US Bank officials met Wednesday with U.S. Rep. Danny Davis (D-Ill), state Rep. La Shawn Ford (D-Chicago) and the Coalition to Save Community Banking to discuss a possible partnership that West Side residents have long pushed for.
The closed-door meeting held at 3333 W. Arthington St. was not the first time bank officials have sat down with the advocacy group formed in the wake of Park National Bank’s seizure last year; the last public meeting between the two was held June 10 and covered by AustinTalks.
Rev. Randall Harris of Faith Community Church began the meeting with an emotional plea to help Austin: We are not just under water, we are at the bottom of the ocean. We need help, and we need it now, he said.
Harris said the coalition, along with West Side residents and elected officials, attended Wednesday’s meeting with US Bank for one reason – to form a partnership.
Oak Park Village President David Pope reminded attendees what he said “really” happened when federal regulators seized Park National in fall 2009 and US Bank took over operations, while Richard Hartnack, vice chairman of consumer banking for US Bank, assured the more than 20 in attendance that a partnership would be in place before Christmas.
“I firmly believe in these agreements, but you need to accept the fact that I can’t control the fact that America has a gigantic load of foreclosures coming onto the market in the next six months. We are going to see the housing market get crushed in the next six months; it’s going to be a blood bath,” Hartnack said. “But we are more than comfortable in getting this agreement signed before Christmas.”
Some said they were relieved with the timeline set by Hartnack, but Pope and others remained skeptical.
“There has been no interest to move forward, and there has been an unwillingness to commit on the part of US Bank,” Pope said.
Mike Kelly, chairman of Park National and its parent company, First Bank of Oak Park, was known for lending to community members in Chicago’s most impoverished West Side neighborhoods. After the bank’s closure, businesses, social-service agencies and other West Side institutions praised Kelly and Park National for its commitment to helping the community and worried its generous support would not continue.
The coalition repeated its request that US Bank agree to, and sign a Community Benefits agreement, which calls for the local hiring of bank employees and vendors; a commitment to serving the “unbanked” and individuals with poor credit or low-income; stepping up its lending to low- and moderate-income businesses and charitable contributions to the community; and honoring commitments that had been made by Park National.
Jacqueline Leavy of the Coalition to Save Community Banking said the agreement also asks the bank to create a Community Restoration Fund, which would require the bank to contribute $25 million over three years to support reputable non-profits and homeowner counseling agencies across the West Side.
Hartnack said the bank’s idea of a good partnership would include a percentage of profits being put back into the community; a list of goals for financing housing and small businesses; and making it a priority to lend to the community.
“The first thing we need to do is appoint a small group who would then sit in a room and hammer out the specifics for an agreement,” he said.
Pope said the small group idea had been put on the table in May, and again in July, and he noted that US Bank never responded or acted with any urgency to get “the ball rolling.”
“I think the frustration that you are hearing is that we have put these things on the table, and we felt it was a reasonable way to proceed. Yet we feel a little bit like it has been one-hand clapping,” he said.
Pope assured bank officials that Oak Park would be fine no matter what, but he’s concerned about the communities like Austin that border the village.
“We are surrounded by communities that have seen dramatic levels of disinvestment and fundamental malpractice on the part of the way in which the public sector ought to be engaging with these communities, as well as the way the private sector ought to be engaging with these communities. The one notable exception to that has been Mike Kelly and Park National Bank,” he said. “We think that you stepping in to that role means that you have assumed a certain legacy responsibility.”
Hartnack said US Bank does not plan on being Park National Bank II but rather will continue to be US Bank.
“We want to be held to the standard of being a very good bank; we will be in the community to serve you now and 10 years from now,” he said. “We will not make every loan that comes down the pike, we will make every good loan that comes down the pike. We will be intensely involved in the community and spend a lot of money in the community, but not near the amount of money that Mr. Kelly spent – what he did was incredibly generous, but not part of a successful business model for the long haul.”
That didn’t sit well with Pope.
“Park National Bank was a bank that was more profitable every year of its existence before the FDIC took it. Mike Kelly took Park National Bank and turned it in to the most profitable private bank in the United States,” Pope said. “He (Kelly) grew the bank in a way that it continued to be committed to the communities it served throughout the entire time it was around.”
Hartnack said US Bank will do what is necessary to put together an agreement that both parties are satisfied with, but he said he struggles with the fact that the bank’s reputation suffers because community members are placing blame on the wrong entity.
“It’s a huge problem for us that we are unable to make you, particularly the public, understand the two different things that are going on here. First, we have the community side of banking and second, we have our role as a trustee,” he said. “There is a misunderstanding of the role of the trustee and it spills over onto our reputation and we don’t want that. I will do everything I can to try to bridge that gap. This is a very good bank that didn’t cause this problem and does serve communities very well.”
Virgil Crawford of the West Side Health Authority said the way to bridge that gap is through a partnership with the community, its residents and businesses.
Crawford invited US Bank officials to a community informational meeting, set for Nov. 1 at Hope Community Church, when coalition members will update residents and business owners.
State Rep. Ford, who represents parts of Austin in the Illinois House, said it isn’t often that politicians come together and unite on issues. But in this situation, he said it is obvious that everyone is at the table and ready to put in the time and work necessary to “rectify the problem.”
U.S. Rep. Davis added that not only does the government, banks themselves and communities understand the serious challenges facing America, but most see it up close every day. But Davis held out hope ending the meeting by saying, “if there is righteousness in the heart, there is beauty in the character.”
Pope said of the coalition and West Side residents, “our hope is to be able to work fully in partnership and make the best of what we perceive to be a bad situation.”