New owners to carry on ShoreBank's mission

August 23, 2010 (CHICAGO) ShoreBank, which was founded in 1973, was known for lending in a community when other banks would not. Now customers are wondering how the federal takeover will impact their business- and the community.

Accounts are secured by the FDIC. However, there is concern about whether the community-minded bank at 71st and Jeffery can continue as a generous neighbor.

The newly formed Urban Partnership Bank bought the assets and deposits of ShoreBank.

"I was watching TV and I saw the bank examiners come in. I knew they had problems before but I thought that was over," said Edwin Anderson, customer.

On Friday after the bank closed for the day, the Federal Deposit Insurance Corporation stepped in as ShoreBank's receiver-- and the bank will now be Urban Partnership Bank.

"Urban Partnership is committed to doing that today and continuing the services that our communities need and are required to restore economic vitality," said Brian Berg, Urban Partnership Bank.

Today some customers wanted to find out how the change in name impacted them. Tonnette Williams-Harrison has several accounts and says ShoreBank warned her months ago about ways to insure her money was safe.

"Because I'm a small business owners and my family owns property loans with ShoreBank, we just wanted to make sure everything will be fine," said Williams-Harrison.

ShoreBank had been struggling. The bank would consider lending to banks others would not.

"The people who were not able to get credit from other banks, who were not quite as credit worthy as normal mortgage loan borrower and these are risky loans in the best of times," said Prof. George Kaufman, Loyola University.

George Kaufman, a professor at Loyola University Graduate School of Business, specializes in banking. He says in order for a bank to be successful it has to watch the bottom line and a bank with philanthropic ideals can run into trouble--particularly when the economy worsens.

"They took a gamble, a do-good gamble but never the less a gamble, and in a time like this they found out it doesn't work that well," said Kaufman.

Leslie Martin has been customer for 30 years. She hopes the new bank will retain some of the same mission as the old one.

"A successful ending for the bank is a successful ending for the community I think," said Leslie Martin, customer.

Urban Partnership Bank has a consortium of private investors. They say they are prepared to carry on the mission, but they are still working out the transition.

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