Detroit-based First Independence Bank, a Black-owned bank, plans to open a Twin Cities branch in early November, pending FDIC approval. The bank filed its branch application on August 19. Currently, the Twin Cities does not have a Black-owned bank.
First Independence Bank is expected to predominantly focus on commercial real estate banking. The bank, the seventh-largest Black-owned financial institution in the United States, will operate at 3430 University Ave. S.E., in Minneapolis, in a former Wells Fargo branch donated to the advocacy group Project for Pride in Living. The branch will also offer customers ATM and debit card use at any such Huntington and Wells Fargo location with no service fees, a loan program to help establish a credit score or repair personal credit, virtual financial education sessions and more.
First Independence Chair and CEO Kenneth Kelly said the Minneapolis site already has a drive-thru, which was important since Minneapolis has placed a moratorium on the construction of new drive-thrus. It will also offer space to host education sessions and community gatherings. A second First Independence location, at the intersection of Lake Street and Hiawatha Avenue, is possible by mid-2022. That location was considered the epicenter of the protests following the murder of George Floyd at the hands of Minneapolis Police Officer Derek Chauvin.
“We are fortunate to find a site on a major thoroughfare, making it accessible to the large cross-section of residents and businesses that a bank needs to be economically viable,” Kelly said of the first site. “Being on a light rail line and a bus route is a plus for the under-resourced communities we hope to serve, particularly the Black community. So is the opportunity to be part of an established commercial area with few nearby banking options.”
The leaders of the five largest banks operating in the Twin Cities — Bank of America, Bremer Bank, Huntington Bank, U.S. Bank and Wells Fargo — are supporting First Independence Bank’s arrival with capital, research, marketing and other services.
Laurie Nordquist, Wells Fargo’s central lead region president, observed: “Black households [in the Twin Cities] are more than five times more likely than white households to be unbanked. We need to continue our efforts for outreach and inclusion while also supporting a Black-owned bank. This is not an ‘either-or’ proposition — it’s a ‘both-and’ proposition.
“Supporting a bank like First Independence Bank, with its history and know-how, is part of the change we are collectively working to make in the financial services ecosystem,” Nordquist added.
Jeanne Crain, Bremer Bank president and CEO, said First Independence, as a qualified Community Development Financial Institution, can tap into a special CDFI fund allowing for more favorable lending rates to individuals and businesses in low-income areas.
The bank’s capital plan called for it to raise $20 million. Half of that amount has been raised; an investment banker is working to raise the remainder.
Kelly said the bank’s home loan programs are intended to reduce racial disparities in the Twin Cities, an area with one of the largest such gaps in the United States. According to the Urban Institute, 70 percent of white families own homes in the Twin Cities, but just 20 percent of Black families do. Of the more than 5,000 U.S. banking institutions, only 18 are Black-owned — down from 48 in 2001. He noted that the decision came after discussions began in April with several Black business, religious, nonprofit and regional community leaders.
Paul Williams, Project for Pride in Living president and CEO, said the bank presents an opportunity for the Black community to build needed capital capacity. As of 2017, the FDIC found that nearly 17 percent of U.S. Black households were unbanked, far higher than the 3 percent of unbanked white Americans.
Damon Jenkins, formerly Wells Fargo’s district manager for Minneapolis, has already joined First Independence Bank as senior vice president and Twin Cities regional market president.
The $324 million First Independence currently has three offices, all in the Detroit area.