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Nothing Worth Saving

Gateway Bank

I was driving by Gateway Bank here in St. Louis, Missouri late last Friday and saw something seriously unusual.  It was about six in the evening, when the small parking lot next to the building is usually void of any vehicles.  But on that day, the lot was full of a fleet of what looked like rental cars.  Each car was new, freshly washed, and conspicuously generic.  My first thought was that the bank was on the verge of collapsing and the FDIC was swooping in.  I can’t remember the last time I saw a security guard monitoring this bank.  But on this particular day there must’ve been at least four guards protecting the cars and the people.  As I drove by I saw two of them standing on either side of the front door.

Not too long ago I heard an article on NPR about the FDIC and the way they move in on banks to try and keep them from going completely under.  They typically move in on a Friday night, flash their badges, and start their work auditing the bank to get an exact picture of where the bank stands.  In order to keep customers from making a run on the bank and making the situation worse, the FDIC moves with as much secrecy as possible and does its best to keep everything as normal looking as possible.

But it’s truly hard to hide the fact that an army of accountants and auditors and banking experts, not to mention a few security guards thrown in for good measure, just descended on this lone bank late on a Friday night.  My curiosity piqued, I took the time to drive around the block to take a closer look.  On the second pass, I saw guards three and four standing in the parking lot.  One would escort people arriving at the bank inside, the other stayed and watched over their cars.  There were a lot of white people showing up at this privately held bank in the heart of the black community.  That in itself was noticeable.

Early the next day, the scene was repeated.  The bank’s normal operating hours on a Saturday is something like nine o’clock to noon.  The parking lot was bursting at the seam with generic cars again.  I parked my car and approached one of the guards.  After I explained that I lived nearby and couldn’t help but notice the cars, I asked the guard for what the deal was.  Dude must’ve been bored and ready for any kind of conservation because he didn’t hold anything back.  He confirmed that the FDIC had arranged for the bank to be sold to an outfit on the other side of the state in Kansas City.  The bank was about to go under new management, but the FDIC was managing the transfer.

Gateway Bank was one of those success stories in which the black community had fought long and hard to make.  If you were a black person living in St. Louis during the sixties, you weren’t getting hired by the dominant community’s banks and you weren’t getting a loan to buy that dream house or that car you wanted.  Back in 1963, civil rights activists in St. Louis began protesting over Jefferson Bank & Trust Co.’s refusal to hire blacks for jobs.  Prospects for financial advancement in St. Louis were pretty slim for blacks.

Disenfranchised blacks opened up a bank with a mission that it would not discriminate against black people.  They soon were able to gain the support of the chairman of the board of the First National Bank of St. Louis.  With support from the white community, Gateway National Bank opened in 1965.  It was a collaboration between people in both the black and white communities.  Today, Gateway Bank’s single branch is now a branch of Central Bank of Kansas City, Missouri.  Gateway Bank had a troubled financial history and was on the FDIC’s list of problem banks since 2006.  The transfer of ownership cost the FDIC over nine million dollars.   This morning, it is business as usual at the bank that still has the name Gateway on its side.

Right now the number of bank failures this year is one hundred twenty three, indicating the worst financial climate in decades.  As the economy has soured with unemployment rising and home prices falling leading its only a natural result that loan defaults would rise as well.  And the FDIC expects bank failures to continue to cascade.  Banks have been especially hurt by failed real estate loans.  But banks that cater predominantly to the black community are especially at risk.  They are sucker bets for failure in an age where people in the black community are told to exercise self reliance.

The historic Gateway Bank could have survived with just a tiny sliver of a fraction of the funds the government gave to such institutions as General Motors and Bank of America and the like.  We know that those institutions, steep in their significance to the dominant community, are way too big to fail.  Institutions like Gateway that play a significant part of the black community don’t even come close to being something worth saving.

Friday, November 13, 2009 - Posted by | African Americans, Black Community, Black Culture, Black People, Economy, Life, Thoughts

1 Comment »

  1. Woke up this morning and realized that the world has changed.

    The new world Government is the Banking system that is owned by individuals, controls all the power and distributes all the world’s wealth.

    In this new reality, history books are written on line in real time and decisions are made by social networks before a law is written or a vote taken.

    Comment by chris tidman | Saturday, November 14, 2009 | Reply

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