
ShoreBank was a community development bank that operated from 1994 to 2010.
It was founded by a group of social entrepreneurs who wanted to create a bank that would help low-income communities in Chicago access financial services.
ShoreBank was known for its innovative approach to community development banking, which included providing small business loans and financial education to underserved communities.
The bank was also a pioneer in the field of social responsibility, with a focus on environmental sustainability and social justice.
History
ShoreBank was founded in 1973 by a group of community banker-activists, including Milton Davis, James Fletcher, Mary Houghton, and Ron Grzywinski, who were angry about the bank's racist lending practices.
These activists successfully petitioned the federal Comptroller of the Currency to stop the bank's relocation to the Loop, and instead formed the Illinois Neighborhood Development Corporation to purchase the bank.
ShoreBank was later renamed in 2000 and became the nation's first community development bank, playing a critical role in stabilizing and rebuilding many of Chicago's low-income neighborhoods over the next 37 years.
Origin

In 1973, the South Shore Bank attempted to relocate from 71st Street and Jeffery Boulevard in the economically declining South Shore to the Loop.
The bank's decision was met with anger from community banker-activists who were fed up with its racist lending practices. Milton Davis, James Fletcher, Mary Houghton, and Ron Grzywinski were among those who took action.
They successfully petitioned the federal Comptroller of the Currency to stop the move and created the Illinois Neighborhood Development Corporation in the process.
Urban planner Stanley Hallett was a key member of this effort, serving as a founding board member and vice president of the bank's holding company for its first five years.
The bank was renamed ShoreBank in 2000, becoming the nation's first community development bank.
Chicago Fails
The Great Chicago Fire of 1871 destroyed nearly 18,000 buildings and left over 100,000 people homeless.
One of the biggest failures in Chicago's history was the construction of the Iroquois Theatre, which caught fire in 1903 and killed 602 people, mostly women and children.

Chicago's early attempts at hosting the World's Columbian Exposition in 1893 were marred by bureaucratic red tape and financial struggles.
The 1919 Chicago race riot was a major failure of law enforcement and community relations, resulting in 38 deaths and widespread destruction.
The infamous 1968 Democratic National Convention was marked by police brutality and civil unrest, with Mayor Richard Daley's police force clashing with anti-war protesters.
The 1979 Chicago Black Sox scandal, in which several members of the White Sox baseball team threw the World Series, was a major failure of sports integrity and trust.
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Structure and Recognition
ShoreBank's structure was quite complex, with several affiliates operating independently of the Chicago-based bank. The Center for Financial Services Innovation, now named Financial Health Network, was one of the affiliates.
Here are some of the key affiliates:
- Center for Financial Services Innovation, now named Financial Health Network
- National Community Investment Fund (NCIF)
- Northern Initiatives, in Michigan's Upper Peninsula
- ShoreBank Enterprise Cascadia in Oregon and Washington state (now known as Craft3)
- ShoreBank Enterprise Cleveland (now known as Enterprise Cleveland)
- ShoreBank Enterprise Detroit (now known as Detroit Development Fund)
- ShoreBank Neighborhood Institute
- ShoreCap Exchange (now named CapitalPlus Exchange)
ShoreBank received numerous awards and honors for its innovative approach to community development. The bank's co-founders and affiliates were recognized by organizations such as Fast Company, Business Ethics, and U.S. News & World Report.
Structure

The structure of these organizations has undergone significant changes, reflecting their independence from ShoreBank.
Some of the organizations changed their names to reflect their new status, such as Enterprise Cascadia in Oregon and Washington state, which rebranded as Craft3 in 2013.
Here are some of the organizations and their changes:
- ShoreBank Enterprise Cascadia changed its name to Craft3 in 2013.
- ShoreBank Enterprise Cleveland changed its name to Enterprise Cleveland (EC) in 2010.
- ShoreBank Enterprise Detroit changed its name to Detroit Development Fund in 2011.
Northern Initiatives, located in Michigan's Upper Peninsula, amended its by-laws in 2010 to end the appointment of board members by ShoreBank.
These changes demonstrate the organizations' commitment to independence and their focus on specific goals, such as Craft3's focus on the "three bottom lines" of economic, environmental and social equity.
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Recognition
ShoreBank and its founders have received numerous awards and honors from reputable organizations.
The bank has been recognized by magazines such as Fast Company, Business Ethics, and U.S. News & World Report.
The University of Notre Dame's Mendoza College of Business and the Independent Community Bankers of America have also acknowledged ShoreBank's achievements.
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Mayor Richard M. Daley of Chicago and the Chicagoland Chamber of Commerce have bestowed awards upon the bank.
Governor Ted Kulongoski of Oregon has also recognized ShoreBank's contributions.
In 2023, the founders of ShoreBank received the Ned Gramllich lifetime Achievement Award for Responsible Finance from Opportunity Finance Network.
Former President Bill Clinton is a prominent supporter of the bank, describing it as "the most important bank in America".
Clinton credits ShoreBank's success with inspiring a movement of community development financial institutions (CDFIs).
Acquisition
ShoreBank's assets were transferred to Urban Partnership Bank, which reopened former ShoreBank locations as its own branches.
Urban Partnership Bank insured the transferred deposits separately from any existing accounts for at least six months after the failure.
You can withdraw your funds from the transferred account without an early withdrawal penalty until you agree to a new deposit contract with Urban Partnership Bank, as long as the deposits aren't pledged as collateral.
On January 28, 2019, Urban Partnership Bank merged with Providence Bank & Trust.
For more insights, see: Urban Partnership Bank
Overview
ShoreBank was a community-development bank with a strong track record of lending to the minority community, making it a unique institution in Chicago.
In June 1993, Mary Houghton, the president of ShoreBank Corporation, received a call from the owners of Indecorp, Inc., the largest African American-owned financial institution in the US, about a potential acquisition.
The acquisition would have nearly doubled ShoreBank's assets to $500 million, making it the largest community-development bank in the nation.
ShoreBank had an exceptionally good record of lending to the minority community, but acquiring Indecorp would have meant swallowing up one of the few minority-owned banks in the nation.
The Black Leadership Development Institute (BLDI) announced plans to challenge the potential loss of African American ownership of a major neighborhood institution.
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Frequently Asked Questions
Why did ShoreBank fail?
ShoreBank failed due to significant loan and operational losses that depleted its earnings and eroded its capital. The bank was eventually closed by the Illinois Department of Financial and Professional Regulation.
Sources
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