Second Federal Savings & Loan Association, a Chicago-based thrift recently ordered by regulators to raise capital, is considering minority institution designation to widen its appeal to investors, the Chicago Tribune reported on Nov. 11.
As a mutual bank, Second Federal is owned by depositors. Third-quarters of its membership is Latino, but the bank's "board currently is not representative," said Francisco Menchaca, a Second Federal association member pushing for the lender to become a minority depository institution, or MDI.
The U.S. Office of Thrift Supervision last summer denied a Second Federal application to become an MDI because of its board composition. Illinois has 15 minority banks, none of which are Hispanic.
The $251.2 million-asset thrift's borrowers tend to be low- to moderate-income. It faces worsening losses and loan delinquency rates. Over the last decade, it has received national attention for providing home loans to illegal immigrants.
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