Stephen Lange Ranzini

Stephen Ranzini
Ranzini in February 2014
Born	Stephen Lange Ranzini New Brunswick, New Jersey, U.S.
Citizenship	United States
Alma mater	Yale University
Title	CEO & President, University Bank

Stephen Lange Ranzini is president and CEO of University Bank and president and CEO of University Bancorp, Inc.^[1] (Listed OTCQB under symbol UNIB.).^[2] He was born in New Brunswick, New Jersey and grew up in the Somerville, New Jersey area, where his father was a pioneering civil rights advocate for the African-American and Jewish communities in Central New Jersey.^[3][4]

Education and early career[]

Ranzini graduated magna cum laude from Phillips Exeter Academy in 1982, and had the following honors: Honor Society, 1982; Recipient of Negley American History Prize; Westinghouse National Science Talent Search (now known as the Regeneron Science Talent Search), Semi-Finalist (Economics).^[5] Ranzini graduated from Yale College in 1986, earning a BA with a Double Major: East Asian Studies (Japanese) and (Economic) History. While at Yale he was involved in many extracurricular activities including serving as Co-Founder and Founding Publisher, 1986, of The Yale Herald; Co-Founder and Founding Editor-in-Chief, 1984–1986, Yale Business Bulletin; and Chairman and Managing Director, 1984–1986, Yale College Student Investment Group.^[6][7]

Ranzini served as the President of the Yale Alumni Association of Michigan, from October 2003 to January 2009, and as one of the 350 Delegates to the Yale University, Assembly of Yale Alumni, from August 2004 to June 2007.^[8][9]

At the age of 23, after graduating from Yale University, Ranzini convinced Bank One Corporation to lend $3.2 million to a newly formed corporation of which he was president the monies necessary to buy a bank in a leveraged buyout, assisted by his father.^[10] He then became the youngest bank holding company president in the US in July 1988.^{[11][12][13][14]} At the time of the purchase of the bank in July 1988, it had 21 employees and managed $34 million.^[15]

Career[]

University Bank, "together with its Michigan-based subsidiaries, holds and manages a total of over $30.5 billion in financial assets for over 163,000 customers", and has over 500 employees.^[16]

Ranzini has received national media attention from NPR and The New York Times for his role in founding faith based lender UIF Corporation, a subsidiary of University Bank, which serves the large number of Muslim, Hindu, Jewish, and Christian customers who wish for religious reasons to avoid paying or receiving fixed interest contracts.^{[17][18][19][20]}

University Bank’s faith based lending program has been highlighted by the Federal Reserve Bank of New York^[21] and by the Federal Reserve Bank of Richmond.^[22] University Bank received the American Bankers Association's 2009 Community Bank Award for its achievements related to this innovative program.^[23]

Under Ranzini's leadership, University Bank has grown rapidly and has been very profitable. University Bank's annual revenue has grown from $6.57 million in 2004 to over $140 million in 2020, an annually compounding internal rate of growth of 21.0%. Over those same 16 years, University Bank's return on shareholders equity has averaged 20.0% and common shareholders’ equity has grown from $3.0 million in 2004 to over $50 million in 2020.^[24]

In the 1990s, Ranzini led an aggressive outreach effort to the black community by University Bank to break down the historic redlining then occurring in Ypsilanti, Michigan. “The program was a huge success,” Ranzini said. “We lent over $8 million in Ypsilanti under the program and did not have even a single foreclosure, despite lending to homebuyers with credit scores as low as 460—160 points under the then-traditional cutoff point for underwriting approval.”^[25]

In June 2021, Ranzini received an award from the Crain’s Detroit Business newspaper as a Notable Executive in Diversity, Equity and Inclusion, for his lifetime of accomplishments fostering diversity equity & inclusion. "'Stephen was forward-looking: tackling the poverty-ensuring legacy of redlining in Ypsilanti, creating religious-compliant, no-interest loan programs for Muslim borrowers, and putting women and minorities on the bank’s board before demands for racial and gender equity drove other banks to introduce those changes. That’s leadership, and it’s powerful and empowering,' said Alma Wheeler Smith, former state senator and state representative."^[26] Ronnie D. Peterson, the current Michigan State Representative for District 54, which encompasses Ypsilanti and Ypsilanti Township, congratulated Mr. Ranzini on this award and noted: "I have served my hometown of Ypsilanti as an elected official at the local, county and state level for the better part of the last four decades. Over the course of my career, I have encountered no one in the financial community who has displayed a greater commitment to diversity and social equity than University Bank President and CEO, Stephen Ranzini. Stephen has led the charge to eradicate mortgage redlining in Ypsilanti and, under his leadership, both minority homeownership and local property values have seen marked increases. Stephen Ranzini has demonstrated through his policies and actions that good corporate citizenship and profitability are not mutually exclusive objectives. He recognized the promise and trusted the integrity of the people of Ypsilanti when no other financial institution could, and the area’s resurgence in recent years is due, in large part, to the good work of Mr. Ranzini and University Bank."^[27]

Regulatory and compliance issues[]

Under his leadership, the bank in 2009 had a regulatory and compliance issue in which it was ordered by the Federal Deposit Insurance corporation and the Michigan Office of Financial and Insurance Regulation (OFIR) to cease and desist conducting business with the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which is used to communicate with foreign financial entities.^[28] The regulators cited that there was reason to believe that the Bank had engaged in unsafe or unsound banking practices and had violated laws, rules, or regulations that included, among others: operating the bank with an ineffective system of internal controls, operating the bank without an effective anti-money laundering program, operating the bank with management whose practices have resulted in numerous violations of laws and regulations and contraventions of policy, operating with a high level of adversely criticized assets, operating with inadequate earnings, operating with management whose policies and practices are detrimental to the bank and jeopardize the safety of its deposits, and operating with an inadequate internal audit policy.^[29] The issues of prior concern having been remedied, the FDIC & OFIR Order was terminated by the agencies on March 16, 2010.^[30]

On September 11, 2014, Ranzini was ordered to personally pay the Treasury of the United States $105,000 as a civil money penalty without admitting or denying any violations of law, unsafe or unsound practice. He was also forbidden from being reimbursed by his (or any other) insured depository institution for this payment.^[31]

On June 15, 2016, University Bank and its UIF division were ordered to pay $1.1 million as part of a judgment for violating trade secret laws, following a March 2015 jury trial in King County Superior Court.^[32] The UIF division had hired two former loan officers of Guidance Residential to sell faith based mortgages, and these loan officers were accused of using proprietary customer information, including "email addresses and phone numbers" to solicit business from former customers. Ranzini called the jury's decision "a travesty of justice," because "Washington law requires companies to take some measure to protect trade secrets and Guidance did not", and stated, "Guidance didn't give their employees company phones or company laptops. This was information stored on their own personal phones and their own personal devices. We're all scratching our heads: How is that a trade secret? Guidance didn't take any steps to protect anything". Ranzini noted, "What our employees did is what everyone expects their employees to do. And somehow they found a court and a jury in Washington to turn a best practice into a tort. These loan officers developed their customers through their own hard work. When they left, they kept the customers' contact information that they'd developed themselves."^[33] However, the jury, in a 9-3 split decision,^[34] ordered the payment of damages and legal fees to Guidance Residential.^[35][36]

Other roles[]

Ranzini served as the U.S. delegate to the United Nations workgroup UN CEFACT TBG5,^[37] from April 2003 until July 2011 and during that time served thrice as a U.S. Delegate to the International Organization for Standardization global standards setting body for financial services, ISO/TC 68, from June 2004 to June 2007. He was a member of ANSI ASC X9 from April 2004 to September 2011. He has been a member of the Federal Reserve System's Remittance Coalition since its founding in 2011. In July 2015 the Federal Reserve System appointed him as one of only five bank executives nationwide to the Federal Reserve System's Secure Payments Steering Committee, which is designing the new Federal Reserve Real-Time Payments System.^[38] Ranzini was also appointed Chair of the ANSI ASC X9 Real-Time Payments Study Group in December 2020.^[39]

References[]