Organizing for America | Finance Matters Blog: SUBJECT: BANKING –What is your office doing to immediately stop these practices? Letter to Senator McCaskill

SUBJECT: BANKING –What is your office doing to immediately stop these practices? Letter to Senator McCaskill

By Dale - Apr 19th, 2009 at 8:01 am EDT

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Tags: banking, banks not lending, Cass Bank, Cass Commercial Bank, predatory lending, Senator McCaskill

Small Business needs YOUR HELP TO STOP PREDATORY LENDING PRACTICES. Small businesses have filed complaints to the Federal Reserve in Washington, D. C. and St. Louis regarding Cass Commercial Bank in St. Louis, MO. I should tell you up front the Federal Reserve position is there is no mechanism for Small Business complaints, only consumer complaints. The Federal Reserve in St. Louis will send a Bank Examiner to review but SMALL COMPANIES DO NOT HAVE MONTHS!

Cass Commercial Bank attempted to force foreclosure on a $1.7 million building with a loan of $240,000 by refusing to renew a note for another 5 years (that term would nearly pay off the entire loan). They would grant a loan for about 9 months and the loan could be called at any time for any reason. This means there is no 9-month loan. The loan continues to be paid on time; but Cass Bank has every intention of calling the loan to attempt to force foreclosure. In addition, Cass proposal tripled the payment and the interest rate from prime plus .75% to prime plus 7%

Think about it. Cass bank forecloses on a building. Sells the building at a steep discount of say $1 million or $1.25 million. Payoff the remaining $200k. Pocket $1 million plus to pay down the bad debt they have on their books and increase their capital reserve closer to the minimum required by the Federal Reserve.

Cass Bank, when asked for a copy, refuses to disclose the credit policies by providing the written policies, only stating the customer did not meet the criteria or the customer falls outside the criteria. Cass Bank when pressed would not admit or reply to the status of their minimum capital reserve as required by the Federal Reserve. But, when a Bank is using that kind of cohersion, wouldn't one suspicion the bank is in deep financial trouble?

The USA can do without financial institutions like Cass Bank. If you are a Cass Bank customer with a loan about to come due, heaven help you. You better look for a source of financing immediately, if you can find a financial institution to make a loan. However, companies are not finding financing. In addition, if you have other funds in the form of deposits or checking accounts, it would be wise to move them from these Banks. The reason is Banks, under law, have the legal right called "offset". Look at your agreements carefully; it is there. So, when Cass Bank decides not to renew a loan, they will confiscate your deposits.
SO BY ALL MEANS - REMOVE ANY DEPOSTS FROM ANY BANK WHERE YOU ALSO HAVE A LOAN.

Mark Benton and Jeanne Scannell at Cass Bank are not allowing the customer to negotiate with the decision maker on loans. In one case, Jeanne did agree to a proposal to for a payment of $5000 monthly including interest. She even stated, "That would give us positive amortization. I think we can to that." The customer left the meeting asking Cass Bank to send loan papers of the proposal for review. But as stated above, Cass Bank sent the proposal they wanted, along with the threat of taking the building if the documents were not signed before the end of the 1st quarter of 2009 – 4 days. Again, this date is to avoid reporting a loan on the Federal Reserve Call Report. Customer has tried to show Cass Bank the continued improvements in the financial position of the company in the face of a slumping economy including, the debt to equity ratio of 2.1 to 2.5. But, Cass Bank officials would not even address / discuss the issue nor even look at the financial statements in meetings.

I wonder how Cass Bank would explain to the Federal Reserve Examiner, taking a building worth a substantial amount over a small loan...which is being paid each and every month on time! As Senator Emanuel Cleaver told some highly paid executives, who took huge bonuses even though the company lost millions, at a Congressional hearing "HAVE YOU NO SHAME! HAVE YOU NO SHAME!".

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