A change of name for One-United Bank is the latest step reflecting the former Boston Bank of Commerce’s recent transformation and new national outlook. But according to OneUnited officials, the mission of the Boston-based institution is unchanged.
The bank last week adopted the name OneUnited, a move designed to help link minority communities from Boston to Los Angeles in which the bank has a presence. The bank also recently introduced a new program designed to educate low-income families and ease their reservations about using bank services.
Last August, the bank merged with Los Angeles-based Family Savings Bank, creating the largest black-owned bank in the country. The merger combined BBOC in Boston, Peoples Bank of Commerce in Miami and Founders Bank of Commerce in Los Angeles with Family Savings Bank.
The latest step in the bank’s evolution is the new name and introduction of a product that serves the mission of the bank and the communities it represents.
Changing names to reflect a broader audience and a more national appeal has not changed OneUnited’s mission and will not affect the bank’s operations in Boston, according to Kevin Cohee, chairman and chief executive officer of OneUnited.
OneUnited alerted local customers of the name change through print advertisements and community newsletters. The ads featured many branch managers in an effort to show that “even though the bank’s name has changed, the people behind the name are still the same, all the while linking many communities together,” said Cohee.
OneUnited offers customers branch service on Federal Street and in Roxbury. Across the nation, the bank has a total of 12 branches located in inner-city communities throughout Los Angeles and Miami.
“We are linking communities together and allowing them to share resources … We are relying on each other and growing from each other,” said Cohee. “We’re in need of being brought up to date and the name captures more of a modern day company but preserves the [bank’s] legacy dating back to the civil rights movement.”
While the name preserves the integrity of the institution, Cohee said the bank’s hometown was the most difficult in which to gain momentum and growth.
“Boston is the toughest city I’ve ever been in for minorities, blacks in particular, to do business,” said Cohee. “The idea of it being a minority-majority city is not meaningful – minorities have no control over any institutions.”
Cohee said that because minority neighborhoods in Boston have not received the full attention of banking institutions or had access to specialized programs, many are distrustful of banks.
So Cohee introduced a product that he said is fully controlled by the customer.
The OneUnited Bank Membership Program provides customers in urban inner-city communities with affordable access to banking services that are not available in existing banks, according to Cohee.
“Essentially, [the new product] addresses the challenge of the existing banking paradigm whereby banks have essentially driven away low-balance customers,” said Cohee, referring to customers with a checking or savings balance of less than $10,000. “Inner-city residents are confronted with a twofold [negative] dynamic when banking – institutions are threatening in appearance and appeal and the creation of the pricing paradigm whereby rich people don’t pay anything and the people with the least amount of money pay fees.”
Cohee said OneUnited customers needed availability and continual access to banking services, and opened the OneUnited Bank Membership Program, which allows customers to open unlimited accounts for free.
“[This product] overcomes a psychological barrier, and people begin opening accounts for the kids, home renovation and education, and it encourages savings in the area,” said Cohee. “It creates a planning and saving tool and creates an environment that allows people to engage in the banking process.”
Cohee said the banking system plays a role in a “capitalistic society whereby citizens are supposed to have a safe haven in saving their money in our society,” However, banks located in inner cities and urban areas with poor pricing policies are not providing for the economy, or attempting to relate to their customers, he said.
“Money is not put away in savings and it tends to dissipate [when fees are incurred],” said Cohee.
Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations, said more businesses devoted to minorities and low-income communities are needed to help build up the economy.
“As a general matter, we would like to see more competition in the minority marketplace,” said Kriesberg. “The importance of having banks, credit unions and mortgage companies targeting inner-city businesses and low- to moderate-income communities is equally as important as having people at that bank focused on those communities to ensure those particular groups don’t fall to the bottom of the list.”
Kriesberg said that in the case of OneUnited Bank, a niche market was serviced because there was an “expertise” in the bank, which translates into the bank knowing its customers well.
Other area bankers argue that successful banking practices are as important as in-depth knowledge of customers and communities, however, and sound programs will prevail over time.
“We are about doing good business so that whatever we put in place we want to make sure is sustainable over a long period of time. If it’s not sustainable, it will ultimately not serve the community,” said Thomas Kennedy, vice president of community development at Sovereign Bank in Boston. “The city of Boston is now a minority-majority city and that catches people off guard – people need to realize this is important … and we need to pay attention to that.”
Education, Information
Cohee said some reports have essentially dismissed the importance of OneUnited, which currently boasts assets of $500 million, by comparing its tenure and assets with the much larger institutions FleetBank, Citizen’s Bank and Sovereign Bank, but he said he believes the bank plays a critical role in inner-city communities and that its smaller size is an advantage in working with minority consumers.
As it relates to banking and investing in low-income and minority communities, Cohee said Community Reinvestment Act requirements are simply “regulations to bigger banks” that do not specialize in working with inner-city customers.
Kennedy, however, said the CRA process is a goal across all business lines to target products toward low- and moderate-income and minority communities and individuals.
“Within the various business lines are products and services addressing those needs … low- and moderate-income communities are just as interested in interest rates and savings products as the rest of the community,” said Kennedy.
According to Cohee, OneUnited is dedicated to leading inner-city communities in a direction resulting in financial stability.
“OneUnited is … very niche-focused in targeting inner cities,” he said.
The historical lack of black-owned banks has created a challenging environment for financial institutions hoping to woo minority customers, said Cohee, who referenced the bank’s financial literacy program as an example of how to correct the problem.
Cohee said the OneUnited financial literacy class is aimed toward educating black women, and was therefore taught by black women so students were able to relate to the teachers.
But for some banks, it is the effort devoted to the nature of a particular community that results in success and value, and according to Kennedy, it is done with “presence and with personnel.”
“All banking is local, as we know, and it makes a huge difference in how people are going to respond to the opportunities that we are going to present them,” said Kennedy.
According to Cohee, aiding communities in need will help the overall marketplace.
“We are suffering from a truncated economic cycle. We have these vibrant businesses and those profits have been reinvested in the form of jobs and the cycle goes on and on … in the inner city you don’t have that cycle,” said Cohee. “We need to develop these vibrant business enterprises that want to participate in local – but also national and regional – economies.”
Cohee said that as the largest black-owned financial institution in Boston, the goal of OneUnited is to help regain the cyclical movement in the economy. And despite the bank’s growing national focus, OneUnited is committed to keeping its headquarters in the Hub.
