| Fed Dropped
CRA Condition on Linkbancorp Approval
after Posting Now Governors Not Told
By Matthew
Russell Lee, Patreon Maxwell
Book
SOUTH BRONX, Nov
21 – The Federal Reserve Board
in considering the proposed
merger on the rebound between
New York-based Link Bank and
Partners Bancorp omitted at
the eleventh hour - or
apparently the thirteenth hour
- language about a Community
Reinvestment Act condition
imposed by the FDIC.
Now the
Fed and its Governors have
been asked Why - and when.
Inner City Press
and Fair Finance Watch have
long exposed redlining - and
in this vein, on May 6 they
filed a Community Reinvestment
Act challenge with the FDIC
and Federal Reserve.
In
October, the FDIC required
from LINKBANK a plan to
improve its lending to African
Americans, which Inner City
Press has published on its
DocumentCloud
here.
But Link kept
spinning, issuing a press
release about these partial
approvals without mentioning
the condition, and concluding
it "remains subject to the
approval of the Board of
Governors of the Federal
Reserve System and other
customary closing conditions.
LINK anticipates closing the
Merger in the fourth quarter
of 2023." We asked, How do
they know?
Well, they
know that the Fed has boiler
plate ready, ready to say it
is concerned with HMDA
disparities without acting on
them, ready to say they
conferred with the FDIC
without acknowledging the
condition the FDIC required.
The "Corrected"
Fed approval emailed to Inner
City Press on November 16 did
not acknowledge the CRA
condition. But the approval
order first posted - and voted
on?- did. We on November 16
filed:
Dear Chair
Powell, Secretary Misback and
others in the FRS:
This is a formal request for
reconsideration under 12 CFR
Part 262.3(k) of the Board's
"corrected" -- dropping
the reference to FDIC's
CRA Condition - Approval of
the above-captioned
applications by LINKBANCORP,
Inc..
The
Board's website currently
says, of this order, that
"Note: The initial version of
this order was incorrect and
inadvertently posted. A
corrected version was posted
on November 15,
2023."
Meanwhile,
Deputy Associate Secretary
Fennell's letter to me dated
November 16 states that "today
the Board of Governors of the
Federal Reserve System has
approved the proposal." If the
approval was "today" /
November 16, how was it
corrected on November 15? The
copy emailed to us on November
16 is entitled "Corrected."
It's
worse, much worse. The
original (real? approved?)
version of the order
stated "The FDIC’s
approval of the merger of Bank
with the Bank of Delmarva and
Virginia Partners Bank
includes a condition requiring
the resultant institution to
develop an action plan,
including a marketing plan and
additional outreach, to be
submitted to the FDIC for
approval, for monitoring and
improving the extent of home
mortgage applications from,
and originations to, African
American applicants in the
resultant institution’s
assessment areas. This
condition will help ensure
that the resultant institution
continues to help in meeting
the credit needs of the
African American population in
the resultant institution’s
assessment areas."
It is true
that the FDIC imposed a CRA
condition, after receiving
comments from Fair Finance
Watch / Inner City Press. The
FDIC sent the order with
condition to us and we posted
it online.
So
why - and when - did the
Federal Reserve, which claims
to have conferred with the
FDIC as primary supervisor,
abruptly take out of its
already-posted approval order
the language about the CRA
condition? Was it after the
Board's approval? Who decided
that the CRA condition
language should be removed?
Why? To make it
unenforceable?
The
"corrected" approval order,
with the CRA language removed,
is said to be: "Voting
for this action: Chair Powell,
Vice Chair Jefferson, Vice
Chair for Supervision Barr,
Governors Bowman, Waller,
Cook, and Kugler." When did
each vote? Were they made
aware of, and is each Governor
responsible for, the removal
of the CRA condition
language?
These are
clearly facts that we could
not present during the
official comment period, or
even prior to approval (or at
least,
"correction").
And they militate for
reconsideration, for airing to
each Governor and an
explanation, given the
Governors' claims and
statements about their
commitment to CRA.
On November
21 past 5 pm, a Federal
Reserve staff attorney left
Inner City Press a voicemail
reading a script that the Fed
General Counsel - without
showing even this to the Board
members - determined there was
nothing new in the request.
But Inner City Press didn't
know about the removal of the
condition language until after
the Fed said it approved it -
it could NOT have been shown
before. UNreal. And the
new(ish) Governnors? What do
they think or do?
Fair Finance
Watch has been reviewing
LinkBank including its 2021
HMDA data not taken into
account in any CRA exam and
finds it troubling.
In
Pennsylvania in 2021, Link
Bank made 49 HMDA-reported
loans to whites - and only TWO
to African Americans, worse
that its peers. When one
expands the review to include
loans beyond Pennsylvania,
Link Bank's loans in 2021 to
whites increase to 53, but to
African Americans remains the
same insufficient
TWO.
Linkbank has grown more
disparate since - but first,
the issue of the Federal
Reserve removing its own
language about the FDIC's CRA
condition must be addressed on
this request for
reconsideration, and the
approval stayed.
Watch this site.
***
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