Jon Prior

The COVID-19 pandemic has exacerbated income inequality in America, and that has implications for banks and other lenders. Among those suffering most: renters, front-line workers and minority small-business owners.

The acquisition of Florida-based Service Finance Co. would expand the North Carolina bank’s presence in the point-of-sale lending business.

In late July, the Justice Department notified the Houston bank of a potential lawsuit alleging violations between 2013 and 2017, according to a securities filing. Cadence said that its prospective merger partner, BancorpSouth, supports the settlement discussions.

The very smallest banks, whose numbers shrank during the financial crisis, were most likely to express concern that the housing market will imperil the broader economy.

The White House is calling on the Department of Justice and federal regulators to give bank deals more scrutiny as part of a broader executive order meant to encourage competition across the U.S. economy.

The company expects loan growth in the “mid-teens” this year, despite concerns that a housing supply crunch could stymie new mortgage originations. “As soon as COVID fades into the background we'll pick up volume,” CEO and Chairman Jim Herbert said.

Already contending with stressed retail, hotel and restaurant loans, bankers are beginning to view office lending — historically a safe bet — as increasingly risky as companies of all types rethink their space needs.

The industry legend turned around a struggling Minneapolis company and even escaped a kidnapping to build the firm that is now the nation’s fifth-largest bank.

The recent stimulus law’s relief for renters and extension of the federal eviction ban were meant to ward off a housing crisis. But owners of 1- to 4-unit dwellings still face mounting mortgage and property tax debts, and delinquencies could start rising soon — followed by foreclosures.

Bank and credit union groups are pushing to include the industry’s front-line workers in the next priority group, but even as a recommendation is coming soon from a CDC advisory panel, the decision ultimately will be made state by state.