Financial Trouble for Feminists

When the First Women's Bank opened a year ago on Manhattan's 57th Street, it was heralded as the answer to a feminist prayer. Founded by a small group of activists, among them Author Betty Friedan and Dress Designer Pauline Trigere, the new bank was supposed to be run as well as owned primarily by women and to give "special attention to the needs" of female depositors and borrowers who felt unwelcome at big, established banks. If such a venture'can be a commercial success, the first year has hardly proved the point.

Since the opening, the bank has run up an operating deficit of $400,000. That is not unusual for a new bank of First Women's small size (capital: less than $4 million). But the bank has also been beset by management problems that officers are reluctant to discuss publicly. Employees grumble that the troubles start with frequent policy disputes that divide the 12-member board of directors, which is headed by a Manhattan lawyer, Evelyn Lehman, and includes four men. Some directors got into the venture for idealistic reasons but soon discovered that the job of guiding a new commercial enterprise can be unexpectedly demanding. One of First Women's women, Betty Friedan, left the bank in March, citing as a reason her writing schedule. Says she: "They gave me hell for missing too many board meetings."

The board has discovered a scarcity of experienced women banking executives. When the directors went shopping for a woman to be president, they found barely 20 whom they considered qualified. They finally picked Madeline McWhinney, 54, an economist who had been an assistant vice president of the New York Federal Reserve Bank but had no experience in commercial banking. Then, in September, she resigned from her $37,500-a-year job, complaining, insiders say, that she had grown weary of dealing with a board whose main devotion seemed not to banking but to a cause. The bank is now headed --temporarily--by a man: Executive Vice President Robert Benedict, 35, who last January was hired away from a branch manager's job with Manufacturers Hanover Trust Co.

High Turnover. Of 57 staffers hired since the bank's incorporation, only ten remain. Such high turnover, quips Eileen Preiss, the only one of the original three executive officers remaining, is the way "we solved the problem of a staff without enough experience." The bank lost many accounts early this year when the inexperienced staff was slow to deal with computer foulups. Even more embarrassing, the bank has actually been accused of sex discrimination by a former teller, Susan Salvia, 23, who claims she was fired because she was pregnant. The bank says Salvia refused to take a new job assignment.

Many women still go out of their way to bank at First Women's. Some 75% of its more than 6,000 checking-account customers are women, although many of the accounts are small and inactive. Lourdes Rosa, 30, an office manager, frequently makes a long subway trip from her Bronx home to First Women's because the bank gave her a furniture loan and she finds its atmosphere "much friendlier than other banks."

Some 95% of the bank's personal loans have been made to women, although the bulk of commercial loan dollars has gone to "prime accounts" like Gulf & Western Industries--not primarily too small, female-run enterprises, as might have been expected. Says Benedict: "Our loan policy is no different from other banks." As a new institution, he adds, First Women's must be extra cautious in lending money because otherwise "every deadbeat in town will beat a path to our door."

Despite the New York institution's troubles, two other women's banks have opened in the past year: the San Diego Women's Bank and Western Women's Bank in San Francisco. Several similar banks have been incorporated but are not yet in business. Curiously, though, the whole idea sparks audible animosity among women who have succeeded in conventional banking. Says Patricia Weninger, vice president of Fidelity Mutual Savings Bank in Spokane, Wash.: "We don't need a 'women's' bank."

Too Little. One reason for thinking so is that, just as First Women's was opening in New York a year ago, the Federal Reserve Board spelled out rules that all banks must follow to comply with the Equal Credit Opportunity Act. If those rules are vigorously enforced, no bank will be able to discriminate against--or in favor of--women. In that case, many women may prefer the efficiency and wide range of services provided by the big established banks. Whether or not they are too little, the women's banks may be too late.

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