August 23, 2010; Source: Crain’s Detroit Business | What’s in a name? For ShoreBank Enterprise Detroit, officials hope there is no connection in the minds of the public and its customers. You see, another bank—with the same name, but located in Chicago—was shut down on Friday by state and federal regulators. Read article about ShoreBank Chicago’s collapse by NPQ’s, Rick Cohen.
According to Ray Waters, president of the Detroit-based nonprofit bank that that makes small loans to minorities and runs workforce development programs, the bank is financially healthy and operates as an independent nonprofit. “I would like to be sure as many people as possible understand that this event does not affect ShoreBank Enterprise Detroit.” However, in a nod to possible blowback from the Chicago’s banks troubles, Walters said his institution will soon drop ShoreBank from its name and do business as Enterprise Detroit.
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The bank has its own $11 million fund, which is financed by local area foundations, and also manages a $2 million fund for Invest Detroit. The only ties to ShoreBank Chicago were human relations, information technology, and accounting that ShoreBank Enterprise Detroit bought from it. Waters said because of fears of the Chicago bank’s pending collapse, he’d begun replacing some of those services and has lined up other providers for the rest.
At the close of business on Friday, ShoreBank Chicago was shut down and purchased by Urban Partnership Bank, which has $140 million in capital, and whose backers include Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley.—Bruce Trachtenberg