One of the nation's few union-owned banks, Amalgamated Bank of New York, is trying its hand at the Washington market.
The New York State Banking Board gave its thumbs-up Aug. 7 for the $2 billion-asset bank, owned by the Amalgamated Clothing and Textile Workers Union, to open a branch in the nation's capital. Approval from D.C. officials is awaited.
The bank, which calls itself "America's labor bank," is hoping to target the significant community of labor unions based in the city, according to its application to New York officials. Washington's 40-plus unions haven't had a bank specifically serving their needs since the failure seven years ago of National Bank of Washington, which was majority owned by the United Mine Workers.
"I think that they'll be able to market themselves quite well to organized labor," said Thomas P. McNutt, secretary/treasurer of Local 400 in suburban Washington of the United Food and Commercial Workers Union.
Amalgamated said in its application that the AFL-CIO and other labor organizations had been asking it for years to open shop in Washington.
One reason it is trying now is the passage last year of a law in Washington that lets banks based elsewhere open so-called de novo branches in the city, the bank wrote.
Mr. McNutt said that unions, in addition to seeking the best deals on routine pricing, want to negotiate special benefits and services for their members, such as no-fee checking. Most banks are "really not interested in providing the basic banking services," he lamented.
Also, he said, unions and their members prefer to do business with a bank that is unionized or connected to labor. Amalgamated's move is "a wonderful opportunity to give union members an opportunity to do business with union members," he said.
J. Anthony Romero 3d, the D.C. commissioner of banking and financial institutions, expressed enthusiasm about Amalgamated's plans. The bank has indicated a willingness to make Community Reinvestment Act commitments in the city, he said. "That's one of the things that excites my office and the mayor."
Amalgamated would also provide some competition for two local banks, Franklin National Bank and Adams National Bank, that have drawn some deposit business from unions in the area. But the president of $500 million-asset Franklin said that doesn't bother him.
"I think it's a smart move for them to come into the Washington market," said Robert P. Pincus, who is also Franklin's chief executive officer.
