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FEDERAL COURT / S Bronx, Feb 17 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And Stock Yards - Commonwealth has been a litmus test, one that the Fed has failed, see below. Will it also fail on CBTX - Allegiance?

  In February 2022 it was quietly reported that the Stock Yards - Commonwealth proposal was still delayed. Then the Fed, using years' old language, rubber stamped it:

"The Board received one adverse comment on the proposal. The commenter objected to the proposal, alleging that in 2020, both Stock Yards Bank and Commonwealth Bank made fewer home loans in Kentucky to African American individuals as compared to white individuals. 21 In addition, the commenter asserted that the proposal has no public benefit. Businesses of the Involved Institutions and Response to the Public Comment Stock Yards offers a variety financial products and services, including checking and savings accounts, mortgage and business loans, and asset management services, through Stock Yards Bank’s network of branches in Kentucky, Ohio, and Indiana. Through its branches in Kentucky, Commonwealth Bank offers commercial, consumer, business, and agricultural loan products; a variety of deposit products; and investment advisory and trust services. 21 The data cited by the commenter appears to correspond to publicly available 2020 data reported by Stock Yards Bank and Commonwealth Bank under the Home Mortgage Disclosure Act of 1975 (“HMDA”). 12 U.S.C. § 2801 et seq.... The Board is concerned when HMDA data reflect disparities in the rates of loan applications, originations, and denials among members of different racial, ethnic, or gender groups in local areas. These types of disparities may indicate weaknesses in the adequacy of policies and programs at an institution for meeting its obligations to extend credit fairly." The data, below, corresponded but the Fed nevertheless rubber stamped the merger, as it has in the past. What has changed?  In fact, it should have been denied as should CBTX (CommunityBank of Texas) - Alliance, on which Fair Finance Watch has also filed.

Meanwhile Stock Yards is still trying to withhold its exhibits about compliance. Inner City Press is pursuing under FOIA. Watch this site.

On October 2, after filing with the FDIC, Inner City Press filed with the Federal Reserve:

"This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by Stock Yards Bancorp to acquire Commonwealth Bancshares, Inc., and thereby indirectly acquire Commonwealth Bank and Trust Company, both of Louisville, Kentucky     

 The applicant Stock Yard Bank is getting worse.  In Kentucky in 2020 it made 1431 home loans to whites and only 39 to African Americans (while denying 18application from African Americans, and only 188 from whites - down from 250 in 2019).    Commonwealth Bank & Trust in Kentucky in 2020 made more loans that its putative acquirer, but was also disparate: it made 3358 home loans to whites and 156 to African Americans (while denying 63 application from African Americans, and 459 from whites).  There is no public benefit to this proposal.    

FFW and Inner City Press have been deeply concerned about the rush by the FRB's penchant to rubberstamp mergers by redliners, particularly during the pandemic - including starting comment periods even before applications are filed and/or publicly available. We have just filed a FOIA request: 

"This is a formal FOIA request for the entirety of the application by Stock Yards Bancorp to acquire Commonwealth Bancshares, Inc., and thereby indirectly acquire Commonwealth Bank and Trust Company including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS' communications with or about Stock Yards Bancorp or Commonwealth Bancshares or either affiliates since January 1, 2020.  . Given the public comment period here, this request should be expedited such that the records are provided before the comment period ends (for now, Oct 21, 2021)." 

We timely request public hearings.  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

Meanwhile, Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here.

Watch this site.

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