’t make these loans. You’re going to lose your shirt,” he told the panel and audience. “And I looked at them and said, ‘You know, there’s a lot of things about banking that you know that I don’t know, but there are a few things that I know that you’ll never know.’

“I ate dinner at the tables of single African-American mothers my whole childhood growing up, and they would work two or three full-time jobs in order to pay any loan back,” Eakes said. “Poor people are a better credit risk than rich people any day of the year.”

Eakes’ outspoken views are diverse and varied. Over the years, he’s spoken out against predatory lending. In 1998, Eakes helped form the Coalition for Responsible Lending, also known as CRL, a group of 120 CEOs from North Carolina financial institutions and other organizations, whose work led to the nation’s first anti-predatory mortgage-lending law in North Carolina.

He’s taken a public stand on number of other issues, as well, including wealth disparity, police accountability and gay marriage.

Last year, Eakes issued a letter from Self-Help to members, partners and communities decrying the deaths of George Floyd, Breonna Taylor and Ahmaud Arbery by police, stating, “Now is not the time for silence. Self-Help and CRL have joined the Leadership Conference on Civil and Human Rights’ letter to the Congress speaking out against violence against Black people and calling for necessary accountability and federal reform for police misconduct.”

In 2015, Self-Help issued a report detailing racial disparities in marijuana enforcement in the credit union’s home city of Durham, N.C., and its impact on efforts by young African-American males to secure higher education, affordable housing and quality employment.

In 2011, Eakes was vocal opponent of the North Carolina Gay Marriage Amendment Bill, a constitutional amendment banning same-sex marriage and any “domestic legal union,” stating, among other things, that it was bad for business.

Eakes has received an array of honors over the years, including being recognized by the Credit Union National Association as an individual who has created innovative concepts and provided leadership with a significant and lasting impact. He was named a MacArthur Fellow by the John D. and Catherine T. MacArthur Foundation and was the recipient of the Hubert H. Humphrey Civil and Human Rights Award.

Despite what some might consider Eakes’ “liberal” leanings – witness his words during the national racial reckoning that began last year – he doesn’t compromise his credit union’s financial principles.

“I always called myself a bleeding-heart conservative,” Eakes told The (Raleigh) News & Observer in 2005. “We will meet you exactly halfway – not one step further or beyond. The most important part of this agreement was that you must pay the loan back or we will foreclose on you faster than any bank.”