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By Matthew Russell Lee, Patreon Maxwell Book
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SDNY COURTHOUSE, July 8 – Will the Community Reinvestment Act actually be enforced against banks with disparate lending records?

Fair Finance Watch, with Inner City Press on the FOIA, is raising the issue to regulators, on June 22 to the Federal Reserve and FDIC on United Community Bank

Dear Chair Powell, Secretary Misback and others in the FRS:

  This is a request for a full copy of, and a timely first comment on, the Applications of United Community Banks, Inc., to merge with Progress Financial Corporation, and subsidiary, Progress Bank and Trust, both of Huntsville, Alabama.  As an initial matter, this is a request that the FRS immediately send by email to Inner City Press all non-exempt portions of the applications / notices for which the Applicants have requested confidential treatment.  Fair Finance Watch has been tracking United Community Bank and finds it lending patterns, including in the newly released 2021 HMDA data not taken into account in CRA exams, troubling.

  In South Carolina in 2021, United Community Banks made 1482 mortgage loans to whites with 310 denials. Meanwhile to African Americans in the state it made only THIRTY NINE loans, while denying fully sixteen applications. A referral should be made to the DOJ for fair lending violations.    Nationwide, United Community Banks is scarcely better. In 2021 overall it made 9252 mortgage loans to whites with 1852 denials. Meanwhile to African Americans nationwide it made only 362 loans, while denying fully 131 applications. A referral should be made to the DOJ for a pattern and practice of fair lending violations.    Public evidentiary hearings are needed, at least like the public meeting the Fed has belatedly set on two Canadian banks' acquisition proposals in the US.  

   FFW and Inner City Press have been deeply concerned about the rush by the Federal Reserve to rubber-stamp mergers by redliners. This has been killing the Community Reinvestment Act and 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

On June 23, the Fed wrote to the applicant's lawyers: June 23, 2022  Lee Kiser Nelson Mullins Riley & Scarborough LLP  2 W. Washington Street, Suite 400  Greenville, South Carolina 29601  Lee.kiser@nelsonmullins.com Dear Mr. Kiser: This refers to the application by United Community Banks, Inc., Blairsville, Georgia, to merge  with Progress Financial Corporation, and thereby acquire Progress Bank and Trust (Bank), both  of Huntsville, Alabama, pursuant to section 3(a)(5) of the Bank Holding Company Act.  Enclosed is a copy of a letter received from Matthew Lee, Esq., Executive Director Inner City  Press/Fair Finance Watch, commenting on the application.  A response to the comments should be received by this Reserve Bank within eight business days  from the date of this letter. In order to expedite processing of your application, please send  copies of your response to the Reserve Bank, the Board of Governors, the protestant, and to the  supervisory agencies that initially received copies of the application.

  And when United Community Banks responded, calling it Project Artemis, they argued "Mr. Matthew R. Lee of Inner City Press/Fair Finance  Watch submitted a comment in opposition to the merger of United and Progress on June 22, 2022.  This letter provides United’s response to the concerns raised by Mr. Lee.  The comment submitted by Mr. Lee requests that the Application not be approved in light  of concerns related to the Bank’s 2021 mortgage lending record, and requests that the comment  period be extended and evidentiary hearings be held regarding the Application.  I. Mortgage Lending Record  Mr. Lee cites 2021 Home Mortgage Disclosure Act (“HMDA”) data, particularly the  volume of mortgage loans made by the Bank to African-American borrowers. Specifically, Mr. Lee asserts that the Bank denied mortgage loan applications of African-American borrowers more  frequently than those of white borrowers in South Carolina and “nationwide.” United respectfully confirms for the reader that the Bank has a Southeastern—not nationwide—mortgage lending  footprint consisting of locations in South Carolina, Georgia, North Carolina, Florida, and Tennessee.  2 Mr. Lee’s comment letter attempts to evaluate United’s lending performance nationwide. Nationwide aggregates  can provide a distorted picture of a bank’s lending practices and have limited value because lenders’ geographic  footprints include differing proportions of racial or ethnic minorities. Accordingly, we understand that regulators do  not rely on aggregated nationwide data as a basis on which to assess a bank’s far lending performance in multiple  geographies.  United appreciates the opportunity to respond to the comments made on the Application  and believes that all substantive issues raised by Mr. Lee have been addressed." Well, no.

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