START: We’re For Real

Uma Ramiah Photo You can open a checking account. You can deposit money into a Certificate of Deposit. You can even use ATMs around town to get cash.

In short: START Bank is a genuine bank.

That’s what bank president William Placke (pictured) impressed on aldermen gathered for a hearing about his lender Wednesday night at City Hall.

While being community focused, START is a serious, old-fashioned, functional, insured financial institution, Placke said.

Placke cut the ribbon on two brand new bank locations exactly one month ago: START Bank—with one location on Whalley Avenue in Dixwell and one on Grand Avenue in Fair Haven—is concerned mainly with the economic growth and financial health of New Haven neighborhoods, he said.

“But we’re not a giveaway,” he pressed. “We’re a full service bank.”

Read more about the bank’s development here.

START is a community development bank with a twofold mission, Placke said: To use its profit to expand existing services, and to improve New Haven. The bank, which is overseen by a non-profit corporation, intends to pour itself into the community by lending to small, local business and non-profits as well as potential home buyers in New Haven. It also seeks to guide low-income people away from predatory payday lenders, encouraging them to start on the road to fiscal security.

A Hybrid Organization

“You can’t expect to be successful if all you’re doing is the community service stuff,” he told the aldermen. “We have to think of ourselves as, and we are, a full-service, traditional commercial bank. And one of the reasons I was asked to speak tonight is because there’s some misconceptions about that.”

“We have a full suite of loans, deposits and other products,” he said. “We’re a tax paying entity and required to maintain the same capital levels as every other bank. We get no free passes from the Feds,” he said.

START deposits under $250,000 are fully insured by the Federal Deposit Insurance Corporation (FDIC).

“So you have CDs [Certificates of Deposit] and things like that?” asked Alderwoman Bitsie Clark.

Yes, and at a rate that won’t last long but beats the heck out of the market—1.67 percent, said Placke.

The hearing came about, Board of Aldermen President Carl Goldfield (pictured) interjected, when one of the aldermen wanted to buy a CD. “He’ll remain unnamed,” said Goldfield, “But he wanted to buy a CD and said the rates are good—but is this insured? I was surprised that he didn’t understand that this was a regular bank with home and business mortgages, checking, savings accounts, ATMs, all the rest.”

I want people to understand what this is all about, said Goldfield, who sits on START’s board.

“START must be a hybrid organization,” said Placke. The bank will provide traditional commercial banking services for companies and organizations around New Haven, he said, and it needs to attract those traditional clients. But it will also offer convenience services such as check cashing, walk-in bill pay, and money transfers to Mexico with lower fees than traditional banks, and neighborhood services including financial and savings education, youth services, and credit counseling.

“And we want to convince people over time that things like check-cashing aren’t a good way to do business,” Placke said. “We want to move them to the middle of the playing field with a checking account first, reducing fees, and making it easy for them to pay utilities without having to run around the city.”

What About the ATMs?

One important thing, Clark (pictured) noted, is that this becomes a truly neighborhood bank. “But you’re talking about the need for having regular business to support it, right?” she asked Placke.

He nodded.

“So I wonder if I should open an account there, but then I wonder if I have to schlep all the way over to Whalley and Grand? There’s no place downtown,” she said. “I’m all excited to support this bank and I’m sure others would be too, but that would have an effect on me—not being able to get there immediately.”

Placke agreed, and said he’d thought about that very issue. He emphasized the need for a strong online banking facility, direct deposit and remote deposit for commercial organizations.

“We also belong to something called Allpoint ATM network, which has 30,000 machines nationally at Walgreens, Target, grocery stores. They have more machines than Bank of America.”

START designed its partnership with Allpoint to protect customers from fees. “There’s no charge to use the ATMs,” he said. “Our challenge is letting people know that’s the case.”

The Fabric

Placke, prepared with PowerPoint slides, walked aldermen through the bank structure, leadership and development. Then he got to the real issue: poverty.

Showing a map of New Haven representing income per capita, Placke pointed to the lightest areas, which represent households making less than $15,000 per year. “This demonstrates why a community bank is needed,” he said. “This is just an extremely poverty stricken city.”

The light areas, he said, are largely black and Hispanic neighborhoods.

He asked the Aldermen to think of the map as a fabric. “The strength of this fabric is only as strong as its weakest pieces,” he said. “If the fabric starts to fray or shred, we’ve got big problems. So it’s on all of us to strengthen, and darken, those light areas with jobs and development.”

Placke said the bank is already calling itself a vehicle for improvement, and asked the aldermen for their support. “You’ve gotta help us become successful, because our work is to raise the level of New Haven generally. It’s in your best interest—our funds will be cycled back into the community.”

He called New Haven a worthy place for such an effort.

“Are we going to make a ton of money?” he asked, rhetorically. “No.”

Does it matter, he asked?

No.

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Comments

posted by: roger huzendubel on February 25, 2011  2:55pm

I think this is a great idea as long as they dont sell out to first niagara (FNFG). They should really watch their lending standards though, I could see them being pressured to make loans to community residents who might not be of the best credit standards. That is how a LOT of banks lost money in the crisis were dealing with. The building on whalley ave is a great building for a bank, and the grand ave branch is great for those who live in fair haven with no car. Oh and high CD rates are not a good indication the bank is in good financial health, but if theyre insured you got no problem.

posted by: HewNaven?? on February 25, 2011  4:31pm

“Showing a map of New Haven representing income per capita, Placke pointed to the lightest areas, which represented households making less than $15,000 per year. “This demonstrates why a community bank is needed,” he said. “This is just an extremely poverty stricken city.”

START is great compared to all those corporate banks downtown, but the fact remains, if you make under $15,000 a year, it doesn’t matter what your bank does. People need a new form of currency, a new vision of economy, a new system of value, but a new bank (in the old model) accomplishes none of those things.

http://www.youtube.com/watch?v=l7uCHIbg064

posted by: Whatsername on February 25, 2011  4:53pm

This map of New Haven that has income per capita—is it available online somewhere?

posted by: eastchap on February 26, 2011  2:11pm

I used to wonder whether such a bank is needed with so much competitive banking in New Haven. 

BUT it’s here now! You should START using this all service bank.  Though START needs to show a profit and maintain reserves—just like all insured banks in the USA—START is owned by a non-profit foundation with “patient capital.” 

So START doesn’t need to pay excessive salaries to wheeler-dealers bent on merger for high profits. START won’t merge with a bigger bank from out of town just so greedy stockholders can make windfall profits.  Directors take large personal risks imposed by the government regulators but they don’t get paid ridiculously high directors’ fees.

What START does do is take deposits insured up to $250,000 by the FDIC (and it pays the best rate in town on CD’s).  It makes loans to credit-worthy folks regardless of place of residence or national origin.  And, if START doesn’t already, it should provide check cashing to responsible folks at reasonable rates. Plus it’s got free ATM’s all over the world, web banking and all the rest of the bells and whistles.

So do yourself and your friends and your neighbors and your city a favor!  START USING START NOW!!! You’ll feel better because you’ll be doing good while you’re doing well!

posted by: robn on February 27, 2011  3:40pm

HEWNAVEN?,

The cartoon is in one way cute and in another way virulently and paranoically anti-Semitic. Try reading this to broaden your perspective about the unaffiliated new global elite.

http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

posted by: HewNaven?? on February 27, 2011  7:43pm

ROBN,

thanks. I already have read that Atlantic article. It was briefly engrossing. What does that have to do with our currency and banking structure? And, how is that cartoon anti-semitic? Please explain.

posted by: robn on March 1, 2011  6:33pm

HEWNAVEN?

The cartoon implies that the Rothschild family conspiratorially runs all banking in the world, which isn’t true. They are stinking filthy rich and do have a lot of power, but they don’t run the world (a routine right wing accusation against jews.)

posted by: HewNaven?? on March 2, 2011  12:41pm

ROBN,

Sorry I’m not too familiar with right-wing conspiracy theories. I thought the video did a decent job of explaining the origin of the United States banking system (i.e. the meeting at Jekyll Island). I think that’s what you were referring to. It says nothing about the world banking system or about anyone’s religion or culture.

BTW, how could accusations against one Jewish family - even if they were true - possibly serve as an implication of the entire race? Now that’s a stretch!