ShoreBank

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ShoreBank (SBK)
Type Community Development Bank, Green Bank
Founded 1973
Headquarters Chicago, Illinois
Key people Ron Grzywinski,
Mary Houghton,
Joseph E. Hasten
Products Financial Services
Microfinance
Total assets $2.1 B. USD (2006)
Website www.sbk.com

ShoreBank is an American community development bank and green bank. It was founded in 1973 in Chicago. A pioneer in profitably lending to underserved urban and rural communities, ShoreBank has grown to $2.1 billion in assets [1]and has affiliates across the United States and international consulting projects.

Contents

[edit] Founding

ShoreBank was founded in 1973,[1] 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. [2] 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.[3] Although mission-based, the bank's financial performance regularly matches or exceeds that of its peer banks.[4]

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.

A ShoreBank branch in Chicago's Bronzeville neighborhood.
A ShoreBank branch in Chicago's Bronzeville neighborhood.

[edit] History

In 1975, the bank became profitable, and has remained profitable every year since.[2]

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. [5]

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.[6]

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). [7] In a 1992 speech, Clinton called ShoreBank “the most important bank in America."[2]

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. [8] ShoreBank Pacific scores potential loan customers based on the sustainability of their operations, environmental impact, and similar factors.[9] In Chicago, Detroit, and Cleveland, ShoreBank has pioneered lending for projects involving Green Building, urban environmental conservation, and energy efficiency. [4]

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

In 2004, ShoreBank founded The Center for Financial Services Innovation to encourage the financial services sector to serve unbanked and underbanked consumers.

In late 2007, ShoreBank became the first community development and environmental bank to launch an online, high-interest savings account. [2]

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.

A ShoreBank branch on Mack Avenue in Detroit.
A ShoreBank branch on Mack Avenue in Detroit.

[edit] Affiliates of ShoreBank Corporation

[edit] Awards

In 1988, ShoreBank founder Ron Grzywinski received the Medal for Entrepreneurial Excellence from the Yale School of Management. [10]

In 2000, ShoreBank received the Community Investing Hall of Fame Award from Business Ethics magazine for “trailblazing efforts in community development financing."[11]

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."[12]

Also in 2004, ShoreBank received the Workforce 2.0 Award from Mayor Richard M. Daley of Chicago. [13]

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."[14]

Also in 2005, the Independent Community Bankers of America conferred to ShoreBank the National Community Bank Service Award.[15]

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."[16]

In 2006, ShoreBank received the Right Workplace Award from the Chicagoland Chamber of Commerce. [17]

In 2007, ShoreBank cofounder Ron Grzywinski was named to the Affordable Housing Finance Hall of Fame. [3]

In November of 2007, ShoreBank cofounders Ron Grzywinski and Mary Houghton were named to U.S. News & World Report's list of America's Top Leaders. [4]

In 2008, ShoreBank received the Social Capitalist Award from Fast Company magazine. [5]

In 2008, ShoreBank cofounders Ron Grzywinski and Mary Houghton received the Hesburgh Award for Ethics in Business from the University of Notre Dame. [6]

[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

[edit] Notes

  1. ^ Thomsen, Mark. "ShoreBank Surpasses $1 Billion in Community Development Investment", "Social Funds", 2001-11-1. Retrieved on January 8, 2007
  2. ^ a b c Douthwaite, Richard. ""How a Bank can Transform a Neighborhood", "Short Circuit". Retrieved on January 8, 2007
  3. ^ Rafter, Dan. "Uncommon Vision", "Motto". Retrieved on January 9, 2007
  4. ^ a b Marshall, Katherine. "ShoreBank gauges success by profit and community impact", Medill News Service, Northwestern University, May 17, 2005, retrieved September 19, 2007
  5. ^ US Congress. "HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1977", 1977. Retrieved on January 8, 2007
  6. ^ Glenn, Brandon. "ShoreBank leaders had hand in Nobel Prize", Crain's Chicago Business, 2006-10-16. Retrieved on January 8, 2007
  7. ^ Clinton, William. "REMARKS BY THE PRESIDENT IN ANNOUNCEMENT OF COMMUNITY LENDING INITIATIVE" White House South Lawn, 1993-7-15. Retrieved on January 8, 2007
  8. ^ Iowa State University. "Investing for Triple Bottom Line Returns", 2006-6-1. Retrieved on January 8, 2007
  9. ^ Weinberger, Dawn. "Company banks on the environment", "Portland Tribune", 2006-9-10. Retrieved on January 8, 2007
  10. ^ "FDIC Advisory Committee on Economic Inclusion", FDIC press release, November 2, 2006, retrieved September 19, 2007
  11. ^ First Sustainable. "Business Ethics Announces Six Social Investment Award Winners", "SRI News", 2000-4-2. Retrieved on January 8, 2007
  12. ^ Cook, Tim. "ICBA Congratulates Houghton on Community Banker of the Year Award", "ICBA", 2004-12-1. Retrieved on January 8, 2007
  13. ^ Clutter, Charles. "Mayor Daley Awards Local Companies Employee Development Achievements" (pdf), "workforceChicago2.0", 2004-6-2. Retrieved on January 8, 2007
  14. ^ The Independent Sector. "Independent Sector to honor ShoreBank CEO Ronald Grzywinski with the 2005 John W. Gardner Leadership Award", "www.independentsector.org", 2005-6-8. Retrieved on January 8, 2007
  15. ^ Cook, Tim. "ICBA Announces National Community Bank Service Award Winners", "ICBA", 2005-4-29. Retrieved on January 8, 2007
  16. ^ The Gleitsman Foundation. "Statement of Purpose", "www.gleitsman.org". Retrieved on January 8, 2007
  17. ^ Chicagoland Chamber of Commerce. "Four Chicagoland Businesses Recognized for Workplace Innovations", "www.chicagolandchamber.org". Retrieved on January 8, 2007

[edit] External links