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FEDERAL COURT / S Bronx, Oct 2 – 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 not only the proposed acquisition of Investors Bank by Citizens Bank NA but also Stock Yards - Commonwealth will be litmus tests.

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. This has now been raised on Citizens' application, to the OCC:

"Re: Timely First Comment Opposing Citizens to acquire Investors Bank

Dear Ms. Cummings and others in the OCC, including at "Large Banks": 

This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Applications by Citizens to acquire Investors Bank.  

  Before getting to the data, be aware that based on Fair Finance Watch's comments to the FDIC about Investors, it recently imposed a condition on Investors. Investors has yet to meaningfully implement the required improvements; this application should not be approved, much less at this time.    The FDIC wrote:

 "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019... The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas. The Action Plan  should include, at a minimum, the following: a. The Bank will regularly monitor application and origination activity of home  mortgage loans in majority-minority census tracts and from Blacks throughout the  Bank’s assessment areas.  b. The Bank will ensure marketing and outreach efforts are inclusive of all communities,  including minority communities within all the Bank’s assessment areas. The  marketing and outreach efforts should focus on home mortgage product awareness.  Marketing activities should use materials and media that reflect the racial and ethnic  composition of the targeted communities. The Bank should also have specific  advertising and outreach goals, and the results of these efforts should be documented,  monitored, and evaluated for effectiveness.  5. Upon Board approval of this Order, the Bank will provide a copy of the signed Order to  the FDIC's New York Regional Office within 30 days.  6. Upon Board approval of such Action Plan, the Bank will provide a copy of the Plan  to the FDIC’s New York Regional Office. 7. The Bank will provide the FDIC’s New York Regional Office with quarterly  updates detailing its progress in meeting the goals listed in the Action Plan."   

Citizens cannot, as of now, be allowed to acquire this hot mess.  As noted:  The applicant Citizens in 2020 in New York State based on its disparate marketing made 7183 mortgage loans to whites, with 3116 denials to whites -- while making only 323 loans to African Americans, with more than that in denials: 336.  

  Here's some of Investors' 2020 HMDA data:  Investors Bank in 2020 in New York State based on its disparate marketing made 164 mortgage loans to whites, with 76 denials to whites -- while making only THREE loans to African Americans, with SEVEN denials. This is far out of keeping with the demographics, and other lenders, in NYS - this is outrageous.

This is a pattern. Investors Bank in 2020 in New Jersey based on its disparate marketing made 1580 mortgage loans to whites, with 281 denials to whites -- while making only 64 loans to African Americans, with 28 denials. This is far out of keeping with the demographics, and other lenders, in New Jersey. The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

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