ARCHIVES OF LEAD STORIES
April 7, 2005
Entrepreneur launches online bank
Mark Jewell
(AP) — America’s first black-owned bank to obtain
a federal charter in a decade hopes to offer Internet banking
services primarily to middle- and upper-income blacks nationwide.
By targeting this growing consumer segment, Boston-based BankBlackwell
is diverging from the strategy of most existing black-owned banks,
which focus on low-income, inner-city clientele traditionally
underserved by bigger banks.
According to a prospectus BankBlackwell began distributing on
Monday to potential investors, the nation’s growing ranks
of wealthier, suburban blacks face few options for investing in
banks serving their communities.
Most black-owned banks focusing on an urban clientele “have
struggled to be competitive in terms of price and convenience,
because they have been unwilling to forego their historical core
constituency but lack the resources necessary for new product
development, targeted marketing initiatives and suburban branch
expansions,” according to the prospectus.
BankBlackwell, which hopes to raise $17 million through a stock
offering, plans to reduce overhead by operating no branches, instead
focusing on online banking. The bank will offer savings and loan
products primarily to black customers and black faith-based organizations,
including churches.
Officials with BankBlackwell declined to comment, citing regulatory
restrictions on what they can say in advance of the initial stock
offering.
The bank is believed to be the first black-owned bank to secure
a federal banking charter since New Orleans-based Dryades Savings
Bank was chartered in 1994, and will join just 47 black financial
institutions operating as of last September, according to federal
records.
Those banks hold just $5.7 billion in assets, compared with $104
billion at the nation’s 36 Hispanic-owned banks.
BankBlackwell’s founder is James Mundy, a former executive
at the nation’s second-largest black-owned bank, Boston-based
OneUnited Bank. Mundy is among 13 organizing founders who have
committed to buy a 9.9 percent stake in the company.
Boston entrepreneur Tony Robinson, who hopes to start a separate
bank focused on underserved minority and immigrant populations,
said BankBlackwell’s wealthier target market offers a lucrative
opportunity.
“I think it will succeed,’’ said Robinson, who
is not involved in the BankBlackwell venture. “One thing
the African American community needs to do is to build up their
own deposit base, because that enables them to invest the dollars
in their communities.”
Back
to Lead Story Archives
Home
Page
