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Middleburg Heights company is going all-out in producing energy gels for endurance athletes — P. 4 Thanks to Launch League, Akron’s startup community has plenty of reasons to get together — P. 5
Banks struggling for city’s backing Surveys show Cleveland has one of the highest percentages of unbanked households in the U.S. By JEREMY NOBILE jnobile@crain.com
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There’s an unbanked problem in Cleveland. According to data from the Federal Deposit Insurance Corp. and the Washington D.C.-based nonprofit Corporation for Enterprise Development (CFED), the city has some of the highest percentages nationwide of residents who either don’t belong to any bank at all (the unbanked) or people who may have some kind of bank account but still rely on often costly, nontraditional bank products, like payday lenders (the underbanked). In 2009, the FDIC began tracking un/underbanked populations through a survey of households being administered every other year. Data released last year on 2013’s survey reports that 7.7% and 20% of American households are unbanked and underbanked, respectively. CFED’s most recent analysis is on the FDIC’s 2011 data; analysis of the most recent data is still ongoing. It reports that 25.5% of Cleveland households are unbanked, and 31% are underbanked — a notable increase from the 17%/25% spread from 2009. Those numbers place Cleveland third in the country for large cities with unbanked populations, behind only Miami (28.4%) and Newark, N.J. (34%), according to CFED. Comparatively, Scottsdale, Ariz., and Fremont and Irvine, Calif., rank the best, with each having unbanked populations below 1%. Evelyn Burnett, vice president of economic opportunity for Cleveland’s Neighborhood Progress Inc., said the next CFED analysis likely will report similar findings on Cleveland.
Seeking ‘secure financial footing’ The nation’s unbanked population decreased slightly from 8.2% in 2011, but it grew minimally compared with the 7.6% unbanked nationwide in 2009. Statewide, Ohio’s numbers mirror the national picture, according to the FDIC: 7.2% unbanked and 20% underbanked. Neighborhood Progress is addressing the problem in Cleveland by partnering with local financial institutions for the economic benefit of the city and its residents. Through Neighborhood Progress’ Community Financial Centers, the group acts like an independent broker, partnering with institutions such as Citizens Bank (formerly Charter One) to assist citizens through various means, including offering educational programs on financial literacy and credit repairing workshops to pairing people with banks offering services or products they need, like accounts with low or no fees. “Financial instability creates instability in other parts of your life,” Burnett said. “It’s also about peace of mind and empowerment for these people.” As financial institutions compete for customers and deposits, these populations are a focus because they offer new business opportunities, said Mike Adelman, president and CEO of the Ohio Bankers League. But it’s also in banks’ best interests to see these people — who largely straddle or fall below poverty lines See BANKS, page 26
Opportunity knocks Market is more welcoming for owners to sell homes on their own By STAN BULLARD sbullard@crain.com
Alan Feuerman of Beachwood and Georgiann Bare of Green and their spouses are taking the road less traveled when it comes to selling their homes: both are eschewing real estate agents and marketing the properties on their own. With real estate’s revival and the growth of real estate technologies, that process is becoming easier, though still requiring more than a veritable click. Real estate sites such
as Zillow allow homeowners to offer properties themselves and ForSaleByOwner.com offers listings for a variety of prices. Discount brokers such as Columbus-based Ohio Broker Direct offer spots on the Multiple Listing Service for as little as $300, which puts FSBOs on the Realtor.com website. The lure remains the same: spend a few hundred bucks for signs, ads or listings versus paying a licensed real estate agent’s commission, which is negotiable, but generally can be as much as 7%,
and will run into thousands. Studies by the National Association of Realtors say the percentage of houses sold through FSBOs and trades between individuals who know each other is about 8% and has been unchanged since 2006. For the first three months of 2015, seller traffic to ForSaleByOwner.com was up more than 200% over the comparable period in 2014, according to the Chicagobased website owned by Tribune Publishing Co., which ranks Ohio See KNOCKS, page 24
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“It’s hard to tell if the (un/underbanked) issue is getting worse without hard data,” she said, “but my guess is that it’s stagnant.”
INVESTING GUIDE The role of investor relations is becoming more prominent at many companies ■ Pages 15-21 PLUS: ALTERNATIVE STRATEGIES ■ SUPERSTARS ■ & MORE
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