Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Committed to the Cause despite Threats to Shut Him Down, the Owner of a Shadyside Ice Cream Shop Who Opened His Own Version of a Community Bank Isn't Backing Down

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Committed to the Cause despite Threats to Shut Him Down, the Owner of a Shadyside Ice Cream Shop Who Opened His Own Version of a Community Bank Isn't Backing Down

Article excerpt

With the pluck of a cornered cat arching its back, Ethan Clay is not going down without a fight.

Despite threats of big fines by state banking regulators, the owner of a Shadyside ice cream shop who opened his own version of a community bank last summer isn't abandoning his mission -- although he has made some changes in the way he advertises his services.

In September, the Pennsylvania Department of Banking and Securities said it did not approve of the operation inside the Oh Yeah! ice cream and coffee shop on Highland Avenue that Mr. Clay launched -- offering check cashing, "neverdraft" loans and interest on deposits in the form of store credit -- as a low-cost alternative to fee-gouging banks.

"We're [going to be] telling him to stop," spokesman Ed Novak said at the time, noting that among other problems, Mr. Clay had not applied for a banking charter.

The department followed up with a letter in late November citing "multiple violations" that could trigger $10,000 fines, according to Mr. Clay.

He said the warning letter primarily took issue with "semantics, the way we phrased what we are doing." So he promptly made some changes.

The name of the operation went from Whalebone Intergalactic Cafe Bank to Whalebone Intergalactic Cafe Banco.

Instead of accepting deposits, Mr. Clay started advertising "never-ending gift cards" that earn store credit. Instead of making loans, he began offering "neverdraft cash sets" of $100 for a $5 monthly "rental" fee.

On his website -- www.theohyeah.com -- he added this disclaimer: "Whalebone Intergalactic is not a bank or member FDIC."

"I followed their letter to a 'T,"' he said.

Since then, Mr. Clay said he hasn't heard from regulators. "If there's still an issue of compliance, they haven't been in communication about it," he said Wednesday.

At this point, the banking department isn't talking. Mr. Novak declined comment this week when asked for an update. The department generally does not discuss ongoing regulatory matters unless a cease- and-desist order has been issued or a consent agreement has been reached settling the dispute. …

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