One of the nation’s largest banks Friday provided details about an agreement with some nonprofit groups in Chicago-area neighborhoods devastated by foreclosures.
The deal, revealed Wednesday by WBEZ, stems from the collapse of Oak Park-based banking chain FBOP Corp. The company’s flagship, Park National Bank, was known for donations and loans in low-income areas. In 2009, federal authorities took over FBOP and sold it to Minneapolis-based U.S. Bancorp, the parent of U.S. Bank.
U.S. Bancorp said it couldn’t fill Park National’s shoes in the community. After protests, though, the banking giant last fall started negotiating with a coalition of nonprofit housing groups. The two sides reached a deal a few weeks ago and kept it quiet until this week.
U.S. Bancorp is promising $600,000 in interest-free loans this year to buy six foreclosed homes in Chicago’s Austin neighborhood and Maywood, a suburb nearby. Community groups will then renovate them and sell them at cost. If the effort breaks even, U.S. Bancorp will lend another $800,000 next year and $1 million more in 2013, bringing the total to $2.4 million.
To celebrate the deal, U.S. Bancorp officials flew in for a gathering outside an Oak Park branch Friday. They included Richard Hartnack, vice-chairman of the company’s consumer and small-business banking.
Could this agreement be a model for banks and community groups to soften effects of the nation’s housing crisis? Or is the deal just a U.S. Bancorp public-relations ploy? We got a chance to ask Hartnack at the celebration and included his responses in this WBEZ segment: