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For Immediate Release

Joanne C. Curran
(213) 236-5017
Daniel W. Weidman
(213) 236-4050

San Francisco, November 9, 2009 -- The Office of the Comptroller of the Currency (OCC) has awarded San Francisco-based Union Bank, N.A., an "Outstanding" rating for surpassing the terms of the Community Reinvestment Act (CRA), which OCC-regulated institutions have been required to follow since the law was enacted in 1977.  This is the second consecutive "Outstanding" rating the bank has received, demonstrating its sustained commitment to the low- and moderate-income (LMI) communities where it conducts business.

Furthermore, in granting Union Bank the rating, the OCC recognized the bank's leadership in community development lending, a core competency for which the bank has received national recognition. Examiners from the OCC reviewed the bank during June, July and August of 2009.

"We are honored to receive this rating from the OCC and be recognized for our unwavering commitment to underserved communities in our markets," said President and Chief Executive Officer Masaaki Tanaka.  "We are pleased to receive the distinction for the second time, which helps validate and reinforce our ongoing efforts.  Moving forward, we will continue to seek opportunities to make credit available in low-and moderate-income communities while maintaining the bank's commitment to safety and soundness."

The CRA was established in 1977 by Congress to encourage banks to meet the credit needs of all of its communities, whether low, moderate or high income neighborhoods. Additionally, the bank's credit and lending practices must be consistent with safe and sound operations. The factors that support this rating are:
  • An excellent level of community development lending that has a positive impact on the banks lending performance;
  • Lending levels that reflect a strong response to community credit needs;
  • Appropriate loan distribution to geographies and borrowers of different income levels;
  • An overall excellent level and nature of community development investments; and
  • A branch distribution that makes banking offices readily accessible to geographies and individuals of different income levels.

In 1995, Union Bank created a 10-Year Community Commitment pledging to contribute a minimum of 4.5 percent of its annual average assets to CRA-related loans and activities. In 2005, the bank renewed its commitment for another 10 years, increasing its pledge to 6.5 percent of average annual assets. Meanwhile, within the current review period, the U.S. entered a recession with California among the hardest hit regions in areas such as housing and unemployment. Thus, the demand on the bank to fulfill its commitment and assist in the recovery was profound. Several key initiatives were critical in helping the bank earn its "Outstanding" rating in the recent OCC review cycle. They include:

Business Diversity Lending

Union Bank's Business Diversity Lending (BDL) program is in recognition of the importance of developing businesses owned by minorities, women and service-disabled veterans. The BDL program provides a more flexible underwriting standard to all of these applicants. In August 1993, Union Bank was granted a Special Purpose Credit Program exemption under the Equal Credit Opportunity Act to encourage small business lending to qualifying businesses. Union Bank is the only bank in the country to be granted this Regulation B exemption and as a result, BDL loans have become a significant percentage of the bank's small business lending portfolio, comprising 24.3 percent of all commitments.

Community-based Financing Program

In January 2008, Union Bank launched the Community-Based Financing (CBF) program to provide alternative financing for small business owners that fall outside of the bank's lending criteria. The bank partners with community organizations to offer lending options to start-up companies, firms with credit scoring issues, and others that fall outside of conventional business bank financing criteria. Union Bank has established relationships with nine CBF organizations that provide alternative credit solutions and technical assistance with the goal of helping these small businesses graduate into traditional financing with Union Bank.

Economic Opportunity Mortgage

The Economic Opportunity Mortgage (EOM) program was established in the early 1990s to allow various forms of alternative credit for borrows in an effort to help alleviate the impediment to home ownership for low- to moderate-income families and individuals. The bank offers a five percent down-payment option with lower cost mortgage insurance provided by a California State Agency program. In addition, the bank allows many forms of ‘gap' financing, including silent seconds, gifts, and grants. Unlike standard loan programs, the down payment can come from cash-on-hand, and post-closing reserves are not required. Union Bank has originated more than $2 billion EOM loans since the program's inception.

Community Development Finance

Union Bank provides loans and equity investments to many of the nation's leading affordable housing developers and other organizations that provide a range of services including homeless shelters, support to the developmentally disabled community, life skills assistance and other services. The bank provided more than $2.8 billion in loans over the exam period, representing a 68 percent increase in the number of loans reported and a 108 percent increase in the dollars reported. A significant element of the bank's community development lending strategy is its multi-family affordable housing lending program. The majority of the loan dollars are originated by the bank's community development finance division, which is a nationally recognized leader in affordable housing lending and investing. The bank made more than $700 million of investments in Low Income Housing Tax Credits, which are a key source of capital for affordable housing development. The OCC particularly recognized the bank for the complexity of its investments and its responsiveness to community needs.

"Union Bank financed $1.6 billion in transactions for affordable housing units in this recent OCC exam period, which comprises 59 percent of all community development loan dollars," said Tanaka. "We thus helped develop or preserve approximately 18,500 units for housing in California, including some projects that were completed in the midst of the recent housing downturn."

In May 2009, the California Housing Consortium inducted Union Bank in the California Housing Hall of Fame in acknowledgment of its ongoing efforts to provide capital and grant support for affordable housing developments throughout the state.

About UnionBanCal Corporation

Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $78.2 billion at September 30, 2009.  Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank has 337 banking offices in California, Oregon, Washington and Texas and two international offices. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world's largest financial organizations. Visit for more information.