PNC Bank and a fledgling credit union are doing the unthinkable in Philadelphia: sharing a branch on the city’s economically depressed North Side.

But PNC is more than roommates with People for People Community Development Credit Union. The flagship banking subsidiary of $72 billion-asset PNC Financial Services Group in Pittsburgh is also the biggest financial backer of the tiny, month-old credit union.

James Kerkula, People for People’s chief financial officer, said PNC has spent $1.6 million to help launch the credit union. The lion’s share of that money — $1.5 million — went into buying and refurbishing the building at 700 N. Broad St., which PNC then donated to the credit union. The bank even pays rent for the space it occupies, Mr. Kerkula said.

PNC also deposited $100,000 in the credit union, accounting for one-fifth of its deposits.

Why the budding relationship between one of the country’s biggest banks and one of its smallest credit unions?

“We didn’t do this to be first or to be different,” said Preston Pinkett, a senior vice president at PNC Bank and the director of its development bank. “Our goal was to create economic development opportunities in one of Philadelphia’s poorest neighborhoods.”

People for People is affiliated with New Exodus Baptist Church, whose pastor, the Rev. Herbert H. Lusk 2d, is a former Philadelphia Eagles running back. The church’s outreach group, also called People for People, operates the credit union, as well as after-school recreation and welfare-to-work and drug-treatment programs, many of which PNC has supported.

Mr. Kerkula acknowledged the bitterness that exists between many banks and credit unions but said these tensions have not clouded People for People’s relationship with PNC.

“We don’t see that as a problem,” the credit union officer said. “Our customers come from low-income backgrounds. The target for banks is commercial loans and wealth clients. We are not competitors, and we should be collaborators. That is the message we want to get out.”

Though shared branches are becoming increasingly common among credit unions, they are virtually unheard of in banking. Jim Eberle, a spokesman for America’s Community Bankers, said researchers at his Washington-based trade group could uncover no other instance of a bank sharing a branch office in a way similar to PNC’s arrangement with People for People.

Alan D. Theriault, president of CU Financial Services in Portland, Maine, said it is not uncommon for banks to help community development credit unions, which are chartered to serve low-income people, typically in cities. Indeed, on the Web site of the National Federation of Community Development Credit Unions, Citibank, Bank of America, and J.P. Morgan are listed as supporters.

But Mr. Theriault said no bank has taken its support to the length that PNC has.

“Even for a bank the size of PNC, $1.6 million is big money,” he said. “And shared branching is very unusual.”

In the section of north Philadelphia where People for People and PNC are partners, storefront check-cashing shops, not banks or credit unions, are the most common financial institution, said Mr. Pinkett, the PNC officer.

People for People hopes to alter the landscape by offering basic retail banking services and financial-education seminars to people who have avoided banks. For the time being, though, the credit union will do no lending. It will refer prospective borrowers to PNC.

The two institutions also plan to coordinate product offerings and marketing efforts.

Richard Smoot, president and chief executive officer of PNC’s Philadelphia and southern New Jersey region, said PNC is considering setting up another credit union for another community group in the city’s Norris Square neighborhood. Still, both he and Mr. Pinkett were careful to point out that the bank views each project as a business opportunity. “We haven’t forgotten our responsibilities to our employees or our shareholders,” said Mr. Pinkett.

Mr. Smoot said links with respected grass-roots organizations like People for People are essential for the bank to attract inner-city customers.

“If you go into a neighborhood as Mr. Corporate America and try to take over, you are going to go nowhere,” he said. “I don’t think big banks are respected and honored in these neighborhoods. The honest fact is, we are viewed skeptically. It is our association with People for People and Rev. Lusk that gives us credibility.”

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.