If a single brochure statement can sum up a business credo, the South Central People's Federal Credit Union might have a corner on it: "Giving credit where it's long overdue."
Since opening its doors in 1993, the Crenshaw district-based institution has loaned out more than $1 million-- roughly its entire asset base--in an area that for years had been shut off from most avenues of credit.
"They really helped me in a time of need," said Olga Cook, a Windsor Hills resident who recently received a $2,500 loan to overhaul her dying Ford Explorer.
Cook wasn't a lender's dream applicant. The 62-year-old woman had defaulted on two student loans five years ago. Loan committee members, however, decided that her employment record and steady efforts to pay off the defaulted loans offset any blemish on her credit history.
South Central People's has grown from an idea about nurturing financial self-determination in low-income neighborhoods to the fastest-growing credit union in the south Los Angeles area, according to recent statistics from the California Credit Union League.
Accounts at the institution have climbed from 380 in its first year to about 1,400 this year--45% higher than its closest competitor. Organizers attribute much of the growth to the institution's mission to provide credit where others won't.
South Central People's provides saving accounts and loan opportunities to anyone with $35 who lives, works or worships in the 49 square miles bounded by the Santa Monica Freeway, Imperial Highway, Alameda Street and La Brea Avenue. The average loan ranges from $2,000 for personal use to $15,000 to buy new or used automobiles.
Take the case of Crystal Davis.
The 34-year-old director of a fledgling performing arts group recently received a $2,500 loan to make a master recording of her youth choir singing rap and traditional gospel songs.
"This'll get us going," Davis said.
Yet in its eagerness to extend credit to people most other financial institutions would shrink from, South Central People's has chalked up about 10% in delinquent loans--more than twice the average for community development credit unions in California. A loan is considered delinquent if no payment has been made in 90 days.
Under early lending guidelines, about 80% of loan requests were granted. Now, only half the loan requests are accepted, and a part-time bill collector has been hired to go after members who make no effort to arrange repayment on delinquent loans.
"What we loan out is members' money," credit union Manager Tammy Brown said. "We have a responsibility to them."
Supporters say the institution has made great strides toward filling a near-vacuum of banking services. In the late 1980s, a wave of consolidation and cost-cutting in the banking industry touched off more than 400 branch closures in Los Angeles.
When the dust settled, the south Los Angeles area emerged with only 19 bank branches for 600,000 people.
The contraction also meant tighter credit for neighborhoods that had little access to bank loans even when times were better. In 1988, Bank of America and Security Pacific Bank made only four first-trust deed loans in South-Central Los Angeles, according to UCLA researcher Gilda Haas.
A year later, Concerned Citizens of South Central Los Angeles teamed up with the Black Employees Assn., representing 5,000 county and city workers, and the Vermont-Slauson Economic Development Corp. to spearhead the long chartering process for the credit union.
The effort paid off in September, 1993, when the facility opened in a cramped office at the employees association headquarters on Crenshaw Boulevard. In December, the institution moved to its current location at 3001 W. Vernon Ave.
"We decided it was time we had our own financial institution," said credit union co-founder Juanita Tate, "so that no one could ever again deprive us of our right to credit."