Boston's OneUnited Bank has launched a high-interest online savings account, making it the first African-American-owned banking company to compete in what has emerged as the fastest growing segment of the deposit business.
For OneUnited, the new account has more than one attraction. It sees the account not just as a deposit play but also as a way to put pressure on competitors that have resisted a consolidation that its executives have tried for years to press.
That drive to consolidate the market is, of course, not part of the new account's marketing pitch. Robert Patrick Cooper, the $540 million-asset OneUnited's chief counsel, said Thursday the bank's new Unity account is an affinity play, aimed mainly at African-American savers who also want to boost development in urban neighborhoods.
Kevin Cohee, OneUnited's chairman and chief executive called the Unity account "a tool for organizing the black community's financial resources."
Mr. Cooper said he thinks that urban development appeal will set the account apart from competitors such as EmigrantDirect.com, a unit of $12.5 billion-asset Emigrant Bancorp in New York, and online account pioneer ING Bank FSB, a unit of ING Group NV of Amsterdam, whose accounts offer higher yields.
OneUnited is the only African-American owned bank with a multi-state presence. It has branches in Miami and Los Angeles, as well as Boston, and it has long nursed an ambition to expand to other markets with large African-American populations. It made an unsuccessful hostile takeover bid for New York's Carver Bancorp, the nation's largest African-American-owned banking company, in 2000.
Mr. Cooper said the creation of the Unity account might speed consolidation.
"The other banks are going to see that this is the level they are going to have to play at, and if they can't, then they are going to have to think about partnering with someone who can," he said.
OneUnited will have company in the online account space. BankBlackwell, also of Boston, is organizing an Internet bank aimed at African-Americans. It expects to begin operations in June, the president and chief executive officer, James R. Mundy, said Friday.
Mr. Mundy is the former chief operating officer of OneUnited. He said was surprised his former employer jumped into the online business, noting that Mr. Cohee had previously expressed skepticism.
"I'm encouraged that they are seeing the light," Mr. Mundy said. He added that the presence of one of the largest African-American banks in the country "validates our model."
Indeed, William Michael Cunningham, the president and CEO of Creative Investment Research, said African-American banks have been at this for a decade. The Minneapolis consulting firm focuses on minority- and women-owned banking companies.
"Both OneUnited and Bank-Blackwell are late coming to this game, and their impact is going to be less than it would have been five years ago," Mr. Cunningham said Friday.
Banks late to the online deposit game do not seem to have suffered by waiting, so long as their rates are attractive. Howard Milstein, Emigrant's president, CEO, and co-chairman, said his company has opened 200,000 accounts and collected $6 billion of deposits since launching its "American Dream" account in January 2005.
He has seen several competitors jump into the online account business, with New York Community Bancorp and HSBC also launching accounts recently. Mr. Milstein said that there is still room, since the sector continues to experience "explosive" growth.
