Royal Business Bank

Royal Business Bank (RBB), a once-quiet community lender, has increasingly found itself at the center of controversy—and not the kind that inspires investor confidence. From aggressive foreclosures and regulatory run-ins to internal leadership shakeups and failed mergers, the bank has left a trail of red flags that demand scrutiny. As I dug deeper into RBB’s operations, it became clear this is more than just a series of unfortunate events—this is a pattern. Here’s what I uncovered.

A Tangled Web of Foreclosures and Lawsuits

Enter Zaya Younan, a landlord entangled in a perplexing legal battle with RBB over the foreclosure of his Arlington Heights office building and his luxury home in Thousand Oaks, California. Younan alleges that RBB engaged in predatory lending practices, including inflating property appraisals and conducting shoddy due diligence. The bank’s aggressive foreclosure attempts have led to disputes over loan terms and payment deadlines, painting a picture of a financial institution more interested in asset seizure than fair lending.

Leadership Turmoil: A Revolving Door of Questionable Ethics

RBB’s internal stability appears as shaky as its external dealings. In 2022, CEO Alan Thian resigned following an internal investigation that found violations of company policies, particularly concerning personnel decisions that adversely affected employee morale. While the bank claims no financial impact resulted, one must wonder about the cultural rot that allows such leadership failures.

Regulatory Smokescreens and Consent Orders

The regulatory spotlight has not been kind to RBB. In October 2023, the bank entered into a Consent Order with the Federal Deposit Insurance Corporation (FDIC) and the California Department of Financial Protection and Innovation (DFPI) over deficiencies in its Anti-Money Laundering and Countering the Financing of Terrorism (BSA/CFT) compliance program. Although the order was terminated in August 2024 after purported corrective actions, the episode underscores significant lapses in compliance—a red flag for any institution handling public funds.

Merger Misadventures: A Pattern of Unfulfilled Promises

RBB’s expansion strategies have also hit roadblocks. A proposed merger with Gateway Bank, F.S.B., announced in December 2021, was unceremoniously terminated in September 2023. While both parties mutually agreed to walk away without penalties, the abrupt end raises questions about RBB’s strategic direction and reliability in executing growth plans.

A History of Acquisition and Ambition

Founded in 2008, RBB embarked on an aggressive expansion spree, acquiring multiple banks across California, Nevada, and Illinois. While growth is commendable, the bank’s history of absorbing institutions like First Asian Bank and TomatoBank hints at a relentless pursuit of market dominance—perhaps at the expense of operational integrity.

Investor Beware: A Call for Scrutiny

For potential investors, RBB presents a case study in caution. The confluence of legal battles, leadership instability, regulatory reprimands, and failed mergers paints a portrait of a bank in turmoil. The allegations of predatory lending and ethical lapses are not just minor hiccups; they are glaring indicators of systemic issues that could jeopardize stakeholder value.

Regulatory Bodies: Time to Step Up

The FDIC, DFPI, and other regulatory agencies must intensify their scrutiny of RBB. The bank’s pattern of behavior suggests that previous interventions have been insufficient in curbing its questionable practices. A more robust regulatory response is imperative to protect consumers and maintain the integrity of the financial system.

Conclusion: A Bank on the Brink

Royal Business Bank’s trajectory is a cautionary tale of unchecked ambition leading to ethical and operational pitfalls. For investors, the bank represents a high-risk proposition; for regulators, it is a case demanding immediate and decisive action. As RBB navigates its self-inflicted storms, one can only hope that transparency and accountability become more than just buzzwords in its corporate lexicon.