Angry with Big Banks, Ice Cream Store Owner Opens Bank of His Own

Thank you for doing business at the Whalebone Intergalactic Café Bank. Would you like a waffle or sugar cone?

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Photo by Tom Kelley/Getty Images

Ice Cream

In defiance of big banks, an ice-cream shop owner in Pittsburgh opened a bank where customers can spend their interest on buckwheat honey waffles or chocolate ice cream garnished with habanero peppers.

Ethan Clay, 31, said he opened Whalebone Intergalactic Café Bank about seven months ago inside his ice-cream shop, Oh Yeah!, after getting fed up with his treatment at the hands of a local bank. About two years ago, Clay was charged $1,600 in overdraft fees for a series of checks that overdrew $200 in his account.

Describing his bank as “community-centric,” Clay says in his YouTube video that he hopes to strike a blow for consumers and end punitive bank fees.

Whalebone Intergalactic Café Bank offers customers a 5.5 percent monthly interest rate. When they deposit $100, their interest comes in the form of $5.50 worth of “exclamation dollars,” which they can spend at Oh Yeah! on products like coffee and ice cream. Clay also cashes checks and makes short-term loans. He told The Wall Street Journal that he currently has $550 in deposits and has given out loans totaling $1,700, which includes his own seed money.

But state regulators are less than pleased with the Whalebone Intergalactic Café Bank, and are intent on cracking down.

“We’re not OK with what he is doing,” Ed Novak, spokesman for the Pennsylvania Dept. of Banking, told the Pittsburgh Post-Gazette. “We’re not in the Wild West anymore.” Chief among the drawbacks: Clay doesn’t have a banking license, and also isn’t carrying depositors’ insurance.

“If a bank goes under, the depositors get their money back,” Novak told The Wall Street Journal, thanks to programs like the Federal Deposit Insurance Corporation (FDIC). “If the ice-cream store goes under, who knows what happens.”

To that, Clay said he won’t consider applying for depositors’ insurance unless he has his shareholders’ consensus — and argues that he shouldn’t come under regulatory scrutiny anyway, since while he calls his operation a bank it’s technically a “gift card savings account,” as the Journal put it. Meanwhile, NewsFeed suspects, the best insurance Clay has is making sure the freezer doesn’t break down.