Bank of America Started By Providing Loans To Immigrants — Here’s How Stilt Is Bringing That Back
I found myself taking a deep dive into the history and humble beginnings of Bank of America, and was surprised to discover some fascinating parallels between how BoA started and how Rohit and I came to found Stilt — namely, a focus on providing loans and other banking services to immigrants and other underserved communities.
Bank of America started out with the premise that everyone deserves the opportunity to access financial services; something we feel has been severely lacking in modern banking. By providing services to immigrants and blue-collar workers, most of whom were unbanked or underbanked, Amadeo Giannini, BoA’s founder, paved the way for one of America’s largest financial institutions.
Let’s explore the origin story of BoA and how that same ethos that made the bank successful in the early days is as important today in 2021.
Amadeo Giannini founded the Bank of Italy
Before there was a Bank of America, there was first the Bank of Italy, which Amadeo Giannini founded in 1904. Twenty-four years later he would merge his bank with a small group of LA banks and found Bank of America.
Giannini, born in San Jose, California in 1870 was the son of Italian immigrants. His father bought a farm and made a living by selling fruits and vegetables; a business which Giannini came to be involved with at a young age after his father was tragically killed in a wage dispute. His mother eventually remarried and he continued to help his step-father, who expanded the business further. This success allowed Amadeo Giannini to attend Heald College but he later dropped out knowing he would find more success by taking an active role in the world of business.
His next big step came after marrying Clorinda Cuneo, the daughter of a San Francisco real estate magnate, and becoming a director of the Columbus Savings & Loan where his father-in-law owned an interest.
He found that he was constantly battling with the other directors as Giannini wanted to serve the increasing immigrant population of San Francisco: a minority group without a bank that was viewed as a credit risk. Frustrated, he quit the board and decided to found his own bank.
Thus, in 1904, Amadeo Giannini founded the Bank of Italy in San Francisco. It was housed in a converted saloon and was marketed as an institution for the “little fellow.” It was the first bank to offer financial services to “the hardworking immigrant's other banks would not serve.” Pioneering the use of advertising to get the bank’s message out, one of his early ads stated “small accounts welcome” and “the small depositor of today becomes the rich man of tomorrow.”
It quickly became the go-to bank for more and more immigrants, laborers and workers, and even women were now able to own accounts, save, and invest at the women’s banking department. The Bank of Italy was immediately successful with deposits totaling $700,000 within a year.
They even offered extended branch hours to fit around customers’ workdays which often went late into the day at construction sites, shipping yards, and other blue-collar job schedules. A true bank of the people.
Innovation in times of crisis: The Bank of Italy opens a makeshift branch to help rebuild San Francisco
Just two years after the Bank of Italy started, in 1906, San Francisco suffered a devastating earthquake and subsequent fires which lasted several days. 80% of the city was destroyed, 400,000 residents were left homeless, and 3000 people lost their lives. It is still considered to be one of the deadliest earthquakes in the history of The United States.
Faced with such widespread devastation, Amadeo Giannini was quick to act, moving all of his customer’s records and money deposits out of the bank before they were destroyed. To do this, without alerting the looters who were running rampant in the city, he borrowed a produce wagon from his stepfather and hid the assets under fruit boxes.
His quick action meant that he was able to operate and provide cash withdrawals in the immediate aftermath of the disaster when other banks could not. He also offered loans to help people rebuild and reestablish their lives with only a handshake as a promise of repayment. His faith in people paid off as every penny was repaid with interest leaving Giannini in a position to expand.
The Bank of Italy becomes the Bank of America
In 1909, legislation passed in California that paved the way for banks to be able to set up branches. Giannini quickly seized the opportunity. Only operating in San Francisco until this point, the first branch of Bank of Italy opened in San Jose in 1909 and by 1916, he had opened several other branches across California.
As Giannini’s banks grew, he set his sights on building a large banking institution to compete with the existing banks of the day. In 1922 he began merging the Bank of Italy with a group of Los Angeles banks known as Bank of America, which created the Bank of America that we know today. By 1929, the rapidly growing bank had over 400 branches in California.
Giannini was famous for taking an interest in each branch, frequently visiting and remembering the name and face of each of his employees. He also continued to invest in California’s prosperity being particularly supportive during The Great Depression.
A few interesting factual tidbits: Giannini financed the first hand-drawn animated film Snow White, loaning money to Walt Disney, and invested in Hewlett-Packard who at that time was operating from a garage. These actions would continue to show that Bank of America, like Bank of Italy, was for the people.
Stilt is bringing back banking opportunities to immigrants and the underserved
Though it seems like a novel idea today, it really struck me how Stilt is actually going back to the roots of today’s successful financial institutions by providing banking opportunities to many of those who feel left out of the modern banking system.
Initially launched as a lender to international students from India, Stilt now provides loans and other banking services to all immigrants in the US, and others underserved or unserved by the banking system, with a modern risk assessment system. Find out how Stilt can help you today.