Midwest BankCentre is opening a new concept, full-service branch in Dellwood in North St. Louis County this month. We call this branch our Innovation Centre because that is where we will be piloting new products, services, and technology to better serve our customers, especially those in the traditionally under-served markets that are part of our Impact Banking mission.
There is a significant need for financial services in the Dellwood area. There are options, but many are predatory payday loan services that cause hardship for many residents. There are nearly 35 payday loan services within a five-mile radius of Dellwood. Payday loan establishments typically impose unfair, deceptive, or abusive loan terms on borrowers, and these types of lenders often target minorities, the elderly, the less educated, and the poor. Payday loans often carry high fees and interest rates, and, according to the Consumer Financial Protection Bureau, a typical two-week payday loan with a $15 fee per $100 borrowed equates to an Annual Percentage Rate (APR) of almost 400 percent. Payday lenders also often strip the borrower of equity or place a creditworthy borrower in a lower credit-rated and more expensive loan, all to the lender's benefit. That’s financial quicksand.
In 2021, Midwest BankCentre announced a commitment to incrementally lend an additional $200 million over a five-year period to the people, nonprofits, faith-based institutions, community development projects, and small businesses residing in or benefiting historically under-resourced communities. Our goal is to ensure people have access to reasonably priced capital on all local main streets and to help the region thrive – this is part of our Impact Banking effort and the Dellwood Innovation Centre is part of our effort to reimagine banking.
Not too long ago I was asked by a leader if Midwest BankCentre focused on providing access to reasonably priced capital to communities like Dellwood for “social purposes”. That’s an interesting question perhaps motivated by the fact that I have spent a significant part of my career in the nonprofit sector. Maybe the question was motivated by the posture of Midwest BankCentre in the marketplace—our goal is not to be the biggest bank but certainly one of the most impactful.
Midwest BankCentre has been around for nearly 120 years. In those nearly 120 years, the bank has been intentional with building community. Building a community is predicated on at least three components: social capital, human capital and financial capital. We focus on financial capital. The Bank was founded in and is still headquartered in Lemay, MO. When I am in the community, I hear the stories about Midwest BankCentre teammates, leaders and community anchors that go back 50+ years. There are seniors who still come into our lobby in Lemay because it is part of their social capital—their network—it too has become an anchor.
We have grown through the years, but what hasn’t changed is we are here for our Main Street, middle market businesses, and we are here for the growing moderate- and low-income communities who need an option for banking that is not predatory. The bank focuses on building partnerships through our Impact Banking platform with other local corporations, governments, nonprofits and individuals who share in our goal in ensuring that more people have access to responsible capital to fund their dreams….
Sometimes there is a temptation to separate out social impact from the ability to turn a profit. I think corporations can do both: Be impactful and be profitable—it is the only sustainable path for true community building…community building that is lasting and transformational – this is the work of Midwest BankCentre, our thousands of customers and partners. It Matters Where You Bank.
Originally published in the St. Louis Business Journals Ask The Expert Column on 9/22/2023 by Orv Kimbrough, Chairman and CEO.