New Haven Independent

The bank-in-progress Placke runs does have a name. A tentative name. It’s called First Community Bank.

That’s the name Placke put on the application and business plan he recently submitted to the Connecticut Department of Banking. The filing moves forward a dream that’s been gestating in New Haven for four years: formation of a community development bank with the mission of developing low- and moderate-income home and business lending. Community development banks have sprung up across the country the past few decades. Prime examples: Chicago’s ShoreBank (the granddaddy), City First in D.C., and North Milwaukee State Bank. People like U.S. Sen. Chris Dodd see them as vital to rebuilding urban neighborhoods amid the current foreclosure crisis and economic meltdown.

The bank will be a for-profit subsidiary of a not-for-profit called First City Funding Corp., which formed with $25 million from a deal struck after 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. The idea was to find a way to keep loans flowing to potential homeowners and small-business owners in neighborhoods like Fair Haven and Dixwell and the Hill as traditional local banks for-profit disappear.

Now Placke, as First City’s chief, is in charge of making the new bank happen. The new bank should have about $14.7 million in start-up capital, he said. He submitted all sorts of ambitious plans to the Banking Department. Now that the multi-step regulatory review process is underway, Placke hopes the new bank can open as soon as fall or the end of 2009.

With, he hopes, a better name than its working title.

“‘First Community Bank’ doesn’t make you say, ‘Wow!’” he said in a conversation in his office on the third floor of 205 Church St. “I would like to have in some way convey our mission — to assist people in prospering [in lower-income neighborhoods]. Someone going from $30,000 to $50,000 is prospering at a greater rate than someone going from $1 million to $1.2 million.”

The fledgling bank’s mission has taken on new urgency in the face of a foreclosure crisis sweeping the city. First City has already joined a coalition trying to keep people in their homes; click here to read about it.

First Stops, Whalley & Fair Haven

When the bank opens, it’ll probably have two branches, according to Placke’s plan. One would be in Fair Haven, the other on Whalley Avenue, somewhere near Sherman Avenue.

He arrived at that choice after Yale Law School volunteers did extensive mapping of New Haven demographic data. They were looking for areas with the high concentrations of low-and-moderate income people; for busy thoroughfares, with lots of bus stops and small businesses; and proximity to other neighborhoods and potential customers.

So lower Whalley, for instance, not only has lots of bus riders. It’s near Shaw’s, where people shop, and the Hospital of St. Raphael, where many potential customers work. It straddles Dixwell, Dwight, Edgewood, with Newhallville not far away. And it’s close to downtown, where Placke hopes to market the bank to accounting and other service firms.

In choosing branch locations, he was also looking for nearby check-cashing and payday-lending outfits — “organizations that charge you and arm and a leg and keep you captured forever.” He wants to lure customers who are currently going to such businesses, and getting ripped off.

Since the new bank’s parent will have a not-for-profit, community-driven mission, it will be able to charge less than those storefront outfits to cash people’s checks, Placke said. Once he draws in those customers, he hopes to move them to prepaid debit cards, then affordable (as opposed to predatory) loans.

In aiming to help people resist the temptations of profiteers, Placke’s bank will aim to do more than get their business. He hopes to give them skills to borrow and save and invest more wisely — what you might call “financial literacy.” Actually, experts do use that term. Yale economics guru Robert Schiller, for instance, is arguing that helping everyday consumers learn the ropes of investing should be an integral part of the federal government’s response to the current Wall Street meltdown. Placke anticipates hiring financial counselors to be stationed at the new bank branches to offer that kind of advice.

His plan includes other newish ideas too. He hopes to use new technology that’ll allow small-business customers to scan deposits from their offices and send them electronically to the bank. And he hopes to partner with Home Depot or Lowe’s to bring in experts to train mortgage-holders on maintaining their homes. The U.S. Treasury Department has a grant program to underwrite such programs.

Getting Ahead

To get there, Placke’s bank will need certification from Treasury — one of several steps still to go before First Community, or whatever it’ll be called, opens its doors.

“There is no more important time to get this up and running and helping people and businesses in this community,” said Placke, who previously ran Centerbank and Boston’s First Trade Union Bank. “There is still fairly good evidence of lending gridlock.”

First step: obtaining a temporary charter from the state banking department. Now that Placke has submitted the application and business plan, the department is conducting a feasibility study. After that come public hearings, which Placke hopes can take place in January. A temporary charter could then come as early as late January or February. The charter application lists the new bank’s proposed Board of Directors: Mayor John DeStefano Jr., John Devlin, William Placke, Michael Schaefer, Robert Solmon, Corey Stone, Susan Whetstone, and Rolan Joni Young.

Assuming the bank gets its temporary charter, it then needs a federal charter approved by the Federal Deposit Insurance Corporation (FDIC). Concurrently the project will undergo an approval process with the U.S. Treasury Department. Placke said that if all goes right, the bank could open its doors before 2009 lets out.

By then, presumably, Placke will have a name he likes better than “First Community.” Have ideas? Post your suggestions below, and we’ll forward them to him.