In an effort to more precisely target predatory mortgage lenders, Illinois regulators and housing activists mailed 4,000 information packets to Chicago residents last week.
The packets contain definitions of predatory lending practices and complaint forms that can be sent to the Illinois Office of Banks and Real Estate.
The regulator is funding a total of 16,000 mailings to people in Humboldt Park, Gage Park and Austin, among Chicago’s hardest-hit neighborhoods when it comes to predatory loans, which carry onerous interest rates, fees and other terms that can send homeowners into foreclosure.
“It’s a program to jump-start investigations into predatory lending in Chicago,” said Tracy Van Slyke, spokeswoman for the National Training and Information Center, a housing advocacy group that coordinated the partnership between regulators and activist groups in the three neighborhoods receiving mailings.
A letter from those organizations is included, asking homeowners to send complaints to the state regulator. “This way it’s not just a letter from a state agency, but neighborhood organizations as well, which are pretty well-known in their communities,” Van Slyke said.
Under state regulations that went into effect last May, regulators now can investigate lenders specifically for predatory lending practices, and fine, suspend or revoke the licenses of companies that violate state regulations and fraud laws.
The Illinois Department of Financial Institutions, which regulates many non-bank lenders, had planned to participate in the mailings as well but decided it did not have the budget or staffing to handle the project, said spokeswoman Mary Kendrigan. The departments exchange complaint information, however, which means complaints about non-bank lenders will make their way to the correct department, she said.
Good news, bad news: The nation’s banks posted record earnings of $74.6 billion in 2001, up 5 percent from the previous record, set in 1999, but the numbers include some bad news that could haunt banks in coming months.
“The news is not all good,” said Don Powell, chairman of the Federal Deposit Insurance Corp., in a press briefing announcing bank earnings.
Earnings from core banking operations, such as lending, declined and the quality of loans continued to worsen during 2001. And the number of banks on the FDIC’s “problem list” grew from 74 to 95, the largest jump since 1991.
“If you look at industry earnings more closely, you’ll see that the record for 2001 was made possible only by $4.5 billion in gains on sales of securities,” Powell said.
“In fact, net operating income, which excludes these gains and other non-recurring items, was 1.2 percent lower in 2001 than in the year 2000,” he said.
Bank notes: Northern Trust last week named Kelly Mannard as its senior vice president of community affairs, effective March 11. She succeeds Marjorie Lundy, who retired after 22 years at the company. Most recently, Mannard was senior vice president of financial development, marketing and communications at the YMCA of Metropolitan Chicago.
The bankrupt Chicago investment banking firm Rodman & Renshaw Inc. was awarded $500,000 in punitive damages, plus $400,000 in compensatory damages, in its case against Boston-based investment brokerage Tucker Anthony Inc. A three-member New York Stock Exchange arbitration panel found that Tucker improperly lured away Rodman’s lucrative bank services group and improperly interfered in Rodman’s client relationships.
The Illinois Venture Capital Association elected Bret Maxwell as chairman, replacing Carl Thoma, who was named chairman emeritus. Maxwell is a managing general partner of MK Capital and the Productivity Funds.