First Republic Bank has been "too vague" says California Reinvestment Committee (Video) – San Francisco Business Times – The Business Journals


Protesters gathered at First Republic Bank’s San Francisco headquarters at lunchtime Tuesday got the message they wanted to hear: The bank will step up efforts to ensure its mortgages don’t finance the eviction of longtime tenants under the state’s controversial Ellis Act.
“First Republic understands the community’s concerns about the implications of the Ellis Act on tenants,” the bank said in a statement distributed to protesters. “We have changed our lending policy to minimize the repurposing of units under this law.
“If we are aware that the owner intends to utilize the Ellis Act before a loan is made, we will not make the loan,” First Republic said in the statement. “On our loan applications, we will now ask each borrower whether the loan is intended to be used to repurpose the property under the Ellis Act.”
Still, Paulina Gonzalez, executive director of the California Reinvestment Coalition and a leader of Tuesday’s protest, said the bank’s statement was “too vague.” Specifically, she wants to know what steps the bank will take if someone says on a mortgage application that they won’t exercise their rights under the Ellis Act, but later decides to do so.
Gonzalez and San Francisco protesters facing eviction under the Ellis Act spoke for about 15 minutes with a First Republic Bank representative in front of the bank’s Financial District headquarters as the protest came to a close. Gonzalez said they scheduled a meeting for Aug. 20 to meet with First Republic President Katherine August-deWilde.
In a statement issued later on Tuesday, the California Reinvestment Coalition said, “First Republic’s new policy related to lending to investors needs to address the following: If First Republic provides a loan to an investor based on the investor’s promise to not Ellis Act evict tenants, how will First Republic enforce that policy later if the investor breaks that promise?
“Will the bank deny consent to the investor for evicting the tenants? How will tenants be protected to ensure that they are not evicted? How will First Republic ensure that no units where the rents are affordable are eliminated as a result of their loans?” the coalition asked in a statement.
The California Reinvestment Coalition also said that it’s aware of other banks providing this type of financing and will take steps to “raise awareness” about those banks’ role in financing Ellis Act evictions.
Maritza Osorio, a tenant facing an Ellis Act eviction from a San Francisco property on Coleridge Street that was financed by First Republic, (NYSE: FRC) said, “I have lived in this building and this community for 50 years.
“Banks who lend to speculators are not investing in our community or city. Instead, they are helping remove people from it,” Osorio said.
Other protesters held signs calling on First Republic to stop making “displacement mortgages.”
First Republic said it has worked with the California Reinvestment Coalition and its membership to help them finance the purchase of six rental buildings that could potentially be subject to the Ellis Act so that existing tenants can stay in place. But Gonzalez said the prices of such buildings often can be too prohibitive for such a plan to work.
The protest was the latest flashpoint in the tension created by San Francisco’s booming economy that’s spurring greater income inequality, soaring rents and escalating property prices.
More than 3,600 units have been removed from the San Francisco rental market under the Ellis Act and over 10,000 tenants have been displaced from 1997 through 2013, according to data analysis conducted by Tenants Together and the Anti Eviction Mapping Project. An attempt this year to modify the Ellis Act failed. The proposal would have required San Francisco landlords to own their properties for five years before exercising their rights under the Ellis Act.
But others point to property sales involving the Ellis Act and tenants-in-common financing as a path to middle-class home ownership in San Francisco.
As protesters celebrated First Republic’s stance on not financing Ellis Act evictions, Gonzalez told the crowd of fellow protesters that if they can’t reach a satisfactory agreement with the bank, “We’ll be back.”
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