Black-owned banks expand reach Forced to look toward whites, others as mainstream banks target blacks

September 06, 1993|By New York Times News Service

Citizens Trust Bank, the largest black-owned bank in Atlanta, for the first time in its 72-year history is aiming at white, Korean and Hispanic customers.

Using a new advertising campaign with the slogan "Look to us . . . we listen," Citizens put up 13 billboards in English, Korean and Spanish in minority and predominantly white areas last year. Citizens said it also planned to open two branches next year in predominantly white areas.

"We are trying to diversify our base," said William L. Gibbs, the president of Citizens. "It's one way for us to gain a competitive edge."

Citizens is far from alone. In the shadow of growing competition, more black-owned banks are "reaching out for mainstream status," said Samuel L. Foggie, the president of the National Bankers Association, a trade group in Washington that represents minority banks.

A principal factor in the competition, ironically, is the federal drive to improve banking services to minority communities, which some black bankers argue could hamper their efforts to expand -- and threaten their survival.

The black bankers said they were concerned about heightened enforcement of the Community Reinvestment Act of 1977, which mandates lending in underserved areas, and a Clinton administration proposal to create a network of 100 community development banks. Under an administration proposal unveiled in July, the existing community development corporations, loan funds and credit unions would also be able to compete for grants from the $382 million pool allotted over four years.

Sylvesta L. Jennings, the chief executive of First State Bank in Danville, Va., said community development banks "could be a problem to us. They target the people we have always served." Jennings said no provisions were made that "would give banks like mine the capital we need to reach the same people."

Community development banks, like South Shore Bank in Chicago, which is not black-owned, exist specifically to provide capital to rebuild low-income areas.

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