Community Development Bank Chief Named

A senior executive from San Marino-based East West Bank has been selected to head the federally funded Los Angeles Community Development Bank, bringing commercial lending savvy to the helm of an institution beleaguered by a tough mandate and bruised portfolio.

Community bank officials announced late Thursday that William H. Chu, senior vice president and director of retail banking at the $2.1-billion East West Bank, will assume the post of president and chief executive next month.

He was chosen from a pool of 100 applicants and replaces interim CEO Linda Griego, who has worked to enhance internal controls and repair a strained relationship with city officials, who oversee the institution.

Funded with $430 million from the U.S. Department of Housing and Urban Development, the bank was the federal government’s biggest response to the 1992 riots. It aims to create jobs for residents of the region’s most blighted pockets by financing businesses rejected by conventional lenders. The bank has loaned $103 million since its inception in 1995. But one-third of the portfolio is in default, due largely to a controversial deal that ballooned to $24 million, then soured. The bank has also fallen short on its core job-creation mandate.

Chu’s experience with East West Bank--which principally served Chinese American clients--will help make the bank’s lending strategies “smarter” as it strives to meet its goals, board member Raul Hinojosa said.

Chu joined East West Bank in 1994 to launch its commercial lending division. Under his direction, the bank branched into bond financing for senior housing and equipment financing for the garment industry. It also has financed the purchase of warehouses as well as seafood companies in the development bank’s target zone.

Chu said community lending has always been his passion, adding that his commercial banking discipline will help in his new duties.

“We try to understand our borrowers and how to make them succeed, and that’s precisely the mandate of the Community Development Bank,” he said.