Howard E. Covington Jr. is a freelance historian and biographer and the author or coauthor of several books, including Terry Sanford: Politics, Progress, and Outrageous Ambitions, also published by Duke University Press; The Story of Nationsbank: Changing the Face of American Banking; Henry Frye: North Carolina’s First African American Chief Justice; and Favored by Fortune: George W. Watts and the Hills of Durham. An award-winning newspaper reporter and editor, Covington received the Ragan Old North State Award for nonfiction in 2004. His latest book is Lending Power: How Self-Help Credit Union Turned Small-Time Loans into Big-Time Change, the compelling story of the nonprofit Center for Community Self-Help, a community-oriented and civil rights-based financial institution that has helped provide loans to those who lacked access to traditional financing while fighting for consumer protection for all Americans.
This is an unusual story that doesn’t follow the normal theme of the life and times of an up-and-coming NGO. I was drawn to the improbable. How did a credit union initially funded by the proceeds of a bake sale become the largest lender for low- and moderate-income home borrowers in the nation?
Martin Eakes and Bonnie Wright founded the Center for Community Self-Help to assist displaced factory workers in North Carolina become worker-owners in the plants where they once worked. They were savvy enough to learn from the experience, which did not work, and shifted their strategy. They didn’t change the mission—to assist those trying to make it on the margins of the economy—but they found a new way to give folk a hand up. Home ownership replaced worker-owned business as the way out.
Most NGO founders fail to learn as they work and eventually come to a dead end. Self-Help adjusted to meet reality. That’s a good story with lessons for many in public service work.
Eakes and others at Self-Help cooperated with me on this project, but not all met it with enthusiasm. Eakes rebuffed my first attempt to do this book. He later agreed to my work on the condition that it not become his biography. That was hard to manage, but I believe I honored the spirit of that request.
Who does the Center for Community Self-Help serve in North Carolina? What impact has it had not just for individuals, but for communities?
Self-Help now provides financial services for large segments of the nation’s unbanked population from California to Florida. Those who benefit most are African Americans, single mothers, Latinos, and underemployed workers who have not had ready access to home loans or other financial services at a cost they can afford.
Communities have benefited from Self-Help’s partnership with larger institutions, such as Duke University, in the rehabilitation of entire neighborhoods. Self-Help has helped neighbors work with neighbors since the mid-1980s. It continues to provide technical support and funding for neighborhoods across the state.
In Chicago, Self-Help saved a community bank that had long served the city’s large Latino community. Borrowers facing foreclosure were assisted with loan modifications that allowed them to stay in their homes. Likewise, the financial strength of a local financial institution was restored and today continues to serve its customers.
What made Self-Help so successful?
It was nimble and willing to adapt. It also developed sources of income independent of foundations or government agencies. It has been able to dance to its own tune, not that called by someone else.
It was creative and willing to take risks, moving into segments of financial services that traditional banks had either ignored or disregarded. Opportunity lay in the space between the feet of the big elephants in the marketplace. It then took what it learned and shared it with others.
Throughout the years, it remained true to its mission and recruited a staff, willing to work for low wages, that believed the organization could make a difference in the lives of those it served.
What are some of the biggest challenges that Self-Help has faced? How did it overcome those challenges?
Five to eight years on, Martin Eakes and the Self-Help staff wrestled with Self-Help’s future and determined that there were multiple ways to serve. This willingness to adapt to lessons learned allowed Self-Help to expand into other areas of work. It also resulted in growing confidence of the ability of Self-Help staff members to deal with multiple opportunities and move beyond a narrow range of options.
What relevance does your book hold for readers who might not be familiar with Self-Help? What lessons can readers take away?
The principles that have guided Self-Help can be applied to any NGO. Focus of mission, sustainability, adaptability, resilience, and adherence to fundamental business practices are tenets that will aid any organization. They do not have to limit the mission or dampen the passions of those called to serve.
The book also provides a broader understanding of the causes of the Great Recession, a financial catastrophe that was driven by the greed and arrogance of Wall Street, not the low-to-moderate income borrowers who got caught up in the tidal wave.
How do you see the role of Self-Help moving forward, especially in the current political climate?
Self-Help continues to use its creative lending to restore historic properties and revitalize communities. Financial services—loans at reasonable rates, savings accounts, small loans—are part of a portfolio at credit unions in California, Illinois, North Carolina, and Florida. The network will continue to grow, especially in the Southeast.
Self-Help has avoided partisanship, but has not avoided dealing in areas rife with controversy. It has one of the largest lending programs for charter schools in the nation. Its clients are carefully selected to insure soundness of the program and relevance to the communities served.
Over the years, Self-Help worked with Republicans and Democrats in the state legislature to pass North Carolina predatory lending law, which helped the state avoid the worst of the Great Recession. It does draw heaps of criticism from segments of the financial industry—payday lenders, title lenders—for its work at the Center for Responsible Lending, its advocacy and policy development shop.