ShoreBank
ShoreBank was a community development bank founded and headquartered in Chicago. At the time of its closing it was the oldest and largest such institution, and in 2008 had $2.6 billion in assets.[1] It was owned by ShoreBank Corporation, a regulated bank holding company.
ShoreBank had branches in Chicago’s South and West sides, Cleveland, and Detroit. Between 2000 and 2006, ShoreBank issued nearly $900 million in loans to citizens in Chicago, Detroit, and Cleveland.[2] ShoreBank and its affiliated companies have projects in 30 countries.[3]
ShoreBank incorporated environmental conservation into its mission during the 1990s, helping develop a triple bottom line approach to banking, equally prioritizing profits, impact on people, and the impact of a project on the environment.[4]
ShoreBank accepts mission-based deposits from across the country through its Development Deposits program, launched in 1982, and its online savings account ShoreBank Direct, launched in 2007.[5]
Although mission-based, the bank's financial performance has historically matched or exceeded that of its peer banks.[6] However, the bank faced significant losses in 2009.[7] and as of May 2010 was seeking $200 million in additional capital from major investors and the U.S. government. The bank's losses were related to the recession, though it was not engaged in subprime lending.[8]
It exceeded its goal of private capital commitments but did not receive requested government support, a condition of the private investors. In August 2010, the bank faced possible insolvency and risked having its deposits taken over by the Federal Deposit Insurance Corporation, which insured its deposits.[9] On August 20, 2010, the bank was declared insolvent, closed by regulators and most its assets were acquired by Urban Partnership Bank.[10]. Some of the more recent management hirees of ShoreBank, in an unprecedented move by the FDIC, have been allowed to continue to run the restructured bank, now a part of Urban Partnership Bank.[11] According to the FDIC, the recent hirees "did not contribute to the bank's problems."[12] , [13]
Origin
In 1973 the South Shore Bank attempted to relocate from 71st Street and Jeffery Boulevard in the economically declining South Shore to the Loop. At the time, one third of all apartment buildings in South Shore were tax-delinquent and in danger of abandonment by landlords. Angered by the bank's racist lending practices, community banker-activists Milton Davis, James Fletcher, Mary Houghton, and Ron Grzywinski purchased the bank after successfully petitioning the federal Comptroller of the Currency to stop the move.[14] Urban planner Stanley Hallett was a founding board member and was vice president of the bank's holding company its first five years.
In 2000 the South Shore Bank was officially renamed ShoreBank.
Structure
ShoreBank Corporation is the holding company for ShoreBank. Its other subsidiaries provide equity investing, consulting, and environmental banking services:
ShoreBank established a number of affiliated nonprofits to provide related financing, technical assistance, and consulting services:
- Center for Financial Services Innovation
- National Community Investment Fund (NCIF)
- Northern Initiatives, in Michigan’s Upper Peninsula. On August 20, 2010, Northern Initiatives announced that it had amended its by-laws to end appointment of board members by ShoreBank and that it would continue its operations independently of the Chicago-based bank.[16]
- ShoreBank Enterprise Cascadia in Oregon and Washington state announced it would change its name to Enterprise Cascadia on August 20,2010, and would continue its operations independently of the Chicago-based bank.[17]
- ShoreBank Enterprise Cleveland. On August 20, 2010, it was announced that ShoreBank Enterprise Cleveland was changing its name to Enterprise Cleveland (EC) and would continue its operations independently of the Chicago-based bank.[18]
- ShoreBank Enterprise Detroit. It was announced that ShoreBank Enterprise Detroit would be changing its name to Enterprise Detroit and would continue its operations independently of the Chicago-based bank.[19]
- ShoreBank Neighborhood Institute
- ShoreCap Exchange
Recognition
ShoreBank, its co-founders, and its affiliates have received numerous awards and honors, including from the magazines Fast Company,[20] Business Ethics[21], and U.S. News & World Report[22], University of Notre Dame's Mendoza College of Business, the Independent Community Bankers of America[23], Mayor Richard M. Daley of Chicago[24], the Chicagoland Chamber of Commerce[25], and Governor Ted Kulongoski of Oregon.
Former President and Arkansas Governor Bill Clinton is a prominent supporter of the bank. In 1985, ShoreBank worked closely with Clinton to set up the Southern Development Bancorporation, a community development bank serving rural Arkansans. Clinton described ShoreBank as "the most important bank in America"[26] and credited ShoreBank’s success with inspiring a movement of community development financial institutions (CDFIs).[27]
Under a grant from the Ford Foundation in the 1980s, ShoreBank worked with Muhammad Yunus to help him incorporate Grameen Bank in Bangladesh. Yunus and Grameen Bank were awarded the Nobel Peace Prize in 2006.[28]
References
- ^ Annual Reports. ShoreBank.
- ^ Rafter, Dan. "Uncommon Vision", "Motto". Retrieved on January 9, 2007
- ^ Developing International Economies. ShoreBank Corporation.
- ^ Iowa State University. "Investing for Triple Bottom Line Returns", 2006-6-1. Retrieved on January 8, 2007
- ^ Carpenter, Dave. 'Bank with a heart' thrives despite predictions of failure. Savannah Morning News. 11 June 2007.
- ^ Marshall, Katherine. "ShoreBank gauges success by profit and community impact", Medill News Service, Northwestern University, May 17, 2005, retrieved September 19, 2007
- ^ Daniels, Steve (April 2, 2010), "ShoreBank sees another $101M loss just ahead", Crain's Chicago Business, http://www.chicagobusiness.com/cgi-bin/news.pl?id=37682
- ^ Williamson, Elizabeth & John D. McKinnon (May 15, 2010), "Bank Rescue Down to Wire", The Wall Street Journal, http://online.wsj.com/article/SB10001424052748704414504575244694263755672.html
- ^ Roeder, David (2010-08-06). "ShoreBank on the brink". Chicago Sun-Times. http://www.suntimes.com/business/2571600,CST-NWS-shore06.article. Retrieved 2010-08-06.
- ^ Selyukh, Alina (2010-08-20). "Regulators Close Chicago's ShoreBank". ABC News. http://abcnews.go.com/Business/wireStory?id=11449393. Retrieved 2010-08-20.
- ^ Guy, Sandra (August 21, 2010). "Feds seize ShoreBank, new management named". Chicago Sun-Times. http://www.suntimes.com/business/2621106,feds-seize-shorebank-082010.article.
- ^ Gordon, Marcy (August 20, 2010). "Regulators shut down big Chicago bank, 7 others". Yahoo! News (The Associated Press). http://news.yahoo.com/s/ap/20100821/ap_on_bi_ge/us_bank_closures. Retrieved 21 August 2010.
- ^ J.E. Post and Fiona Wilson, Too Good To Fail, Stanford Social Innovation Review, Fall, 2011, [1]
- ^ Douthwaite, Richard. ""How a Bank can Transform a Neighborhood", "Short Circuit". Retrieved on January 8, 2007
- ^ "OneCalifornia Bank to Acquire ShoreBank Pacific and Provide Growth Capital to Extend Beneficial Banking from California to the Pacific Northwest."
- ^ "News about ShoreBank"
- ^ "Message from the President"
- ^ "News on ShoreBank"/
- ^ Henderson, Tom, (August 23, 2010) "ShoreBank Enterprise Detroit unaffected by namesake bank's closure, will get new name″, Crain's Detroit Business Retrieved on September 6, 2010.
- ^ Profits with Purpose: ShoreBank. Fast Company.
- ^ First Sustainable. "Business Ethics Announces Six Social Investment Award Winners", "SRI News", 2000-4-2. Retrieved on January 8, 2007
- ^ Schulte, Bret. Ron Grzywinski and Mary Houghton: Community Bankers. U.S. News & World Report. 12 November 2007.
- ^ Cook, Tim. "ICBA Announces National Community Bank Service Award Winners", "ICBA", 2005-4-29. Retrieved on January 8, 2007
- ^ Clutter, Charles. "Mayor Daley Awards Local Companies Employee Development Achievements" (pdf), "workforceChicago2.0", 2004-6-2. Retrieved on January 8, 2007
- ^ Chicagoland Chamber of Commerce. "Four Chicagoland Businesses Recognized for Workplace Innovations", "www.chicagolandchamber.org". Retrieved on January 8, 2007
- ^ Douthwaite, Richard. How a Bank Can Transform a Neighbourhood., "Short Circuit". Retrieved on January 8, 2007
- ^ Clinton, William. "Remarks by the President in Announcement of Community Lending Initiative." White House South Lawn, 1993-7-15. Retrieved on January 8, 2007
- ^ Glenn, Brandon. "ShoreBank leaders had hand in Nobel Prize", Crain's Chicago Business, 2006-10-16. Retrieved on January 8, 2007
Further reading
- Carpenter, Dave (June 12, 2007). "'Bank with a heart' thrives; Expanding ShoreBank pumps loans into inner-city projects". Spokesman-Review (Associated Press). http://www.spokesman.com/stories/2007/jun/12/bank-with-a-heart-thrives/.
- "Democracy's Edge: Choosing to Save Our Country by Bringing Democracy to Life" by Frances Moore Lappe, Jossey-Bass Publishers, 2005 (ISBN 0787943118)
- Johnston, Chris. "ShoreBank: A self-sustaining institution", Center for Business as an Agent of World Benefit, 2004. Retrieved on January 8, 2007.
- 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
- Sachdev, Ameet: "Nobel winner's bank has Chicago interest", Chicago Tribune, 11/22/2006
- Srivastva, Alka. In Search of Noble Organizing: A Study in Social Entrepreneurship. Diss. Doctor of Philosophy, Case Western Reserve University, Organizational Behavior, 2004.
- Thomsen, Mark (January 11, 2001). "ShoreBank Surpasses $1 Billion in Community Development Investment". Social Funds. http://www.socialfunds.com/news/article.cgi/673.html.
- "Uncommon Vision", Motto, premier issue, 2006
- Wisniewski, Mary. "Milton Davis, community banking pioneer", Chicago Sun-Times, 2005-16-12. Retrieved on January 9, 2007.
- ShoreBank SBA and All About Kids Learning Academy. First Business.
- Schütte, Arjun (August 30, 2010). "ShoreBank's Demise: Death of a Brand and Shot in the Arm of Social Capitalism". FastCompany. http://www.fastcompany.com/1685788/shorebanks-demise-death-of-a-brand-and-shot-in-the-arm-of-social-capitalism. Retrieved September 6, 2010.
- Suttmeier, Richard Henry (August 23, 2010). "Cleaning Up From Recent Bank Failures". Forbes blogs. http://blogs.forbes.com/investor/2010/08/23/cleaning-up-from-recent-bank-failures/. Retrieved September 6, 2010.
- Chesser, Paul (August 27, 2010). "Did Green ShoreBank Escape Bankruptcy?". National Legal and Policy Center. http://www.nlpc.org/stories/2010/08/27/did-green-shorebank-escape-bankruptcy. Retrieved September 6, 2010.
- Hernandez, Will (August 24, 2010). "ShoreBank Affiliate — and Prepaid Advocate — Will Continue Despite Bank's Failure". American Banker. http://www.americanbanker.com/issues/175_162/center-for-financial-services-innovation-shorebank-1024485-1.html. Retrieved September 6, 2010.
- "Eight Banks Collapse Last Week As Questions Arise On FDIC’s Unique Handling Of A Chicago Bank Failure". REJournal online. August 24, 2010. http://rejournalonline.com/eight-banks-collapse-last-week-as-questions-arise-on-fdic%E2%80%99s-unique-handling-of-a-chicago-bank-failure/851579/. Retrieved September 6, 2010.
- "ShoreBank: Small Enough to Fail - The Sorry End to a Bold Banking Experiment". Economist. August 26, 2010. http://www.economist.com/node/16891993. Retrieved June 23, 2011.
External links