OneUnited Bank

OneUnited Bank

Type	Community Development Bank, Green Bank
Industry	Banking
Founded	1968
Headquarters	Boston, Massachusetts
Area served	Boston, MA Miami, FL Los Angeles, CA
Key people	Kevin Cohee
Products	Financial Services Mortgages
Website	www.oneunited.com

OneUnited Bank is an African-American-owned Internet bank and controlled Massachusetts-chartered trust company headquartered in Boston, Massachusetts. The bank is also a community development financial institution (CDFI) as designated by the United States Department of Treasury. Proponents claim that OneUnited Bank has provided unique and valuable services to African-American communities. Opponents claim that the bank was given an unfair advantage through illegal back-room deals with politicians.^[who?]

OneUnited Bank had to write off more than $50 million when its investments in Fannie Mae and Freddie Mac stock "became virtually worthless after the government takeover, which wiped out shareholder value". In 2010 the bank was at the center of a House ethics investigation involving U.S. Rep. Maxine Waters who set up meetings to assist the bank while her family had a financial interest in the institution at which her husband served as a director from 2004 until 2008.^[1]

The Bank had achieved consistent profitable growth through both bank acquisitions of similar mission driven banks and organic loan and deposit growth.^{[citation needed]} The bank has provided products and services to fulfill its community development mission in the urban communities of Boston, Massachusetts, Miami, Florida and Los Angeles, California. OneUnited Bank services not-for-profits, small business, affordable housing, churches, and others.

History

In overcoming the immense challenges associated with its mission, OneUnited’s success is due to the strong legacy of its African American-owned predecessor banks. For example, Unity Bank & Trust Company, the predecessor to Boston Bank of Commerce and OneUnited Bank, started in 1968 with $1.2 million in capital. Located in Boston’s Dudley Triangle neighborhood, where over 30 percent of the community lives below the poverty line and nearly 20 percent of the land lies vacant, Unity Bank & Trust sought to revitalize the area by lending exclusively to local businesses and homeowners. This ambitious goal proved insurmountable given the Bank’s limited resources. As a consequence, Unity Bank & Trust ultimately failed, but it left a legacy of African American-ownership and community re-investment.

Based on the legacy of Unity Bank & Trust, Boston Bank of Commerce was organized in 1982 with a refined model of community development that included partnerships with large corporations and government agencies. Over the ensuing years, a succession of chairmen, including United States Senator Edward Brooke, guided the Bank to a measure of stability until it also fell on hard times. In the mid 1990s, following the economic downturn that adversely affected other northeast-based regional banks, Boston Bank of Commerce was placed on a Cease & Desist order by the Federal Deposit Insurance Corporation (FDIC) and charged to increase capital and improve the quality of its loan portfolio. However, its partnerships with corporations and government agencies and the loyalty of its customer base left an important legacy.

A significant capital infusion by the now current Chairman & CEO Kevin Cohee in 1995, along with a new strategy of acquiring African American-owned banks and thrifts in major metropolitan markets, ushered in a new era of prosperity for the institution.^[2] When the Bank’s current senior management team assumed control of Boston Bank of Commerce, the institution had negative equity and significant asset problems, resulting in unprofitably which pushed the Bank near failure. The team turned Boston Bank of Commerce around and subsequently acquired three African-American owned banks over several years that had either failed or had a history of being on the verge of failure.

In 1999, Boston Bank of Commerce became the first interstate African American-owned bank in the country through its acquisition of Peoples National Bank of Commerce, South Florida’s only African-American-owned bank. In 2001 the institution merged with Founders National Bank of Los Angeles, bringing the largest banking market in the country along with star power in the form of Founders’ majority owners-former Los Angeles Lakers superstar, NBA Hall of Famer and successful businessman Earvin "Magic" Johnson, Grammy Award-winning songstress Janet Jackson, and former Motown Records President Jheryl Busby. In 2002, the acquisition of the Los Angeles-based Family Savings Bank, the largest African American-owned thrift in California, further added to its scale and efficiency and brought a legacy of successful experience lending to urban communities. The Bank launched its new name, OneUnited Bank, later that year to better reflect the Bank’s mission, strategy and national brand. OneUnited implemented a plan that focused on its core strengths. It is the only African-American owned bank with significant acquisition and integration experience, one of a small pool of banks that is designated as a CDFI with a strong financial performance and the only African-American owned bank with fully operational online banking capability.

The Bank’s mission has historically been only the promise of African-American banks; no African-American institution truly has been able to take full advantage of this market to promote both a mission of assistance to African-American communities and its own success. OneUnited has succeeded in this endeavor principally by fulfilling its community development mission through sound banking practices, state-of-the-art technology, strong financial performance and marketing campaigns to establish and develop its brand. OneUnited Bank’s success both inspires and motivates the African-American community nationwide, as well as other successful individuals and institutions that support community development. OneUnited encourages these individuals and institutions to associate themselves with OneUnited to help ensure the continued financial success of the Bank and the inner city communities it serves.

In the latter part of 2008 and the beginning of 2009, OneUnited saw troubles as their investment in Freddie Mac and Fannie Mae became worthless. With some controversy, the bank requested $50 million from the Treasury and ended up receiving $12 million from the Troubled Asset Relief Program (TARP)^[3]. The House Ethics Committee has announced that they are investigating Representative Maxine Waters, who helped arrange the meeting between the bank and Treasury regulators, to determine whether her husband's involvement with the company led to a conflict of interest.^[4][5]

Awards

In 2004, 2005, 2006, 2007 and 2008, OneUnited Bank won the Treasury Department's highest award - The Bank Enterprise Award.

References

1. ^ Bank in Maxine Waters case was weakest to get TARP help; Boston institution was slammed by collapse of Fannie, Freddie Advertisement August 9, 2010 MSNBC
2. ^ Company's Website
3. ^ Banks' Action Called Improper, http://www.boston.com/business/articles/2009/03/14/banks_actions_called_improper/, Retrieved on August 12, 2009
4. ^ California Rep. Waters May Face Ethics Trial Wall Street Journal, Associated Press report. July 31, 2010
5. ^ Tied to Bank, Helped Seek Funds New York Times, Retrieved on August 12, 2009