Santa Ana Mayor Is Director of Bank Under Federal Watch

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Santa Ana Mayor Miguel Pulido at a 2010 Santa Ana City Council meeting. (Photo by: Violeta Vaqueiro)

Monday, June 27, 2011 | Fullerton Community Bank, where Santa Ana Mayor Miguel Pulido has been a director for six years, is under the watch of the federal Office of Thrift Supervision for "unsafe or unsound business practices," according to documents on the federal agency's website.

The federal office took action against the bank and its parent company, RMG Capital Corp., in October. Under the terms of the supervisory agreement between the bank and the agency, the bank must submit various written plans to raise capital levels, reduce assets and control bank risks, according to agency documents.

If the bank fails to meet capital requirements, abide by a required capital plan or is ordered to do so by the agency's regional director, the bank must either merge with another institution or go out of business, according to the agreement.

Redondo Beach-based Opus Bank last week agreed to pay $50 million to acquire Fullerton Community Bank and its parent company, according to a press release. The deal is expected to close in the fourth quarter of 2011.

Tom Meyer, chairman of the Fullerton Community Bank board, declined to comment. Pulido did not return reporter's calls and messages for comment.

The documents filed by the agency do not specify what business practices resulted in "inadequate asset quality, earnings, liquidity planning, and capital levels" at the bank. William Ruberry, a spokesman for the agency, said the number of such enforcement actions taken against banks spiked during the recent financial crisis.

"When we find problems, we have a right to enforcement actions," Ruberry said.

Pulido has been a director of the bank since at least 2004, according to statements of economic interest filed with the city. Pulido is also listed as a bank director in the supervisory agreement.

Pulido has a business history with the bank that goes beyond his seat on the board. Property records show loans from the bank on his home, to business partners and on a Garden Grove apartment development in which Pulido had a stake.

Pulido in 1999 received a $650,000 loan from the bank to finance his home in the Floral Park section of Santa Ana, though Pulido did not list himself as a bank director that year.

Also in 1999, Pulido and Kris Kakkar received a $500,000 loan from the bank through their K and P Partnership for a property in Garden Grove that would eventually become apartments for senior citizens.

In 2003, a judge fined Pulido $1,000 for failing to disclose his financial interest in these developments.

In 2000, Kakkar's company, Whitestone Properties Inc., also received a construction loan from the bank for a home in Santa Ana. The same year, Kakkar and his wife, Yolanda, received a $225,550 loan from the bank on a home in Tustin.

In 2004, the bank issued a $430,000, federally-secured, Small Business Administration loan to Abel Food Services, a vending truck supply business that involved Pulido's father, according to reporting by the OC Weekly's R. Scott Moxley.

Pulido came under fire last year for casting votes on the City Council that awarded the company an overnight parking permit and voting again to allow a a broader range of vehicles to park there, despite having past business relationships with some of those involved.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek. And add your voice with a letter to the editor.

 

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