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’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’s North Side, one bank’s troubles with its South Asian borrowers boiled over into a big enough problem that a U.S. Congresswoman had to intervene.

Businessman Balvinder Singh was one of the first to voice his problems with United Central Bank. Standing in front of a strip of storefronts that he owns on Clark Street, he pointed out a Chinese restaurant at the corner. “That’s the one pays my bills,” Singh said with a rueful laugh. “If my properties are fully rented,” said Singh, “I don’t have a problem to pay my mortgage.”

But Singh’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.   

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. “I showed them my plans,” said Singh. “I told them up to March I will fill up my property and I will start paying you certain amount, and they agree.” But Singh says after he filled about 80 percent of the property with tenants, the bank refused to work out a loan modification.

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.

United Central Bank’s CEO, Luke Lively, denies racial prejudice played any role in lending decisions. “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,” said Lively. “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.”

Since Texas-based United Central Bank acquired failed Mutual Bank last year, Lively has traveled frequently to the company’s Western Avenue location on Chicago’s far North Side. Those trips have become particularly important in the wake of the allegations of discrimination. Lively said United Central Bank investigated the claims, but found no written proof, in emails or other records, to substantiate them.

But Lively does concede the borrowers were treated in a less-than-professional manner. “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,’” said Lively. “‘Babysitting’ being a term that we saw in e-mails, something that we could identify from within.”

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.

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’t until she saw the petition that she understood the urgency of the matter. “I was concerned about the neighborhood and I was concerned about a large number of constituents,” 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.

But some have questioned Schakowsky’s involvement during this election year. Her opponent has filed a complaint with the Office of Congressional Ethics alleging that Schakowsky’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.

Schakowsky says she didn’t consider campaign contributions when she decided to get involved. “I feel completely non-defensive about having intervened,” said Schakowsky. “I’m proud of it. I think it was a really good thing.”

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.

Geoffrey Smith of the Woodstock Institute says it’s a good thing the bank and the borrowers there are finally working together. “Our experience in talking to community organizations, that’s a real concern,” said Smith. “(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.”

Lively has asked the borrowers to form an advisory committee to tell him how the bank is doing with minority borrowers. It’s supposed to meet on a regular basis. “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,” said Lively.

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. “I think things will be alright. If bank works with the people, things will be alright,” said Singh. “I will work with (United Central Bank), you know. Whatever the way I will have to work, I will work.”