Headline Off the Mark on Community Bank Story

We are extremely disappointed in the poor judgment of the Los Angeles Times to print the headline on May 31, “L.A. Community Bank Faces Risk of Collapse.”

Not only was it inaccurate, it was sensational and not supported by the facts in the article. At best, it seemed motivated by the primary objective of selling papers above that of fair journalism.

Moreover, if the article had been written about an insured financial institution, we seriously doubt The Times would have run such a similarly scandalous headline. To do so would risk legal challenges from that institution and the Federal Deposit Insurance Corp., and expose The Times to possible punitive damages for triggering a run on bank deposits.

The Los Angeles Community Development Bank is not at risk of collapse. As stated in the article, LACDB is in the process of reorganizing itself to continue meeting the challenge of helping those living and working in the inner city. Our board of directors, working closely with bank management, has developed and is in the process of implementing a refocused strategic plan that includes raising an additional $25 million of capital to deploy the remaining $200 million in HUD Section 108 funds.

The goal of the LACDB is important and necessary: to provide capital to worthy businesses that will create jobs in economically impoverished communities. Meeting those objectives is a challenging, but not impossible, endeavor. Rather than helping to establish a prophecy of failure, The Times should step back and allow LACDB and its stakeholders the time necessary to bring forward a plan that will ensure the viability of this needed community-oriented lending institution.

WILLIAM H. CHU

President and chief executive

Los Angeles Community

Development Bank

Los Angeles