Disir
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- Sep 30, 2011
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One afternoon in the fall of 2009, Jie Chen and Ariel Chi walked into the headquarters of Abacus Federal Savings Bank, near Canal Street, to inquire about a mortgage. Chi, who was twenty-four and worked in customer service at a pharmaceutical company, had spent nearly her entire life in the United States, after her family came from Taiwan. Chen, her husband, who was a year younger, had arrived in his late teens and spoke little English. They had been married for a year and spent almost all their time in New York’s various Chinese enclaves, especially Bensonhurst, Brooklyn, where Chen worked at a hair salon. They’d been living in Chen’s studio apartment, not far away, but Chi was now pregnant with their first child and they needed a bigger place.
The plan was to buy a two-family house and rent out one of the units. Looking around the neighborhood, they found one with a small garden out front. The asking price was seven hundred and eighteen thousand dollars, and they began putting together a down payment with money from savings and relatives. The difficulty was getting a loan. The subprime-mortgage crisis of 2008 had exposed lax lending standards throughout the banking industry and credit was tight. Chen had no credit history and was paid largely in cash. “We were asking everywhere,” he told me in Mandarin when I visited him recently at the salon. Many people he knew in Chinatown had similar problems. His co-workers at the salon suggested a solution. “People said go to Abacus. Go to Abacus,” he recalled. A hair washer told him, “It approves loans without too much fuss.”
Abacus was founded thirty years ago by Thomas Sung, a lawyer and a real-estate investor who had come from China in his teens. It is one of a dozen or so community banks in Chinatown that cater to immigrants, including undocumented ones, who often inhabit a cash economy and mistrust mainstream banks. For more than two decades, Abacus had grown at a healthy rate; the year that Chi and Chen applied for their loan, it had six branches and some hundred and fifty employees, and originated about half a billion dollars in loans.
A Chinatown Bank Accused of Fraud
That is a lengthy read.
The plan was to buy a two-family house and rent out one of the units. Looking around the neighborhood, they found one with a small garden out front. The asking price was seven hundred and eighteen thousand dollars, and they began putting together a down payment with money from savings and relatives. The difficulty was getting a loan. The subprime-mortgage crisis of 2008 had exposed lax lending standards throughout the banking industry and credit was tight. Chen had no credit history and was paid largely in cash. “We were asking everywhere,” he told me in Mandarin when I visited him recently at the salon. Many people he knew in Chinatown had similar problems. His co-workers at the salon suggested a solution. “People said go to Abacus. Go to Abacus,” he recalled. A hair washer told him, “It approves loans without too much fuss.”
Abacus was founded thirty years ago by Thomas Sung, a lawyer and a real-estate investor who had come from China in his teens. It is one of a dozen or so community banks in Chinatown that cater to immigrants, including undocumented ones, who often inhabit a cash economy and mistrust mainstream banks. For more than two decades, Abacus had grown at a healthy rate; the year that Chi and Chen applied for their loan, it had six branches and some hundred and fifty employees, and originated about half a billion dollars in loans.
A Chinatown Bank Accused of Fraud
That is a lengthy read.
