CHICAGO--(BUSINESS WIRE)--As Congress considers appropriations for the U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund, UNITE HERE is raising new concerns regarding whether Illinois-based Inland Bank and Pan American Bank received questionable awards of nearly $3 million through the CDFI’s Bank Enterprise Award (BEA) program since 2009. The banks, which share common ownership, were awarded federal funds as Inland hid losses in sister companies in an arrangement later reversed by regulators.
In a letter to the Treasury Department that can be read here, UNITE HERE last month raised a number of questions about Inland and Pan American’s BEA eligibility, including:
- Did Inland have an unfair advantage over other BEA applicants because it used access to millions in related-party capital to hide losses and fuel its growth?
- Did Inland tell the BEA that it was in a Consent Order with federal and state regulators and that its independent auditor had issued an adverse opinion against the bank?
- Why did Inland get an award for supporting Pan American, when both banks share the same majority owner?
These concerns follow a 2006 report by the Government Accountability Office (GAO) that found the BEA’s “impact on distressed communities is difficult to determine, but likely not significant.” GAO also found that “the BEA program is vulnerable to making improper payments” due to limited guidance provided to review staff.
The Treasury Department is proposing to cut funding for the BEA program altogether and to increase funding for the Healthy Food Financing Initiative (HFFI), which seeks to eliminate food deserts. HFFI awardees have reported investments of over $29 million on grocery, production and distribution projects in low-income census tracts with limited access to healthy food retail options.
“I fought hard to make sure kids in Chicago could eat real, fresh food that is healthier than frozen, pre-prepared meals,” said lunchroom worker Louise Babbs, who has worked for the Chicago Public Schools for 18 years. “Now it is time for Congress to fund healthy food, not problematic banks.”