Photo: Steve Mellon/Post-Gazette
The Hill District Federal Credit Union is one of only 23 Black-owned banks nationwide. Founded in 1971 by Mary Walker, who went door-to-door collecting 25-cent deposits, this fully community-run union has since grown to an impressive $15 million in assets—assets that directly benefit the Hill District neighborhood.
Much of that growth can be credited to the organization’s dedicated executive director Richard Witherspoon, who has guided the credit union for the last 36 years. Witherspoon was recently recognized at the Black Excellence in Real Estate Awards Gala, accepting the Community Bank of the Year award for the organization’s steadfast service.
We sat down with Richard to learn more about the credit union and their holistic approach to banking and closing the racial wealth gap. Their story serves as an example for others looking to strengthen their communities and uplift families through financial education.
How did you get into this line of work?
I started out in retail. I was an assistant manager at a drugstore, and the hours were long, and the pay was small. I eventually moved on, and someone told me about a small credit union in the area. That’s how I started running the Carnegie Library’s credit union. I had a little office in the basement of the museum. I worked there for a few years, and then the University of Pittsburgh took over that credit union, so I moved on to the South Side Hospital’s federal credit union. I worked there for a few years until Pitt acquired that one. Eventually, someone told me about the Hill District Federal Credit Union. I came here, and the rest is history. But Pitt is not going to be able to gobble up this one, because I’ve built such a strong foundation here that merger and acquisition is not an option.
Can you tell us about the history of the Hill District Credit Union?
Shortly after the assassination of Dr. Martin Luther King Jr., neighborhoods like this across the country burned. When the dust settled, financial institutions were reluctant to come into Black neighborhoods. There was a little lady by the name of Mary Walker who said, “Well, if banks don’t want to come into our neighborhood, we’ll start our own bank.” That was back in 1971.
When she first started out, she went door to door in this neighborhood asking people for 25 cents to open up an account. She did a fantastic job and worked here from the time of its inception to 1992. I came on board in 1988. We worked hand-in-hand, and she taught me the ropes. She taught me about communities. She taught me how to interact and be empathetic to people, how to be understanding and not just depend on the numbers—because numbers and credit scores don’t tell the whole story of someone’s character.
How do you go beyond the numbers when helping a customer?
Typically, whenever someone’s credit deteriorates it’s for one of three reasons: loss of work, illness, or family separation. We know how to dig in behind that credit profile. We take a look and say, “Okay, so your score fell. What have you done since it fell?” A lot of times, they got called back to work. A lot of times, they’ve been able to reorganize. And sometimes, they were able to improve the health of the family or themselves in terms of paying their bills. To understand and grasp that is a real challenge, but it’s worked out well for us. We’ve been able to be a beacon in the community. We’ve been able to help people to the extent that we’re improving their quality of life.
That human focus seems like a key difference between a credit union and a normal bank. Can you break down the differences for people who are unfamiliar?
The biggest difference between a bank and a credit union is that the people who have accounts in a credit union are the owners of the credit union. They have a say in the operation. They have a say in its management. They have a say in its services. We take it to heart.
For example, years ago, our minimum deposit was $25. One day, a senior came to me and said, “Richard, you know, $25 is really difficult for me to maintain in my account.” I said, “Okay Ms. Jones, we’ll see what we can do.” It just so happened that our board meeting was that night, so I took it to the board, and in 30 seconds, the minimum went from $25 to $5, and it’s been that way ever since—all based on that one person’s concern about maintaining $25 in their account. That’s the biggest difference, whether we’re talking about fees, lending, or services on any level, when we hear from our members—no matter how much money they have in their account—they are shareholders with a say.
You’ve been able to grow the credit union to $15 million in assets. What do you think has been key to that growth?
I haven’t been able to totally figure it out yet. Pre-pandemic, our total assets were at $5 million. So in the past four, almost five, years, people have taken an interest in the credit union, and their confidence level has gone through the roof. People were scared at that time. They were so worried about making a living and paying their bills, about having a nest egg and money to fall back on, so they came here. They said, “I want to put my money where I can get to it and where I know that it’s going to be taken care of and be safe.”
During the pandemic, the confidence that people had in banks deteriorated, just like many other services, so our deposits just kept growing. On top of that, the government had a program called the CDFI Rapid Response Program. I applied for it on a whim, and we were awarded $1.29 million dollars, so that helped a lot as well.
“Whether we’re talking about fees, lending, or services on any level, when we hear from our members—no matter how much money they have in their account—they are shareholders with a say.”
The Black-white wealth gap is a major issue across the nation and beyond. How is the Hill District Federal Credit Union working to close that gap?
One word: homeownership. Homeownership addresses the Black-white gap. But the challenge is, in communities like the Hill District, traditional homeownership criteria are very stringent. It’s difficult for people to meet. It’s not only the financial institutions. They have their part in terms of wanting to make money, but the other challenge is regulatory requirements that resulted from predatory vendors. Back around 2008, before the mortgage crisis, there were lenders that were making loans at 110-120% loan-to-value ratio [The LTV ratio is a percentage that compares the loan amount to the appraised value or purchase price of a home. A lower LTV indicates less risk, with a healthy LTV around 80% or lower], which caused the mortgage industry to collapse. That corporate greed is a challenge that trickles down and causes people in my world to not be eligible for mortgages.
How do you get around these stringent criteria?
To address that issue, what we do is we give people a plan to get mortgage ready. We even designed a product called a credit builder loan so that people can build a positive profile to help them get a mortgage. The way the credit builder loan works is that we’ll loan anybody off the street up to $2,500, but we don’t give them the money upfront. We take the money, and we put it into their savings account. They make their repayment, we pay back the loan, and we report it to the credit bureaus. That’s positive reporting. We also have a community partner, Neighborhood Allies’ Financial Empowerment Center, that will help someone repair their credit, free of charge. Under that program, not only do they get favorable reporting, but they also get credit repair, which will cause their credit score to build up pretty quickly.
The other thing we do is have a savings deposit requirement. If someone wanted to borrow $20,000 for a car, for example, we require that they have 10 percent of the financed amount in their account, which is $2,000. That shows us that they can afford a payment, and it also gives them a jump start to saving. That’s another way to address the Black-white wealth gap. When someone puts in that $2,000 for that $20,000 car, they’ll say, “Oh, I have $2,000 in my savings. I think I’ll add a little bit more for every payment.” By the time they finish paying for the car, not only do they have access to the $2,000 that they put in, but they also have access to all the savings.
How much of your work is about financial education?
We do a lot of financial counseling—a lot. The issue is that people just don’t know. It’s not that they don’t want to. Also, they don’t realize how much waste they have going on. I’ve been doing financial literacy classes for years. As a matter of fact, we’re building a financial literacy classroom in our building right now. My target audience will be young folks, teenagers, college students, small business owners, etc. We have small business lines of credit that we offer. The other target group is seniors. The thing that really bothers me is that seniors don’t know how to navigate home banking, technology, paying bills online, those kinds of things. And they are reluctant to ask for help, because they don’t want their ignorance in that area to show. We’re going to do a class just for them, and it’s going to be an ongoing training.
“We do a lot of financial counseling—a lot. The issue is that people just don’t know. It’s not that they don’t want to.”
What are some of the changes that you’ve witnessed in the community over the years since starting this work?
There’s been more businesses that have come up, which is a great thing. When I started here, there was no grocery store. There were no banks. There was no Family Dollar. The lot next to us was vacant. Now, slowly but surely, the neighborhood has evolved, and we’re moving right along with it. Like this building we’re in; we own it. We have a three-story, two-storefront building, and we’re in the process of rehabbing it. So as the community grows and prospers, similarly, we’re doing our part as well. We’ve also acquired some land across the street for future development, for a parking lot or whatever the case may be. The Hill District Credit Union is open to any community organization that wants to develop. We will bring our resources there. We will be an advocate for them—that’s the role we would like to play.
