Banks With No Shareholders? The Curious Case Of Mutual Banks
Ponce Bank, founded in 1960 in the Bronx and currently New York’s only Latino community bank, shows the possibilities of lending as a mutual bank.
There have never been that many banks or credit unions in the Bronx, but there are even fewer today than there were in 1968. Ponce is currently one of only five active banks or credit unions based in the Bronx — a borough with 1.4 million residents, 43% of whom are Black, 56% of whom are Hispanic, and 24% of whom live below the federal poverty line...
But the things that many newer kinds of institutions and partnerships are trying to do more of today — relationship-based lending, or lending on terms that don’t fit into a standard credit box — community banks like Ponce have been quietly doing these things all along."
For many years, the South Bronx even had its own George Bailey: a man named Erasto Torres, the long-time former CEO of Ponce Bank. The bank’s founding board members had recruited him from their beloved Puerto Rico to come and run the bank, which he did until 2011. He passed away in 2013, but the bank he left behind remains very much Bailey-like, specializing in real-estate lending for smaller landlords or small businesses like Sanchez’s grocery.
Published on Oct 18, 2022