For many consumers -- gay, lesbian or straight -- the first words that come to mind when banks are mentioned are unflattering terms like impersonal, uncaring and even dishonest. Banks often have a reputation for poorly trained employees, high fees, disregard for their customers and policies geared toward making high profits while stepping on customers.
But a small bank in Boston says it works on a different model. Their policies support socially responsible causes and they boast about a well-trained staff that is diverse and friendly. The staff -- some gay and some straight -- march in gay pride parades where they say the crowd is actually excited to see them. It would seem there is something different about this bank.
Wainwright Bank (Nasdaq: WAIN), which already accepts customers from across the country, will by the end of 1999 launch online banking in hopes of attracting more customers who are dissatisfied with banking as usual.
"We're not afraid to visibly put our name in association with controversial issues," says senior vice president Steve Young. Quoting the banks founder and co-chairman Bob Glassman, Young says, "We're a conventional commercial bank doing unconventional things."
Wainwright was created in 1987 as a private bank for
wealthy people, but later Young was hired to move the
company into retail banking. Glassman wanted to create
a financial institution that would influence the industry.
The bank sets itself apart by incorporating a socially
responsible business philosophy and a commitment to
social justice in its operations. Its social responsibility
is demonstrated not just to the gay and lesbian community,
but to women and other minorities and to people living
with HIV/AIDS. The company has a thorough nondiscrimination
policy and offers domestic partner benefits.
The commitment to diversity that they promote with their words seems to shows in their leaders. In March, Glassman was honored by the American Jewish Committee with its Institute of Human Relations Award. He has also been honored by the AIDS Action Committee of Massachusetts and other groups and has spoken at gay pride events. Half of Wainwright's banking officers are women and half of the company's board of directors are women or minorities. Although Young says he finds it difficult to believe, the bank has been told repeatedly that they are the only publicly traded U.S. company with an open lesbian on their board.
Young says the bank's employees show their commitment toward social responsibility through their work with charities. Over 50 percent of employees volunteer for charitable causes, he said. And all employees are encouraged to pay a fee for the privilege of dressing down on Fridays. (Executives pay $5 and other employees pay $2.) The money raised by these "Casual for a Cause" Fridays is donated to a different charity each week selected randomly from groups submitted by employees.
In return, the company shows its commitment to its employees by using full-time tellers rather than the low-paid, part-time tellers who get no benefits that are rapidly becoming the industry standard; the standard is usually one week of vacation for new tellers, but Wainwright starts them with three weeks vacation.
Specifically relating to the gay and lesbian community, Wainwright is one of only a few banks in the country to offer a gay and lesbian credit card. The Community Card, started in 1994, charges no annual fee and offers a 16.15 percent interest rate. Young says they make no effort to track how many of their customers belong to particular demographic groups, but he estimates that a quarter to a third of Wainwright's customers are gay or lesbian. He also said he knows anecdotally that a number of clients are relatives or friends of gay or lesbian people.
Wainwright was the first bank to advertise in a Boston gay and lesbian newspaper (in 1993) and was the first to sponsor a gay pride parade in the city. Young said the bank lost no customers over its stands of support.
The bank has financed over half of the Boston housing for people living with AIDS. Over 20 percent of the bank's loans are to socially responsible community development projects. "All of this is funded by our depositor's money," Young points out.
Despite their appeal to the gay and lesbian community, no particular group is the primary focus for the banks. "We target people who also believe in social justice issues," Young says.
So if Wainwright has so much appeal, why aren't their services available nationally? In one sense they already are; in another sense they soon will be. The bank already offers its full line of services to customers from across the U.S. but admits that it does not yet have facilities in place to make long distance banking convenient for its customers. There are no plans to expand the bricks-and-mortar branches outside the Boston area, but online banking is coming by the end of 1999. "We're not encouraging customers from outside Boston now because we don't have the online banking product that's going to make it easy for them," Young says.
Once online banking is ready, he says he thinks the bank will appeal to many, not just for its social policies but because its location makes it safe. "Our clients receive the benefits of Massachusetts banking laws that are far, far stricter than any other state," he says.
Wainwright also owns a 30 percent interest in Trillium Asset Management, formerly Franklin Research. Trillium, a socially responsible investment management firm, manages accounts of $600,000 or more for a number of clients, including Amnesty International. "Trillium couldn't have been a better match for our principles," Young says.
Wainwright is not the only company that will soon be courting gay and lesbian banking customers online. Florida-based G&L Bank (www.g-lbank.com), is pending approval to start accepting customers. They intend to offer accounts and services aimed specifically at gay and lesbian customers, although thrift regulations require that their services be open to all. Approval has been pending for about a year but may come by October.
As for the mega-banks that dominate the scene these days -- like Bank of America, recently formed by the merger of BankAmerica and NationsBank -- Young says he is not worried. He says customers simply may not tolerate them.
"My theory is they're not going to last long," Young says. "You generally get better service from a smaller bank."
Details about Wainwright Bank can be found on their website at wainwrightbank.com.
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