Union of Calif. Stakes a Check Casher
SAN FRANCISCO - Union Bank of California said Thursday that it has taken a 40% stake worth $6 million in a Los Angeles-area check cashing business and will work with a nonprofit in that city to bring banking services to low-income areas.The initiative takes advantage of new flexibility afforded banking companies under the Gramm-Leach-Bliley Act of 1999. Union Bank did not have to get approval from bank regulators to make its investment in Navicert Financial Inc., a closely held company in Carson, Calif., that operates Nix Check Cashing.
Union Bank plans to buy approximately 0.5% of the remaining stock in Navicert each year over the next 10 years and turn it over to Operation HOPE, which facilitates loans to low-income communities.
The three-way partnership, unveiled under the tag line "We're bringing banking back to the inner city," will allow Union Bank to offer services including checking and savings accounts, car loans, and residential mortgages through 47 Nix locations.
"We want to distribute bank services through someone else's brick-and-mortar," said Richard Hartnack, vice chairman of Union Bank, in an interview. If the venture succeeds, the bank may "expand the number of Nix locations and buy into additional check cashing companies," he said.
Union Bank has made several attempts over the last few years to expand its client base to Los Angeles' poorer neighborhoods. One such effort was its 1993 launch of Cash & Save, a program to open check-cashing and business services points.
- Laura Mandaro
Ex-Im Bank Breaks Into the Movies
LOS ANGELES - The U.S. Export-Import Bank, known for insuring and providing guarantees on agricultural and manufacturing loans, has introduced a $100 million program to back the production of exported U.S. independent films.The initiative- the agency's first venture in the entertainment industry - will cover 90% of loans for motion picture production, including banks' collection risk.
The plan was initiated by Lewis Horwitz, a Los Angeles banker who has financed the independent film industry for the last 30 years. Independent film companies generally turn to lenders once they have signed sales contracts with overseas distributors. Like other export credits, these loans carry political and currency risk, which can limit a bank's ability to carry such credits.
"The aim of the Ex-Im program is to get more protection for lenders with experience in the industry, thereby increasing the amount of loans made," said Mr. Horwitz, who is president of the Lewis Horwitz Organization, which is a division of Southern Pacific Bank.
- Laura Mandaro