Alvin J. Boutte: an astute banker, civil rights leader and Chicago treasure, dies at age 82

Boutte was success you could bank on

Boutte died at his home in Hazel Crest, IL, April 1. He was 82 years old.

By Juanita Bratcher

Alvin J. Boutte was an astute banker. He was knowledgeable about the banking industry and shared much of that banking and financial expertise in an extensive interview with CopyLine Magazine in 1991.

It was an extraordinary interview with Boutte, entitled, Alvin J. Boutte: Success you can ‘Bank’ on. Following is a reprint of that article from CopyLine’s 1991 archives:

It’s one thing to write your own success story, but it’s a strike of ingenuity to carve out success stories for others.

Alvin J. Boutte, president and chief executive officer of Indecorp, Inc., and chairman and chief executive of Independence Bank of Chicago and Drexel National Bank, has been carving out success stories for entrepreneurs for more than 20 years. And, he relishes every minute of it!

Boutte has made his mark in both the banking and business communities (was involved in other business endeavors), and has an unquestionable track record of success.

“I’ve been at this for a long time,” Boutte said. “I like what I’m doing. I know what it means to people. So I have a great deal of personal satisfaction from it.”

When Boutte and four other investors set-out to start Independence Bank more than 20 years ago, they started with $800,000 in capital. The bank now has 40,000 customers and over $21 million in capital. Three of the five original investors are deceased. The remaining original investor is businessman George Johnson.

And although the country is in a recession, Boutte said for 40 years, since World War II, “Our country has had an unprecedented economic growth.”

This economic growth, he said, was caused because most of the countries in the world were destroyed by the war – all of Europe, all of the major powers in Asia, literally all of the western democracies except this one, including England.

“Their infrastructures were destroyed, and as a result of that, we had a huge advantage for 40 years…it began to slow down about eight to 10 years ago when these other economic systems like western Europe, especially Germany…Japan, which had been devastated by the war, rebuilt their infrastructures and economic systems and began competing in the world markets.”

And due to this competition, Boutte added, “this country had a much slower rate of growth, which is understandable in these cases. But a recession in this country is not like traditional recessions in the world that we’ve known for centuries. Recessions in economic systems have lasted sometimes for a generation. In this case, our recessions – which we have had four or five – usually last anywhere from a year to three years. The longest we’ve ever had a recession was three years, of course excluding the great depression in1929, which was a different act of reasons altogether.”

Further, Boutte said because other economic systems have “begun to catch up with us, begun to export more and reduce our markets, we’ve had much slower growth. This country (America) even today is still the most powerful economic force in the world, including Japan and Germany. And it has produced a standard of living unparalleled in history.”

He sees the recession as being temporary. “As a matter of fact, we see evidence now that we’re coming out of that. Slow economic growth means a reduction in value to any banking system. We have a banking system which is tied to money supply. It has affected the banking industry, particularly the larger banks. As the recession gets worse the banking system normally would get worse; and that is what has happened here.”

Some years ago, banks began charging fees for various services provided that were unheard of before.

“You want to know who is really responsible for this (fees)?” Boutte asked. “I think President (Jimmy) Carter made a critical error when he deregulated the banking industry. I testified against this. He insisted that we pay interest on certain deposits.

“We used to have a maximum interest that you could charge. Under the new law, under President Carter, that was eliminated.

“When Carter made this decision, which in my judgment it was a very poor decision, especially for poor people. What he said is, you must pay people that have a checking account – which we do – but the minimum (balance) doesn’t help our people.

“In other words, you must keep a minimum of $1500 in your account. Well, these people have a checking account to pay their rent, so they get nothing out of this. In terms of the deregulation of banks, I think the Carter Administration…and Carter who is a very decent man and a very liberal man, made a very ignorant, dumb error.”

CopyLine: Do you foresee bankers pushing to have deregulation of the banking industry removed? Or, is it a small matter and not that significant?

Boutte: It’s a very minor matter, really, it’s not significant. I think there are several things that should be deregulated by government. However, the three industries which have been deregulated have been devastated. We now know after 12 years what the results are. I think the airline industry has been devastated by deregulation. I think the trucking industry has been devastated by deregulation. And I think the banking industry has also been hurt by it.

CopyLine: Why has Independence Bank been so successful?

Boutte: I think one of the reasons why we are so successful is that we have the first and second generations of highly educated blacks working all over our company. These are Blacks – some of them – the first Blacks in their families to go to college and get MBA degrees. These are the people who are driving all of this…very bright people. We’ve got the best in the black community. We’ve got the cream of the crop…people from Harvard, Yale, and the University of Chicago Graduate School. We have the advantage of getting the very best and very brightest. Most of the young people that I recruit, or we recruit, know that if they’re really going to have upward mobility in their careers, it is with us. The only Black presidents of banks in the state are our guys. We don’t have a problem retaining people. People who work here now have been working here for many years.

CopyLine: What are your thoughts on the S&L scandal?

Boutte: Banks and S&L’s missions are not the same. S&Ls make mortgages to people. We do all kinds of things. However, I think it’s a tragedy (scandal). It’s unfortunate that it happened. One of the ways to avert that is to be more critical of the people who own and run these things. In S&Ls, anybody and his brother could do that. In the banking industry you have to be approved by the Federal Reserve Board. They check you out and make sure that you have the funds, to make sure that you have the reputation, that you have the expertise.

We are in the business of causing upward mobility and increasing the wealth of Black Americans. That’s what we do. And, we do it on a very large scale, not a small scale. The reason why so many Blacks have McDonald’s franchises is because we did this. But people don’t know this.

CopyLine: How much is the average McDonald’s franchise?

Boutte: The average McDonald’s franchise is a loan of about anywhere from $400,000 to $600,000. We’ve got them all over the country. So our job is to funnel funds in to people who know what they’re doing and who have a project which has merit. Reggio’s Pizza (owner), he’s getting ready to build a huge factory that makes frozen pizzas with a market all over the country. We are in the business of causing economic development to happen on a much, much larger scale. That’s what we’ve been doing for many years.

CopyLine: Aside from Reggio’s, is there any other black firm here in the city that perhaps your bank gave a loan to and they made it big?

Boutte: Let’s take Cirilo McSween (owns five McDonald’s), he started with one. People criticized me for lending in the Loop. He literally owns every McDonald’s in the Loop, and I financed every one of them. He’s been a great success.

CopyLine: So, there were a lot of success stories?

Boutte: Many. Many of them. Hundreds of them.

CopyLine: There are many people in the city who say that the business community is not out-front. They would like to see business persons run for public offices. Are businessmen so content in what they do that they have no interest in the political arena?

Boutte: That’s a great fallacy, and it is one of the weaknesses of our people. Everybody ought not to be a politician. A society of people is a conglomeration of many kinds of people. We have our role to play – we play it. We have our job to do and it shouldn’t mix. If you want to be a politician, fine, but we all have a role to play in this society. We need more people that can create wealth, who’s bright enough that can not only make their own lives for their wives, their children and their families, but can create opportunities for other people. I am very content in what I am. I’ve never had any aspirations to be (a politician). The public things I do, I do it as a part of a civic responsibility…you have to understand that there’re only a few people who are doing what I am doing. Suppose I decided to leave, who could do this? The banks here are not ordinary banks. I mean, I don’t know if the public understands that. We’re the only black business that’s not only better than the best in the black community, we’re better than our white counterparts, which no black business can say that – no line of black business. We beat the hell out of other banks – white ones in the suburbs and everywhere else. Our numbers are better, that’s the only way I can explain it.

CopyLine: Why are your numbers better?

Boutte: Because we work harder, we have better people, and we have more loyalty among our people…that means an awful lot.

CopyLine: During your time in the banking business, what has been the greatest disappointment? What has been the high point?

Boutte: I have not had a major disappointment. I think I’m disappointed that more of our young people are not interested in business. They seem to go to college to do everything but that. It’s beyond me as to why. I just don’t understand why. Many of the colleges still are teaching the same thing they taught years and years ago – teaching them how to be a teacher, how to be a social service worker – and that’s reflective in the reproduction of capital. I think if I had a disappointment, and this one isn’t that great, is that we have not stressed enough the importance of a business career, it’s the only way you can create wealth- significant wealth, not just for yourself but for many, many other people. We’re much more intoned to politics and to social services – things that are important – but we need men and women who understand the dynamics of capital and the interrelationships of them, that can generate wealth. And we don’t put any effort into that, not enough.

The greatest joy I’ve gotten, is watching this marvelous, educated second generation which is on board now bring their valuable skills and intelligence that they have been trained for so many years.

CopyLine: What kind of plan is needed in the black community in order to bring about economic empowerment?

Boutte: I think the process is going on. The problem is, it’s happening and nobody realizes it or they don’t understand it. You got to understand that when I started there wasn’t a single Black automobile dealership in America. There wasn’t a single black McDonald’s owner in America. There wasn’t a single black bank in America. All of these businesses that we are now in, we’ve only been like this for 25 years. It takes a long time for it to regenerate itself.

The publishing business, now you don’t have just John Johnson and Ebony, you’ve got Essence, you’ve got nine significant black publications today in 20 years. Well that doesn’t sound like a lot, but that is a lot. You’ve got an upward mobility; that’s significant in the black community. Of course you have an underclass, and of course that has to be addressed, and of course they need help, but clearly, I think the latest census will show that – the significance of race. Look at the Blacks who are actually now living in the suburbs. The process is going on every day; these are victories and defeats, but there are more victories than defeats.

I wish it can be done in two years, but economic development isn’t something that can be done overnight. I am the guy that helped to bring cable to Chicago. We own part of the systems here, not just here, but all over the country. I remember when Blacks owned no radio stations, they owned no television stations, they owned no cable companies, and they owned nothing! They had nothing! Well that isn’t true today. Tom Lewis, who used to work for me, owns four or five radio stations around the country. You have Blacks who own TV stations, the Seaway Group started that 15 years ago…the process is going on, a very difficult one, but it is causing upward mobility. We want to work with intelligent, bright people who know what they are doing. And if they do, they will have our support.

Between the black banks in this city, you only elected one black mayor (Harold Washington), and he came here first. I’m the guy that gave him his first $100,000. Everybody in the city knows that. We had the meetings right next door in this room every night until he was elected.

Our job is to help. Not to help making speeches on a corner, but to help by using my creative intelligence; not just me, these creative, young, bright people who know what they’re doing; who understand the dynamics of business and can make a difference. They are all over this place, on every floor. Not like us who had a hard time being out there. Of course I went to college, but I don’t have the kind of education they have. This is the cream of the black community. That’s what gives me the most good feelings. And, frankly, they are going to do a better job than we did. The next group that comes in here, look what they’ll have to work with. Look at what I had to work with. They will take this to a conclusion and to a level that is unmatched by me or anybody that was in my generation. The next guys are going to do a hell of a lot more than me.

Brief Highlights of Boutte’s career

Boutte was born in Lake Charles, La., but moved to Chicago

Earned a degree in pharmacy from Xavier University

Boutte owned and operated a Chicago drugstore and later expanded into a chain

Alvin J. Boutte, Sr. was founder and CEO of Independence Bank, 79th and Cottage Grove, a bank he founded with Businessman George Johnson and three other investors. It became the largest minority-owned bank in the nation.

A Civil Rights leader

In the 1960s, Dr. Martin Luther King Jr. and Rev. Ralph Abernathy frequently visited Boutte at his Chatham home. He raised money for the Southern Christian leadership Conference (SCLC)

A supporter of Operation PUSH

Acquired Drexel National Bank

Served on the Chicago Board of Education

Funeral Services for Mr. Boutte were held April 14, 2012. He is survived by wife, Barbara; daughters, Janice Boutte and Jeanette Simpson; sons, Al, Jr. and Gregory; and four grandchildren.

Juanita Bratcher is the Publisher of www.copylinemagazine.com, the author of several books, songwriter and poet. She has been a Journalist for more than 35 years covering politics, education and a wide-range of other topics.