Union Bank and The Bank of California Finalize Ten-Year CRA Plan

Strategic Insights -

Union Bank and The Bank of California have finalized a ten-year plan to support commitments under the Community Reinvestment Act (CRA). The plan, designated as a community investment, lending, and outreach effort, will be funded at a minimum of 4.5 percent of the combined banks' assets each year for 10 years, starting April 1, 1996. The new plan aims to promote economic development and provide fair and equal opportunities for employment, credit, and business enterprise in the communities served by the banks. The plan includes various initiatives, such as economic development loans, multi-family housing, single-family housing, rural priority, charitable contributions, and community advisory committee.

Key Takeaways:

  • The plan funds a minimum of 4.5 percent of the combined banks' assets each year for 10 years, totaling $1.35 billion in commitments.
  • The plan includes annual targets for small business and farm lending, with 50 percent of loans to be for $100,000 or less.
  • Programs will be expanded and strengthened to provide special assistance to businesses owned by women and minorities, not-for-profit organizations, and loan consortia.
  • The Bank will increase direct loans for affordable multi-family housing, with priority given to not-for-profit organizations and HUD preservation projects.
  • Community outreach efforts will be increased, including home loan counseling and first-time home buyer programs.
  • Charitable giving will be increased to 2% of after-tax income by 1999, with 60% of donations directed to non-profit community-based organizations.
  • A Community Advisory Committee will be established to provide guidance to the Bank on various facets of the plan.
  • Minority vendor purchasing will aim for 25% of discretionary purchases from minority-owned enterprises.

Statistics:

  • Combined assets of Union Bank and The Bank of California total $27 billion.
  • 46 offices throughout California, Oregon, and Washington, and 11 overseas offices principal locations along the Pacific Rim, will be operated by the merged bank.
  • The merged bank, Union Bank of California, will have more than 200 offices statewide and five overseas facilities.

Sources:

  • Union Bank press release, October 18, 1995
  • The Bank of California press release, October 18, 1995
  • Community Reinvestment Act (CRA)
  • The Greenlining Institute
  • California Reinvestment Committee