Magazine article American Banker

PNC Houses and Funds A Credit Union in Philly: Shares Start-Up's Site, Lends to Its Members

Magazine article American Banker

PNC Houses and Funds A Credit Union in Philly: Shares Start-Up's Site, Lends to Its Members

Article excerpt

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. …

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