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Board deadlocked on banking services

Posted on August 26, 2010August 26, 2010 by Staff

By Kirk Ross
Staff Writer

CARRBORO — The Carrboro Board of Aldermen returned to Town Hall Tuesday night with the top item on the agenda a lingering discussion of whether to switch banking services from Bank of America to either BB&T or Harrington Bank, but wound up deadlocked 3-3 after about 40 minutes of discussion and once again tabled the issue for a later meeting.

The board, with member Joal Hall Broun recused, debated its inclination toward supporting local businesses and concerns about uncertainties in financial markets.

Board member Jacquie Gist said she wanted to see the town switch to Harrington because of its local ties. Duke business professor and investment advisor Doug Breeden, who lives in Chapel Hill, owns about 80 percent of the bank.

But the bank’s trouble with regulators last year worried some members. After losses in 2008 in its bond portfolio took a toll on the bank’s capital reserves, the Office of Thrift Supervision put the bank on notice that it would need to improve its risk-based capital ratios.

Quizzed by board member Dan Coleman, Harrington president Larry Loeser said the bank has been working with regulators to obtain a clean bill of health for the institution. He said the bank has improved its capital rations and he expects the issue to be resolved by the end of the calendar year.

Mayor Mark Chilton said his experience working with affordable-housing organizations had left him with a favorable impression of both institutions. “In terms of community reinvestment, I don’t think either of these banks could be questioned,” he said, adding that he was leaning toward a switch to Harrington.

Board member Sammy Slade said he was in support of a move to Harrington because they are locally based.

Board member Lydia Lavelle said she was concerned about the recent changes in the town’s financial staff and said she felt more comfortable going with BB&T.

Board member Randee Haven-O’Donnell said she also was in support of BB&T, given the banks record of working with municipalities and the uncertainty of the financial markets.

Coleman said he would prefer to go with BB&T, but would consider Harrington again once the town’s three-year contract expires.

After the vote, the board debated the issue, but could not reach agreement. The discussion was tabled until its next meeting on Sept. 7.

In other action, the board set a public hearing for September to gather input on phases 3 and 4 of the Ballentine project located off Old N.C. 86 north of Hogan Hills. The board approved the first two phases of the project on June 28 but delayed a decision on these phases while developer M/I Homes added a commercial portion to the 25.79-acre development.

The board also appointed Collan Kneale and Paul Wyss to the town’s Arts Committee.

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