Net bank to target affluent blacks
A former executive of OneUnited Bank, the largest African-American owned bank in the country, has received preliminary approval from federal regulators to launch an Internet-only bank in Boston that would target affluent African-American households across the country.
The bank, to be known as BankBlackwell, would be run by James R. Mundy, who served as chief operating officer at OneUnited Bank until fall 2003. Two other members on the board of directors are also connected to OneUnited Bank, including Michael P. Burley, who currently serves as the bank's senior vice president and treasurer.
Mundy and other BankBlackwell officials declined to comment because they are in the process of raising capital.
Robert Patrick Cooper, senior counsel at OneUnited Bank, described BankBlackwell's approach as a ''skimming strategy that only appeals to the affluent."
OneUnited Bank, which started in Boston as the Boston Bank of Commerce, is now the largest African-American owned and managed bank in the country after taking over the Founders National Bank of Commerce in Los Angeles and the Peoples National Bank of Commerce in Miami.
Bank officials are currently seeking private investors. The bank plans to go online this summer if it can raise about $16 million in capital. To date, it said it has commitments of $860,000 from its officers and directors.
BankBlackwell says in its filing with the federal Office of Thrift Supervision that African-American banks -- unlike Hispanic and Asian banks -- have had relatively limited reach and not one African-American banking institution currently has assets exceeding $1 billion. The bank says the buying power of affluent African-Americans is expected to grow to $921 billion in 2008.
According to US Census figures, African-American households earning more than $50,000 grew to 4 million in 2002 from 766,000 in 1970.
At the same time, the 47 African-American financial institutions currently operating are located primarily in inner cities and were established to provide banking services to the low-to moderate-income segment of urban communities, BankBlackwell said in its filing.
''It's an interesting way to get past the traditional brick-and-mortar localized banks that have focused on African-American communities," said potential investor Winston Henderson, vice president of Surface Logix, a drug development company in Brighton. ''The Internet allows you to reach African-Americans who have moved from urban areas and provide the most sophisticated services that more affluent African Americans may desire."
In its filing, the company said its banking services will exploit the Internet to maintain low overhead costs and pass on those savings to its customers. BankBlackwell's financial services are designed to supplement, not replace, a customer's existing checking account.
To open a deposit account with BankBlackwell, customers must establish a link between the new account and a checking account at another financial institution. This allows customers to avoid the difficulties of changing banks and to keep the convenience of ATM networks offered by traditional brick-and-mortar banks.
Jenn Abelson can be reached at abelson@globe.com.
