WASHINGTON - After nearly 18 years of waiting, the District of Columbia's Department of Banking and Financial Institutions is finally getting a bank to regulate.
WashingtonFirst Bank is set to become the first bank chartered by the District of Columbia and the first new bank to open in Washington in six years. The bank, which will cater to professionals and nonprofits and received its regulatory approvals, raised the required capital; it will open its doors in the next week or two, assuming all goes well in its final examination.
The 1986 law that created the department gave it the power to charter banks, but only in the last five years - since longtime Mayor Marion Barry left office - has it tried to drum up interest in establishing local banks. Until then it mostly licensed check cashers and consumer finance companies.
Though a number of groups have tried to organize banks in Washington recently - including one that planned one with an Internet-cafe flavor for the city's Middle Eastern community - it has taken a team of bankers with ties to the city to be successful.
WashingtonFirst's lead organizer and chairman is Joseph Bracewell, a former chairman and chief executive officer of Century Bank, a D.C. bank that United Bankshares of Charleston, W.Va., bought in December 2001. WashingtonFirst's chief executive officer, Shaza Andersen, and five of its other 12 employees are also from Century.
"This is a good team coming in," said Albert Elder 3d, the district's interim banking commissioner. "It's always great when you get something for the first time and it's the very best."
Mr. Elder said that many bank organizers in the area decided to set up outside the city, where real estate is cheaper, and then branch in. Others have had problems raising capital, since it is often hard to find local investors in a city of transients.
For example Legacy Banc, in formation for more than four years, has struggled to raise capital. And though it is now led by the district's former commissioner of banking, its plans have apparently been delayed yet again.
Mr. Bracewell began organizing WashingtonFirst soon after the sale of Century. It applied for a district charter and started raising money in October 2002.
It finally got the charter last November, and deposit insurance approval in January. When its offering closed Wednesday the bank had $8.3 million in capital, comfortably above the $7.2 million that regulators had required.
One reason the charter approval took so long was the Banking Department's lack of experience in chartering banks. Another was that charters require City Council approval.
Though it is state-chartered, its federal regulator will be Office of the Comptroller of the Currency. WashingtonFirst will be the only state-chartered bank under its supervision.
The D.C. Department of Banking will be its primary regulator, however. It was more supportive than the OCC, which the organizers might have chosen, said Ms. Andersen, the bank's CEO. Officials of the D.C. department "were the most encouraging and the most willing to work with us," she said. "In fact, some regulators discouraged us from moving forward."
Mr. Elder said he hopes his department's approach and its lower fees will spur applications for D.C. charters from start-ups and existing banks. One start-up application besides Legacy's is pending, he said, and three small banks that operate in the city have looked into changing their charters.
"We have a very competitive charter," Mr. Elder said. "I think this is the first step in a very long journey for us."
