Sep 20, 2013
While hundreds of community banks were taken over by larger institutions following the recent financial crash, an historic small bank that has served immigrants on the Southwest Side is bucking that trend — it’s being resurrected (as it were) as a community-based institution.
The Resurrection Project and the Self-Help Credit Union will celebrate what they’re calling the re-opening of Second Federal Credit Union on Saturday, September 21, with a press conference at 10 a.m. and cultural program at 11 a.m. at 3960 W. 26th.
That’s the location of the main office of Second Federal Savings and Loan, which opened in 1923. As the needs of its immigrant clientele changed over the years, Second Federal pioneered making loans to undocumented immigrants who lacked Social Security numbers. Like many institutions, it was weakened as home values dropped for properties on which it held mortgages.
Last year the FDIC closed Second Federal, rejecting a bid for the bank’s assets and loans by TRP and Self-Help, and sold its three branches and $176 million in deposits to Rosemont-based Wintrust Financial Corp, which has been actively acquiring failing banks in the area.
At the time, U.S. Representative Luis Gutierrez slammed the FDIC’s decision, saying it needlessly placed hundreds of Latino homeowners at risk of foreclosure.
But Wintrust didn’t want Second Federal’s mortgages; those were subsequently spun off to TRP and Self-Help, a North Carolina-based institution that focuses on services for minority and low-income consumers. And late last year, Wintrust decided to sell Second Federal’s assets to the TRP group.
It’s the first time a credit union has acquired a community bank, said Ed Jacobs of Neighborhood Housing Services. Self-Help is one of the largest credit unions in the nation, with operations in North Carolina and California; this is its first involvement in the Midwest.
“It’s an important community financial institution,” he said of Second Federal. The deal will “take a financial institution with the scale and mission of Self-Help and pair it with the local knowledge on the ground that TRP has.”
TRP has said the new institution will be dedicated to preventing foreclosures and community deterioration, driving out predatory lenders, and providing financial services for residents through the new credit union.
Founded by six Pilsen parishes in 1990, TRP has grown into a mutli-faceted community organization, developing affordable housing, conducting financial education including foreclosure prevention, and offering a range of programs including digital access, health, and arts and culture.