Chicago has lost several Black-owned banks in the last few years, including Highland Community Bank and Covenant Bank. Unfortunately, another has joined the list. Seaway Bank & Trust, the largest Black owned bank in Chicago, was shut down Friday by the Illinois Department of Financial and Professional Regulation.
In 2011, Seaway took over Milwaukee’s Legacy Bank after it too was closed by regulators. Legacy was founded in 1999 by three Black women who raised $6.9 million in capital. It was one of a few Black owned banks in Milwaukee.
The New Owners
Now, all of Seaway’s deposits and most of its assets will be transferred to the Dallas-based, Indian-American owned State Bank of Texas. According to the FDIC, SBT has $740 million in assets, and Seaway had $361 million in assets as of September 30th. Seaway customers will automatically become customers of State Bank of Texas.
Chan Patel, SBT’s founder has an interesting story. He came to the US in 1965 with $600(his father’s whole life savings). To start SBT, Chan raised and invested $1 million himself. He then approached other local Indian businessmen and professionals to purchase shares at the $10 per share.
He was about to raise another $1 million in two weeks by promising family and friends that each of them would become a professional banker and be Director of the bank throughout his lifetime.
Last Bank Standing
The one Black-owned bank left in Chicago—Illinois Service Federal, was also in danger of failing, but was rescued early last year with $9 million investment from the Ghanaian-American, Nduom family. The Nduom family runs Groupe Nduom, a 5,000-employee conglomerate that include entities in the tourism, financial services, technology, media and sports industries.