Chicago’s 52-Year-Old Black Owned Seaway Bank And Trust Co. Closed Down, Here’s Why
By, Jen Nicole
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Black banks helped sustain the African-American community, during the Jim Crow era when Black folk struggled to attain economic success. They can also help sustain the Black community now, that is, if we invest in them.
Did you know, according to the FDIC, there were more than 130 Black-owned banks in the U.S between 1888 and 1934. Over the years, that number plummeted to 48 in 2001, with only 22 remaining in 2016.
Now we can bring that number down to 21 because Seaway Bank and Trust Co., one of Chicago’s largest Black-owned banks, founded in 1965, closed on Friday, Jan. 27, 2017. The bank was sold to the State Bank of Texas in Dallas.
The FDIC reported that Seaway Bank had approximately $361.2 million in total assets and $307.1 million in total deposits, but the institution’s heavy involvement in the #BankBlack movement last year still wasn’t enough to secure much-needed depositors from the African-American community.
The bank said they ultimately closed due to “operations of an unsafe and unsound nature that resulted in inadequate capital to protect its depositors,” the FDIC said in a written statement issued to Atlanta Black Star.
Trying to decode that statement I believe they are saying that the banks were basically in dangerous neighborhoods and people were scared to go deposit their money at these branches, and possibly even open up accounts at these branches, therefore the bank lacked the funds to provide extra security for their banks in these dangerous neighborhoods. If that is in fact the case, that is terrible.
“The FDIC confirmed that all 10 of the bank’s locations across Chicago’s south and west suburbs and O’Hare International Airport, would immediately operate under the ownership of the State Bank of Texas, which was founded by Indian-American businessman Chan Patel. The corporation assured Seaway Bank’s former depositors that their funds would not be affected by the transition.”- atlantablackstar.com
“We want to stress that not one depositor will lose a penny as a result of this action,” Kerri A. Doll, director of banking for the Illinois Department of Financial and Professional Regulation said.
“Apparently, financial woes for the historic Black bank began during Chicago’s crippling housing market crash between 2006 and 2012, during which home values in the area declined a whopping 35 percent, according to theGrio. The market has slowly recovered over the past four years but only managed to regain 10 percent of its value, making it that much harder for the bank to survive the crash.”- atlantablackstar.com
If you remember another failing Black bank, The Illinois Service Federal Savings and Loan Association, was about to suffer a similar fate until the Groupe Nduom of Ghana decided to invest $9 million in capital to revive the bank’s struggling operations. The Ghanaian financial firm acquired the ISF bank in May 2016.
Besides the bank closing what is also unfortunate is the many major Black news outlets that haven’t really covered the Seaway Bank collapse.