Self-Help Credit Union: Maintaining Seaway Bank’s Legacy

The recession of 2008 has left a great deal of collateral damage despite reports of our country’s economic growth in the past four years. The United States’ economic foundation was shaken by some of the biggest banking institutions inflating interest rates on existing and new homeowners. The results were catastrophic, pushing many into bankruptcy and foreclosure.

Along with the economic dip, many Black businesses were hit hard and forced to close. A staple in the Chicago community, Seaway Bank—a force to be reckoned with on the South Side for 30 years—also found itself reeling from the crisis and fighting to keep up with its competition’s rapid growing technology and expanding consumer services. Compounded by the death of its chairman Jacoby Dickens in 2013, the once prominent bank faced troubles.

Established in 1965, Seaway was one of a handful of Black-owned banks on the South Side of Chicago. A graduate of Phillips High School, Dickens became a self-made businessman—investing in real estate and later several business ventures. In 1983, he was appointed as the Chairman of Seaway Bank & Trust after serving on the bank’s board for nearly four years.  Dickens built the bank into a thriving powerhouse with 10 locations and $547 million in assets before he died.

Seaway Suffers Major Blow

At the top of the year, federal regulators approved State Bank of Texas to take over Seaway’s deposits and assets. For industry insiders in the financial world, the move was not surprising but for the bank’s loyal customer base—it was devastating.

Seaway Bank and Trust Company was one of the last African American financial institutions where second and often third generation Black people still held accounts. Many acquired their first mortgage and commercial loans when mainstream banks denied them. Will the new owners understand the importance of maintaining this community relationship?

A month after State of Texas acquired the bank, the Indian-American owned institution sold off Seaway’s customer deposits and product services to Durham, North Carolina-based Self-Help Credit Union. Over the last five decades, Seaway has gained a great deal of mortgage and commercial loans along with airport contracts on its ATM placement—accumulating $3 million per year. A primary hotel lender, State of Texas held on to the bank’s loans and city contracts while Self-Help Credit Union will rebuild Seaway’s infrastructure and solidify new loan programs.

Picture l-r: Self-Help Credit Union President, Al Bass; Seaway Bank Chief Retail Banking Officer, Daryl Newell; North Carolina Branch Manager, Wilma Wesson; Regional Director, Cheryl W. Cherry, M.Ac.; Marketing and Communications Manager, Anthony Scott; Defender Interim Publisher, Frances Jackson; Executive Staff, Armeer Kenchen; Defender Sr. Account Manager, Will Rogers.

Why choose Self-Help Credit Union when there were a number of banks that could’ve taken over the operations? Self-Help is a credit union with a 37-year-old history of serving predominately African-American customers.

President of Self-Help Bank Al Bass has worked in the banking industry for nearly 40 years. Born and raised in Durham, North Carolina, he graduated from North Carolina A&T State University starting out in retail banking and working up through the ranks.

Headquartered in Durham, Self-Help’s mission is similar to Seaway’s philosophy in serving their customers.

Bass explains, “It started with a group of business people out of Durham, headed by Martin Eakes, who is our current CEO, and his wife who raised money to start a credit union to provide financial services for worker-owned businesses in North Carolina. We were losing manufacturers in the 1980’s and wanted to find a way to save some of those monies for the workers,” he said. “Self-Help refocused and provided mortgage services for people who had problems retaining mortgages. So, we started providing mortgages and opened up a credit union at that particular point. It was very successful. We actually started a mortgage securitization program for mortgage loans that other institutions were actually making to satisfy their CRA (Community Reinvestment Act). If you would make those loans, we would buy them from you.”

Bass said at the time, the bank had “deals with some of the largest financial institutions” in the country. Self-Help worked with Fannie May to secure those mortgage loans and sell them on the secondary market, which provided liquidity for other financial institutions. He said this would allow them to continue to make loans to “single people of color” and people who had less means who weren’t able to gain “traditional mortgages” from anywhere else. 

All was lost in 2008 when the housing market dropped and recession woes halted mortgage lending temporarily by the bank.

Aside from having locations in North Carolina, Self-Help is in California and now implementing their model at former Seaway branches throughout Chicago.

Adjustment For Customers

For customers who have banked with one of the last Black-owned financial institutions, it is an adjustment that will take time.

Daryl Newell, Chief Retail Banking Officer for Self-Help, is part of the transition team. “Once they heard more about the credit union and the legacy—they recognized those similarities and they are always very pleased. We’re getting the word out because there’s been a lot of transition around new ownership. Some customers are not quite clear about what the mission between the two institutions are since the bank failed,” Newell said.

He added that they are determined to engage with community leaders, business owners and residents about their services. With Seaway, customers received the services as depositors versus becoming part of the ownership of a credit union. Self-Help’s new team will educate established customers while gaining new members on the advantages of money management.

“It’s not always about the interest or loan rates, even though they will get those advantages because they are part of a credit union, but it goes deeper. It’s about the good works the credit union can do because we have the deposits to invest in projects that make the community better. It allows us to have the amenities such as the daycares, the churches and nonprofits along with businesses, in addition to the homeownerships in which Seaway was about in the first place,” added Newell.

Bass agrees on the importance of bringing clarity to the new financial institution’s mission.

“As a member of a credit union, you become part owner of the credit union. Whereas a bank, you’re simply a depositor, its owned by stockholders. If you align yourself with a credit union or a bank that’s committed to provide financial services to benefit the community, it benefits you as well.”

They admit there have been challenges in rural areas of Southeastern North Carolina where Self-Help serves low income families in high unemployment communities.

Regional Director Cheryl W. Cherry is based in Greenville, North Carolina. She says, some parts of the South Side of Chicago remind her of the challenges they face in the Southeastern region of North Carolina.

“We’re from a very rural part of the state. That part has struggled with industries leaving, attracting and attaining talent. I’m a prime example, born and raised there and left to go to Raleigh, Durham, area and then came back. It makes a difference to assess the needs and you have to make sure your products and services match those needs,” she said.

“Our customers are from one of the poorest counties in North Carolina and finding ways to provide financial products has not only become challenging but rewarding. We take those experiences and take them across the country,” said Cherry.

Maintaining Seaway Bank’s Legacy

A Chatham native, Armeer Kenchen is part of Self-Help Credit Union’s executive staff and he feels highly confident on what’s on the horizon for its new customers.

“I met so many folks who are second and third generation Southerners. On the South  Side, their families come from Mississippi, Alabama, Georgia and so forth, so it resonates that Self-Help is from the South. I feel like I’m home. I’m excited that Self-Help is here. We’re going to do some good things,” he said. “I don’t think there is many companies that can compete with us with our products and services. We want to do much more on the South Side and West Side of Chicago. With all of our resources and our talent—we won’t stop until we get it done.”

Starting out without acquiring Seaway’s loans and mortgages will pose work for the company, but with $600 million in their reserve—they are committed to carry the operation until they can make some loans.

Bass says, “That’s one of our primary objectives, not only to provide the deposit products and pay good rates but also to get loans in the community. This is our first foray into Chicago. Four years ago, we acquired another bank—Second Federal Savings and Loans. During that four-year period, we’ve been able to make $120 million in residential mortgage loans within the community. We want to come back four years from now and say we’ve done even better with Seaway’s marketplace. We’re committed to getting loans on the books, not only to service the community but to also to finance the operation as well.”

As of July 1, Self-Help has converted the old Seaway Bank IT system into their current mainframe and they are gradually upgrading services for mobile-friendly capabilities. With a new staff on board, Bass and his team are currently training customer service representatives and will expand commercial lending by year-end.

Building and educating customers about financial literacy is on the bank’s priority list. Offering great CD rates at 1.8 percent, Self-Help Bank is confident of providing the best money market rates and challenges other banks to beat or match their rates.

Heading up a multi-million-dollar operation is not easy, but Bass is adamant about maintaining the mission to provide the best services for the benefit of the community.

“Seaway is on the South Side of Chicago and Self-Help is more diverse in their communities throughout the country, but the focus is the same in providing financial services. The majority of other institutions don’t go into the community or they provide limited services,” he says. “We want this to be our primary focus.”

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