The nation's only Internet-based bank created specifically to serve homosexuals announced Tuesday that it will close within 90 days.
G&L Bank, whose initials stand for gay and lesbian, had little difficulty attracting depositors but was unable to find enough customers for loans, said Kay Griffith, chairwoman and chief executive officer.
"Customers are still concerned about dealing financially over the Internet," Griffith said.
The nation's faltering economy also contributed to the bank's problems, she said. It has been losing about $280,000 a month with a total loss of approximately $10 million since opening in 1999.
Deposits are insured up to $100,000. Depositors will get their money back and loans are being sold to other institutions. Shareholders will get back about half their investment, Griffith said.
Bank directors looked at a couple purchase offers but both were deemed unsatisfactory. Griffith said shareholders would get a better return through dissolution than selling the bank.
Griffith said G&L ran into the same problems generating income-producing assets as other stand-alone Internet banks and could not afford to establish satellite offices around the nation needed to attract that business.
It joins such Internet banks as Wingspan Bank, Compubank, USABancshares and Security First Network Banking in shutting down, pulling back, selling or exploring their options, Griffith said.
G&L bank was founded by Steven Dunlap, an inventor and businessman, who was ousted by the bank's majority shareholders in 2000. Dunlap has sued G&L and its officers, claiming the bank's concept, name and trade mark were stolen from him.
Dunlap said he tried to buy the bank, but Griffith said no offer was received from him.
Associated Press
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