WBEZ | fdic http://www.wbez.org/tags/fdic Latest from WBEZ Chicago Public Radio en Alderman accuses bank of ‘redlining’ http://www.wbez.org/news/west-side-alderman-accuses-us-bank-owner-%E2%80%98redlining%E2%80%99-103151 <p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/RS5396_Mitts1-scr.jpg" style="margin: 4px 0px 0px; float: left; height: 279px; width: 250px; " title="Ald. Emma Mitts, 37th Ward, is angry about a plan by Minneapolis-based U.S. Bancorp to close a branch in her neighborhood. (WBEZ/Chip Mitchell)" />An alderman on Chicago&rsquo;s struggling West Side is steamed about a plan by Minneapolis-based U.S. Bancorp to close a full-service branch in her neighborhood.</p><p>Ald. Emma Mitts (37th Ward) said the company&rsquo;s decision to shut down its U.S. Bank outlet at 4909 W. Division St. blindsided her. &ldquo;They&rsquo;re leaving high-and-dry with no warning,&rdquo; she said, calling the process &ldquo;disrespectful.&rdquo;</p><p>The branch is an anchor of Austin, a mostly African-American neighborhood hit hard over the years by factory closings and, more recently, home foreclosures.</p><p>But Mitts said there is still plenty of banking business for company officials to keep the branch open. &ldquo;The money is good but they don&rsquo;t want to be in the neighborhood,&rdquo; she said. &ldquo;That&rsquo;s redlining.&rdquo;</p><p>U.S. Bancorp spokesman Tom Joyce bristled at the alderman&rsquo;s accusation. &ldquo;It&rsquo;s off base and unfortunate,&rdquo; he said.</p><p>&ldquo;In 2011, we put more than $152 million into affordable housing and economic development in metropolitan Chicago,&rdquo; Joyce said. &ldquo;We&rsquo;re a proud citizen of the Chicago area and the Austin neighborhood and we&rsquo;ll continue to serve the neighborhood.&rdquo;</p><p>When the branch closes November 16, Joyce added, the company will leave an ATM and start shuttling seniors from that part of Austin to nearby U.S. Bank locations two or three times a month.</p><p>The branch on the chopping block was once part of Park National Bank, a&nbsp;commercial chain owned by Oak Park-based FBOP Corp. The chain was known for charity and investment in low-income areas. U.S. Bancorp acquired FBOP holdings as part of a 2009 federal rescue.</p><p>Austin community groups fought the U.S. Bancorp takeover. In 2011, bowing to pressure from the groups, the company agreed to put hundreds of thousands of dollars into affordable-housing efforts in Austin and Maywood, a nearby suburb.</p><p>U.S. Bancorp says it has 88 branches and 1,600 workers in the Chicago area.</p></p> Tue, 16 Oct 2012 05:51:00 -0500 http://www.wbez.org/news/west-side-alderman-accuses-us-bank-owner-%E2%80%98redlining%E2%80%99-103151 Bank and borrowers forge new ties http://www.wbez.org/story/banks/bank-and-borrowers-forge-new-ties <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2010-October/2010-10-26/IMG_0758.JPG" alt="" /><p><p>&nbsp;Bank failures have brought a wave of new lenders into many communities. These institutions are larger and more stable than the ones they have replaced, but they don&rsquo;t have the same relationships with the communities they serve. For minority business owners that rely heavily on loans from their small, local banks, this can be a rocky transition. And on Chicago&rsquo;s North Side, one bank&rsquo;s troubles with its South Asian borrowers boiled over into a big enough problem that a U.S. Congresswoman had to intervene.</p><div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Businessman Balvinder Singh was one of the first to voice his problems with United Central Bank.&nbsp;Standing in front of a strip of storefronts that he owns on Clark Street, he pointed out a Chinese restaurant at the corner. &ldquo;That&rsquo;s the one pays my bills,&rdquo; Singh said with a rueful laugh. &ldquo;If my properties are fully rented,&rdquo; said Singh, &ldquo;I don&rsquo;t have a problem to pay my mortgage.&rdquo; </span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">But Singh&rsquo;s retail strip is far from full; most of the rest of the spaces are empty or occupied by tenants that are behind on rent.&nbsp;&nbsp;&nbsp; </span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Singh's troubles began last December, when almost all his tenants went out of business or left the property in Chicago's Rogers Park neighborhood. Singh said when he realized this, he immediately went to his lender: United Central Bank. &ldquo;I showed them my plans,&rdquo; said Singh. &ldquo;I told them up to March I will fill up my property and I will start paying you certain amount, and they agree.&rdquo; But Singh says after he filled about 80 percent of the property with tenants, the bank refused to work out a loan modification.&nbsp;</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">The next month Singh got foreclosure notices on his three properties in the area, but he also found out that he wasn't the only borrower in trouble with United Central Bank--another North Side businessman, Arshad Javid, was stuck in the same situation. Javid approached Singh with a petition that alleged United Central Bank discriminated against its South Asian borrowers. Together, Singh and Javid got nearly 30 other minority borrowers to sign it.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">United Central Bank&rsquo;s CEO, Luke Lively, denies racial prejudice played any role in lending decisions. &ldquo;It hurt us when we hear those kinds of claims because,one, we've never heard those anywhere else in the 23 (-year) history of the bank,&rdquo; said Lively. &ldquo;If that was the case, that would have been something that would have bubbled up, I'm sure, at some point. It's never been the case.&rdquo;</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Since Texas-based United Central Bank acquired failed Mutual Bank last year, Lively has traveled frequently to the company&rsquo;s Western Avenue location on Chicago's far North Side.&nbsp;Those trips have become particularly important in the wake of the allegations of discrimination.&nbsp;Lively said United Central Bank investigated the claims, but found no written proof, in emails or other records, to substantiate them.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">But Lively does concede the borrowers were treated in a less-than-professional manner. &ldquo;It was more things like -- and this is, to me, this is a terrible term, but it's 'I'm tired of babysitting you, as a borrower,'&rdquo; said Lively. &ldquo;'Babysitting' being a term that we saw in e-mails, something that we could identify from within.&rdquo;&nbsp;</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Lively said the bank fired two loan officers as a result of the investigation. Despite that, a spokesman from the Federal Deposit Insurance Corporation confirms the agency is investigating a complaint of racial discrimination.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">The petitioners also sought relief from another source: U.S. Congresswoman Jan Schakowsky. Singh had approached Schakowsky early into his troubles, but she declined to intervene on his behalf. Schakowsky said it wasn&rsquo;t until she saw the petition that she understood the urgency of the matter. &ldquo;I was concerned about the neighborhood and I was concerned about a large number of constituents,&rdquo; she said. Schakowsky helped arrange a town hall meeting with the borrowers and Lively. It was there that the bank committed to working with the borrowers to avoid foreclosures.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">But some have questioned Schakowsky's involvement during this election year. Her opponent has filed a <a href="http://www.pollakforcongress.com/2010/10/13/pollak-to-file-expanded-ethics-complaint-against-schakowsky/">complaint </a>with the Office of Congressional Ethics alleging that Schakowsky&rsquo;s intervention was politically motivated. The complaint says that only a few names on the petition are actually targets of United Central Bank foreclosures. And some of those names, like Balivinder Singh, have donated tens of thousands of dollars to Illinois Democrats.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Schakowsky says she didn't consider campaign contributions when she decided to get involved.&nbsp;&ldquo;I feel completely non-defensive about having intervened,&rdquo; said Schakowsky. &ldquo;I'm proud of it. I think it was a really good thing.&rdquo;&nbsp;</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Many of the signatures on the petition are people who are employed by borrowers. Singh says they signed because they would lose their jobs if the businesses were foreclosed.</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Geoffrey Smith of the Woodstock Institute says it&rsquo;s a good thing the bank and the borrowers there are finally working together. &ldquo;Our experience in talking to community organizations, that's a real concern,&rdquo; said Smith. &ldquo;(That) when a local bank is acquired, especially a community bank is acquired by an out-of-town bank, that it changes the way that the bank interacts with the community.&rdquo;&nbsp;</span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">Lively has asked the borrowers to form an advisory committee to tell him how the bank is doing with minority borrowers. It&rsquo;s supposed to meet on a regular basis. &ldquo;This is, I think, an opportunity where you can turn something that is really critically negative into something positive by simply not offering words, but by offering actions and community involvement,&rdquo; said Lively. </span></div> <div style="">&nbsp;</div> <div style=""><span style="font-size: 10pt;">The committee has met once already, and Singh attended. Even while looking at his nearly-deserted shopping strip in Rogers Park, Singh says the meetings with United Central Bank have restored some optimism in him. &ldquo;I think things will be alright. If bank works with the people, things will be alright,&rdquo; said Singh. &ldquo;I will work with (United Central Bank), you know. Whatever the way I will have to work, I will work.&rdquo;</span></div></p> Tue, 26 Oct 2010 21:03:00 -0500 http://www.wbez.org/story/banks/bank-and-borrowers-forge-new-ties