Pacific Capital Bancorp Gets New CEO, SBB&T Reconsiders Loans Criticized as Predatory

Pacific Bancorp Gets New CEO

George Leis took the reins as the new president and Chief Executive Officer of Pacific Capital Bancorp on 4/2. Headquartered on Carrillo Street, Pacific Capital Bancorp is a bank holding company that manages $7.5 billion in assets, according to Debbie Whitely, the company’s director of investor relations. Bancorp is the parent company of Pacific Capital Bank and its various bank brands, including Santa Barbara Bank and Trust SBB&T, which itself has 35 branches in Santa Barbara and Ventura. Leis replaced William “Tom” Thomas, 63, who joined SBB&T in 1994 and will continue to work with Bancorp in a public relations capacity. Leis, 47, has 23 years experience serving high net worth clients, according to the company. He served as Pacific Capital Bancorp’s executive vice president for the past year, overseeing its wealth management business and information technology group. Previously he served as managing director for investments at Deutsche Bank Private Wealth Mangement, and as director of Wells Fargo’s Private Client Service Centers. Leis announced that he is excited by opportunities to continue growing the Pacific Capital franchise, and that senior management intends to better serve middle-market businesses with new financial products and services.

Santa Barbara Bank and Trust Reconsiders High Cost Holiday Loans to the Poor

A citizen’s watchdog group said it has received no response to its request that the Santa Barbara Bank and Trust stop offering a catergory of loans that the group characterized as “predatory.” For four years, the Association of Community Organizations for Reform Now (ACORN) has waged a campaign to reduce both the cost and the prevalence of Refund Anticipation Loans (RALs), which are short-term advances secured by tax refunds. They are typically facilitated by tax preparation professionals who assess high fees added on to the high interest rates. The advances are marketed to the poor, especially those without bank accounts. Critics allege that RALs divert more than a billion dollars annually from tax credits intended to assist low-income working families.

Augmenting the market for RALs are new types of unsecured loan products known as “pre-file” or “holiday” loans. These allow borrowers to receive advances starting in November, even before receiving their W-2 forms, as tax preparers estimate the customers’ tax refunds based on their paystubs. It is these pre-file loans that the watchdog group has called on the banks to stop offering. ACORN claims that these products not only induce more consumers to sign up for RALs to pay off the loan, but are worse than the RALs themselves because they are based on refunds that are only projected from paystubs. If the refunds don’t materialize, the pre-file loans frequently lead to unmanageable debt.

The SBB&T and JP Morgan are currently the nation’s largest issuers of pre-file loans, since New York-based HSBC bank’s March announcement that it would eliminate them from its product line. SBB&T’s Director of Investor Relations, Debbie Whitely, said on 4/3 that as a result of the controversy, the bank is “looking at those products very seriously right now.”

ACORN has also entered into agreements with three of the nation’s largest tax preparers-H&R Block, Jackson Hewitt, and Liberty Tax–to eliminate extra processing fees and also to ensure that the lenders disclose lower cost alternatives to RALs, such as free e-filing with direct deposit. Consumer advocates recommend that would-be RAL customers open checking accounts so that they can take advantage of that option.

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