said. “Except textile workers were making $8 an hour, $12 an hour, maybe $15—and our overhead worked out to like $25 an hour.” So by fiat Gulley initiated a new billing policy that Eakes would later dub “unjust but pragmatic”: Clients were still charged based on their hourly wages but then hit with a $25 hourly surcharge on top of that rate. “We were hardly getting rich off that plan,” Gulley said, “but at least we were no longer losing more money with every new client.” A longtime legal aid attorney named Mike Calhoun would join the firm in 1985. Legal aid societies are notorious for lousy pay, but Calhoun figured he took roughly a 50 percent pay cut when joining the firm of Eakes and Gulley. “In seven years there I don’t think I ever got back up to my legal aid pay,” Calhoun said. To supplement his income, Calhoun would do side work for Self-Help until going to work there full-time in 1992.
This first incarnation of Self-Help as a consultancy providing advice to fledgling employee-owned cooperatives was not without its successes. They helped a group of unemployed textile workers in a coastal town a couple of hours from Durham convert their old mill into a bakery, and they provided critical assistance to a sewing cooperative of around seventy workers, most of them black women, struggling to make payroll each month after buying the bankrupt cut-and-sew operation where most of them had worked. But mainly they learned the world was more complicated than they had imagined it to be during their late-night bull sessions. It turned out there were other reasons for plant closings beyond the heartlessness of management. Sometimes there was no longer a market for the goods a mill produced; other times the costs of upgrading a facility were prohibitive. Moreover, they discovered that the main impediment workers faced was a lack of working capital. Self-Help could provide all the expertise and encouragement in the world but it meant nothing if a lender refused to finance a deal, even when the employees could offer a mill and pending orders as collateral. “For some reason,” Eakes says, “bankers wouldn’t give these people a loan, particularly if they happened to be African-American, female, or from rural Carolina.” The answer, Eakes and Wright decided, was to get into the lending business themselves.
That would be Wright’s job. For a class project at Yale, she had written a business plan for a credit union, and she put the plan into effect after returning to Durham in mid-1983. (The couple would marry the next year “once both of us were done with schooling,” Wright said, and have two children.) Wright would run the Self-Help Credit Union until the early 1990s. “It was time,” she said, “for me and for my family.” One all-consumed activist in the family, it seemed, was more than enough.
Raising money so they could start making loans proved easier than they thought. Their first benefactors were several Catholic orders that together put up well over $1 million in working capital during that first year. “We were paying them better than zero interest but not by much,” Eakes said, “but they wanted to put their money to use to help working people.” Eakes was so touched by their generosity that he vowed that, if necessary, he would work the rest of his adult life to pay back the Catholic orders should Self-Help lose any of their money. He would strike a lighter note when around that time he joked in an interview with the local Durham daily, “We make money the old- fashioned way. We beg for it.”
At first the credit union stuck to financing worker-owned cooperatives. When, for instance, an out-of-state owner shut down a mill in the center of the state, laying off more than one hundred people, Self-Help loaned money to thirteen former employees so they could reopen the plant and get back into the business of making men’s and women’s socks. It helped another 150 workers buy a nearby sock factory after the children of the former owners made it clear they had no interest in running a struggling textile mill for the rest of their lives. Self-Help tried to use its money as leverage to help these fledgling cooperatives pry money from the local banks or agencies like the federal Small Business Administration. “People really had to make their case to us,” Wright said. “We needed to see a viable business plan.” But that didn’t make the ventures any less risky. Self-Help wrote off the first three loans it made, for a total of $90,000, and Eakes had to acknowledge that he probably knew a lot more about eighteenth- century philosophy and nineteenth-century economics than twentieth-century financing. “I had to confess my banker friends were not as dumb as I liked to think,” Eakes said. Over time, the credit union expanded its loan profile to women and people of color seeking capital to start or expand a business, even if those entrepreneurs had no intention of creating a worker-owned cooperative. Self-Help continued to grow, and by 1986, with $4.5 million in deposits that had been harvested from churches, labor unions, foundations, and socially minded individuals, the credit union moved into home loans.
Over lunch at a restaurant in Durham in 2008, Eakes wondered what had taken them so long. Self-Help is now housed in an old bank building it bought and rehabilitated more than a decade earlier. In the fashion of a big bank, it has put the Self-Help name on top of the eight-story building in letters large enough to read from the highway. It owns several more buildings downtown to house its various operations, including the Center for Responsible Lending, and employs more than 250 people. “When we started Self-Help, we felt jobs were the key to making a difference in the life of poor people,” Eakes said. Then he came across statistics showing that where the median white family had a net worth of $44,000 in the mid-1980s, the average black family had a net worth of under $4,000. The difference, he knew, was the equity people built up in their homes. Dating back to his undergraduate days, he and his friends had been debating whether jobs or education or health care or poverty eradication programs were the most effective way of bringing about a more equitable world. He now had his answer. “I guess we were very slow learners, because it took us six or seven years to figure out that the real issue was equity. We became preachers for the importance of owning a home.” They opened branch offices around the state and focused on helping the working poor grow their wealth through what he liked to call “bricks-and-mortar savings accounts.”
It was never easy. “If we had known what kinds of loans you intended to make,” Eakes quotes an early regulator as saying, “we’d have never let you get started.” Self-Help was deliberately seeking out those with the poorest credit rankings getting by on meager wages; its typical borrower in the early 1990s had a family income of $22,000. (A household wasn’t eligible for a Self-Help loan if its occupants earned more than the area’s median income.) But Self-Help’s borrowers were purchasing $30,000 or $50,000 homes and receiving loans almost as favorable as their prime counterparts. The key, Eakes said, was to find people who had proven themselves to be hard workers and then make sure they weren’t buying a home beyond their means. In a 1993 interview with a publication called
The local media seemed equally impressed. The editorial board at the
His shoes were a pair of scuffed, dirt-smeared Reeboks that might raise an eyebrow at a backyard barbecue. They looked even more out of place given the rest of Martin Eakes’s ensemble. He wore a pair of pinstriped gray dress slacks that matched the suit jacket draped atop a box in the corner, and a wrinkled white dress shirt that was frayed at the cuffs and collar. Later that day, he explained after shaking my hand to welcome me to his office, he would be flying to New York. So he put on the pants this morning and wore the sport coat to the office so he wouldn’t have to carry a garment bag on the plane.
“Martin,” said Keith Corbett, who has worked with Eakes since 2000, “is not a man who wastes a lot of time thinking about things like fashion.” His old law partner’s manner of dress, Wib Gulley told me, caused bemused smirks even on the basketball court. He’s deceptively quick, said Gulley, who played in a regular pickup game with Eakes. He’s smart and tough on the court and he’s certainly not opposed to throwing the occasional elbow. But it was also like playing with Will Ferrell in the movie
He’s lean and fit, despite his age and what Gulley described as Eakes’s “very narrow approach” to food groups. “It’s a wonder he can operate as efficiently as he does,” Gulley said, “on a diet of chocolate chip cookies
