ST. LOUIS – In contests, someone has to win.
Late this year, Midwest BankCentre won the 2019 Community Commitment Award.
Presented by the American Bankers Association Foundation, the award lauds the bank’s work with black residents as well as Bosnian and Latino immigrants here. The award also highlights Midwest BankCentre’s internal diversity and inclusion.
It all equals to a win for the bank and the communities it serves.
“We celebrate this national recognition of our business strategy, wisely using capital to help everyone achieve their dreams as part of our Midwest BankCentre family,” said Orvin Kimbrough, who in 2018 became the bank’s CEO – the only African-American to hold that post at a Missouri bank.
Before taking his role at the bank, Kimbrough served for five years as CEO of the United Way.
Kimbrough grew up in north St. Louis, some of that time in foster care settings that received aid from the United Way. He began working for the nonprofit in 2007.
Out of 10 executive team members at the bank, three are African-American men and four are women. The bank’s 17-member legal board of directors includes four African-Americans, two Hispanics or Latinos, one Bosnian and three women.
The bank, Kimbrough said, embraces and fosters diversity not just because it’s the right thing to do, but also because it makes good business sense.
“By embracing diversity in people, geography and products, we can spark innovation to better understand and serve all (emphasis on all) of our customers,” Kimbrough said, noting the 17 full-service locations St. Louis.
“Our branches are in some of the our region’s most economically challenged communities and in some of the most affluent” (where most of them are). Our branches reflect the communities we serve with our team members living, working, going to church with and volunteering alongside our customers.”
Midwest BankCentre has a full-service location in the Wells-Goodfellow neighborhood at 5501 Dr. Martin Luther King Jr. Dr.; and another at 3529 N. Broadway in the North Riverfront neighborhood. There is also one in Pagedale, a predominately Black suburb in St. Louis.
Midwest BankCentre recently explained to The NorthSider how winning the financial business of residents who establish bank accounts is a win for the community as well.
Along with accepting deposits in low- to moderate-income areas, it extends capital as credit. As such, local deposits can help area residents and companies buy or improve homes, pay for education and starting businesses.
“By opening an account in a bank, it not only establishes funds for the banks to use, it creates a marketable resource for the person who deposits the money in the account,” MBA Laura Golliday explained.
“It shows their financial worthiness, meaning that they’re able to manage their money. If they’re able to manage their money, then the bank can therefore give a loan based on the amounts they have in those deposits and loan it back to the person,” Golliday added.
It also saves the account holder more money, Golliday said, explaining that unbanked people pay more, on average, for money orders, certified checks, cashiers checks and check cashing fees.
Ninety-three dollars out of every $100 on deposit stay in St. Louis, the bank expressed.
To arrive at figures for the bank’s financial work in distressed neighborhoods, such as those north of the infamous Delmar Divide, the bank uses low- to moderate-income census tracks.
The totals are not in for 2019, but last year there were eight LMI commercial loans, totaling $21.6 million, with 16 totaling $48.5 million in 2017. Also last year, there were 62 LMI small business loans and 201 moderate.
Mortgage loans in LMI areas were: 10.11 percent minority borrowers; 25.17 percent by borrower income; and 21.2 percent by census tract.
Midwest BankCentre provided some ways in which it financially served LMI areas:
- In mid-2019, the bank launched its Bridge Loan, for up to $1,000 depending on the customer’s credit score. A borrower can take up to 18 months to pay it off — with no fees. The Bridge Loan targets the thousands of St. Louisans who spend millions in fees and interest with costly “payday loan” vendors every year, creating a never-ending cycle of debt.
- Affordable Home Improvement Loans help families borrow money for repairs or improvements. To date, $2.28 million worth of local AHIL loans have been logged by Midwest BankCentre, working with the St. Louis Regional Financial Empowerment Coalition (until recently known as the St. Louis Regional Unbanked Taskforce). The program has helped 600 to 700 low- to moderate-income families. The default rate was originally estimated to be 25 percent, but nine years after the launching of the program, 93 percent of the families were paying — or had already paid back — the loans as agreed.
- Credit Booster CD Loans help people build or repair their credit history. Through mid-2019, 950 customers had taken these loans; 95 are currently active. Midwest BankCentre and the 13 nonprofits that make up the Unbanked Task Force set up the program. Customers reach their goals by borrowing money from the bank, and those funds are then placed into a certificate of deposit. As customers pay off the loan, the CD earns interest, giving the customer a solid credit history and a savings account at maturity.
- Second Chance Checking. Another result of Midwest BankCentre’s partnership with the St. Louis Regional Financial Empowerment Coalition is the Bank-On Save-Up Program. Modeled on similar programs nationally but customized for the St. Louis market, it promotes low- or no-cost accounts, low dollar amounts to open accounts, free online banking services, and safeguards to help customers avoid overdraft and other fees.
- The ITIN Mortgage helps people such as recent immigrants who have no Social Security cards. To date, $855,400 worth of ITIN loans have been logged.