Regardless of the final federal budget, the handwriting on the wall is writ in day-glo lettering: Government's role in community redevelopment continues to shrink, and private enterprise must pick up the slack.

"We're moving from an era of public/private partnership toward a private/public model," Comptroller of the Currency Eugene Ludwig told an October forum sponsored in Brooklyn, NY, by The Social Compact, a nonprofit dedicated to promoting redevelopment. The forum followed a bus tour in which bankers, regulators and journalists got a close-up view of redevelopment in what was once one of New York's most blighted neighborhoods, Bedford-Stuyvesant.

Bed-Stuy has become something of a celebrated laboratory for urban renewal, and banks and nonprofits like Neighborhood Housing Services have been-and will remain-big players in those efforts. But as the tour suggested, the future really lies with local people and local resources, particularly African-American institutions like Carver Federal Savings Bank and the Central Brooklyn Federal Credit Union (CBFCU).

Carver, the nation's biggest black-owned financial institution, plans to boost its lending and start making small business loans by January. CBFCU, a two-year-old credit union, has grown sharply since it moved into an abandoned Chemical Bank branch in March 1994, executive Mark Winston Griffith told the forum. Now at $5 million in deposits and adding 250 members a month, CBFCU is lending chiefly to contractors and other small local businesses.

Griffith said the community is trying to shape its own destiny. That won't be simple. "We're filling a niche," he added, "that I kind of wish the banks hadn't made available."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.