Urban Partnership Bank, the reincarnation of pioneer CDFI ShoreBank Corp, cut its workforce by 20% last week. Is this a necessary evil to continue a good banking mission?
ShoreBank, the Chicago-based community bank that since 1973 was a leader in the Community Development Financial Institution (CDFI) industry, was seized by the Federal Deposit Insurance Corporation (FDIC) on Friday August 20th due to dramatic losses in recent years.
ShoreBank’s 15 branches, located in Chicago, Detroit, and Cleveland, reopened yesterday under the name of the Urban Partnership Bank. David Vitale, a former First Chicago Corp. senior executive, helped line up the group of investors that acquired ShoreBank and now serves as chairman of Urban Partnership Bank. Vitale said UPB aims to continue ShoreBank’s mission of three decades: lending to low-income urban neighborhoods. Cutting 60 of the 300 jobs was a necessary step in the process according to bank spokesman.
“It was a difficult decision, but a smaller workforce is needed for Urban Partnership Bank in order to continue providing quality financial services in our low-income communities in a strong and sustainable manner,” the spokesman said in an article in Crain’s Chicago Business.
In addition to a leaner workforce, Mark Pinsky, President and CEO of Opportunity Finance Network (OFN), said, “They’re going to have to adjust some of their strategies,” but that he is confident the situation has been resolved in a positive way. Socially responsible individuals, philanthropic organizations, and financial institutions from Chicago and across the country want to see this new bank and its new owners succeed. Let’s hope they will for the distressed neighborhoods and communities in the areas ShoreBank once served.
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