Regulators Frown on 'Ice Cream Bank'

Pittsburgh man is paying out interest in gift cards
By Newser Editors and Wire Services
Posted Sep 13, 2012 3:33 PM CDT
Apparently, ice cream is not an acceptable form of interest payment.   (Shutterstock)

(Newser) – State regulators are cool on a Pittsburgh businessman's idea for a bank that pays interest in ice cream shop gift cards. The Pennsylvania Department of Banking says it wants Ethan Clay to shut down the community bank he's set up at Oh Yeah! ice cream and coffee shop. Clay says he was motivated by unpleasant bank experiences to provide a simplified community bank offering savings accounts, check-cashing, and loans.

Clay calls the venture Whalebone Cafe Bank. He says he's not subject to the usual banking rules because his "bank" is actually a gift card program that pays out its 5.5% monthly interest in a made-up currency that can be used at his store. Regulators are unmoved. Banking department spokesman Ed Novak says if Clay doesn't close down, "he will be hearing from the district attorney." (Read more bank stories.)

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