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by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX/SDNY, Dec 9 – Amid the Federal Reserve's proposal to cut 30% of its regulatory staff, Prosperity Bank has applied to the Fed to buy San Antonio-based Southwest Bank for $269 million.

   Fair Finance Watch on November 7 commented to the Federal Reserve:

    This is a timely first comment on the application by  Prosperity Bancshares, Inc., to merge with Southwest Bancshares, Inc., and indirectly acquire Texas Partners Bank.

    Fair Finance Watch has reviewed the just-released 2024 Home Mortgage Disclosure Act data of Prosperity Bank, not reviewed in any Community Reinvestment Act performance evaluation.    In the state of Texas in 2024, Prosperity Bank denied 109 applications from African Americans while making fewer than half that, 40 loans - while it made fully 1502 loans to whites and denied only 904 applications. This is disparate. 

  In Oklahoma in 2024, Prosperity Bank denied three applications from African Americans while making only four loans - while it made fully 84 loans to whites and denied only 22 applications. Though lesser volume, this too is disparate.   

Also for now consider: "Does anyone else find Prosperity Bank terrible? Should I go shopping for another bank. I don't know if this is the place to vent about this, but it seems that Prosperity Bank is constantly triggering fraud alerts and then it's extremely long waits on customer service calls to get them restored, and twice I have had all my cards canceled" and "I was with them since they were Legacy Texas and then Viewpoint and once Prosperity took over service completely tanked." Would that happen to Southwest?

The Federal Reserve Bank of Dallas responded that "please be advised that the Board will not consider the part of the comment that pertains to a proposal by the Federal Deposit Insurance Corporation (“FDIC”) regarding the FDIC’s procedures for insured nonmember bank branch applications.  This part of the comment is considered non-substantive, and it does not relate to the statutory factors the Board considers in acting on an application under the Bank Holding Company Act."

  Inner City Press filed a second comment:

  Earlier this evening Fair Finance Watch received from the FRB of Dallas a portion of the application, noting that a FOIA request was required for the rest.    We have FOIA-ed, including communications:    This is also a request of all records reflecting this delegated approval, including why it is listed as "addition" in the H2:  Prosperity Bancshares, Inc., Houston, Texas—to acquire by merger American Bank Holding Corporation and thereby indirectly acquire American Bank, National Association, both of Corpus Christi, Texas.* Approved: October 28, 2025 *Addition     We have courteously been told "This is a 'Reg Y request fulfillment' as delineated in the e-mail – and the Reserve Bank wished to fulfill this request as expeditiously as possible."     But still do not understand it. The FRB of Dallas also ruled, in advance, that the Governors will not consider the portion of our first comment about the federal regulators' reduction of public notice.  FFW believes that is a determination that must be made by the Board, not a Reserve Bank on a delegated basis.     Fair Finance Watch has reviewed the just-released 2024 Home Mortgage Disclosure Act data of Texas Partners Bank, not reviewed in any Community Reinvestment Act performance evaluation -    Surprisingly, Texas Partners lists only a loan to a white borrower. We are inquiring into this, as well as into what the FRB will do with the CFPB telling DDC it will receiving no more funds from the FRB and foreseeably close, along with the HMDA portal, at the end of 2025. FFW has petitioned the FRB on that - but that is apparently beyond the scope of this comment (to be determined by the Governors).    In the portion of the Application provided, Prosperity gushes about its CRA and fair lending record without mentioning a 2023 condition imposed by the FDIC after comments by FFW.  For the record on this application, this

 How has Prosperity complied - given that Prosperity is not even disclosing the condition to the Federal Reserve, including on the record application approved under delegated and apparently expedited authority?

On December 9, Prosperity belatedly removed its specious claim to confidential treatment for exhibits - "The Applicant provided the Board with an updated public exhibits section of the application, which includes exhibits previously designated as confidential.  Accordingly, we are providing you with the updated public exhibits volume of the application pursuant to Regulation Y." But this is long after the Fed says its comment period is closed. So what's the point?

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

 We note the FRS proposal to cut 30% of supervisory staff. Really? 

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