Alden McDonald has used his career in banking as a platform to make the dream of homeownership a reality for members of his community.
With a career in banking that spans decades, Alden is a financial services pioneer, who has enabled many members of the African-American community in New Orleans to access credit and finance services which otherwise would have been far from easy or impossible for them. In addition, he has provided help and guidance for many people who yearned to own their own home but lacked the means. With his dedication to helping others achieve financial stability and education, Alden J McDonald Jr has made a significant contribution to society by assisting African Americans to optimise their potential and fulfil their dreams.
A graduate of the LSU School of Banking and of Columbia University’s Commercial Banking Management Program, Mr. McDonald began his financial career endeavours at International City Bank in New Orleans in 1996, rising to the position of Vice-President for Consumer Lending.
Now, as President and Chief Executive Officer of the Liberty Bank & Trust company in New Orleans, McDonald is a legendary figure in the financial world, who has played a vital part in the history of US banking. A strong and generous leader, he combines great depth of financial knowledge with a desire to help those around him accomplish as much as possible.
Roots and forays in finance
A native of New Orleans, Alden’s ancestry is liberally infused with Creole connections, which go back to relatives who came to Louisiana from countries such as Belize and Cuba. Enthusiastically embracing his Creole heritage, Alden has researched his background to learn more about Creole culture and even helped with making a documentary on the topic. “I know a lot about the Creole culture from our family ties,” Alden says.
His role with the Liberty Bank was a transformative one, as the institution began trading at a time when many members of the Creole and African-American community did not have access to banking products. “We started the bank in a period when we were a solution for people who couldn’t get credit,” explains Alden, “and by providing this, all kinds of people were enabled to do more with their lives.”
Established in 1972, when it was recognised that the African-American community needed greater financial support and services, Liberty Bank incorporated as a plank of its mission, to enable them to buy their own homes. Today the bank offers all kinds of services to its clients, including consumer, commercial and the tax credit business.
Alden says the bank combined pragmatism with the desire to support members of the community. “It’s a business and we selected to enter the niche that other people didn’t want, which was a very good business model for us,” he mused. Banking has always been enjoyable for him, even with its challenges. “These (challenges) come about because of racial segregation and prejudice. Even today people don’t want to bank with us because of who we are. But that’s okay as we find somebody who does want to.”
Under Mr. McDonald’s stewardship, Liberty has grown to more than $350 million in assets, realised consistent profitability and national recognition and leadership.
Nominated by McDonald Sr
In some ways, fate led Alden McDonald to banking. His father was working as a waiter at a function in 1965 and some of the guests were launching a new commercial bank in New Orleans and decided they wanted to employ some African-Americans. Asking Mr. McDonald Senior if he knew of anyone, he put his son forward and that was the start of Alden’s career. “I was the first African American to be employed in a commercial banking system in the state of Louisiana,” Alden recalls, and he was with that bank from 1966 until Liberty Bank opened.
The role of Dr. Norman Francis
His career has not been without challenges, some of which related to his rapport with colleagues in that first commercial banking job, but his then boss encouraged him to keep going. Then in 1972, former Xavier University of Louisiana President, Dr. Norman Francis, the founder of Liberty Bank, asked Mr. McDonald to come and run his new bank.
“I turned him down three times and then he convinced me,” Alden recalls. This was a great opportunity, but Alden’s natural humility made him hesitate. At only 29 years of age, he worried that he was too young, and only had six years of banking experience. But Dr. Francis believed in Alden, as did his wife-to-be, and with approval from a Higher Power he soon recognised his future lay with Liberty Bank. “The decision was not only made by my future wife, but the good Lord also sent me in this direction,” Alden reminisces. His rewards have included great pleasure and fulfilment in helping people achieve their goals and enjoy greater financial security.
Liberty Bank: Business v Social function
Much as Alden derives satisfaction from benefiting members of the community, he is also running a business. The bank has a social mission that it takes very seriously, but it also needs to make money to survive. There is no special treatment from regulators just because Liberty Bank is helping those with low credit scores. “We are not a social organisation or a civil rights organisation,” Alden explains, “we stick to this social mission because our aim is to help people grow economically, but we still have to operate in this society.”
In 1987, Mr. McDonald played a central role in the establishment of the Black Economic Development Council (BEDC). BEDC has become the driving force behind Black economic development in the region and has helped many minority businesses to secure public and private contracts for goods and services. The organisation is currently recognised as a leading voice in the African-American community in Louisiana and a potent political force on issues that impact the quality of life in New Orleans.
Personal experience determines his approach to life as Alden has seen people around him struggling, such as his own father, who worked hard and yet did not own his own home for most of his life. However, after one particular incident, Alden was really invigorated to help members of his community take control of their finances and acquire property.
At one point before joining Liberty, Alden himself was holding down three jobs and the father of a friend who was a part-time real estate agent had given Alden the nickname of “Money Bags”. The friend’s father came to Alden saying that he had a beautiful house for sale, and Alden agreed that it was a beautiful house but not worth the amount his friend’s father said the owners were asking for it.
Despite all these jobs, Alden was still broke, but too embarrassed to say so. The friend’s father asked him what he would offer for the house, and Alden put forward a much lower figure. The man asked Alden if that was an offer, and Alden agreed, thinking that this was just a theoretical discussion. The friend’s father made Alden write the figure down, he went away, and on his return announced that the house owners had accepted Alden’s “offer”.
Alden was in shock – he liked the house, but he didn’t know how to pay for it. So, he went to his boss at that time, and his boss asked him a few questions about his finances and with assistance in managing them, Alden was on his way to becoming a homeowner.
Today, when people come to Alden wanting to buy a house, he assists them in a similar manner: “I sit them down and I show them how they can buy their house,” says Alden. “Most people can afford to have a house because if you can afford to pay rent, you can afford a house – there’s no difference.”
The difference is, however, having someone like Alden who believes in you and helps you through the process. The assistance that Alden had received was fundamental to his success, and as a result, he pledged that he would help every person – especially young people – who wanted to buy their own home.
When Alden meets people who would like to own their own home but don’t know how to go about it, he tells the story of how he became a homeowner. Owning property is not rocket science, but sometimes requires a bit of help. “I take the place of their parents guiding them through this process of purchasing real estate because that is how you develop wealth,” says Alden.
The growth of Liberty Bank and the leaders of the future
Liberty Bank is now established across a broad swathe of the southern states, with branches in Louisiana, Mississippi, Alabama, Kansas, Missouri, Illinois, Michigan and Texas. The bank takes its role of developing wealth and skills in the community very seriously. “We do a lot of mentoring for young people,” Alden exudes. This is primarily through a leadership programme that aims to expand the horizons of trainees between the ages of 24 and 40 with classes focusing on subjects such as politics, education and economic development. This programme has made a huge impact on African-American representation in public life, with graduates running for office and attaining positions on boards and commissions.
“We hope to have a profound effect on future leaders,” says Alden, “to grow this community in such a way where the racial divide is fully understood and where people can work and enjoy life together.”
The Norman C Francis Leadership Institute, which is named after the founder of the Liberty Bank and allied with its goals, also provides training for members of the African-American community who wish to access further education. Between the two leadership institutes and the support of Liberty Bank, there is significant infrastructure in place to foster future leaders by providing exposure to ideas, networking, exchange of information and increasing African-American representation in public life. Around 250 people from a variety of backgrounds have completed the Liberty Bank leadership programme so far, and graduates have included doctors and lawyers, along with hardworking community members and even ex-convicts.
There have been setbacks too, but one particular setback was a predicament that no one could’ve prepared for. Over the period 1987-9, there was an oil industry bust in the south. McDonald reflects: “All of the oil companies were down, and the economy was down. We lost a lot of money in those three years. It was the first time we lost money. Sixty percent of the financial institutions in the state failed. We had eleven locally owned community banks. Only two of us survived. That hole kept getting deeper and darker every day. We didn’t know if we would make it because so many others in front of us did not. That was the most challenging part of my career.”
Then in 2005, Hurricane Katrina and its aftermath presented a devastating set of challenges for Liberty Bank. Katrina’s destruction had not only struck Liberty Bank financially, it had almost deprived them of their community.
“We were the only commercial bank that was totally wiped out. We lost everything – we lost all of our files, all of our equipment, and our operation centre was under seven feet of water,” Alden says. The bank lost its staff, its base and its customers.
Apart from losing his office, Alden also lost his home and belongings. He even moved to a friend’s house in Atlanta just to have accommodation for his wife and children. The destruction of basic infrastructure such as telephone lines made the situation almost impossible, but Alden returned to New Orleans to get the bank running again: “We opened the bank and we didn’t have any computers, but we couldn’t let our customers know because they would’ve lost confidence,” Alden says. “We made sure it was business as usual, customers could still make transactions. We literally let people take money out of the bank and we just wrote it down on a piece of paper,” Alden adds.
During this challenging time, Alden’s standing in the community was a great asset. With assistance from a local computer expert, the bank came back online and a friend in the transport industry retrieved the necessary data to revive the bank. With the basics in place, other banks pitched in to help with making things work.
As so many had lost everything in Katrina, Alden decided anyone who needed a loan – for a deposit on a place to live, for food or clothing – should have it. “We loaned money out to our customers for whatever they needed to get started again, and they were forever grateful,” explains Alden.
Equipment was required right away, and suppliers made sure the bank had what it needed within a speedy 10 days. While the disaster backup plan for the bank may have failed, Alden says the people rose to the challenge magnificently.
The future and his wish list
Of course, Alden is looking far ahead. “We have developed young people to take on our mission, so it can continue with the same passion after Dr. Francis and I are gone”, he says, “we think we have done that to a great degree and we think that it should last forever.”
Alden recommends that those who want to succeed look for opportunities and then make the most of them. “When there is an obstacle, look for the opportunity and you will find success,” says Alden. After Katrina, for example, Alden realised he needed to diversify and started buying banks in different areas to build his impressive extensive network.
In 2001, McDonald received the prestigious Loving Cup from New Orleans’ major newspaper, The Times-Picayune. This award is considered the highest honor in the New Orleans Metropolitan Area. He then became the chairman of the New Orleans Chamber of Commerce. McDonald also became the co-chair of the Greater New Orleans Education Foundation. In 2004, he was the first chairman for Greater New Orleans, Inc., established for the economic development of the New Orleans region. Five years later in 2006, McDonald was named to Fortune Magazine’s highly regarded “Portraits of Power” list for 2006, extolling him for his powerful presence in the business community and his impact on the global market. He was also named to the Federal Deposit Insurance Corporation’s (FDIC) Advisory Committee on Economic Inclusion, concentrating on the expansion of access to banking services for underserved populations.
Most recently in 2018, Alden J. McDonald was awarded the Liberty Bell Award which recognises someone’s understanding of the rule of law, has encouraged greater respect for law and the courts, and has inspired a sense of civic responsibility, or has contributed to good government in the community.
Alden is proud of his work with the Liberty Bank and what it has achieved. If he had three wishes, his first would be to look for an opportunity in adversity. Number two would be to respect his family, spend time with them, and respect others. Lastly, Alden would wish for people to be true to themselves and behave with integrity so that anyone can look in the mirror and be proud of the person you see there.