New bank to grow wealth in Chicago’s Austin neighborhood

When Xavier Williams learned the Leaders Network Financial credit union had opened in his neighborhood, he immediately wanted to join.

The Austin resident was accustomed to driving out of the area for banking services and was eager to take care of his finances closer to home.

“It’s in our community. It’s in our neighborhood,” Williams said.

Williams’ long-term goal is to save for his retirement. The 55-year-old said it's probably 20 years down the road, and he’s hoping to increase his savings.

“I gave [the credit union] my email so I can stay in touch for workshops,” Williams said. “I’d like to learn more about investing in the stock market.”

The financial institution was opened by an unlikely pairing: a network of faith leaders and a local credit union. The Leaders Network opened the bank, at 5600 W. Madison, in Chicago’s Austin neighborhood with Great Lakes Credit Union at the end of June. Organizers hope the nonprofit financial institution will increase the access to capital and wealth in the predominantly Black and underserved neighborhood.

According to the Chicago Health Atlas, 22% of Austin residents did not have a checking or savings account in the years 2022 to 2023.

Michelle Collins lives on the city’s West Side and recently retired from a career in community development banking. She helped the Leaders Network connect with Great Lakes Credit Union to form their partnership.

“We both are concerned about what people call ‘the least of these,' people that are marginalized, in communities where people are going to currency exchanges, where people are going to title loan companies to get their lending,” Collins said.

One of the main ways the credit union plans to build wealth in the neighborhood is by offering credit builder loans, said Reggie Little, the credit union’s business development specialist.

“We will take $1,000 of our money and deposit it into that member's account. We then put a hold on that $1,000 and as the member makes payment, that positive payment history is reported to the credit bureau,” Little explained. “After a year, they've got a 12 month positive payment history. We release the hold on that $1,000 so they now have $1,000 that they've saved, and we charge 0% interest for that loan.”

Anyone who is not in active bankruptcy may qualify for that loan.

“There are a lot of people in the Austin community and in our other communities that are trying to build or establish credit, but they really don't have the means or the knowledge as far as how to go about doing that,” Little said.

The credit union also offers certificates of deposit accounts that offer an interest rate premium in exchange for the customer leaving a predetermined deposit untouched for a set period of time — that pay 5% interest over six months.

In addition to CDs, the credit union offers checking accounts that pay up to 5% interest monthly based on debit card usage. There are no monthly minimum balance requirements or annual fees for checking accounts. It costs one dollar to join the credit union, and if a member decides to leave, they can get the dollar back.

There is also a full-time, on-site United States Department of Housing and Urban Development housing and financial counselor who will host workshops on financial empowerment and understanding credit.

The formation of the credit union was a long time coming and faced many obstacles, said the Rev. Marshall Hatch. First, the Leaders Network wanted to start up its own credit union independently, but it lacked the capital to do so. Then, the network explored absorbing a smaller credit union, but hit a wall.

He's happy the Leaders Network was able to partner with Great Lakes Credit Union.

“Living in capitalism, people have a distinct disadvantage if they do not have access to capital,” Hatch said. “Having the ability to teach financial literacy to help improve the economic plan of our families and our communities, a credit union is an essential tool to do all of those things with.”

There are about 250 open accounts so far.

Hatch’s church, New Mount Pilgrim Missionary Baptist Church, won the Pritzker Traubert Foundation prize. Hatch said ground will be broken in September on a facility where the second branch of the Leaders Network Financial will eventually open.

Adora Namigadde is a metro reporter and hosts the morning episodes of The Rundown podcast. You can follow her at @adorakn.