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April 4, 2011
Carver Federal Savings on the brink
Feds order Harlem bank to raise new capital. Or else.
Crain's NY Business
by Aaron Elstein
We take no pleasure in reporting the woes facing the bank into which Bruce Ratner made a much-touted (and to some, controversial) $1 million deposit in March of 2005. Though it is ironic that the bank is in trouble due to bad real estate loans.
The parent of Carver Federal Savings Bank holds its annual stockholders meeting April 4 at The Studio Museum in Harlem, near the bank's 125th Street headquarters. It could be the last.
Time may be running out for Carver, the nation's largest bank founded and run by African-Americans and an integral part of the city for 63 years. Staggering under a load of delinquent real estate loans, the bank is under orders from the U.S. Office of Thrift Supervision to raise $20 million in fresh capital by the end of this month. That's a steep climb for a bank that at best posts annual profits of $5 million. Yet if Carver can't raise the cash, regulators can either seize the institution and sell it to another bank, or dissolve it.
Longtime Chief Executive Deborah Wright has pulled Carver back from the brink before and has many high-level business and political connections who could help the bank get the needed funds.
NoLandGrab: But of course, Ratner, who made the deposit for TV cameras while surrounded by signatories of the Atlantic Yards Community Benefits Agreement, claimed his deposit had nothing to do with Atlantic Yards. Which is good, since he might not get it back. But that's ok, because he encouraged everyone else to put their money there, too.
Here's what he told NY1 back in March, 2005.
Bruce Ratner, the president of Forest City Ratner, said the public deposit, made with a ceremonial giant check, has nothing to do with his hopes of building an arena for the Nets in Downtown Brooklyn.
“This is part of a commitment by our company to constantly, whether an arena or not arena, to support local institutions,” said Ratner. “I have to say one other thing: This is a great bank, and it's a good business move for us and everybody to put deposits here. This is a very important part of the community and very important part of our city.”
Posted by eric at April 4, 2011 10:54 AM