ICP
Challenges
Huntington
Bank
Application to
Close 106
Branches, No
Merit
By
Matthew R. Lee
NEW
YORK, March 20
-- The lack of
seriousness in
US bank
regulation
grows from the
relatively
smaller to the
largest banks
like Goldman
Sachs -
through those
in the upper
bulge like
Huntington,
seeking to buy
First Merit
and close more
than 100
branches.
Inner
City Press /
Fair Finance
Watch has
filed with the
Federal
Reserve a
challenge to
Huntington's
application to
acquire First
Merit and
close
branches:
"This
is a timely
first comment
opposing and
requesting a
complete copy
of an and an
extension of
the FRB's
public comment
period on the
Application by
Huntington
Bancshares to
acquire First
Merit
Corporation.
"This proposed
merger would,
if approved,
result in the
closure of
more than 100
branches --
nearly 50 are
in the
Cleveland,
Akron and
Canton
areas
Two of these
areas are
analyzed
below; more
will follow.
These closures
would cause
harm; what
would be the
countervailing
public
benefit?
Public
hearings are
needed.
In Ohio
alone, the
proposed
merger would
outright close
the following
branches, for
the record:
FIRST
MERIT
HUNTINGTON
80 Severance
Circle,
Cleveland
Heights
39 E. Market
St., Akron
111 W. Rich
St.,
Columbus
3899 A Median
Road, Akron
1156 E. Powell
Road, Lewis
Center Road,
Lewis
Center
3630 Center
Road,
Brunswick
5710 Mayfield
Road,
Lyndhurst
965 E. Cherry
St., Canal
Fulton
5393 Ridge
Road,
Parma
3504
Tuscarawas
St., W. Canton
210 N. Main
St.,
Rittman
1600 Bethel
Road, Columbus
7530 Kings
Point Road,
Toledo
5801 Darrow
Road, Hudson
801 Crocker
Road,
Westlake
1011 East
Aurora Road,
Macedonia
888 Lake
Avenue,
Ashtabula
Huntington in
the Akron MSA
in 2014 made
197 home
purchase loans
to whites --
and only nine
to African
Americans and
only three to
Latinos.
For refinance
loans,
Huntington in
the Akron MSA
in 2014 made
263 loans to
whites and
only nine to
African
Americans and
only ONE to
Latinos. Its
denial rate
for Latinos
was 77.8%,
versus only
50.7% for
whites.
For home
improvement
loans,
Huntington in
the Akron MSA
in 2014 made
23 loans to
whites and
only FOUR to
African
Americans and
NONE to
Latinos. Its
denial rate
for Latinos
was 100%.
Huntington in
the Cleveland
MSA in 2014
made 582 home
purchase loans
to whites --
and only 37 to
African
Americans and
only nine to
Latinos.
For refinance
loans,
Huntington in
the Cleveland
MSA in 2014
made 680 loans
to whites and
only 58 to
African
Americans and
only 14 to
Latinos. Its
denial rate
for Latinos
was 80%,
versus only
54% for
whites;
Huntington's
denial rate
for African
Americans was
72%.
For home
improvement
loans,
Huntington in
the Cleveland
MSA in 2014
made 88 loans
to whites and
only NINE to
African
Americans and
only one to
Latinos. Its
denial rate
for Latinos
was 96.4%,
versus only
72.8% for
whites; its
denial rate
for whites was
fully 94%.
We will have
more comments,
but for now
the comment
period should
be extended;
evidentiary
hearings
should be
held; and on
the current
record, the
application
should not be
approved."
There
is talk of how
divestiture
might impact
this; some
seem
inappropriately
resigned to
it.
One
development
pointing in
the other
direction is
the Community
Reinvestment
Act downgrade
of Regions
Bank. Inner
City Press has
previously
commented to
the regulators
on disparities
in Regions'
record, while
noting that
the bank has
timely
provided its
Home Mortgage
Disclosure Act
Loan
Application
Register data.
As simply one
example, in
the Jackson,
Mississippi
MSA in 2014,
Regions Bank
denied the
applications
for convention
home purchase
loans of
African
Americans 3.21
times more
frequently
than whites.
Now,
no new
mergers.
Shouldn't this
apply to some
other banks as
well?
Republic
was caught on
its
overdrafts, an
issue Inner
City Press has
raised and
will continue
to raise.
On Republic,
Inner City
Press / Fair
Finance Watch
in late 2015
challenged its
proposal to
acquire
Cornerstone
Bank, stating
among other
things:
" In
the Louisville
MSA in 2014
for home
purchase
loans,
Republic made
651 such loans
to whites and
only 22 to
African
Americans, and
only13 to
Latinos. It
denied the
applications
of African
Americans 2.15
times more
frequently
than those of
whites. For
refinance
loans, it made
215 loans to
whites and
only 10 to
African
Americans; for
home
improvement
loans it made
129 loans to
whites and
only ONE to an
African
American,
while denying
7 of 10
applications
received from
African
Americans.
In Nashville
in 2014,
Republic made
13 home
purchase loans
to whites,
NONE to
African
Americans or
Latinos.
“Washington-based
Fenway Summer
LLC, in
January
reached a deal
with
Louisville,
Ky.-based
Republic
Bancorp Inc.
to offer a
credit card
that is being
pitched as a
more
affordable
alternative to
payday loans,
which are
short-term
loans that
often charge
triple-digit
interest
rates. The
Build Card,
which is being
rolled out
later this
year, will
charge an
annualized
interest rate
of 25% to 30%
and will cap
borrowers’
initial credit
lines at
$500.”
Thirty percent
interest? In
New York,
that's called
usury."
And,
in fact, Inner
City Press has
photographed
Republic's
high cost tax
loan posters
in New York
City. Now the
Fed has asked:
In
Republic’s
letter to the
Federal
Reserve Bank
of St. Louis
dated December
17, 2015 (the
“Letter”),
Republic
asserted that,
“[RepublicBank]
no longer
offers refund
anticipation
loans and will
not provide
tax refund
anticipation
loans as a
result of the
proposed
transaction.
The fact that
[RepublicBank]
previously
provided
refund
anticipation
loans does not
relate to the
competitive
effects of the
transactions
contemplated
by the
[a]pplication,
does notrelate
to Republic’s
financial and
managerial
resources,
does not have
any bearing on
Republic’s
ability to
meet community
needs, does
not relate to
compliance
with the Bank
Secrecy Act,
and does not
affect the
financial
stability of
the United
States.
Consequently,
we
respectfully
submit that
the fact that
[Republic
Bank]
previously
provided
refund
anticipation
loans is
simply not
relevant to
any of the
statutory
factors the
FRB is
required to
consider under
the Bank
Holding
Company Act.”
But
now it does...
So
the Fed asks,
"consumer
advocates have
expressed
concern that
tax preparers
may pass along
RAL fees to
customers.
Please respond
to this
concern. Your
response
should include
a description
of Republic
Bank’s
monitoring and
auditing
plans."
There's
also those in
the middle,
seeking to
become a
Systemically
Important
Financial
Institution
like New York
Community
Bancorp is,
applying to
buy Astoria
Bank.
After
Inner City
Press / Fair
Finance Watch
filed a timely
protest, the
Federal
Reserve On
January 8
asked NYCB 14
questions.
Inner City
Press has put
the Additional
Information
letter online
here,
including a
request to
know which
branches NYCB
would close,
how it would
try to sell of
Astoria's
loans, etc.
Inner City
Press said,
there should
now be more
fair lending
questions, and
the comment
period should
be extended.
On
January 21,
the Federal
Reserve
informed Inner
City Press /
Fair Finance
Watch that the
Fed is
re-opening and
extending its
comment period
on NYCB -
Astoria until
Tuesday,
February 16.
We'll have
more on this (see here).
Back
on January 15,
after Inner
City Press /
Fair Finance
Watch also
filed comments
with the FDIC,
that agency
has written to
NYCB's Joseph
Ficalora
asking for a
response, and
stating that
"We
are writing in
reference to
the enclosed
e-mail that we
received from
Executive
Director
Matthew Lee,
of Inner City
Press/Fair
Finance Watch
concerning
your
institution's
application to
acquire
Astoria Bank.
We reviewed
the subject
e-mail in
accordance
with the
guidelines of
12 C.F.R.
Section 303,
and deemed it
a Community
Reinvestment
Act (CRA)
protest for
the purpose of
your
application.
The subject
e-mail raises
issues
regarding your
institution's
record of
lending to
African
American and
Latino
persons. The
anticipated
time and
research
required to
investigate
these issues
has
contributed to
the removal of
your
institution's
application
from expedited
processing."
NYCB's
home mortgage
lending is
extremely
disparate; its
multi-family
lending, some
to slumlords,
is no defense.
Inner City
Press / Fair
Finance Watch
has filed this
with the Fed:
“On behalf of
Inner City
Press / Fair
Finance Watch,
this is a
timely first
comment
opposing and
requesting a
complete copy
of an and an
extension of
the FRB's
public comment
period on the
Application by
New York
Community
Bancorp
('NYCB') to
acquire 100%
of the voting
shares of
Astoria
Financial Corp
and indirectly
acquire
Astoria Bank.
The
applicant NYCB
in the New
York City MSA
in 2014 made
109 home
purchase loans
to whites --
and only THREE
to African
Americans. For
refinance
loans, NYBC in
the the NYC
MSA in 2014
made 27 loans
to whites and
only ONE to an
African
American.
While
NYCB may
attempt to
minimize these
severe
disparities by
pointing to
multi-family
loans, there
are
significant
complaints
about that
lending; note
also this
account of
the CFPB which
lists the
ostensibly
mostly
multi-family
NYCB with more
complaints
against it
than banks
that are both
larger and
more “retail."
In the
Nassau Suffolk
(Long Island)
MSA in 2014
NYCB made 107
home purchase
loans to
whites -- and
only ONE to an
African
American,
while denying
African
Americans 4.7
times more
frequently
than whites.
For refinance
loans, NYBC in
the the Long
Island MSA in
2014 made 52
loans to
whites and
only three to
African
Americans and
only TWO to
Latinos, while
denying
Latinos 2.32
times more
frequently
than whites.
In the
Cleveland,
Ohio MSA
(where NYCB
bought Ohio
Savings), NYCB
in 2014 made
17 refinance
loans to
whites in 2014
and only one
to an African
American,
while denying
African
Americans,
while denying
African
Americans
three times
more
frequently
than whites.
Similar
disparities
exist for NYCB
in New Jersey,
Arizona and
Florida -- ICP
is requesting
public
hearings on
this
ill-conceived
proposed
merger.
As the
Federal
Reserve surely
knows, this
proposal was
driving by
activist
investor
pressure on
Astoria (by
Basswood
Capital
Management
LLC); both
institutions'
securities
fell
significantly
in price when
it was
announced. The
price to
consumers
would include
the closure of
branches,
disclosure of
which should
be demanded
during the
extended
comment period
and at the
requested
public
hearing(s).
The
comment period
should be
extended;
evidentiary
hearings
should be
held; and on
the current
record, the
application
should not be
approved.”
Inner City
Press / Fair
Finance Watch,
which also
opposes NYCB's
requests for
approvals from
the FDIC, New
York and other
regulators,
has prepared
this
comparison of
NYCB to other
lenders:
“In the Nassau
Suffolk (Long
Island) MSA in
2014 NYCB made
107 home
purchase loans
to whites --
and only ONE
to an African
American,
while denying
African
Americans 4.7
times more
frequently
than whites.”
While NYCB
made 107 home
purchase loans
to whites for
one to an
African
Americans
(ratio of
107-to-1), the
aggregated in
2014 for home
purchase loans
on Long Island
had a ratio of
13.41 loans to
whites for
every loan to
an African
American
(15,081 loans
to whites,
1125 loans to
African
Americans).
NYCB is eight
times more
disparate than
other lenders.
Also on
Long Island,
compared to
NYCB's 4.7
denial rate
disparity
between
African
Americans and
whites, the
aggregate
denied African
Americans 1.66
times more
frequently
than whites.
NYCB is 2.83
times more
disparate than
other lenders.
NYCB in
the New York
City MSA in
2014 made 109
home purchase
loans to
whites -- and
only THREE to
African
Americans.
While
NYCB made 109
home purchase
loans to
whites and
three to
African
Americans in
NYC (ratio of
36.3-to-1),
the aggregated
in 2014 for
home purchase
loans in the
New York City
MSA had a
ratio of 11.39
loans to
whites for
every loan to
an African
American
(47,166 loans
to whites,
4,140 loans to
African
Americans).
NYCB is 3.19
times more
disparate than
other lenders
in the New
York City MSA.
Meanwhile
Goldman Sachs
is trying to
speed through
Federal
Reserve
approval to
buy $16
billion in
insured
deposits from
GE Capital,
and the Fed,
documents
released to
Inner City
Press under
the Freedom of
Information
Act (FOIA)
show, is
inappropriately
bent on
helping,
including by
closing its
comment
period...
The Federal
Reserve has
belatedly
responded to
Inner City
Press / Fair
Finance
Watch's
September 2
FOIA request,
with some of
its internal
documents,
many heavily
redacted. FOIA
letter here;
FOIA
documents
released to
ICP here,
and embedded
below.
While
Inner City
Press is
appealing,
even as
released the
documents show
that Goldman
Sachs through
its law firm
Sullivan &
Cromwell
reached out to
Fed General
Counsel Scott
Alvarez in May
2015 about the
transaction,
and was
largely able
to vet it with
the Fed's
staff by July,
even receiving
an "additional
information"
request before
any
application
was filed.
Since the
public cannot
comment or ask
questions
before a
transaction is
announced,
this
"pre-review"
by the Fed in
essence cuts
public review
and
transparency
out of the
process. The
Fed's rules
against
ex-parte
communications
can't be
triggered
before there
is an
application.
But should Fed
review be
held, and
apparently
completed,
before there
is any public
notice?
The
deal was
publicly
announced on
August 13 and
Goldman Sachs
on August 18
submitted the
apparently
pre-approved
application.
Inner City
Press / Fair
Finance Watch
submitted a
comment and
FOIA request
(delayed until
now); the end
of the FOIA
response has a
redacted
reaction to
the "public
comment." Now
others have
commented and
a campaign has
begun. But has
the Fed
already made
up its mind?
The Fed has
been asked.
On
Goldman Sachs,
Federal
Reserve's
Initial FOIA
Response to
Inner City
Press on GE
Capital Bank
by Matthew
Russell Lee
On
October 20,
the Federal
Reserve asked
Goldman Sachs
five
questions, but
not on the
predatory
lending issues
raised... Only
this from
Goldman Sachs,
only
snail-mailed
by its
counsel:
Goldman
Sachs' 2d
Reply to Inner
City Press, As
Fed Withholds
FOIA Documents
by Matthew
Russell Lee
On
October 13
Inner City
Press
published the
Federal
Reserve's
communications
with the CIT
Group's
outside
counsel,
which shows
how the
release of
public
documents is
allowed by the
Fed to be
delayed. CIT
made
disingenuous
requests for
confidential
treatment of
information
that could not
be withheld,
without any
repercussion.
They were
rewarded with
FOIA appeal
denials by Fed
Governor Jay
Powell; now
Goldman is
trying to
withhold
information
that should be
public. Will
there be any
repercussion
or
accountability?
Watch this
site.
Revealed:
Federal
Reserve Asking
CIT Group
About Inner
City Press
FOIA Request:
Now Goldman
Sachs? by
Matthew
Russell Lee