|
Community Reinvestment Agreement
Old Kent Bank and the Chicago CRA Coalition*
upon the Acquisition of Pinnacle Bank
September 1, 1999 through December 31, 2002
July 1999
Introduction
Increasing
lending to low- and moderate-income (LMI) people and areas is a major
goal of this agreement. To penetrate these markets it is important to
continue to use specialized marketing and lending practices, such as
working in collaboration with community groups, engaging in
relationship lending and adopting flexible underwriting procedures.
Subprime loans, which should account for only a portion of the
increase, should be fairly priced for risk and not carry excessive
fees. CRA Coalition members will include Old Kent in the
community-based outreach development projects and programs that meet
the parameters of this agreement. Old Kent Bank's strategic plan will
identify specific strategies for targeted marketing and lending.
Lending
- Residential Lending: Lending in LMI areas should be commensurate with lending increases to LMI people overall.
- Achieve
and maintain an LMI-to-MUI market share ratio of at least 1.0 for home
purchase, refinance, and home improvement, within three years.
- Maintain an LMI-to-MUI market share ratio of at least 1.5 for multifamily lending for three years.
Subprime Lending
- Old
Kent will develop a program within 60 days to provide subprime
borrowers with an opportunity to refinance loans at a lower rate.
- Old
Kent will provide all subprime borrowers with an informational brochure
outlining opportunities for rate reduction through refinancing.
- Old Kent will report subprime loans semi-annually as a subset of the residential lending reported to the Chicago CRA Coalition.
Small Business Lending
- Small
Business lending will be analyzed in two categories: Very Small
Business Lending (loans to businesses with annual revenues less than $1
million) and All Other Small Business Lending.
- Old
Kent will achieve and maintain an LMI-to-MUI market share ratio of at
least 1.25 for Very Small Business Lending within three years.
- Old
Kent will achieve and maintain an LMI-to-MUI market share ratio of at
least 1.15 for All Other Small Business Lending within three years.
Services
An
important step in providing services to lower-income people is to
establish and maintain full-service branches in lower-income
communities. Further, bank products and services must be appropriate
for consumers in these communities.
- Old
Kent will not close any branch located in a low- or moderate-income
community in MSA 1600 for the period of this agreement (through
December 31, 2002).
- Old
Kent will not diminish the level of banking services currently offered
at any branch located in a low- or moderate-income community in MSA
1600 for the period of this agreement.
- Old Kent will provide a branch summary detailing lending and deposit services offered and business hours.
- Old
Kent will promote the Action Bank and Budget affordable checking
accounts through financial literacy workshops and counseling. Workshops
will be conducted in cooperation with community groups and members of
the Chicago CRA Coalition.
- Promotion
of direct deposit of paychecks and government benefits through
financial literacy workshops and counseling will be targeted at
branches located in or near LMI communities, including Ashland, Elgin,
Harvey and Division branches.
Grants, Investments, and Community Development Lending
A
bank's community development grants, investments, and lending should
increase as the bank grows. These activities should assist a wide range
of community development programs and organizations.
Community Development Grants
Increase annual grants to community development organizations as scheduled below:
* 1999: $300,000
* 2000: $325,000
* 2001: $350,000
* 2002: $375,000
Equity-Equivalent Investments and Community Development Lending
Old
Kent will review all CDFI requests and approve funding for those
requests that meet the bank's criteria. It will increase annual
equity-equivalent investments and community development lending as
scheduled below:
* 1999: $400,000
* 2000: $500,000
* 2001: $600,000
* 2002: $700,000
Downpayment Assistance
- Old Kent will provide $100,000 per year in downpayment assistance through the Welcome Home Program.
Monitoring
Old
Kent will provide information on the progress of these goals to the
Chicago CRA Coalition on a biannual basis, on May 1 and November 1.
Quarterly meetings will be held to exchange information on the capital
and credit needs of the communities served by the bank and the
development of new products and programs.
|
