New Haven Independent

The new bank doesn’t exist yet. It’s been years in the making. But it now has a president, Chandler Howard. He has been working alone upstairs in a different bank’s building at 205 Church St., in an office without a secretary, to prepare for a late-summer or early-fall launch.

Howard used to have two secretaries working for him — and as many 5,000 employees at one time, including 14 vice-presidents. That was when he served as a senior vice-president at Bank of America, one of several large banks where he broke barriers in a storybook career rise from the streets of Bridgeport.

After 33 years climbing that ladder, Howard has left all that behind to start small, but aim for what some may consider a higher star: building from a scratch a community development bank in New Haven that measures its success as much by how many blue-collar people buy homes or start businesses, as by how large a dividend it sends investors.

“I spent 33 years making a lot of money for a lot of investors,” Howard said the other day. “I made a lot of money. Money isn’t everything.”

A New Genre

The new bank doesn’t have a name yet. A leading contender is “First City Bank.”

The bank is the product of a community campaign. Politicians, community groups and just regular depositors reacted in outrage when the old New Haven Savings Bank converted in 2004 from a local mutual savings bank into a regional publicly-owned colossus-in-the-making called NewAlliance. They opposed the conversion. They decried the transfer of wealth from the city’s last major local community-focused bank to yet one more faceless megabank skimming tens of millions of dollars off the top for management and board salaries and bonuses.

As part of a settlement deal, NewAlliance agreed to put $25 million into a new not-for-profit fund called First City Fund Corp. to “create wealth” in New Haven. Some of that money will go toward creating a new for-profit “community development” bank in New Haven. It’s the first time anyone around here can remember that a bank had to fund the creation of a competitor to gain permission to go public.

The goal of the bank is to fill the gap left behind after out-of-town megabanks swallowed up local institutions: lending to working-class people and people of color in city neighborhoods to buy or fix up homes and to start or expand businesses. Such “community development banks” have sprung up across the country the past few decades. Prime examples: South Shore in Chicago (the granddaddy), City First in D.C., and North Milwaukee State Bank.

Unlike traditional banks, community development banks have a dual mission: To make enough money to stay in business and grow, of course; but also to revive the economic fortunes of redlined or otherwise left-behind urban or rural communities. Their investors don’t expect them to earn the same rates of return as more traditional lenders.

$$s & Social Sense

Chandler Howard learned how to deliver the higher returns at traditional lenders. He arrived at that place through an unlikely path.

Howard had grown up in a blue-collar family in Bridgeport. Both parents worked. His mom, a teacher, was also an activist. She started a model neighborhood tutoring program. She also got involved in civil-rights causes.

In 1971, Howard returned home to Bridgeport after two years flying helicopter missions in Vietnam. He didn’t feel especially welcomed, or hopeful of finding a lucrative job. “If you were African-American, and you were a Vietnam veteran, you had two strikes against you” back then, he said.

The best job Howard could find was retrieving carts in a supermarket parking lot. He also cleaned the floor of a bakery, in between taking classes at Housatonic Community College.

In 1972 he dropped everything for a few months to respond to a Red Cross appeal for volunteers to travel to Pennsylvania to help communities devastated by Hurricane Agnes. Back in Bridgeport, the Red Cross gave Howard its volunteer of the year of the award. He found himself sitting with an elderly couple he didn’t know at the dinner.

“What kind of work do you do?” the man asked.

“I don’t have a job,” Howard responded. Then he added, half-joking: “Perhaps you can give me one.”

That comment proved far more valuable than the silver goblet the Red Cross gave Howard. The woman at the table happened to be B.J. Goodspeed, who chaired the volunteer event. The man was her husband, top dog at fast-growing People’s Bank.

Howard landed at a teller window — with a job. Then he landed in a management training program, the first African-American enrolled. He worked his way up to branch manager, zone manager, regional manager, until he ascended to senior vice-president overseeing 25 percent of People’s expanding roster of branches.

When Fleet moved into Connecticut in the early ’90s, gobbling the failed Connecticut Bank & Trust Company, it hired Howard away from People’s to help figure out how to work better with local communities. “Fleet had a terrible reputation. They deserved it,” Howard said. “At the time, the posture of most large banks when they gobbled up another bank was, ‘We know what we’re doing, and you don’t.’ They felt they knew more about local politics and local conditions than the people who are there.”

Howard moved from there to a senior vice-president’s post at Bank of America, where he had all those employees and senior vice-presidents reporting to him; then on to the top post at Connecticut Innovations Inc. Next came the offer to downsize and help New Haven turn the activists’ proceeds from the NewAlliance conversion into a new era of community investment.

Howard said he believes he’s following in his mother’s socially conscious footsteps by using his banking knowledge to make millions of dollars available to help people rebuild New Haven neighborhoods.

First City (or whatever the bank is eventually called) will not just lend money to homeowners and small-business owners, he said. It will compete for some of not-profit loan business, and counsel urban dwellers on how to access credit. It will offer CDs and checking accounts, but no credit cards.

“I’m a banker. I know what the regulators look for. I know what kind of loan decisions to avoid. I understand the nuts and bolts of how to run a bank” and make a difference in a community, he said.

By having a dual mission, with investors looking for returns other than straight dividends, community development banks can deliver loans to many city-dwellers otherwise ignored by conventional lenders, Howard said. “I don’t think [the major banks deliberately] redline,” he said. “The people who work there are good people.” But their large organizations set up a process by which bankers “seek the safest loans and the highest rates” and feel constant pressure for short-term results. “They don’t have the appetite” for smaller loans in cities, he said. “A smaller community like New Haven isn’t important enough for a bank to evaluate it.”

Community-development banks have the luxury of being more “patient,” he said. And “helping to stabilize a neighborhood” makes its investments “more secure.”

To get there, Howard is finishing up the new bank’s business plan and a submission to the State Department of Banking. Next come public hearings, reviews by other state officials, a temporary charter, and pursuit of FDIC insurance. That process usually takes up to six months.

Meanwhile, the bank will hire permanent chief financial and chief lending officers. It will look for locations in city neighborhoods. Howard expects to hire 17 employees in the first year.

That’s fewer than 5,000 — but potentially more powerful a force in New Haven.

Sign Up for Email AlertsEmail This Story

Your Email:

Recipient's Email:
Your Email:
Message (optional):

Your Name:
Your Email:
Message: