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Florida Company Plans to Open Gay-Oriented Bank

Finance: G&L Bank hopes to tap community's prosperity with service via the Internet and ATMs.

July 01, 1998|From Reuters

PENSACOLA, Fla. — A Florida company hopes to open the only bank in the United States that caters to gays and lesbians, using the Internet to tap a multibillion-dollar national market.

Pensacola-based G&L Bank filed an application with the Office of Thrift Supervision on Monday to organize a federal savings bank.

G&L's main purpose will be to provide a comfortable environment for same-sex couples to apply for loans and other services and to tap into a nationwide gay and lesbian market numbering in the millions, company officials said. The bank will also offer service to heterosexual customers.

"Everyone will be welcome as a customer," co-founder Keith Cotham said.

Much of G&L's business will be conducted via the Internet, the company said. Nearly all transactions will be performed online, except for those done through automated teller machines. The company also plans to roll out full-service ATMs throughout the country.

G&L could be in operation by fall. Approval from the OTS currently takes about four months because of a backlog of applications from insurance companies that are interested in entering the banking industry, OTS spokesman Tom Mason said.

The concept of a bank geared to gays and lesbians is a sound one, said Jennifer Hatch, managing partner with Christopher Street Financial Inc., a gay-oriented New York brokerage house.

"Gay people seem to feel more comfortable talking to people who understand what they're trying to accomplish," she said.

"It certainly has its appeal," said Paul Poux, vice president of New York-based Mulryan/Nash Advertising Inc., which specializes in advertising to the gay market. "Gay people will be attracted to the novelty, the fact that they may not be discriminated against when they apply for a loan or an account."

Mulryan/Nash estimates the U.S. gay market at 6% to 10% of the population, or some 15 million to 25 million people, according to 1990 census figures.

According to a 1996 survey by Simmons Market Research, gays are 2 1/2 times as likely as heterosexuals to earn $250,000 or more and 52% subscribe to online services, compared with 15% of heterosexuals.

Kay Griffith, a former NationsBank Corp. executive, was hired as chief executive and president earlier this year.

Backers are required to raise a minimum of $2 million to capitalize a federal savings bank, Mason said.

G&L plans an initial public offering in September, Cotham said.

The first gay-owned and -operated bank was Atlas Savings & Loan in San Francisco. It grew to three branches before closing with losses of more than $1 million.

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