Self-Help Federal Credit Union, the California community development credit union that bought Second Federal Savings & Loan last year, has officially reopened the failed thrift in conjunction with Chicago's Resurrection Project.
Though several credit unions have acquired failed banks and absorbed them into their operations, this deal is unique because it marks the first time a credit union has acquired and revived a failing bank.
In an unusual alliance, Self-Help, a $600 million-asset affiliate of North Carolina's Center for Community Self-Help, and the Resurrection Project bought the failing thrift's $161 million of mortgages from the Federal Deposit Insurance Corp., then acquired its deposits and three branches from Wintrust Financial (WTFC) in an effort to preserve banking services for the low-income Hispanic neighborhood where Second Federal operates.
Wintrust's Hinsdale Bank & Trust acquired the thrift's $160 million of deposits and facilities, but not the mortgages, from the FDIC when the agency took over Second Federal in July 2011.
The Resurrection Project has worked to revitalize predominantly low-income Hispanic communities on Chicago's southwest side since 1990 through a variety of community development initiatives.
Since February, the Resurrection Project and Self-Help have been working to make service and physical improvements to Second Federal's three, while conducting community outreach to new and existing members. The credit union has also been working with distressed borrowers to help families keep their homes. It is also offering new products such as the Dreamer Loan, a $465 loan to young immigrants to finance their visa applications for the federal government's Deferred Action for Childhood Arrival program.
Rudy Medina, who joined the thrift as a branch manager in 2009, will serve as president and CEO of the rebranded Second Federal Credit Union.
The failed thrift was unique because of its focus on the low-income Hispanic market. It was one of the pioneers in making home loans to undocumented immigrants who possessed taxpayer-identification cards. Many of those customers made their monthly payments in cash, which most mortgage providers aren't equipped to deal with.
Self-Help is the second credit union formed by the North Carolina's Center for Community Self Help, which includes the state-chartered Self-Help Credit Union in Durham, N.C.