The last black-owned bank in Chicago is set to receive a $20 million deposit of city funds.
City Treasurer Kurt Summers on Monday announced the deposit into Illinois Service Federal Savings and Loan Association.
Founded in Chicago in 1934 to help give the black community better access to credit, ISF Bank is one of just more than 20 black-owned banks in the country, according to the Federal Deposit Insurance Corp.
The deposit is meant to help drive economic development in the city’s neighborhoods, Summers said.
“It’s about being a community bank,” said Summers, noting that his office works to invest in the city’s neighborhoods and institutions. “Community banks are a great opportunity for that because they are designed for the sole purpose of reinvesting in their local area.”
Though the Bronzeville bank survived the financial crisis and remains the last black-owned bank standing in Chicago, it has seen recent overhauls.
Ghana’s Nduom family, which has a conglomerate that spans West Africa and the United Kingdom, invested $9 million into the bank in June 2016. The family brought plans to make services more efficient, among other changes.
Now, the bank is in a more stable position, and the time was right for the city to make the deposit, Summers said.
On average, the city keeps between $300 million and $700 million on deposit in banks. In order to receive deposits of city funds, financial institutions must go through a special certification process.
The deposit at ISF Bank, which went through the certification process, is the first the city has made with the intent to bolster a community bank, Summers said.
This newest deposit will strengthen the bank’s financial foundation, Chairman Papa Kwesi Nduom said in a news release.
It will ensure “that we can strengthen the economic base of our communities and help people fulfill their dreams,” he said.
The push to invest in black-owned banks and by extension the community is nothing new. The idea is that with money on hand, institutions can improve surrounding communities with loans to individuals and small-business owners.
One of ISF’s competitors, Seaway Bank and Trust, ran a local version of a national campaign known as Bank Black that encouraged people to bank at black-owned institutions. Some industry experts, however, have questioned whether opening new accounts at black-owned banks would turn around neighborhoods affected by lack of investment and jobs.
Seaway was closed by regulators early this year and after two sales is now part of North Carolina-based Self-Help Federal Credit Union.