Culinary Union targets Elardi’s bank

Bob Shemeligian

Tuesday, July 2, 1996 | 11:59 a.m.

The Culinary Union is turning up the heat on Frontier hotel-casino owner Margaret Elardi by trying to derail the plans of a local bank with which she is affiliated.

The union, entrenched in a nearly five-year-long strike against the Frontier, filed a request Monday with the Federal Reserve, asking it to delay an application filed by Community Bank of Nevada to open a new branch. The union wants public hearings on the request.

"We have serious questions about the management and the lending record of Community Bank of Nevada," said Theresa McGuire, senior research analyst with the Culinary.

McGuire said 60 percent of the money loaned by Community Bank has gone to 12 shareholders, directors and employees of the bank and five local real estate developers.

She noted that within the past year, Community Bank has loaned $962,000 to Elardi, a member of the bank's board of directors and the bank's loan committee.

The bank also has loaned $1.3 million to developer Jim Saxton, a member of the bank's board, McGuire said.

It is not illegal for a bank to loan money to a board of directors. "But it does seem inappropriate," McGuire said.

Culinary officials also contend that because Community Bank allocates a large share of its residential loans to real estate developers, shareholders and bank directors, it has diminished its ability to serve the larger community as required under the federal Community Reinvestment Act.

McGuire said Community Bank has made only one residential loan in a census tract in which more than 40 percent of the residents are minorities.

Community Bank President Ed Jamison said the institution "is in full compliance with all appropriate regulations, which include the Community Reinvestment Act."

As to the other charges, Jamison said: "I have not seen all the allegations, so it's hard to respond, but the ones I have heard about are unfounded and reach tortured conclusions."

One source at Community Bank suggested that the charges have more to do with Elardi than the bank.

"The fact that Margaret Elardi is on this bank board is rather an example of the way this bank views their role in the community," McGuire responded.