Home Capital names chair of board of directors, deposits continue to dwindle

TORONTO -- Home Capital Corp. says one of its independent directors with extensive regulatory experience will now chair its board of directors as the mortgage company suffers from a further outflow of money from its high-interest savings accounts and GICs.

The Toronto-based mortgage company says its new chair is Brenda Eprile, who joined the Home Capital board last year. She replaces Kevin Smith, who will remain on Home Capital's board of directors.

Eprile was a senior member of the Ontario Securities Commission staff prior to beginning a 17-year career as a consultant focused on regulatory affairs.

The company is also adding two former CEOs of major Ontario pension funds -- Claude Lamoureux from the Ontario Teachers' Pension Plan and Paul Hagis of OMERS -- as well as Sharon Sallows, a trustee for two major real estate trusts.

Home Capital (TSX:HCG) has been weathering a series of blows, including OSC staff allegations that the company and three senior executives misled investors in their handling of a scandal involving falsified loan applications.

The company has vowed to defend itself against the allegations, which have sparked a massive withdrawal of funds from Home Capital. Lawyers for the three men haven't responded to requests for comment.

Home Capital has made several changes at its board table, including the replacement of company founder Gerald Soloway with former Royal Bank executive Alan Hibben last week.

Jim Keohane, CEO of the Healthcare of Ontario Pension Plan (HOOPP), also resigned from the board citing a potential conflict of interest following the pension fund's decision to provide a $2-billion credit line to Home Capital. William Falk, who announced his departure from the board earlier this year, is also set to step down on Thursday.

The company estimates that only $192 million will remain deposited in its high-interest savings accounts by the end of Monday, down from $1.4 billion two weeks ago. The balance deposited with GICs offered by its subsidiaries stood at $12.64 billion as of Friday -- down $220 million since April 28.

Home Capital uses money deposited into GICs and savings accounts to help fund its mortgage lending. To offset the draining deposits, Home Capital said it drew $1.4 billion from the $2-billion credit line provided to it by HOOPP, one of Ontario's largest public-sector pension funds.

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