When Pastor Gregory Edwards, couldn’t get an answer on why his thriving predominantly African American church couldn’t get answer from his local white led bank on why Resurrected Life would not get a covid relief PPP loan from the federal government he’d had enough.
His Allentown, Pennsylvania UCC church, which had started in a Bible study in his home, had grown to more than 200 members deposited its $1.2 million in annual revenues, from collections and a related community development corporation (CDC) with a strong childhood education program into the bank. They had never been late paying for anything from a light bill to the mortgage. He was not alone; black led non profits and businesses in the Lehigh Valley were experiencing the same thing. In a time where people were waking up to the fact that Black lives matter, it was too much.
“We’re invisible and disposable to the traditional banks,” Edwards said. “They take our money, our deposits, but we don’t get the loans that white churches get, white businesses get. We are dehumanized by traditional lenders.” He decided to do more than complain about the unjust state of business as usual.
Edwards reached out to the Rev. Dr. Patrick Duggan, Executive Director of the UCC building and loan fund, which whom he was working on a renovation project. He wanted a credit union, connected to his congregation to serve the local African American community. As it turns out, Duggan had received a concept proposal for a congregation-based credit union network anchored by an African American led credit union from the team at Faith+Finance not ten minutes before.
Setting up an African American led, faith based financial institution node can catalyze system change, Edwards says. “They don’t mind that you protest and march in the street and say black lives matter. But when you take your deposits and create something of your own for your community, that’s something new.”
A pilot project is now in the works with Resurrected Life as the projected first node in the envisioned church credit union network anchored by Hope Community Development Credit Union, which operates in the heart of the Mississippi Delta. Hope was born in the church, said CEO Bill Bynum, “this is getting back to our roots. I think the network of church nodes is totally in line with our mission.
Hope recently received $10 million in deposits from Netflix, as part of their goal to bank with black financial institutions as part of the company’s commitment to show it believes Black lives matter. Hope has since been featured in the New York Times, the Wall Street Journal and other national publications and Bynum, who has been doing exemplary work for decades has become suddenly in demand as the face of BankingBlack on webinars and virtual conferences. “It’s good to get attention on the work of building intergenerational wealth in communities that are often left out,” he said.
The first loans will be for low income church members and others in Allentown currently subject to predatory pay day lenders who charge exorbitant interest for loans for emergency expenses like medical bills, car repairs. The $500 to $1,000 loans, called Shared Secure Loans, would be guaranteed by an equal amount collateral provided by more affluent people of faith, who want to a low risk way to show that they want to take action to do more than give vocal support to the fact that black lives matter. As the pilot progresses, it’s anticipated that checking, CD’s and perhaps business loans will be added.
Why is a church at the center of creating an innovative solution to solve an economic justice problem in its community? “The black church is at the center of the local community,” Rev. Edwards said. “It’s the storehouse of civic life, the storehouse of social capital, of the community’s well being. The value we bring is the trust, consideration and care we bring. This is the work we are in. We have the relationships that can make this work,” Edwards said, citing two older pastors who’d done the same in their communities in New Jersey and Chicago.
“In the Bible, when Nehemiah saw the walls torn down in Jerusalem and the city in ruins, he knew God was calling him to rebuild the community right in front of him, to restore the breach,” Edwards said.
“The church is the neighborhood manifestation of God’s economy, where God’s people, through the power of the Holy Spirit, are called to bring forth signs of God’s economy,” Rev. Duggan said. “Given that the essential cause of poverty in underrepresented communities is intentional underinvestment through historic barriers to capital access, the prime directive of living into God’s economy is to deploy local church assets for mission, and to remove any and all barriers to, and reignite the flow of all resources _including financial capital_ in communities that have been historically impoverished.”
It’s important that the loans are paid back and the money from the guarantees is returned to the individuals, foundations and others who pledge them, so that the relationship is reciprocal and mutual, rather than the top down relationship of charity, and a hand out to the needy, Edwards says. “We want to build intergenerational wealth in the African American community. That’s a perfect place for the church to take the lead.”
Cort Gross, a seminary trained and experienced affordable housing lender and credit union veteran and I are leading the initiative to create the network of church based credit union nodes, called Rebirth Credit Union. We have already contacted high net worth individuals and affluent churches and are looking for more.
Duggan hopes that affluent Christians, often in predominantly white churches put up the money for the guarantees that will enable people to become free of pay day lenders and also build relationships across class and race.
“My hope is that people of faith, and people of goodwill, high net worth individuals, investors, and other financial professionals would invest with a long-term view of financial gain through investing for the broadest possible participation of all people in wealth-generation, rather than seeking the short-term gain of maximized profit,”Duggan said.