The City of Chicago, Illinois, USA, has deposited $20 million into the operations of Illinois Federal Service Bank (ISF Bank), which has the Nduoms, led by Dr.& Mrs. Papa Kwesi Nduom as majority shareholders.
Chicago City Treasurer, Kurt Summers announced the deposit at a press conference on September 18, 2017. He reiterated that the deposit is to help boost economic development of Chicago City and its immediate communities.
He disclosed “it’s about being a community bank” adding, “my office works to invest in the City’s neighbourhoods and communities. Community banks are a great opportunity for that because they are designed for the sole purpose of re-investing in their local area”.
Dr. Papa Kwesi Nduom speaking to the media yesterday said he feels honoured that his small bank in the US has been recognized by the City Treasurer to gain such a huge deposit in his bank. According to him, it is the largest deposit in the bank’s 83-year history and is partly due to the credibility they’ve built over the years in Ghana which has reflected in the US too.
He said “$20m is not really a huge amount of money, however, for our small bank on the south side of Chicago, 20million dollars is significant and is the single biggest deposit that we have received or the bank has received. The bank that we own has been in business for 83 years and this coming from the city of Chicago is also significant because the city has other resources and other opportunities for us to earn fee income. So it is the establishment of the credibility with the city of Chicago and with customers in the US”.
The ceremony was attended by top banking players, some directors of ISF bank, politicians, family members of the founders of ISF Bank and other financial stalwarts in Chicago and its immediate communities.
As the only black-owned bank in Chicago, the deposit will help give the Black community better access to credit and move the bank into long term profitability and credibility to attract other significant businesses from both public and private sector organizations and individuals.
Founded in Chicago in 1934 to help give the black community in Chicago better access to credit, the American Federal Deposit Insurance Corp has noted that ISF Bank has survived as one of just more than 20 black-owned banks in the USA.
This is largely due to the recent overhaul of the bank’s operations by the Nduom family, which also has a conglomerate of companies in West Africa including their home country Ghana, and the United Kingdom.
The Nduoms invested and took control of the bank on April 29, 2016 and immediately brought plans to make services more efficient, among other changes.
This, according to Summers, has seen ISF bank in a more stable position, and therefore the time was right for the City to make the deposit.
According to the Chicago Tribune, “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 made by Chicago City at ISF Bank, which went through a similar certification process, is the first the City has made with the intent to bolster a community bank, Treasurer Summers noted.
Chairman of ISF Bank, Dr. Papa Kwesi Nduom in a news release said this newest deposit will “strengthen the bank’s financial foundation” and noted, “it will ensure that we can strengthen the economic base of our communities and help people fulfil their dreams,”.
The push to invest in black-owned banks and by extension, the community, according to the Chicago Tribune, is underpinned by the fact that “with money on hand, institutions can improve surrounding communities with loans to individuals and small-business owners”.