WASHINGTON - Chase Manhattan Corp. seems to believe it has found a profitable way to meet inner-city banking needs, and secure Community Reinvestment Act credit in the process.
The $114 billion-asset giant has opened a prototype neighborhood banking center in Harlem. The storefront includes an automated teller machine, a direct link to Chase's phone banking system, a community meeting room, and a bank employee who can take loan applications or answer questions.
The center does not include a teller or a vault, reducing overhead costs substantially, said Mark Willis, president of Chase Community Development Bank.
The 1,000-square-foot facility cost "well under $500,000" to build, he said. Most branches cost more than twice that.
"The challenge is to find facilities that win both for the community and the bank," Mr. Willis said. "We think this may be the right mix."
The bank expects to get CRA credit for meeting the community's service needs, he said. Also, it will get points on the lending test for all loans that originate from the branch.
The branch, which opened Aug. 16, already is making money, Mr. Willis said.
"If this works as well as it appears to be, we plan to replicate it in other areas in New York City soon," he said. Chase may roll the center out in other markets as well, he said.
Mr. Willis said as long as the branch makes money, the company's proposed merger with Chemical Bank shouldn't affect the expansion plans.
"It should be just as attractive to the merged institution as to Chase alone," he said.
Additional branches could appear within a year, he said.
Community leaders embraced the move, saying it is the first new banking office to open in Harlem in more than 38 years.
"The most important thing is the signal they are sending," said Lloyd Williams, president of the Greater Harlem Chamber of Commerce. The bank's move shows that the community is undergoing a rebirth, he said.
The project requires a branch license - as opposed to an ATM license - from regulators, even though it doesn't have tellers, Mr. Willis said. During its first two weeks, the office recorded more than 2,800 ATM transactions and made three loans.
Mr. Willis said the storefront offers all of Chase's financing programs, including 3% down payment mortgages and small-business loans.
The facility is part of the Strivers Center Development, a project by the Chamber of Commerce that has developed more than 200 residential units and numerous commercial sites in Harlem.
