WASHINGTON - When Sam Foggie started United National Bank here in 1964, there were only six minority-owned banks in the country.

Now, 30 years later, there are 108 minority-owned banks holding $13.6 billion of assets. Mr. Foggie has retired from banking, but he recently assumed the presidency of the National Bankers Association - which opens its 66th annual convention in Nashville today.

Born in the small South Carolina town of Laurens, Mr. Foggie moved to Washington when he was 16. He's now 66.

Began as a Teller

Mr. Foggie, the youngest son of a factory worker, began his banking career as a teller at Industrial Bank of Washington. He had worked his way up to head bookkeeper when a dentist friend from his church asked him if he wanted to organized a new bank.

"I thought it was the best thing in the world to organize a bank that would serve the community where I lived," Mr. Foggie recalled in a recent interview. Was it tough? "It might have been, but I didn't notice."

Mr. Foggie and the other founders of United National Bank raised $1.2 million from more than 1,000 investors.

"The stock sold for $10 a share, and some people just bought one share," Mr. Foggie said.

Rose to CEO

United National opened in August 1964 and had grown to $100 million of assets by 1985, when it was acquired by James Madison Bank. By then, Mr. Foggie was chairman and chief executive officer.

When he was a banker, Mr. Foggie worked to provide a good return to investors and help his community.

"I have high regard for him," said Bob Pincus, president of Franklin National Bank in Washington. "He was a local banker who tried to enhance the quality of life here."

"He made a banker out of me," said J.B. Holston, a vice president at Industrial Bank. "He is one of the most impressive bankers I've ever known."

The 6-foot-4 Mr. Foggie took the reins of the National Bankers Association in May. His goal: creating more opportunities for minority bankers.

One of his main targets for change is President Clinton's legislation to funnel $382 million through newly created community development banks. Mr. Foggie wants that money invested in minority-owned banks.

"I think the President missed the boat," he said. "Organizing new organizations to provide the same services that our banks have been providing just seems to me to be a waste of capital.

"I don't think the final bill will really exclude minority banks."

Wants Insurance Rule Changed

Mr. Foggie also is working to get a change in the Federal Deposit Insurance Corporation Improvement Act of 1991 that would allow $170 million of deposits to remain in minority-controlled banks and thrifts. Right now the Department of Energy puts fines from oil companies into minority banks, but the 1991 law tightened deposit insurance rules in a way that would make these funds uninsured come Dec. 21.

6 Failures This Year

These deposits fund lending in some 60 cities, so the trade group is working in Congress to get this money exempted from the new insurance rules.

Minority banks resemble community banks because they are small and locally focused. But they operate in large cities just like the biggest banks. Return on assets at minority banks is about half that of the average domestic bank. Six minority banks have failed this year.

According to the Federal Reserve, African-Americans control the biggest chunk - 37 - of minority institutions. Asian-Americans are next with 34. Hispanic-Americans operate 25, American Indians four, and two have multiracial ownership.

Mr. Foggie said minority banks had a successful niche for a long time, but their traditional market are being invaded by other competitors.

Vows to Be Creative

He wants the association to help its members find new ways to make money.

"Creative we will be," he said.

But he does not think minority banks are interested in selling insurance. Comptroller of the Currency Eugene A. Ludwig said last month that banksin urban areas ought to be rewarded with the right to sell insurance.

Impressed with Ludwig

Mr. Foggie has met with Mr. Ludwig and says the new comptroller "is really getting down to the real grass roots - to the problems we're facing."

As an example, Mr. Foggie lauded Mr. Ludwig for tackling Community Reinvestment Act reform. Like most other banks, minority-owned institutions are fed up with the paperwork involved in complying with the law.

Like many community banks, Mr. Foggie said his members have no choice but to meet the needs of their community.

"Where in the world would the minority bank get its business if it was not getting its business in the minority community. Do you think it's going to an affluent white community? That just does not happen."

Mr. Foggie said his members want to lend more to their communities, and are trying to get majority-owned banks to buy pieces of their loans.

He is thinking of forming an investment pool. Member banks could feed in funds and the money could be invested in other minority banks. Mr. Foggie said such a fund could mushroom if corporation could be coaxed to invest.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.