A Durham-based credit union founded to help low-income and minority borrowers is expanding in North Carolina and California during the downturn.
Self-Help Federal Credit Union bought Kern Central Credit Union, a failed lender in Bakersfield, Calif., with three branches and about $35 million in assets. The deal announced Friday was arranged by the National Credit Union Administration, which took over Kern and transferred its assets and members to Self-Help.
It's the fourth California credit union Self-Help has taken over during the past 18 months.
On Monday, Self-Help Credit Union, an affiliated lender chartered in North Carolina, announced it has taken over Choice Federal Credit Union, with one branch in Greensboro. In November, Self-Help took over Carolina Mountains Credit Union, with four branches.
"Given the way the economy is going, it's not unlikely we'll do more of these deals," said Self-Help spokesman David Beck.
Combined, the nonprofit now manages 19 credit union branches with $600million in assets and more than 50,000 members.
The Self-Help credit unions are part of the Durham-based Community Center for Self-Help, a nonprofit group founded in 1980 by Martin Eakes. Another division, the Center for Responsible Lending, works to help homeowners avoid foreclosure and lobbies for tougher consumer protections.
The Center for Responsible Lending opened an office in California four years ago, and officials realized that the best way to improve its policy work in that state was through lending, Beck said. Self-Help received a federal credit union charter in 2008 and began seeking deals in California that year.
Beck said Self-Help isn't planning to open or buy credit union branches in other states, for now.
Kern's three branches will be merged into a division of Self-Help focused on the Central Valley and Bay Area regions of California. The Central Valley, including Kern County and Bakersfield, has been hit hard by the recession and housing bust. The area has a high concentration of construction and farm workers.
"You're dealing with a lot of low-income families who are the first ones hit by the carnage in the economy," Beck said. "There's some risk involved, but we wouldn't be taking it on if we didn't think we could continue to maintain our financial strength."
Kern traces its roots to the United Farm Workers Credit Union, founded by the late activist Cesar Chavez. Self-Help "shares our culture, mission and dedication to best serve our members," said Kern CEO Carl Trejo, in a prepared statement.
By joining forces with Kern, Self-Help will work to enhance "financial services to low-income communities across California," said Steve Zuckerman, managing director of Self-Help's California operations.
