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Do Minority Banks Lend Enough to Other Minorities?

Activists want Asian-oriented firms to help a diverse set of borrowers.

July 02, 2003|E. Scott Reckard | Times Staff Writer

Greenlining also is looking into the pending merger of two L.A.-based Chinese American banks: Cathay Bancorp's agreement to pay more than $430 million for GBC Bancorp, parent of General Bank. The deal would create an even bigger banking concern than UCBH, with more than $5 billion in assets.

Cathay has been "quite forthcoming" in dealing with Greenlining and appears willing to work out a minority-lending plan, Gnaizda said. Such a plan is needed, he said, because Cathay didn't make any home loans to blacks in L.A. County last year and has no Latinos or African Americans on its board.

Cathay Chairman Dunson Cheng declined to comment because of the pending merger.

One likely point of contention is Greenlining's insistence that UCBH and Cathay contribute 2% of their pretax profits to charity, matching previous pledges extracted from Comerica Inc., a Detroit Bank with large California operations, and UnionBanCal Corp. of San Francisco, whose majority owner is Bank of Tokyo-Mitsubishi.

Richard Hartnack, vice chairman of UnionBanCal and past president of the California Bankers Assn., said banks can't ignore Greenlining, whose tactics have set a precedent for advocacy groups nationwide.

"They're smart people and absolutely committed to their constituency," he said, but they are also realists.

"Most people have found that when you deal with them in a positive way, you come away with agreements you can live with for years to come," he said. "You hate to give credit to your enemies, but they've made us a better bank."

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