Exhibit 10.1


                          AGREEMENT AND GENERAL RELEASE
                          -----------------------------


                  This AGREEMENT AND GENERAL RELEASE (hereinafter referred to as
the "Agreement") is made and entered into on January 28, 2005 by and between
Catherine A. Papayiannis (referred to below as "You") and Carver Federal Savings
Bank (referred to below as the "Company").


                              PRELIMINARY STATEMENT

                  You have agreed to resign from the Company, and consequently,
Your employment with the Company is being terminated. In this regard, the
Company is prepared to pay You severance benefits, but will do so only if You
give up Your rights to bring or participate in certain types of lawsuits. By
signing this Agreement, You will give up those rights, and the Company will
agree to pay You severance benefits. By signing this Agreement, You are not,
however, in any way suggesting that You have any claims against the Company.
Rather, You and the Company are entering into this Agreement to finally resolve
all matters between You and the Company. This Agreement was given to You on
January 5, 2005.

YOU SHOULD THOROUGHLY REVIEW AND UNDERSTAND THE TERMS, CONDITIONS AND EFFECT OF
THIS AGREEMENT. THEREFORE, YOU HAVE BEEN GIVEN A MINIMUM OF TWENTY-ONE (21) DAYS
AFTER THIS AGREEMENT IS GIVEN TO YOU BEFORE SIGNING IT. YOU ARE ADVISED TO
CONSULT WITH AN ATTORNEY BEFORE YOU SIGN.


                                    AGREEMENT

                  1.       You and the Company have agreed that:

                  a.       Your employment with the Company shall cease
         effective at the close of business on January 28, 2005 ("Termination
         Date"). Your compensation and fringe benefits as an employee will
         continue through the Termination Date in accordance with the Company's
         customary practices. By signing this Agreement, You tender Your
         resignation, effective as of the Termination Date, from any and all
         positions that You hold as a director, officer, employee,
         representative or agent of the company and any and all of its direct
         and indirect subsidiaries and affiliates; and

                  b.       In light of Your experience with and knowledge of the
         Company's business and operations, beginning on the day after the
         Termination Date and continuing through the close of business on March
         31, 2005, You will be available to provide consulting services to the
         Company at the request of the Chief Executive Officer of the Company.

                  2.       As of the Termination Date, You will receive the
benefits, if any, to which You are entitled as a former employee of the Company
under its various employee benefit plans and programs.

<PAGE>


                  3.       Your group life, health (including hospitalization,
medical and major medical), dental, accident and long term disability insurance
coverage will continue for the period beginning as of the Termination Date
through March 31, 2006, at the Company's expense to the same extent as if You
were an active employee of the Company and for the same limits or coverage as
would be applicable if You were an active employee of the Company, taking into
account the coverage provided by any subsequent employer.

                  4.       The Company will pay You a severance payment totaling
$251,384.62 payable in bi-weekly installments in accordance with the Company's
customary payroll practices for the period beginning as of the Termination Date
through September 30, 2005 and thereafter a lump sum payment equal to
$107,500.00 payable on or before October 15, 2005, subject in all cases to
applicable withholding taxes. No payment will be made under this Paragraph 4
until after this Agreement has become irrevocable. No additional payment shall
be due and payable to You under this Agreement on account of any services that
You may be requested to provide under Paragraph 1.b. above.

                  5.       As of the Termination Date, any and all unvested
stock options and shares of stock issued to You under any stock option plan or
restricted stock plan maintained by, or covering employees of, the Company, will
be deemed to be 100% vested and will otherwise be subject to the terms and
conditions set forth under such plans.

                  6.       At Your request, the Company will pay for continuing
education and/or coaching services for You. Such education and/or coaching
services, if any, must be completed prior to October 1, 2005 and may not exceed
an aggregate total of $6,000.

                  7.       To the maximum extent permitted under Section 545.121
of the regulations of the Office of Thrift Supervision, for a period of six
years following the Termination Date, the Company will cause You to be covered
by and named as an insured under any policy or contract of insurance obtained by
the Company to insure its directors and officers against personal liability for
acts or omissions in connection with service as an officer or director of the
Company or service in other capacities at the request of the Company, which
coverage will be of the same scope and on the same terms and conditions as the
coverage (if any) provided to active officers or directors of the Company.

                  8.       You hereby agree that You, on behalf of Yourself and
also on behalf of any other person or persons claiming or deriving a right from
You, unconditionally and irrevocably forever release and discharge the Company
and its agents, servants, employees, directors, officers, affiliates and/or
subsidiaries, and any agents, servants, employees, directors and/or officers of
all such affiliates and/or subsidiaries and their respective heirs, successors
and assigns ("the Releasees") from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, actions, demands,
debts, costs, expenses, damages, injuries or causes of action ("Claims") which
You now have, or ever have had, arising out of Your employment by, or
termination of employment with, the Company, up to and including the date on
which You sign this Agreement, whether arising in equity or pursuant to any law,
rule or regulation, including any Claims of which You are not aware or do not
suspect to exist as of the date on which You sign this


                                      -2-
<PAGE>


Agreement, except with respect to such obligations of the Company to You
pursuant to the terms of this Agreement.

                  9.       The release contained in Paragraph 8 of this
Agreement includes, but is not limited to, any Claims that You (or any person or
persons claiming or deriving a right from You) may have based on discrimination
due to age, race, sex, religion or national origin, or any other claims pursuant
to the Age Discrimination in Employment Act of 1967, as amended, the National
Labor Relations Act, Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1866, the Family and Medical Leave Act, the Rehabilitation
Act of 1973, the Americans with Disabilities Act of 1990, as amended, the Equal
Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security
Act of 1974, as amended, the Internal Revenue Code of 1986, Executive Orders
Nos. 11246 and 11141, and any other federal, state or local statute, rule,
constitutional provision, regulation, ordinance or common law, including, but
not limited to, those for wrongful discharge, fraud, intentional or negligent
infliction of emotional distress and breach of any expressed or implied covenant
of good faith and fair dealing, and including but not limited to, any Claims for
recovery of attorney's fees. YOU UNDERSTAND THAT BY SIGNING THIS RELEASE, YOU
ARE GIVING UP ALL RIGHTS THAT YOU HAVE UNDER THESE AND OTHER LAWS.

                  10.      You acknowledge that:

                  a.       (i) the payments and/or benefits provided in
         Paragraphs 3 though 7 of this Agreement are in consideration for the
         releases made by You in Paragraphs 8 and 9 of this Agreement and are in
         addition to what You are otherwise entitled from the Company and (ii)
         You would not receive such payments and/or benefits except for Your
         execution of this Agreement and the fulfillment of the promises
         contained herein;

                  b.       You have been advised to consult an attorney before
         signing this Agreement and have been afforded the opportunity to do so;

                  c.       You have had the opportunity to consider this
         Agreement for at least 21 days;

                  d.       You have read this Agreement in its entirety,
         understand its terms, and knowingly and voluntarily consent to its
         terms and conditions; and

                  e.       the releases made by You in Paragraphs 8 and 9 of
         this Agreement are made knowingly and voluntarily, and without coercion
         by the Company or any of the Releasees.

                  11.      You hereby covenant and agree that, for a period of
six months following the Termination Date, You will not, without the written
consent of the Company, which shall not be unreasonably withheld if it will not
materially injure the Company, become an officer, employee, consultant, director
or trustee of any entity or any direct or indirect subsidiary or affiliate of
any such entity, that directly competes with the Company or any of its
subsidiaries or affiliates (as reasonably determined by the Company) as of the
Termination Date in any city, town or county in which the Company has an office
or has filed an application for regulatory approval to establish an office as of
the Termination Date.


                                      -3-
<PAGE>


                  12.      You hereby covenant and agree that You will keep
confidential and will refrain from using for the benefit of Yourself, or any
person or entity other than the Company or any entity which is a subsidiary of
the Company or of which the Company is a subsidiary, any material document or
information (including, but not limited to, plans, customer lists and business
proposals) obtained from the Company, or from its parent or subsidiaries, in the
course of Your employment with any of them concerning their properties,
operations, business or proposed business plans (unless such document or
information is readily ascertainable from public or published information or
trade sources or has otherwise been made available to the public through no
fault of Your own) until the same ceases to be material (or becomes
ascertainable or available); PROVIDED, HOWEVER, that nothing in this Paragraph
12 will prevent You, with or without the Company's consent, from participating
in or disclosing documents or information in connection with any judicial or
administrative investigation, examination, inquiry or proceeding to the extent
that such participation or disclosure is required under applicable law.

                  13.      The Company agrees that it will make no disclosures
concerning Your employment or other information regarding You except for
confirming employment, job title, dates of service and rate of pay, plus
additional information as, and only as, required pursuant to subpoena or
otherwise required by law. The Company shall make no other disclosures
concerning Your employment or other information regarding You, except that, if
you request a letter of recommendation from the Chief Executive Officer of the
Company, the Chief Executive Officer will consider Your request in good faith
and provide an appropriate letter of recommendation. You agree not to make any
statement or other communication (whether oral or in writing) that You intend,
or that a reasonable person would infer, to be derogatory or disparaging of the
Company or any of the Releasees. You further understand and agree that You shall
not hereafter contact or communicate with employees of the Company or former
employees of the Company regarding the subject matter of this Agreement and will
not join in, facilitate or otherwise participate in any action, proceeding or
investigation against the Company. To the extent provided by law, You will not
be prohibited from filing, or participating in claims filed, with the Equal
Employment Opportunity Commission. Notwithstanding anything in this Paragraph 13
to the contrary, You and the Company agree that the Company will issue a press
release, which shall be substantially in the form attached to this Agreement,
and will otherwise make such disclosures regarding Your resignation and the
terms of this Agreement in compliance with the federal securities laws to which
the Company is subject, including filing this Agreement as an exhibit to the
Company's periodic and current reports under such federal securities laws.

                  14.      This Agreement constitutes the entire understanding
between the parties, and supersedes any and all prior understandings and
agreements between the parties.

                  15.      The parties acknowledge that no representations,
promises, consideration or inducements have been made by the Company or by any
of the Releasees to You other than what is contained in this Agreement.

                  16.      This Agreement may not be modified except by a
writing signed by all parties.


                                      -4-
<PAGE>


                  17.      The parties acknowledge that this Agreement does not
constitute or imply any admission of liability by the Company, or by any of the
Releasees, to You or to anyone deriving or claiming a right through You or on
Your behalf.

                  18.      This Agreement shall be governed by and construed and
enforced in accordance with the federal laws of the United States and, to the
extent federal law is inapplicable, in accordance with the laws of the State of
New York applicable to contracts entered into and to be performed entirely
within the State of New York. If any provision in this Agreement is declared or
determined by any court to be illegal, void, or unenforceable, the illegality or
unenforceability of such provision shall have no effect upon, and shall not
impair, the enforceability or validity of any other provisions in this
Agreement.

                  19.      By signing this Agreement, You promise that You will
not file any Claims, or assist in the Claims of others, against the Company. If
You break this promise by bringing, participating or assisting in a lawsuit
filed under the Age Discrimination in Employment Act of 1967, as amended, or in
administrative proceeding with the Equal Employment Opportunity Commission or
any state or local government agency serving as a referral agency for the Equal
Employment Opportunity Commission, then in addition to any other remedies that
may be available to the Company:

                  a.       if You prevail in such a proceeding, any award that
         You are entitled to receive as a result of such proceeding may be
         reduced by the amounts payable to You under this Agreement; and

                  b.       if You do not prevail, a court may order You to pay
         the Company damages, including attorneys' fees in certain cases (for
         example, if the court finds that You have acted in bad faith).

                  If You violate this Agreement by filing, participating in or
assisting in any other type of lawsuit or agency proceeding, You agree to the
issuance of a temporary restraining order and/or an injunction as an appropriate
remedy, that You will not contest the entry of such an order or injunction once
a violation shown, and that the Company will have the right to seek other
damages, including but not limited to the termination of its obligations to
provide future monetary payments and/or benefits under this Agreement, the
repayment of money and/or benefits already provided, and attorneys fees and
costs.

                  20.      The parties acknowledge that this Agreement will
become effective and irrevocable on the EIGHTH day following the day it is
signed by You and delivered by You to the Company (whichever is later) and only
if it is delivered by You to the Company no later than the close of business on
February 7, 2005. You may revoke this Agreement at any time prior to its
effective date by giving written notice of revocation to the Company.

                  21.      This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.


                                      -5-
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first herein written.


                                            CARVER FEDERAL SAVINGS BANK


/s/ Catherine  A. Papayiannis               By: /s/ Deborah C. Wright
-------------------------------------          ---------------------------------
Catherine  A. Papayiannis                      Name:  Deborah C. Wright
                                               Title: President and CEO

January 28, 2005
-----------------
Date



                      [Press Release Intentionally Omitted]





                                      -6-