This letter is written in response to “Last Black-Owned Bank On the West Side Closes,” written by Nona Tepper and published on September 18, 2018. New Orleans-based Liberty Bank & Trust and Co., the last black-owned bank on the City’s West Side, has closed its North Lawndale branch, with the exception of an ATM due to “underutilization”. The bank will focus more on online banking, and acknowledged that its customers “are not tech savvy”. They indicated that they would work with their customers during the transition. The bank leaders indicated that they remain committed to the Chicago market and will continue bank operations at its Forest Park branch.
Ms. Tepper reported that the North Lawndale branch “held $34 million in deposits as of June 30, 2017, which represented 6 percent of Liberty’s total deposits of $554 million, according the most recent data available from the Federal Deposit Insurance Corporation (FDIC). Forest Park held just $3.3 million during the same time frame.” If I read this article correctly, the North Lawndale branch had a deposit base 10 times the Forest Park branch deposit base. Yet, it was the North Lawndale branch that was closed.
I remember doing a study on the lack of banking services in North Lawndale when I was in business school (in the late 1980’s), and the situation seems worse now than it was then, unfortunately. It seems that, regardless of ownership, banks prefer to plant ATM’s in North Lawndale, while offering full services in other locations. They are effectively investing the community’s deposits in other communities, which does not bode well for North Lawndale’s consumers or local businesses.
North Lawndale could benefit from an economic development strategy that will include capacity building to raise the earning potential of local residents while helping local businesses to move towards long term sustainability. This will necessarily include the creation of a community-controlled financial institution and an economic development agency with the capacity to engage in micro-lending and incubate small businesses through multiple growth stages. A lot easier said than done, given the plethora of other community issues, but doable, assuming investors will take the long view, and the community responds appropriately.
Co-Founder, Lawndale Alliance