Lesson #1: Think Big About the Little Guy

Growing up in the produce store of his stepfather, Giannini was surrounded by farmers, merchants, and other labourers. He got to know them, their businesses, and their business needs, in what proved to be an experience he would not soon forget. In fact, the lives and stories of these workers would come back to haunt him when he first took the job with the Columbus Savings & Loan Association. For, it was during this time that Giannini began to recognize that there were entire groups of people – workers – who were readily denied access to bank loans and credit.

In the beginning of the nineteenth century, it wasn’t easy to get credit from a bank, especially if you were an immigrant or a worker just trying to make ends meet. Financial institutions rarely gave out loans of less than $200, forcing many immigrants to turn to loan sharks just to be able to pay the bills. When Giannini took the job with Columbus S&L, he didn’t want to be a part of that system. Columbus S&L, however, had other plans.

Columbus S&L was quite happy working with only the wealthier segment of society. Giannini’s insistence that a banker with any dignity would never refuse credit to anyone simply because they weren’t consolidated didn’t find any sympathy within the association. Remembering his origins, Giannini couldn’t settle for anything less. Immigrants from Italy and elsewhere had come to California, eager to make a living for themselves, but had wound up getting caught between hardship and humiliation. Ignorant of the language and with no assets to their name, they were falling between the cracks.

That was where Giannini came in. He believed that it would be these very immigrants and their children – like him – that would serve as the backbone for the development of California. After struggling to change the policies of Columbus S&L for two years, Giannini finally quit to found his own bank, Bank of Italy. Here, service would be made available in Serbian, Russian, Mexican, Portuguese, Chinese, Greek or any other language Giannini felt necessary to adequately represent and serve his customers. He made it possible for immigrants to send money to their homeland with just a 2 percent tax, versus the 8 percent of regular banks. And, the loans he gave out started at just $25; he based his decisions on the feel of a customer’s hands and the look in their eyes.

On its first day in business, deposits to the Bank of Italy totaled almost $9,000. As word of Giannini’s policies grew, so too did his reputation and along with it a loyal customer base. Giannini had seen his father killed right before his very eyes, and he understood that life was too short not to take risks. With the Bank of Italy, Giannini was taking a huge risk where other banks wouldn’t; he was betting on the working class. In the end, every single one of the loans Giannini personally lent out was paid back in full. His bet had paid off.



Lesson #1: Think Big About the Little Guy

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