The owner of a western Pennsylvania ice cream parlor that also accepted money deposits but paid customers “interest” in ice cream shop gift cards said state regulators are backing off now that he’s changed the name of his banking business and made other alterations.
The Pennsylvania Department of Banking in September wanted Ethan Clay to shut down the community bank he’s set up at his Oh Yeah ice cream and coffee shop, and in November sent a letter warning he faced $10,000 fines for “multiple violations.”
Instead, Clay has changed the name of the bank to Whalebone Intergalactic Cafe Banco — removing the word “bank” from the original name — and added a disclaimer that the business “is not a bank or member FDIC.” The FDIC is the Federal Deposit Insurance Corp., a government-created agency that insures deposits at licensed banks.
Clay previously advertised that he would take deposits and pay interest in gift cards to his shop.
Now he advertises “never-ending gift cards.” Customers give him a certain amount of money for the cards, for which they earn additional purchasing power at a rate of about 5 percent, Clay explained to The Associated Press on Friday.