WHEN INDEPENDENCE FEDERAL Savings and Loan got started 10 years ago, a number of people in the District held little hope for its success. In those days, most financial institutions employed few black people and invited even fewer to join their boards. Local banks and savings and loan associations often shield away from making loans to District residents, especially those of modest means; some literally drew red lines - hence the term "redlining" - on maps to indicate the parts of town in which mortgage loans would not be made. Independence Federal set out to challenge those biases and became one of the largest and most community-responsive minority-controlled savings and loans associations in the country.

Independence Federal opened its doors at 624 E Street NW soon after the riots, and pledged itself to make a substantial number of loans to District residents. Local banks and S&Ls considered the District a risky place to invest. But Independence Federal's president, William Fitzgerald, a black businessman, was determined to prove that a financial institution could succeed without participating in racial or economic discrimination. As a result, almost 85 percent of all loans made by Independence Federal have been within the District boundaries - as distinct from an average of 17 percent of such loans made by other local savings and loans. Most mortgage loans that Independence Federal has made have been for properties located east of 16th Street, in areas that other institutions traditionally redlined and ignored. What's more, of the 2,000 loans that it has made, Independence Federal has foreclosed on fewer than 10 in as many years.

Mr. Fitzgerald believes that the success of Independence Federal is due at least in part to its willingness to concern itself with more than just the day-to-day accounts. It sponsors scholarships programs, community luncheons and artistic exhibits. It has offered low-interests loans to a number of community groups; financial counseling is always available. Though it is considered small when compared with other area savings and loans, Independence Federal is large in the contributions it has made to this community. It has demonstrated that loans made in the District can be sound; that people - black People - with moderate incomes repay their loans; and that a minority-controlled financial institution can succeed.