A syndicate of 60 minority-owned banks said Wednesday that Sears, Roebuck & Co. has increased its revolving line of credit with the institutions to $30 million.
The banks represent the largest consortium of minority-owned financial institutions assembled for a line of credit and comprise roughly two-thirds of the minority-owned banks in the country.
Among the institutions are three banks in Los Angeles that are primarily owned by Chinese-Americans. They are Cathay Bank, one of the oldest and largest Asian-owned banks in the city; Far East National Bank, and Los Angeles National Bank.
“By doing business with one big corporation, you hope that it will spread out to other large corporations,” said Henry Y. Hwang, chairman and chief executive of Far East National, which has assets of more than $200 million. “They also give you a pride that you are chosen.”
Started in 1983
Many minority-owned banks are very profitable, particularly some of the more than two dozen Asian-American banks in California. But they often have difficulty reaching beyond their traditional minority customer base to big corporations. The Sears line of credit illustrates that small, minority-owned institutions can do business with major corporations, said Alvin J. Boutte, chairman and chief executive of black-owned Independence Bank of Chicago, the lead bank in the syndicate.
“It also stimulates growth for minority banks and the minority communities that they serve,” Boutte said.
The institutions in the consortium are in 24 states. The owners are black, Latino, Asian-American, women and American Indian.
Sears established the line of credit, which is used for general business purposes, with a smaller group of minority banks in 1983, and the amount of credit has grown each year. This year, the figure was increased $5 million from 1988.
The Chicago-based retailer’s corporate treasurer, Edward J. Condon Jr., said the credit line is part of the company’s support of economic development in minority communities.