| FirstSun Bid
for First Foundation Challenge
to Fed Now Qs on Strange Deal
Provisions
by
Matthew Russell Lee, Patreon Book
Substack
SOUTH
BRONX/Federal
Court,
Jan 12 – A proposed
acquisition by FirstSun, whose
merger bid failed, of First
Foundation has given risen to
a challenge under the
Community Reinvestment Act.
On
December 5 Fair Finance Watch,
reviewing Home Mortgage
Disclosure Act data of 2022
and 2024, filed a CRA
challenge to the merger with
the Federal Reserve Board:
This is
opposition the Applications of
FirstSun Capital Bancorp,
Denver, CO (& Dallas TX)
to merge with First
Foundation, Inc., Irving,
Texas, and thereby indirectly
acquire First Foundation
Bank.
FirstSun's flagship Sunflower
Bank, in Texas in 2024, made
401 mortgage loans to whites,
and only 46 to African
Americans. Meanwhile it denied
12 applications from African
Americans, and only 36 from
whites.
This is
disparate, and more disparate
both than the aggregate in
Texas.
Nationwide in 2022, Sunflower
Bank made 2248 mortgage loans
to whites, and only 104 to
African Americans. Meanwhile
it denied 24 applications from
African Americans, and only
162 from whites.
FirstSun's record has grown
even worse than in 2022, which
Fair Finance Watch analyzed in
commenting against FirstSun's
ill-fated Home Street
proposal. Now, First
Foundation is not only
"unloved" - it has had massive
CRE and other
problems.
For the
record, on managerial
resources and otherwise, note
that this proposal involved a
complex restructuring,
including a $3.4 billion
downsizing plan, which is said
to carry not only community
harm but also execution risk.
The price paid for First
Foundation has also raised
concerns among some
analysts. As with Fifth
Third / Comerica, there has
been a legal inquiry launched
by a class action firm
regarding the merger with
First Foundation.
On January 12 the
Federal Reserve Bank of Kansas
City asked FirstSun questions,
including "3. Section 6.1(f)
of the Agreement and Plan of
Merger between FirstSun and
First Foundation (“Holdco
Merger Agreement”) states that
“FirstSun shall be entitled to
direct the defense of the
transactions contemplated by
this Agreement before any
Governmental Entity and to
control the scheduling of, and
strategic planning for, any
meetings with, and the
conducting of negotiations
with, Governmental Entities
regarding any Requisite
Regulatory Approvals.” Please
discuss the purpose of this
provision and how FirstSun
expects it might operate in
practice.
4. Section
6.22(a) of the Holdco Merger
Agreement states that “[f]rom
and after the date hereof,
FirstSun and First Foundation
will use their commercially
reasonable efforts to
facilitate the integration of
First Foundation with the
business of FirstSun following
consummation of the
transactions contemplated
hereby. First Foundation shall
permit representatives of
FirstSun to be onsite at First
Foundation or First Foundation
Bank to facilitate integration
of operations and assist with
any other coordination efforts
as necessary . . .” Please
discuss the purpose of this
provision and explain whether
FirstSun would require changes
to be made to the information
technology systems of First
Foundation or the target bank
prior to Federal Reserve
approval of the proposal."
That would violate the law...
And see, e.g.,
Sept 10, 2025: https://www.americanbanker.com/opinion/the-fdic-is-undercutting-a-key-element-of-the-cra
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