How a New Anti-Woke Bank Stumbled [View all]
An A-list group of financial backers including Ken Griffin and Peter Thiel gave Toby Neugebauer tens of millions of dollars to build a new kind of bank—one aimed at people who see Wall Street as too liberal. The potential customer base was huge, Mr. Neugebauer and his business partner, former Mike Pence chief of staff Nick Ayers, told the investors. Plumbers, electricians and police officers, the pitch went, are fed up with big banks that don’t share their values.
The startup, called GloriFi, initially aimed to launch with bank accounts, credit cards, mortgages and insurance, while touting what it called pro-America values such as capitalism, family, law enforcement and the freedom to “celebrate your love of God and country.” Within months, the investors’ money was nearly gone, and GloriFi was on the verge of bankruptcy. It missed launch dates, blaming faulty technology and failures by vendors, and laid off dozens of employees. It stumbled with products; for instance, a plan to make a credit card out of the same material used for shell casings failed when the company realized the material could interfere with security chips and potentially be too thick for payment terminals, according to people familiar with the matter.
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GloriFi’s app did make its debut in September. The company said customers can open checking and savings accounts and apply for credit cards. It said it is continuing to work on plans to offer mortgages, brokerage accounts and insurance, and is focused on optimizing shareholder value... GloriFi defined itself in contrast to many big, established banks, including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc., which have in recent years pledged to consider environmental, social and governance, or ESG, principles in their businesses. Some lenders have cut ties with some corporate clients in the gun, coal and private prison industries.
Mr. Neugebauer said many Americans have come to believe big banks have moved too far left, and that customers want a bank that reflects their conservative values. “It is about my friends that played football at ‘Friday Night Lights.’ And they don’t feel loved. They don’t feel respected,” he said. Politicians in West Virginia and Texas have penalized some Wall Street firms for their ESG policies, saying they effectively boycott fossil-fuel companies. Florida this summer banned the consideration of ESG factors in state pension investments, and the governor proposed legislation to prevent banks from discriminating against customers for their political or social beliefs.
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GloriFi took center stage at the CPAC event this summer. “It’s time for the conservatives to deliver better products than the people who hate us,” Mr. Neugebauer said on a panel... On a call with investors in September, Mr. Neugebauer suggested the company might accelerate a plan already in the works to offer financial services to Latinos. Mr. Neugebauer expressed the idea that people were trying to hurt GloriFi, and his wife read a Bible passage about adversity.
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https://www.wsj.com/articles/glorifi-how-new-anti-woke-bank-stumbled-11665174704 (subscription)
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Not exactly clear whether the company is on solid ground.
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