Discrimination by Hanmi Bank of People of  Indian Origin

Los Angeles, California
NRIpress/ Raj Srinivasan 

Hanmi Bank is a bank with over 25 branches in Southern California, started in 1982 to serve the Korean community in the area.  However, many people of Indian origin having business in Artesia and surrounding cities have also opened accounts with Hanmi Bank.  Initially their dealings seem to support the large Indian community to attract business for themselves, a mutual support, which lasted for many years.  The business men from India, continue to have their banking relationship with Hanmi, even when they move to other locations, or start businesses in other cities.  Generally, Indians have loyalty to the organizations and the people they deal with and do not severe their relationship easily, mainly because of this positive cultural reasons.

 However,  the many businessmen of Indian origin, feel that they are being discriminated, by Hanmi Bank, while the customers of Korean origin are treated with favorable terms in terms of deposit and loan operations.  Of them Mr. Pramukh Patel, who has been a customer of the bank; of who, Mr. Pramukh Patel is one.

 He deposited a check at their Fullerton Branch, and the branch put a hold on that deposit, which was released after Sep. 18th.  By then, the hold should have automatically been released, and the bank did not have to do anything.  The bank officials informed Mr. Patel that they released it after confirming from the home branch in Artesia.  In the meantime, an officer of the bank also has contacted the customer of their hold policy.  When Mr. Patel mentioned that an officer of the bank (origin India) has said that there was no hold, the contacting officer said that he had no authority to give clearance on hold.  Offended further by these, Mr. Patel sent a letter to their corporate headquarters at Wilshire Blvd., who were also justifying the actions of the branch.  He brought this to the attention of the Federal Reserve Bank (FRB) of San Francisco, who are charged with the enforcement of the  Federal Regulation CC, regarding customer Funds Availability policy.  Unsatisfied with their reply, he specifically mentioned the dates and the points of unacceptable actions by Hanmi Bank to the FRB,

 In addition to these incidents involving his deposit, he felt that there is a pattern of discrimination and delay while approving loan for one of his gas stations, which has led to millions of dollars of loss in his business.  Having been given a run around by the regulatory authorities, he has finally, sued the bank for monetary loss and punitive damages in the Los Angeles Superieor Court in Downtown Los Angeles. 

 As this reporter understands Mr. Patel also complained the matter to the California Department of Financial Institutions, and the Office of the Comptroller of Currency.

 Ten  other customers of the bank of Indian origin also have felt discrimination by the bank, which was confirmed by this reporter by contacting them by phone.   

 Regulation CC states that the bank may impose hold on the customers' check deposits except the following:

(Source: FRB website)

1.    Cash 2.    Electronic payments received by your institution for deposit in an account-- 3.    U.S. Treasury checks deposited in person 4.    U.S. Postal Service money orders deposited in person 5.    Federal Reserve Bank and Federal Home Loan Bank checks deposited in person 6.    State or local government checks deposited in person 7.    Cashier's, certified, or teller's checks deposited in person 8.    Checks drawn on an account held by your institution ("on-us checks") deposited in person 9.    The Expedited Funds Availability Act requires up to the first $200 of a non-"next-day" check(s) to be made available the next day. Exceptions: When deposits of types 1, 4, 5, 6, and 7 are not made in person (for example, when they are made at one of your ATM s), the funds must be made available by the second business day. Deposits, cash or check, made at an ATM that you do not own (a "non proprietary" ATM) must be made available by the fifth business day. For checks of types not discussed above, funds generally must be made available in accordance with a schedule specified in Regulation CC. That schedule differentiates between "local" or "non-local" checks. Since there is now only one Reserve Bank check-processing region, however, there are no longer any "non local" checks for purposes of Regulation CC. A detailed explanation can be found in section 229.12 of Regulation CC This does not apply to deposits at non-proprietary ATMs or to deposits subject to certain exception holds. Further explanation can be found in section 229.13 of Regulation CC. If you decide to hold funds beyond the period specified in your institution's general availability policy, you must give the customer a notice at the time of the deposit explaining why the funds are being held and when they will be available. If the deposit is not made in person to an employee of your institution or if you decide to extend the time when deposited funds will be made available after the deposit has been made, you must mail or deliver the notice to the customer not later than the first business day after the banking day on which the deposit is made. Deposits of cash and electronic payments are not eligible for exception holds. The six types of deposits that are eligible are • Large deposits (greater than $5,000)--Any amount exceeding $5,000 may be held. Your institution must make the first $5,000 of the deposit available for withdrawal according to your availability policy and the remainder within the "reasonable" time frames discussed above. • Redeposited checks--May be held unless the check was returned because an endorsement was missing or because the check was postdated. In such a case, if the deficiency has been corrected, the check may not be held as a redeposited check. • Deposits to accounts that are repeatedly overdrawn--An account may be considered repeatedly overdrawn and items may be held if 1.    On six or more banking days during the previous six months the account had a negative balance, or would have had a negative balance had checks and charges been paid, or 2.    On two or more banking days during the previous six months the account balance was negative in the amount of $5,000 or more, or would have been had checks and charges been paid. • Reasonable cause to doubt the collectibility of a check-- • Checks deposited during emergency conditions that are beyond the control of your institution- • Deposits into accounts of new customers (open for less than 30 days)

 An interview with Hanmi Bank's Compliance officer Mr. Ray Williams revealed that the bank is providing adequate training to all its staff and officers in all their branches regarding compliance of Regulation CC, and any specific instance brought to his attention by any customer will be dealt with suitably.  He did not want to go into the discussion of individual customers due to privacy policy.

 A pattern of discrimination being felt by all those contacted  by this reporter.  When I asked the question of withdrawing the deposits and depositing with other banks, which will be punishment enough, they said that they do not want to do this because of the actions of few officers.  May be Hanmi Bank, having grown enough, does not continue to see the need to depend on the Indian community for their continued growth.  Any way,  there is expected to be a flight of business away from Hanmi Bank in the near future. It will affect their both deposit and loan business.

 Some customers, including Mr. Pramukh Patel have sought legal remedies including punitive damages in millions of dollars  in the courts of law.  If this culminates into a class action law suit, it may substantially reduce their ability to attract or retain the customers of Indian origin, but also impact heavily on their profitability. 

 Anyone having similar experience with Hanmi or other banks may contact the NRI Press by an email to Rsrinivasan@NRIPress.com or by phone (562) 222-9931.