ShoreBank

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ShoreBank (SBK)
Image:ShoreBankLogoSmall.jpg
Type Community Development Bank
Founded 1973
Headquarters Chicago, Illinois
Key people Ron Grzywinski,
Mary Houghton
Products Financial Services
Microfinance
Website [1]

Founded in 1973 on the South Side of Chicago, ShoreBank is America’s first and leading community development bank. [2] A pioneer in profitably lending to underserved urban and rural communities, ShoreBank has grown to $1.8 billion in assets and has affiliates across the United States and international consulting projects around the world.

Contents

[edit] Founding

ShoreBank was founded in 1973 when Milton Davis, James Fletcher, Mary Houghton, and Ron Grzywinski purchased the South Shore Bank at 71st Street and Jeffery Boulevard in Chicago’s South Shore neighborhood to fight redlining and prevent the bank’s relocation due to white flight and demographic change in South Shore. [3]At the time, one third of all apartment buildings in South Shore were tax-delinquent and in danger of abandonment by landlords.

Over the last thirty years, loans made by ShoreBank, especially home mortgage loans and loans to small businesses, have contributed to the economic resurgence of Chicago neighborhoods like Kenwood, Chatham, Bronzeville, Austin, and, most dramatically, South Shore. Over one-quarter of all mortgage and rehab loans in the South Shore area have been made through ShoreBank. ShoreBank has helped finance the purchase and renovation of 49,000 affordable housing residences. Between 2000 and 2006, it issued nearly $900 million in loans to citizens in Chicago, Detroit, and Cleveland.[4] Although mission-based, the bank's financial performance regularly matches or exceeds that of its peer banks. [5]

ShoreBank now has branches in Chicago’s South and West sides, Cleveland, and Detroit. It has affiliates in Oregon and Washington state, and in Michigan’s Upper Peninsula. ShoreBank’s international consulting services have offices in Chicago, Washington, D.C., and London, and projects in 30 countries around the world.

[edit] Milestones and contributions to community development banking

Frequently called the "inventors" of community development banking, ShoreBank’s successful community lending models have been the inspiration for community development banking institutions around the world.[6]

In 1975, the bank became profitable, and has remained profitable every year since. [7]

In 1977, ShoreBank co-founder Ron Grzywinski was the only banker to testify before congress in favor of the Community Reinvestment Act of 1977 which required banks and thrifts meet the credit needs of the communities in which they did business, including low- and middle-income residents. Thanks in part to Ron’s testimony, it was enacted by congress later that year.[8]

In the early 1980’s, ShoreBank worked with Muhammad Yunus in Bangladesh to help him design and launch the Grameen Bank, under a grant from the Ford Foundation.[9]

In 1982, ShoreBank launched mission-based “Development Deposits,” a program encouraging persons from across the country to keep their savings with ShoreBank. The customers received a competitive rate, but had the added bonus of knowing that their money was supporting projects in ShoreBank target communities.

In 1985, ShoreBank worked closely with then Arkansas Governor Bill Clinton to set up the Southern Development Bancorporation, a community development bank serving rural Arkansans. During this project, ShoreBank introduced Bill Clinton to Muhammad Yunus. Clinton later credited ShoreBank’s success with inspiring a movement of community development financial institutions (CDFI’s).[10] In a 1992 speech, Clinton called ShoreBank “the most important bank in America.”[11]

In the mid 1990’s, ShoreBank helped develop a triple-bottom line approach to banking—a system equally prioritizing profits, impact on people, and the impact of a project on the environment. In 1997, ShoreBank launched ShoreBank Pacific, the nation’s first commercial bank formed to support environmentally sustainable development. [12] ShoreBank Pacific scores potential loan customers based on the sustainability of their operations, environmental impact, and similar factors.[13] In Chicago, Detroit, and Cleveland, ShoreBank has pioneered lending for projects involving Green Building, urban environmental conservation, and energy efficiency. [14]

At the end of 2000, the South Shore Bank was officially renamed ShoreBank.

In 2004, ShoreBank founded the Center for Financial Services Innovation (CFSI) to encourage the financial services sector to serve unbanked and underbanked consumers. [15]

Today ShoreBank’s success is reflected in the global reach of its affiliates like ShoreBank International. ShoreBank continues to reflect the diversity of the communities it serves. Two-thirds of its more than 500 employees are African-Americans.

Currently, ShoreBank Corporation is the holding company for ShoreBank.

[edit] Affiliates of ShoreBank Corporation

[edit] Awards

In 2000, ShoreBank received the Community Investing Hall of Fame Award from Business Ethics magazine for “trailblazing efforts in community development financing.”[16]

In 2004, ShoreBank cofounder Mary Houghton was named “Community Banker of the Year” by American Banker magazine for her work making ShoreBank “the gold standard of community development banks.”[17]

Also in 2004, ShoreBank received the Workforce 2.0 Award from Mayor Richard M. Daley of Chicago. [18]

In 2005, ShoreBank cofounder Ron Grzywinski received the John W. Gardner Leadership Award from the Independent Sector recognizing a career that has “transformed underserved neighborhoods into vibrant communities and inspired a community development banking movement worldwide.”[19]

Also in 2005, the Independent Community Bankers of America conferred to ShoreBank the National Community Bank Service Award.[20]

In 2006, ShoreBank cofounders Ron Grzywinski and Mary Houghton received the Gleitsman Citizen Activist Award at Harvard University for their work transforming “under-served urban neighborhoods across the country into vibrant communities.”[21]

In 2006, ShoreBank received the Right Workplace Award from the Chicagoland Chamber of Commerce.[22]

[edit] Sources

  • Sachdev, Ameet: "Nobel winner's bank has Chicago interest" Chicago Tribune 11/22/2006
  • “Uncommon Vision” Motto, Premier issue, 2006
  • Marcus, Craig: "Beyond the Boundaries of the Community Reinvestment Act and the Fair Lending Laws: Developing a Market-Based Framework for Generating Low- and Moderate-Income Lending" Columbia Law Review Vol. 96, No. 3 (Apr., 1996), pp. 710-758
  • Wisniewski, Mary: "Milton Davis, community banking pioneer" Chicago Sun-Times 12/16/2005

[edit] References

[edit] External links

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