Amalgamated Bank: Plugged in to politics
Amalgamated Bank may not be a bank well known outside of New York and Washington D.C., but it plays an outsized role in politics, almost entirely with the Democratic Party.
Amalgamated is the nation’s only union-owned bank and has a unionized workforce. It’s also a bank that handles many union pension funds and accounts for Democratic political campaigns.
Amalgamated CEO Keith Mestrich spoke with the AP ahead of this coming week’s Democratic National Convention. What does your competitive environment look like? Our success as a bank is built on being a boutique bank. I compare us to two other entities in the banking industry. There’s Silicon Valley Bank. They’ve built products and services that speak to the needs of people in Silicon Valley. There’s also Esquire Bank in New York. They take money from the trial lawyer community and develop products for them. They provide loans to lawyers who may need funds to fund a class-action lawsuit, a type of loan that the traditional banking industry wouldn’t do.
I think that’s what we are for the progressive movement. We have no major competition in this field, which I think gives us a competitive advantage. What are some issues your bank faces today? The banking industry has gone a great job figuring out how to create “sticky” banking relationships with their customers. It’s just a pain to change banks. While we win the value proposition at times, we do run into that inertia of change. Secondly, like all other banks, the interest rate environment is challenging. We have some expenses that our competitors do not. We have a unionized workforce. We have a defined benefit pension plan. So we are dealing with little bit lower margins in the meanwhile. Do you consider Amalgamated to be a political organization? We certainly figured out how to make a book of business with the Democratic Party largely by being able to provide services that fit the needs of the political community. For example, modern campaigns spend large sums on TV advertising. Oftentimes if a candidate runs a negative ad, the opposing campaign will want a negative ad up that evening and they will fund raise all day to put that ad on the air. Most banks close their wire rooms at 2-3 p.m. We keep ours open for our political customers right up to the very last minute before the Fed window closes.
While it causes a few headaches for us, we consider this service important. So yes, we are a political organization if you think about us providing services to the political world. Looking forward to the Democratic National Convention? We are a sponsor this year and it’s a great business opportunity for us. All our potential customers and clients are all going to be in the same place at once. It’s going to be a great chance to build new and existing relationships. Interviewed by Ken Sweet. Answers edited for clarity and length.