Chicago Treasurer Kurt Summers Has Struck An Agreement To Deposit $20 million Of City Funds Into Chicago's Last Black Owned Bank.

P.W. Chiefy Nduom and his brother, N. Kweku Nduom


The last black-owned bank in Chicago is set to receive a $20 million deposit of city funds.
City Treasurer Kurt Summers on Monday announced the deposit into Illinois Service Federal Savings and Loan Association.
This deposit will breathe new life into the last black-owned bank in the city.
Summers reportedly has been working on the deal for over a year to invest city funds into the community bank headquartered at 4619 S. Martin Luther King Drive, which looked headed toward closure and the same fate as the city’s other black-owned banks two years ago.
Chicago City Treasurer Kurt Summers


“Community banks are designed with the purpose of investing and reinvesting in their community,” Summers said at a Monday morning news conference. “Community banks are more capable of evaluating the risks in their communities.”
The historic Illinois Service Federal Savings & Loan (ISF) bank located in the Bronzeville section of Chicago was on the verge of being defunct. ISF needed an immediate infusion of at least $10 million dollars to avoid a federal decree that would force it to convert from a depositor-owned model to a shareholder-owned model. 
The bank was on the auction block to be sold since April 2015. ISF was founded by 13 Black men in 1934 as a depositor-owned lender serving the credit-starved Bronzeville. Being one of only two Black-owned banks left in Chicago, the bank was in desperate need of saving.
That’s when P.W. Chiefy Nduom and his brother, N. Kweku Nduom, of Ghanaian investment firm Groupe Nduom saw an opportunity they couldn’t resist. 
According to P.W. Chiefy, the firm’s vice president and general counsel, “We were seeking to diversify and had been looking at banking in the U.S. when we came across this opportunity.” So the firm made an immediate investment of $9 million dollars to take over control of the failing bank. 
P.W. Chiefy Nduom and his brother, N. Kweku Nduom


With its investment, Groupe Nduom became ISF’s majority shareholder.
The investment brings the bank's holdings up to $130 million, according to the bank President Bob Klamp and allows it to invest more in commercial ventures.
The bank traditionally has been a mortgage lender, with 70 percent of its loans going for first-time residential mortgages, Klamp said. The new investment allows the bank to lend more to businesses in Bronzeville and Chatham, where the bank has its only branch.



He said the bank intends to focus on those two communities and will consider adding a location in one to three years.
The $20 million the city invested Monday comes from a pool of more than $400 million that is held by national banks on a rotating basis, Summers said.