Managing Editor Eric Nee spoke with Self-Help’s founder and CEO, Martin Eakes, about the subprime loan crisis and its impact on the poor ;

When Martin Eakes was a teenager growing up in a poor, rural community outside of Greensboro, N.C., his best friend, who was an African American, was shot and killed in a playground near Eakes’ home. On that day, Eakes vowed to live his life for the two of them. Eakes went on to graduate from Yale Law School, but instead of taking a lucrative position at a high-powered New York law firm, he returned to North Carolina to devote his energy and talents to improving the lives of the poor.

In 1980, Eakes started Self-Help as a way to help the poor help themselves. His first loan was for $1,700, to help seven laid-off textile workers start a community bakery. From those modest beginnings, Self-Help has grown into a financial powerhouse. At its core is a credit union that takes in deposits and lends out money to low-income people who want to buy homes or start businesses, and to nonprofit organizations. Self-Help also repurchases home loans made by large banks to low-income buyers. The 501(c)(3) community development financial institution now has more than $1 billion in assets.

Self-Help isn’t the only organization lending to low-income home buyers. In the last decade a host of lenders went after these borrowers, some offering loans with reasonable conditions and others offering predatory loans with onerous terms, now dubbed subprime loans. To combat these predatory lending practices Eakes helped launch the Center for Responsible Lending (CRL), a research and policymaking organization that operates at the state and national level. Eakes and other staffers at CRL have testified before Congress on numerous occasions. Unfortunately, Congress didn’t listen to CRL’s earlier warnings about the problems that predatory lending creates. The danger now is that lenders will become so conservative that they will stop all home lending to lower-income families.