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The Color of Money

Editorials and Letters

Redlining banks may get a taste of competition

By Jeff Dickerson, The Atlanta Journal

Published June 10, 1988, Editorial Page, Page A22

Copyright 1988, The Atlanta Journal-Constitution

Sick of banks that redline? Are you sick, too, of the '60s tactics of "boycotting," or threatening banks that redline? You may have only two choices. One is to bank at black-owned Citizens Trust; the number of new accounts there shows a lot of Atlantans are doing just that. The second -- get this -- is to start your own bank.

Our redlining series did not stir the banking passions of Herbert Orise. Those passions were planted long before. But the DeKalb County businessman is in the process of starting his own bank. It will be the first minority-owned bank chartered by the state in at least half a century. And in light of reports that banks grant five times more loans in white than in black or integrated neighborhoods, Orise's First Southern Bank couldn't have come at a better time.

The bank will be located in east DeKalb County. East DeKalb is one of metro Atlanta's most racially diverse areas; an area, therefore, that needs a bank that won't grant loans of the basis of color.

The bank boasts enthusiastic support of area businesspeople. Gregory Baranco, of Baranco Pontiac in Decatur, is chairman of the bank's board of directors. The bank's 14-member board reflects the area's racial diversity. And Orise won't label his bank "black"; it will be a "community bank," he says, that will serve all the community.

Herbert Orise's story is the story of turning dreams to reality, plans to substance. It's the story of pooling resources, a tactic other ethnic groups have used more successfully than blacks.

Tired of toiling at other banks, Orise three years ago began to lay the groundwork for starting his own bank. With backing of $2,500 to $5,000 from 18 friends and associates, he conducted a feasibility study. The study showed a bank in the area wasn't just feasible -- it was potentially profitable. The planned location was growing rapidly; upper-income black and white families were building $300,000 homes nearby; an industrial park had come to the area, and a shopping mall was planned for Turner Hill Road.

With feasibility study in hand, Orise applied for a state charter. The charter was granted in March 1987, making First Enterprise, as the bank was then named, the first minority-owned bank to win a state charter in at least half a century. The bank is now in the process of selling $5 million in stock, a state requirement for opening an independent bank. Orise is confident the goal will be in hand and the bank will open this fall.

Independent banks are opened every year; why focus on this one? Because First Southern promises to meet a community need so graphically illustrated in our series, "The Color of Money." And because First Southern will meet that need in a way boycotts, coercion and threats cannot -- by directly competing with banks in the marketplace. No need for boycotts or sit-ins -- First Southern will meet the banks on their own turf and compete in a language both understand -- profit.

Orise got started before our series, but in response to redlining, no response is more apropos.


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Reprinted with permission from The Atlanta Journal and The Atlanta Constitution. Further reproduction, retransmission or distribution of these materials without the prior written consent of The Atlanta Journal and The Atlanta Constitution, and any copyright holder identified in the material's copyright notice, is prohibited.


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