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‘Community banking’

New financial institution brings different meaning to the term for D.C.’s neighborhoods

(Published February 8, 1999)

By OSCAR ABEYTA

Staff Writer

The District has a new bank with a slightly different mission than most traditional banks: building D.C.’s poorer neighborhoods

"We’re going to make our business the business of Washington’s neighborhoods," said Debbi Hurd Baptist, president of City First Bank. She said City First hopes to bring a different way of doing banking to the neighborhoods east of the Anacostia River and east of 16th Street NW, an area that is home to about 370,000 people.

City First, which opened its doors Nov. 24, is a community development bank, the first of its kind in the District. The bank’s major investors include Georgetown University and Fannie Mae and its chairman is Lloyd Smith, retired president of the Marshall Heights Community Development Organization in Northeast Washington.

Baptist said Smith’s involvement in the venture has helped direct the "traditional" bankers in the organization toward thinking about community development. Smith is one of the District’s most recognized leaders in the field of neighborhood revitalization and was named Washingtonian of the Year in 1996.

Baptist said she wants to attract the city’s numerous community development corporations (CDCs), which she said traditionally do not get priority service at banks, and make them a priority at City First. The bank will work with CDCs and lend them money for projects to rehabilitate housing and commercial developments in the District.

City First also plans to offer mortgages, small business loans, special housing and commercial rehabilitation loans. She said she also wants to attract potential borrowers, particularly small business owners, who might have been turned down by other banks.

"We’re committed to a certain amount of technical assistance to some of our clients," Baptist said. She said this could include advising customers on how to complete their loan application or even referring customers to a third-party accountant for help.

Baptist said the bank hopes to begin offering retail banking services — checking and savings accounts — in April or May. She said mortgage packages also will begin being offered at that time.

With the bank’s office located on 14th Street in Northwest Washington’s Columbia Heights neighborhood, Baptist said she will make sure her tellers are bilingual in order to better serve the large Latino population in the area.

Baptist said bank officials also are considering offering educational programs to teach account holders about basic money management to help them stick to their budgets and avoid unnecessary bank fees.

"I think it’s an education that a bank can do if it wants to," she said.

She said City First originally wanted to open two offices at the same time — one in Columbia Heights and one in Marshall Heights — but another bank leased the proposed Marshall Heights location ahead of City First.

"We would love to have a physical presence east of the river," Baptist said. She said plans for the bank still include opening another location.

Baptist said that while the large banks have branch locations throughout the city, the services they provide customers are limited.

"A branch office is not the same as a bank for loans," Baptist said. "They take in money, but if you want to refinance your house, they give you an 800 number to call for a loan application." She said the difference at City First would be that the people who make the lending decisions will be the people with whom the customers are talking.

The concept of the community development bank was started in Chicago two decades ago with South Shore Bank, which offered banking to the black and Hispanic neighborhoods on that city’s South Side.

The idea for City First was born three years ago when an organizing committee was put together to pitch the idea to investors. In addition to Georgetown University and Fannie Mae, other major corporate shareholders include Crestar Bank, First Union Corp., NationsBank Corp., National Community Investment Fund and the Community Foundation for the National Capital Region.

Copyright 1999, The Common Denominator