Chicago – State regulators closed ShoreBank, the community development bank that built a national reputation for its lending in underserved markets and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver on Friday August 20.  The FDIC entered into a purchase and assumption agreement with a group led by members of the bank’s management team, which was recently installed to help bring the bank back to profitability.  The group plans to reopen under the name Urban Partnership Bank.

“We are excited to see an agreement that will allow this new institution to continue to serve Chicago communities starved for access to loans and other mainstream financial services.” said Dory Rand, Woodstock Institute president.

One of the key roles that ShoreBank has historically played has been as one of Chicago’s leading financiers of multifamily housing.  ShoreBank’s lending focused on neighborhoods that were rarely served by Chicago’s mainstream financial intuitions and on projects that required patience and local market knowledge that few lenders have today.  In 2008, ShoreBank was the top multifamily mortgage lender in Chicago with 166 loans, or roughly the same number of loans as the next three lenders combined.  Most of these loans were concentrated in communities like South Shore – hard hit by foreclosure, unemployment and disinvestment-- where few other multifamily lending options were available.  In South Shore in 2008, ShoreBank made 38 multifamily loans; the number two lender in South Shore that year made only eight multifamily loans.

“ShoreBank was one of the few lenders in the Chicago region with the expertise to take on multifamily loans, which are critical to maintaining affordable rental housing options,” said Rand.  “I look forward to Urban Partnership Bank continuing to fill this unique and very necessary role.”

Media contact:

Tom Feltner, Vice President

tfeltner at woodstockinst dot org

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Woodstock Institute works to create a just financial system in which lower-wealth persons and communities, and people and communities of color, can achieve economic security and community prosperity.