With a red-hot real estate market and a multiplex theater on the way, the cash flows fast these days in Harlem. Unfortunately, little of that new money stays around long enough to make a difference: Harlem has more check cashers than banks, and local entrepreneurs and homebuyers have few places to turn for lines of credit.
That soon should be changing. Two Harlem community activists, April Tyler and Luther Smith, are now in the process of starting up the neighborhood’s first community development credit union.
To begin with, the bank’s first branch will merely provide checking and savings services to Harlem residents, who may have a hard time getting access to cheap banking. “We’re initially doing a lot of outreach to certain segments like tenants in public housing,” explained Tyler. “Those are the people most cut out of commercial banking by high fees.”
But Tyler and Smith have bigger plans: Eventually, they intend to expand the credit union into a full-fledged community development bank, offering small business loans, home improvement loans and mortgages. The goal is to create a strong base for the local economy.
According to research prepared by the Neighborhood Economic Development Advocacy Program, West and Central Harlem residents have at least $650 million on deposit in the neighborhood’s nine bank branches. But credit is a chronic problem, and only a few pennies on the dollar are returned to the neighborhood in the form of mortgages or loans.
“We didn’t want to complain, march, moan and groan,” said Smith. “We wanted to do something proactive. We have the economic power to make a difference right now.”
Smith and Tyler are now collecting pledges from neighborhood residents, in order to apply for a charter later this year.