Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
We've been talking a lot about bank earnings. Morgan Stanley reporting beating Wall Street estimates ending the day of about four and a half percent. Bank of America, second largest bank, reporting earnings as well on in the day, up about as much. And as you mentioned, Carol, a good moment to look at smaller banks as well. Of course, some regional banks is going to be reporting here in the
coming days. But Terry Williams joins us now in studio here in New York, President and chief operating officer of one United Bank that's a black owned bank, digital and traditional with branches in Boston, Los Angeles, and Miami. Almost one billion dollars in loans, most in low to moderate income communities. Changes us here in the studio. Great to have you with us.
Great to be here.
And for those unfamiliar with the bank, tell us a bit about it. So who you serve and how you've grown here in recent years.
Yes. Sure. First of all, we're a CDFI community development financial institution and our focus is on building wealth and low to mottered income communities. But we're also a digital bank, so ninety percent of our customers come to us online.
Not in person, No, not in person, not in person.
And we've been a digital bank for twenty years, so we really have been a long time in this space. And we're about to introduce a really exciting product. It's called Wise one, and it's a conversational virtual agent that will help people manage their money. We're doing this in partnership with Google Salesforce as well as JP Morgan and City.
I would say, in this new evolution of technology, you need partners and so we've really been thrilled to have Google really help us through this and using Gemini as the tool.
Yeah, that is certainly their AI tool and kind of what you know, you've got Touch ept, Open AI, you've got Google got their version one. Thing I'm going to ask you about, Terry though, when it comes to I feel like the financial community all communities, like education is such a big part and especially in I think areas where there are individuals that are unbanked or underbanked. So tell us about how that plays into because I get a little nervous when we start like going online.
And figuring out things. Is there an educational component to all of this?
Absolutely, In fact, it is the educational component. That's that's really what we're about. So the tool actually teaches you financial literacy by giving you actionable insights about what you can do with your money. If you say to people, oh, co take this course on money management, you know two
people will sign up. But on the other hand, if you say, hey, you could move some money from spending to checking, or hey, I noticed that you know your mortgage rate is a little high, or hey that I mean, if you give people actionable insights and things that they can do, Hey, here's a budget, here's a budget tool, people really respond to that. And we've had a money management tool actually for a couple of years and our
customers love it. What we're adding to it with Google AI is really the conversational agent piece which is going to take us over the top.
So Carol mentioned the the unbanked and the underbanked, and I'm curious sort of how you've found outreach to those communities and what success you've had convincing folks that they should open up a bank account, that it's important to have one. And indeed, helping them go through that process.
So our focus is really to talk about every spectrum and so on the underbanked, I'll call them people that have check systems records that aren't able to open up a bank account. We have something called a second chance checking account. It's called YouTube checking, and it allows people that and actually a pretty large percentage of Americans have check systems records. And in fact, if you don't have one, you probably even know what that is.
I don't even know that we have one. I just assume that somebody has tons of information.
Yeah, yeah, And.
So it's just like cards, right.
You hear about FYCO scores and credit scores, but it's actually a score for your use of bank account. And if someone has a check systems record, they're not able to go into a bank and open up an account, but we give them a second chance. So that's an example of where we're really bringing people in. We also have this wonderful service called cash Please, where people can get a small short term dollar loan up to one
thousand dollars with no credit check. Again, it's a way of us serving the load of mottered income, you know, underbank community. At the same time, on the other spectrum. Everybody needs a budget. Everybody needs to know how to manage their money. And to be a GPS for your money is what you remember when we used to use maps. Yeah, so the AI tool will be a GPS for your money. So and everybody needs that.
When you give like a thousand dollars loan for someone that you know may not be able to get it elsewhere, what's the interest rate on something like that? What's the payment?
Yeah, that's the great question. So if you go to a payday lender, is three or four hundred percent?
That's crazy?
Wow? Are right? It's twenty two and a half percent.
That's still crazy.
I'm sorry, Like I have a real hard thing full disclosure so time, but I mean the rates for even people with good credit score, Like it's just crazy.
But for if you have a bad credit score, you can't get a loan or unless you go to a payday lender and pay three or four hundred percent. Yeah, by twenty two and a half percent with no credit check is actually a great rate. And I will say.
How long people pay us back? Yeah?
Howay?
Yes, yeah, it's a short term loan.
It's three months and they pay us back and we won't allow them to roll it over. So that's the other thing. And we also report to the credit bureaus, so you know with payday loans, they only report if you don't pay with our cash please. We actually report positive payment and I think that is another reason that people use it, pay it back and improve their credit score.
As I mentioned, we've been following these big banks that have been reporting, and we hear from their chief executives just about how they're thinking about the economy and the trends that they're seeing. I'm very curious sort of if that if that fantasi is different, the one that you have is different, and what you're thinking about the direction of this economy, the level of uncertainty that we're seeing, how that's playing on the communities that you serve.
So we definitely are seeing draw down in savings. We are definitely seeing We have actually a financial literacy essay contest for kids and this year there's two things we saw. One is that the kids are using AI to write their essays and the other is that they're talking about you know, pakaboots, PoCA book issues. They want to win so that they can help their family by groceries and that's the This is the first we've had this contest for fifteen years. This is the first time that that
kind of feedback from children is coming out. So we can definitely feel that the economy, you know, is not st Yeah, it's a strength, there's a strain at the same time. And again, I don't want to keep going on about wise one, but people want a budgeting tool. They recognize that they need guardrails, they need information. They need more than just what's my balance, you know, they want to know how can I improve my spending? How can I improve my credit score? And that's where we come in.
No, I love that, but it really disheartens me to like, I feel like this is something we've been talking a lot about Main Street versus Wall Street. I mean, here we have, you know, records on Wall Street or you know, there's certainly big pockets of this economy that have done very well and have gotten wealthier, and then there's just so many that have not tell us a little bit more about your clientele and who is your customer and what you know, we need to understand.
About different pockets of the US population.
Yeah, so what I will say is that there are a lot of wealthy people as well as corporations that really support what we do. I mean, I you know, I can't tell you how many, like a lot of corporations, a lot of wealthy individuals that have deposits in the bank, that really understand what we do, why we do it. They may not do it, but they really support how we're doing it, and we're we're maniacal about doing it.
So they're like, great, you know, we can't turn our big ship to focus on every community, but we love the fact that you were doing.
So they're depositing at your bank. Yes, yes, as our sign of support or yes.
As a sign of support as well as it gives us dollars to lend to the community. And because we've had like almost zero losses, they're they're supporting us so and I would even say even that, you know, Google as an example, they didn't have to step in and help us, you know, develop this tool, but they saw that this is a way to use AI for good. You know, you hear a lot of crazy stuff about it. We're really trying to get our community to embrace it, not be afraid of it, to realize that there is
a good use of it. I mean, you remember when we were afraid of online and mobile banking, but people were afraid.
I'm still afraid. Yeah, I'm probably more afraid today than I was when I started.
Just to be fair, no, but I just think, you know, it's interesting all the stuff that's going on digital.
So is most of your business deposits? Is it long? Like? Give us an idea?
Yeah, you're going First of all, as I said, ninety percent of our customers come to us online, right, even the corporations, they're located all across the world, and they come to us and deposit. We focus our lending is on supporting affordable homes, so multi family affordable housings with the rent is below the average for the communities that we're in. Again, cash Please is a big one. We've
done thousands of cash Please loans. We also have a secured credit card again to help people rebuild their credit. That's the lending tools. We also focus on home ownership.
I want to ask you about the other ten percent then of your customer base. So you do have some geographic footprint and as you think about expansion or where you want to be, how do you how do you think that through? Are you are you happy in the cities that you're in or where else would you see opportunity and kind of if you're not going to name names, what are the kinds of places where you would want to have a footprint.
We love the cities we're in. We you know, what's happening in Boston and Miami and the tech world is just amazing, and we're we're really a fintech that's also a community bank, and that's the the great thing about us is when you put your money with us, you have the benefit of the regulatory you know, environment and all that that comes with, as well as the fact that you can bang with us online. So we're really excited about what's happening, particularly in Miami these days, as
well as what's been going on. Our IT team is in Boston and we love it. And then la is just such a huge market, it really is. And we're in Compton. I mean we're down in South Central on a quench out boulevard. So we really like the communities we're in. We're always looking for other opportunities and really I would have to do a shout out to all black banks. We're located in major cities and we really do serve the communities.
One last question thirty seconds.
Is there anything that you would like to see in terms of policy changes that would help what you are doing.
It's a good question. Well, I do like what we're seeing on AIK that there is flexibility. We're introducing this tool.
And the relators are not saying no, okay no.
I mean that's huge. Yeah, I mean, I can't tell you how huge that is. I've been in banking for thirty years and we're not getting no for like, you know, one of the first times yet.
I'm just kidding. I'm gonna think positively for you, Terry, Thank you so much.
Yeah, thank you, thank you for having me.
Terry Williams, President, chief operating Officer of One United Bank joining us here in studios.