The newest location for L.A.’s bank to the stars? A storefront in a Crenshaw strip mall
City National Bank, L.A.’s “bank to the stars,” has branches in Beverly Hills, Pacific Palisades, Westlake Village and — coming soon — a location in a Crenshaw Boulevard strip mall storefront currently occupied by a payday lender.
It’s uncharted territory for an institution that built its business catering to affluent customers but has pledged to boost the amount of lending and services it provides in lower-income and minority neighborhoods — a promise the bank made to regulators when it was acquired by Toronto’s Royal Bank of Canada in 2015.
“We want to make sure African American and Latino entrepreneurs know we want to be there to serve them and to manage their wealth,” said longtime City National Chief Executive Russell Goldsmith, who continues to run the bank following the acquisition. “We want to show, in a very visible way, that we’re open for business.”
Known for its connection to Hollywood businesses and entertainers — it famously lent Frank Sinatra money to pay a ransom for his kidnapped son — City National specializes in serving wealthy clients and business owners, and it has a branch network to match.
You’ll find most City National locations in neighborhoods where wealthy clients live or work.
The new branch, set to open in October on Crenshaw Boulevard a few blocks south of Exposition Boulevard, will focus in particular on mortgages and small-business lending, though Goldsmith said it would provide other services, including personal wealth management — a major City National offering.
“I think our mission is to work with entrepreneurs, small-business owners and homeowners who need help on the way up,” Goldsmith said. “I think it’s a service to the broader community to have a proven, responsible bank and wealth-management company there for them.”
To run the branch, City National hired Peter Jackson, 43, an African American business banker who has worked for Bank of America, JPMorgan Chase and Wells Fargo. Jackson grew up in nearby Baldwin Hills and lives in the Crenshaw district.
He said a City National Bank branch is the kind of business that many residents have long wanted, and the kind of business that’s usually reserved for tonier neighborhoods.
“In the community, we’re always looking for a Whole Foods, a Trader Joe’s, a City National Bank — we’re always waiting for things other communities have,” he said.
Paulina Gonzalez, executive director of the California Reinvestment Coalition, which pushes banks to do more lending in lower-income and minority communities, said City National’s move to Crenshaw shows that it is keeping promises made in advance of its acquisition by Royal Bank of Canada.
“Opening a branch in an underserved area — and certainly taking the place of a check casher or a payday loan store — is a positive thing and it shows City National is taking its commitment very seriously,” she said, noting that many other banks are closing branches instead of opening new ones.
City National has been expanding elsewhere too, but for different reasons.
Royal Bank of Canada, which bought City National in November 2015, has long had wealth-management and stock-trading businesses in the U.S., but no banking operations. It acquired City National so it could offer personal and business banking services to its American clients. To that end, City National has been opening up branches in areas where those customers are clustered.
That includes Minneapolis, home to RBC’s U.S. wealth-management headquarters, and lower Manhattan, home of its capital markets division. City National is also opening branches in Washington, D.C., where RBC has a concentration of wealth-management clients.
The Crenshaw branch has little to do with RBC’s offerings, though it does stem from the acquisition.
When the deal was announced, City National pledged that it would provide $11 billion in loans and donations to borrowers and organizations in low-income neighborhoods over the course of five years.
Such deals are often announced amid bank mergers. Banks are required by the federal Community Reinvestment Act, or CRA, to show they are serving low-income and minority borrowers, and regulators scrutinize banks’ CRA activities ahead of mergers and acquisitions.
Plans like the one announced by City National, which had the support of the California Reinvestment Coalition and other fair lending groups, can help speed regulatory approval.
Plans that fall short or that advocacy groups oppose, though, can lead to delays. When New Jersey lender CIT Group announced plans to purchase Pasadena’s OneWest Bank, the coalition and some other groups called the banks’ CRA plan insufficient and pushed federal regulators to take the rare step of holding a public hearing about whether the deal would benefit low-income communities.
In its plan, City National pledged to make at least $700 million in mortgage loans to minority borrowers and to increase its issuance of loans backed by the Small Business Administration to at least $140 million a year. At least half of those SBA loans must be made in low-income neighborhoods.
The Crenshaw branch could help the bank meet those goals. Mortgages and small-business loans will be a focus for the branch, though Jackson said there are other opportunities as well, such as providing private banking and wealth-management services to higher-income professionals living in nearby Windsor Hills and View Park, a neighborhood sometimes called the black Beverly Hills.
“We want to serve the doctors, lawyers and athletes living up on the hill, but also small-business owners,” Jackson said. “We’re a bank for small businesses and entrepreneurs.”
City National could have opened a branch in any number of minority or lower-income communities, but Goldsmith said Crenshaw was particularly attractive because of a wave of business activity in the area, some of it spurred by the construction of the Crenshaw/LAX light rail line, which will connect the existing Expo and Green lines and go past the new City National branch.
“Taking a long-term view, it’s an area where we think there will be more entrepreneurs and businesses looking for the type of relationship banking, small-business banking and investment opportunities we provide,” Goldsmith said.
A handful of big-bank branches — Bank of America, Chase and Wells Fargo among them — can be found along Crenshaw Boulevard. Lori Gay, chief executive of Neighborhood Housing Services of Los Angeles County, a nonprofit that supports affordable housing through a variety of programs, said big banks don’t offer the kind of tailored services for which City National is known.
“Any time a bank is expanding its presence with brick-and-mortar branches in low-income communities, we’re going to applaud them,” she said. “But we want more than checking and savings accounts. We need things only full-service branch banking can offer. We’re looking forward to that.”
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