Although OneUnited Bank is doing a good job lending in its California market area, the bank "needs to improve" its community lending efforts in the Bay State and Florida, the FDIC said in a recent evaluation of the bank’s compliance with the Community Reinvestment Act (CRA).
In a performance evaluation released this week, the FDIC characterized the bank’s lending activities in those assessment areas as "less than reasonable" and attributed that partly to lack of resources and staff in Massachusetts and Florida. OneUnited attained a "satisfactory" rating in California, a "needs to improve" rating in Massachusetts and "substantial noncompliance" in Florida.
During the FDIC’s evaluation period, which ran from Oct. 4, 2010, through Nov. 5, 2013, the bank made just 26 loans in Massachusetts, where it has offices in Roxbury and Dorchester: two in 2011, 16 in 2012 and eight year-to-date in 2013. In Florida’s Miami-Dade County, OneUnited made two loans in 2011, three loans in 2012 and three loans in 2013.
The FDIC noted that OneUnited improved its performance in California since its last evaluation in 2010 and attributed that to having dedicated staff that regularly seeks out new loan origination opportunities in the Los Angeles County market area.
While the FDIC characterized the bank’s community development activities as adequate, it noted that all of the community development loans (CDLs) it originated were inside its California market. OneUnited originated 62 CDLs totaling around $51 million during the evaluation period.
"Management believes that its performance in the Massachusetts and Florida assessment areas is commensurate with its size, opportunities and lack of demand in those markets; however, market share reports reflect demand and opportunity for lending by entities of varying sizes," the FDIC wrote in its evaluation.
OneUnited’s participation in financial literacy efforts, however, passed muster, with the FDIC noting that the bank had participated in or sponsored 64 financial literacy programs over the evaluation period, especially in Massachusetts and California.
The FDIC also noted that OneUnited had made significant qualified donations to Massachusetts-based organizations, including the Neighborhood of Affordable Housing, the Home for Little Wanderers and Nuestra CDC. The agency also recognized that OneUnited had sponsored eight first-time homebuyer seminars during its evaluation period, with seven of those in Massachusetts and one in Florida.
In an email to Banker & Tradesman, OneUnited responded: "OneUnited Bank is committed to community development and we disagree with the assessment of our CRA performance, since over 65 percent of our loans (over $300 million since 2009) are in low to moderate income communities – compared to 15 percent for all lenders – and over 65 percent of our loans are in communities that are 90 percent or more minority, compared to 3 percent for all lenders."
