In an effort to bolster economic development in the local Black community, the city of Chicago invested $20 million in its last operating Black-owned bank, Illinois Service Federal (ISF) Savings and Loan Association.
City treasurer Kurt Summers announced the deposit to The Chicago Tribune and other media outlets yesterday (September 18). The Tribune reports that while Chicago keeps $300 to 700 million of city funds in local financial institutions, this deposit is the first intentionally made to support a community bank. Summers says that he intends for the deposit to ignite local economic development. “Community banks are a great opportunity for [that development] because they are designed for the sole purpose of reinvesting in their local area,” he told The Tribune.
Bloomberg reports that ISF started in the city’s Bronzeville neighborhood in 1934 with the goal of financing residents of the predominantly Black South Side. ISF outlasted the city’s other Black-owned banks, including Seaway Bank & Trust, which Bloomberg says the regulatory Federal Deposit Insurance Corporation closed earlier this year.
Despite that endurance, ISF still encountered financial difficulties of its own. Bloomberg notes that in 2015, the federal Office of the Comptroller of the Currency ordered the bank to raise more capital or risk closure. The Tribune says that the Ghanaian Nduom family—whose conglomerate oversees a mix of businesses across West Africa, the United Kingdom and the United States—invested $9 million with ISF in 2016, introducing new management and policies soon afterwards.
ISF chairman Papa Kwesi Nduom told Bloomberg that the deposit will add a “much-needed boost to our financial foundation, ensuring that we can strengthen the economic base of our communities and help people fulfill their dreams.”