The end of an era in New Haven finally seemed like reality last week as Toni Harp won election to the mayor's office. The man she's replacing, John DeStefano, is following 20 years at the head of city government with another prominent role in New Haven. He'll become an executive at New Haven's Start Bank.
As he enjoys his last few months in charge of the city, John DeStefano has an opportunity to reflect on the changes he's seen in his time at the top. "We're sitting here doing this interview on Church Street in the Mayor's office," he said, "and 20 years ago, when I walked into this mayor's office, there were four or five locally-based banks on this street. There are none now."
Those changes in the banking sector are a personal matter to DeStefano, who led the attempt to save the city's last community bank, the New Haven Savings Bank. When it did finally go from being a mutual institution to being publicly owned in 2003, DeStefano was one of those who insisted that money be set aside to begin another community-owned bank. "It's not a big Bank of America, or Wells Fargo -- those are important institutions -- it's not a large regional. It's a small community bank. Those are good things to have."
That bank was incorporated in 2010, headquartered on Whalley Avenue, and named Start Bank. And though community banks have been going through a two-decades-long contraction, Start was born at a uniquely challenging time, according to DeStefano. "Prior to 2008, probably on average, 150 charters were issued a year. Since 2008, I believe less than five have been chartered. We were one of them. We were, I think, the second-to-last charter issued in the United States, and that was in 2010. So it's a tough environment out there."
DeStefano has been on the board of the bank since its inception. Now he'll be an executive vice president, and he'll serve under a new CEO. Founding CEO William Placke just announced he's retiring, to be replaced by Maureen Frank.
DeStefano said current low interest rates mean keeping the bank growing is a challenge. "I think the first goal is to ensure the long-term sustainability of the bank. You know, when you're a small bank, you don't have a lot of transaction fees, and that's how banks make a lot of profits these days."
But why does it matter if New Haven has a community bank? He said part of the answer is a responsiveness to small businesses in the city. "To me," he said, "that's an important part of growing the wealth of the city. And for me, the charm of this is I get to be dealing with lots of folks and businesses I've been dealing with for 30 years, during my time with the city, and doing it around something I think's really important, which is helping families do better, and helping business grow and create jobs."
Start has a little more than $40 million in assets. Its goal under its new management team is to more than triple that in the next two years.