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FEDERAL COURT / S Bronx, April 5 – Whether or not the U.S. Community Reinvestment Act will be again enforced under the current Administration and its regulators is an open question still - though the answer is more and more No.  The proposed acquisition of Investors Bank by Citizens Bank was a litmus test, one that both Citizens and the Fed have failed.

   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 was raised on Citizens' applications: "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."

  But in response to this, Citizens only said dismissively that the record of the acquiree doesn't matter. So they could buy OneCoin? It is major law firm making this argument. It is an embarrassment. And the Federal Reserve's question letter of October 22 does not address it, and Citizens' law firm late provided its "answer" and two responses to the Fed.

Nevertheless on March 22 the Federal Reserve Board, with Sarah Bloom Raskin blocked from joining and two others yet to arrived, rubber stamped Citizens' application. It stated that "The commenter also alleged that, as a result of disparate marketing, Investors Bank made disproportionately fewer home loans in the states of New Jersey and New York to African American individuals as compared to white individuals based on 2020 HMDA data. In addition, the commenter noted that the FDIC had imposed a condition in connection with a previous branch acquisition that Investors Bank develop an action plan to ensure that its home mortgage lending adequately addresses the credit needs of all segments of its market areas. The commenter asserted that Investors Bank has yet to meaningfully implement the required improvements and that the proposal should not be approved at this time."

The Fed gave its March 22 approval despite Investors having done very little or nothing. This as Fair Finance Watch has raised another moribund condition, by Oakwood Bank in Dallas, to the FDIC. What do these conditions mean?

Inner City Press filed a timely request for reconsideration: "This is a timely request for reconsideration of the Board's approval of the Applications by Citizens Financial Group's application to acquire Investors Bancorp noting but not addressing Investor's weakness which gave rise to FDIC condition.    This is a new low for the FRB. This was a condition imposed by one of the two other Federal bank regulators. If the Board won't even inquire into and take a written position on a merger partner's performance under a written condition imposed by another regulators, these conditions are meaningless.    Fair Finance Watch timely put into record before the Board:  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."      The Board in its approval merely recited this, without addressing it: "the commenter noted that the FDIC had imposed a condition in connection with a previous branch acquisition that Investors Bank develop an action plan to ensure that its home mortgage lending adequately addresses the credit needs of all segments of its market areas. The commenter asserted that Investors Bank has yet to meaningfully implement the required improvements and that the proposal should not be approved at this time."     Has Investors meaningfully implemented these requirements? The Fed with all its resources does not address it. The Order makes a mockery of the regulators' way to approve an otherwise unapprovable merger like Investors.    The Order should be reconsidered, by each current government and those incoming, before this proposal is consummated - the Order should be stayed for that purpose."

  The Fed waited until April 5 and then this boilerplate: "Your request presents matters that you raised in the application process or that were otherwise considered by the Board in acting on the proposal. Your request fails to provide additional material information related to these matters that was not already part of the record that the Board reviewed.  For the reasons discussed above and in the Order, and in light of all the facts of record, no member of the Board has requested that the Order be reconsidered or modified in any manner. Accordingly, your request for reconsideration is denied." This Fed must (be) change(d). Watch this site.

 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.  

Watch this site.

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