Self-Help Helps Itself. That was the headline on a study published by the Washington, D.C.-based Capital Research Center. It accuses Durham-based Self-Help Credit Union and its CEO, Martin Eakes, of making insider loans and understating credit risks.
The report was written by David Hogberg, a research associate at the center, a think tank founded in 1984 by former staff members of the first Reagan administration. It monitors nonprofits that it says promote the expansion of government at the expense of private business.
Eakes denies the loan and credit-risk charges--which even Hogberg now says are baseless--and says it's a case of becoming known by the enemies you make--in this case, the payday-loan industry, which he says is behind the report. He started Self-Help in 1980. It targets people who have trouble getting loans from conventional lenders, particularly minorities, women, rural residents and poor families--as does the payday-loan industry. The worst payday lenders, Eakes says, charge annual interest of up to 450%. "Most loan sharks would blush at that rate." He has lobbied for the state's predatory-lending law, adopted in 1999, and against payday lenders.
Despite backing off the insider-loan and credit-risk allegations, Hogberg says he stands by his report, which also criticizes Eakes for using money generated by a nonprofit to lobby Congress and state legislatures. "Eakes set up shop in Washington...