CHICAGO (CBS/ProPublica) – It's a small bank situated on a tree-lined street on Chicago's South Side.
GN Bank stands alone in Illinois as the last Black-owned bank in the state. It stands out for other reasons too. Customers are complaining about problems they're having with the bank. Some even fear losing their homes because of the bank's Stone-Age record-keeping system. Further, the bank is under a federal consent order that noted several deficiencies that need fixing fast.
HOW GN BANK CAME TO BE
GN Bank used to be called Illinois Service Federal Savings and Loan (ISF). It opened in 1934, offering mortgages, homeownership assistance, and access to banking for Chicago's underserved Black neighborhoods.
But when the 2008 recession hit, many banks, including ISF, began to struggle.
By April 16, 2015, ISF was under a federal consent order issued by the Office of the Comptroller of the Currency (OCC), one of the agencies tasked with regulating banks and financial institutions.
The order required the bank to come up with a plan to get out of financial trouble and to hire competent management.
A year later, ISF thought it had found its savior in Dr. Papa Kwesi Nduom.
Dr. Nduom was a wealthy West African who owned many businesses, including a large bank in Ghana. He agreed to take control of ISF and pump $9 million into it. You can read more about the behind-the-scenes negotiations from our investigative partner, ProPublica.
SHARON STEWART'S STORY
For more than 30 years, Sharon Stewart said her late mother, Dorothy, held a mortgage at ISF because she wanted to support the bank's commitment to community.
"It was a sense of pride," she said, "They invested in the community and helped African Americans get mortgages."
Stewart says her mother also enjoyed the intimate, friendly customer service at ISF.
"She could go in there and talk to them personally," Stewart said. "She loved it. Absolutely."
Eventually, Stewart added her name to the mortgage and carried on that commitment to support what eventually became GN Bank -- and ultimately became the last Black bank in Chicago.
She has a different feeling about the bank today.
"I am very disappointed. I'm so disappointed with them," Stewart said. "They take your money. They do nothing for you."
Stewart told CBS 2 since GN took over, customer service has gone downhill.
"There's no one to speak to," she said. You can't talk to anybody."
She also said normal banking procedures are not followed.
"I don't even get bank statements," Stewart said.
Worst of all, she said, is the time she thought she might lose her mother's home.
"The last bank statement that we received was December 2017. And that's when Yorke Properties came about," Stewart said.
And she said that was when all the trouble with that loan began.
Stewart met with the then vice president of the loan department.
"He told me that the property had been in foreclosure since June of 2018," she said.
Stewart said her mother had automatic loan payments set up with ISF/GN Bank.
But Stewart found out that GN Bank had sold the mortgage to Yorke Properties, LLC. Dr. Nduom is Chairman of GN Bank. He's also listed on state LLC records as a manager of Yorke Properties.
Stewart received a collection notice in 2021. The notice informed her that she was in default on her mother's Yorke Properties mortgage loan.
She had to prove the loan was current to avoid foreclosure.
Stewart started going to GN Bank every month to make the loan payments after that. She described her monthly routine: "I presented the check with the loan numbers on because there are no payment coupons -- nothing. So I always write [on] a piece of paper the address, my mother's name, my name, the check number, how much I'm paying, the loan numbers that they told me are the loan numbers -- and I always write a statement that GN Bank does not provide annual or monthly statements, nor payment coupons."
After the payment is made, Stewart explained: "They'll give me a handwritten receipt. From a financial institution -- that's my receipt. It's like the Flintstones. That's what I call it."
Back to the fear of foreclosure. Stewart kept all of those handwritten receipts and cancelled checks totaling $60,000 to prove to GN Bank that the loan was not in default.
She blames this whole mortgage mix-up, missing statements, and antiquated receipts on the chairman of the bank, Dr. Nduom,.
"They do not run it like a financial institution in the United States at all," Stewart said.
MORE CUSTOMER COMPLAINTS
Stewart is not the only customer complaining. Robert Jansen drives 110 miles each way from his home in Marseilles to GN Bank in Bronzeville every month to also make his mortgage payments. He's a real estate investor – so he has a lot of them.
"Through ISF at one time, I had 18 mortgages," said Jansen. "I'm down to 10 now."
Jansen pays in person at the bank because he's heard of stories like Stewart's and is afraid something similar could happen to him.
"I'm afraid he's going to sell these mortgages to Yorke Properties -- not notify me," Jansen said. "I don't want to be sold to Yorke, because Yorke don't send statements either. They just come in and foreclose."
Jansen keeps every receipt he gets from the teller to prove "my mortgages are paid." And like Stewart, he questions the type of receipts given out by GN Bank, comparing them to something that might come from a fast food place.
"Ever since they changed the system over to a new system that gives you these Burger King coupons, that's your payment history," Jansen said.
Stewart reported her issues with GN Bank to the OCC. A public records request from ProPublica revealed many other customers filed complaints between 2016 and 2021.
We got back more than 20 cases where dissatisfied customers complained to various federal bank regulatory agencies about problems with GN Bank that included, among other things, the bank's handling of mortgages, handling of other accounts, and poor customer service.
In some cases, the OCC responded by saying it "does not have the judicial power to interpret or enforce private contractual agreements." In other cases, the OCC advised customers to take their concerns to other state or federal agencies or take GN Bank to court.
GN Bank, while not being particularly responsive to its own customers, most of the time did respond when the OCC followed up on customer complaints and asked the bank to reply.
The OCC has another interest in GN Bank. This concerns the latest consent order it issued on Sept. 17, 2020.
Jeremy Kress is an Assistant Professor of Business Law at the University of Michigan. He's also the Co-Faculty Director of the school's Center on Finance, Law & Policy and a former regulator with the Federal Reserve.
Based on the 2015 consent order and now this new one, Kress said, "This suggests that GN bank is pretty far down the path of having very significant problems that its primary supervisor has been encouraging the bank to fix for quite some time."
The 2020 consent order cites some old concerns "about the quality of the loans on its books," said Kress, who looked over the documents at our request.
The 2020 consent order specifically calls out GN bank leadership since they took over ISF. It states, "The Board and management have not corrected previously identified unsafe or unsound practices."
The order also cites some new requirements including the Board adopt and implement a Conflict of Interest Policy and adhere to it.
The CBS 2 Investigators caught up with OCC regulators as they arrived at GN bank for a scheduled check-in session earlier this year. They would not speak with us.
"The regulators are concerned that the bank is not as well run as the regulators would expect," said Kress.
He added that it's rare for a consent order to be made publicly available, and even rarer for one bank to have back-to-back orders issued against it.
THE FUTURE OF GN BANK
So what's next?
"In order to satisfy the regulator's concerns that are identified in the consent order, GN bank needs to improve its management," said Kress. "That could mean the current management improving the systems that it has in place. It could mean hiring new managers to come in, managers who had success at other minority depository institutions or more traditional depository institutions,"
Kress looked at the publicly available financial asset data for GN Bank. He said it looks to be on solid footing for the time being, despite the consent order.
"There is some level of supervisory discretion that the OCC may have used here in order to try to help GN Bank rehabilitate itself and return to safe and sound operations," he said.
GN Bank is the last Black-owned bank in Chicago. It is also the last Black-owned bank in the state, and one of just 19 Black-owned banks in the entire United States.
Jansen and Stewart may be unhappy with the bank's practices, but the last thing they want is for GN Bank to close.
"I want to see the bank succeed," said Jansen.
"Sure, we want this to be a successful bank," said Stewart. "It's historical."
The CBS 2 investigators asked to sit down with Dr. Nduom to discuss customer concerns and the consent order. GN Bank's lawyer sent the following statement instead:
As the only remaining Black-owned Illinois bank, we are proud to have invested resources to serve the community and that is and will continue to be our priority at GN Bank.
Dr. Papa Kwesi Nduom
Previously, the bank had sent a lengthier response to ProPublica in November 2021:
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