Crain’s: Seaway Bank’s New Owners Will Preserve Its Name, Say Deposits are Safe | But Who to Blame for the Failure?

Seaway Bank Draped in Purple

Seaway Bank & Trusts’ Maywood branch. Chicago’s largest black-owned bank failed earlier this year. | File

Monday, February 13, 2017 || By Local News Curator || @maywoodnews

A Feb. 4 Crain’s Chicago Business report caught up with Sushil Patel, the president of State Bank of Texas, which now owns the now-defunct Seaway Bank & Trust, once the state’s largest black-owned bank.

Patel told Crain’s reporter Steve Daniels that he knows he isn’t a blank bank, but that should be of secondary importance to depositors.

“I’m not a black bank,” Patel, whose bank is owned by Indian-Americans, told Daniels. “I’m not a white bank, but I’m definitely not a black bank.”

“Banking is still banking,” Patel said. “I respect the idea of depositors wanting to put money into a bank that will put money back into that community.”

“To that end,” Daniels reported, “the Patel family, which owns State Bank of Texas, will preserve the Seaway name for the 10 Seaway branches in the Chicago area and Milwaukee. State Bank of Texas’ one other branch in Chicago, on Devon Avenue, will continue with that name.”

Now with Seaway out of the picture, the Chicago area’s only remaining black-owned bank, Illinois Service Federal, is looking to seize the moment.

“Those who want to bank black have a place they can do that in Chicago,” ISF Executive Vice President Monica Thomas told Daniels.

Crain’s Greg Hinz investigates institutional homicide

In a Feb. 10 article, Crain’s columnist Greg Hinz put on his detective’s hat and began sniffing out the main suspects responsible for Seaway’s demise:

“As in an Agatha Christie mystery, there are a lot of perpetrators in its demise,” Hinz wrote. “But in the end, no one with the wherewithal in Chicago cared enough to intervene, not City Hall or anyone in the city’s still substantial black business community. And Chicago is left with a stinking corpse.”

For a list of perpetrators, read Hinz’s full article here. Read Daniels’ full article here.

Don’t forget First Suburban National 

While journalists conduct a postmortem of black-owned Seaway, let the locals not forget the death of the local bank, First Suburban National, in 2010. First Suburban had served Maywood since 1943.

You can read Crain’s coverage of Seaway’s takeover of First Suburban seven years ago here.

So, remember, this isn’t  just a story of the demise of black-owned business. It’s also a story, told over and over again, of the demise of the small business that prioritizes the interests of a particular community over those of dispersed, atomized investors. VFP

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