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By Matthew Russell Lee, Patreon Maxwell book

SOUTH BRONX NY, Feb 10 – When the US Department of Justice sued and immediately settled with Lakeland Bank for fair lending violations, it announced a proposed merger with Provident Bank.

As if to sweep it under the carpet.

And when Fair Finance Watch looked into it, it found that the DOJ settlement did not address in any way the banks' disparities in New York. So on December 1, the FDIC's comment deadline, it filed the below, with Inner City Press on the FOIA.

We refer to the application filed by Provident Financial Services, Inc. (“Provident”), Jersey City, New Jersey, for prior approval of the Board of Governors of the Federal Reserve System (the “Board”), pursuant to Section 3(a)(3) and 3(a)(5) of the Bank Holding Company Act of 1956, as amended, and Section 225.15 of Regulation Y, to acquire Lakeland Bancorp, Inc. (“Lakeland”), Oak Ridge, New Jersey, and thereby indirectly acquire Lakeland Bank, Newfoundland, New Jersey (“Transaction”). Based on our review of the current record, the following additional information is requested. Please provide responses to all the following items, including those in the Confidential Annex. Supporting documentation should be provided, as appropriate. Convenience & Needs/Community Reinvestment Act (“Act”) 1. Provident’s response to Question 1 of the November 30 Request for Additional Information (“November 30 AI Request”) indicates that “[t]he combined company will deliver an expanded set of products and services to its customers and communities.” Describe those products and services to be offered by the combined organization that Provident deems most beneficial to customers in low- or moderate-income (“LMI”) geographies or income levels. 2. Indicate whether any consumer products or community development programs and services of either bank are expected to be discontinued as a result of the proposed transaction, and whether any products, programs or services that are not currently offered will be made available in the combined organization’s markets. 3. The application states “Provident and Lakeland will determine through the integration planning process how the Combined Bank will continue the successful processes, policies, procedures and technology platforms of Provident and Lakeland to maintain a strong, comprehensive and sustainable CRA program.” Provide an update on these efforts. Mark J. Menting, Esq. February 8, 2023 2 NONCONFIDENTIAL // EXTERNAL Compliance Program 4. In the response to Question 6(a) of the November 30 AI Request, Provident stated that it anticipated that its existing compliance risk management program would “either be the successor policies and procedures for the combined organization, or that they may serve as a solid foundation for revised policies and procedures going forward.” If available, provide an update on the expected compliance risk management program at the combined organization. 5. Describe in greater detail Provident Bank’s current fair lending program and risk management controls with respect to fair lending and discuss the rationale behind the decision for the combined organization to adopt the overall framework and structure of Lakeland Bank’s fair lending compliance program. To the extent not previously addressed, include in your discussion any areas of Lakeland Bank’s existing fair lending program the combined organization intends to enhance, as well as all efforts to ensure that the policies and procedures adopted by the combined organization will be adequate for the combined organization to provide equal access to credit to majority-minority communities in its assessment area (“AA”). Branching 6. For Provident Bank, Lakeland Bank, and the combined organization, provide the number and percentage of total branches that are or will be located in LMI and/or majorityminority census tracts. 7. To the extent not previously addressed, describe the process by which Provident Bank currently determines whether and where to open or close a branch. Include in your discussion any fair lending considerations the bank takes into account in making such determinations. Indicate whether the existing policies and procedures of Provident Bank or Lakeland Bank will be implemented at the combined organization. Staffing 8. Discuss whether any existing staff of Provident Bank or Lakeland Bank are under consideration to be the combined organization’s Chief Compliance Officer or Fair Banking Officer. If so, identify those individuals and provide an update regarding the timing and content of the selection process, if available. 9. Confirm, if such is the case, that Lakeland Bank’s current Community Development Officer will continue in that role at the combined organization. If not, indicate who will assume that position at the combined organization, if known. Mark J. Menting, Esq. February 8, 2023 3 NONCONFIDENTIAL // EXTERNAL 10. Provide an update to the organizational chart provided in response to question 6(b) of the November 30 AI Request reflecting all compliance-related positions at the combined organization. For those positions where an individual has been identified to fill the role, indicate that individual’s name in the organizational chart. Department of Justice (“DOJ”) Consent Order 11. Under Section C of the Consent Order, Lakeland Bank is required to take certain steps with respect to fair lending training. Indicate whether the combined organization intends to continue to adhere to those training requirements following the proposed acquisition. If so, indicate whether they will apply to all employees of the combined organization or only those employees retained from Lakeland Bank. 12. Provide an update on the timing of the opening of the full-service branch in Newark, New Jersey, as described in Paragraph 19 of the Consent Order. In addition, provide an update on the plans of Lakeland Bank or the combined organization to open a second branch, if available.

Tellingly, the banks' response on CRA to not only the lending disparities but even the rare DOJ discrimination settlements has been to attack the comments. Provident Bank's Deputy General Counsel Bennett MacDougall writes that Inner City Press / Fair Finance Watch (the Commenter)

"notes three points: (1) Lakeland Bank recently entered into a consent order with the U.S. Department of Justice (the “DOJ”) to resolve certain fair lending-related allegations (the “DOJ Consent Order”); (2) Lakeland allegedly engages in “disparate marketing” in New York; and (3) in 2021, Lakeland made 27 mortgage loans to white borrowers in New York and no mortgage loans to African American borrowers in New York. None of these three points, however, can be considered substantive: 1. It is true that Lakeland Bank entered into the DOJ Consent Order on September 27, 2022. By its terms, however, the DOJ Consent Order has no bearing on Lakeland’s activities in New York. Both the claims made in the DOJ complaint resolved by the DOJ Consent Order (the “DOJ Complaint”) and the actions required of Lakeland Bank under the DOJ Consent Order were expressly limited to five counties in New Jersey. The DOJ Complaint and the DOJ Consent Order only mention New York in passing, noting that Lakeland Bank has a single branch in the state. It is also important to note that the DOJ Complaint and the DOJ Consent Order represent the culmination of a DOJ investigation into Lakeland Bank—and that the investigation resulted in no claims being made against Lakeland Bank related to any unlawful practices in New York.4 The DOJ Consent Order is irrelevant to 3 The Comment Letter also requests “an extension of the comment period” and “evidentiary hearings” without providing any reason or justification whatsoever for either. 4 To the extent that the Commenter seeks to argue that the DOJ Consent Order should have addressed Lakeland Bank’s mortgage lending activities in New York, we submit that an implied Eileen K. Banko Federal Reserve Bank of New York -4- the Commenter’s stated concern regarding Lakeland’s mortgage lending activities in New York. This allegation relating to the DOJ Consent Order therefore does not “relate to a statutory factor” or matters that “otherwise warrant action by the Board.” 2. The Commenter states that Lakeland engages in “disparate marketing” in New York. The Commenter, however, provides nothing to substantiate this statement, other than this conclusory allegation. This allegation relating to a purported violation of law by Lakeland is therefore “without any supporting evidence” and does not “otherwise warrant action by the Board.” 3. The Commenter notes that, as reported in Lakeland Bank’s reported Home Mortgage Disclosure Act (“HMDA”) data for 2021, the bank made 27 mortgage loans in New York to white borrowers and concludes, based on the selective information, that Lakeland Bank made no mortgage loans to African American borrowers in New York in 2021. However, the Commenter fails to note that the HMDA data reflects that Lakeland originated a total of 46 mortgage loans in New York in 2021. The 19 loans the Commenter failed to mention were to borrowers whose race was reported as Asian or Joint or whose race was not available in the HMDA data, and therefore cannot be known. The suggestion in the Comment Letter that Lakeland originates mortgages in New York only to white borrowers is wrong and the Commenter fails to provide important and readily available facts.5 This allegation relating to a purported violation of law by Lakeland is therefore “without any supporting evidence” and does not “otherwise warrant action by the Board.” The Commenter’s apparent concerns with Provident’s mortgage lending activities in New York are similarly baseless. The principal support that the Commenter provides for this concern is that, in 2021, Provident made 20 mortgage loans to white borrowers in New York and none to African Americans. As with Lakeland, the claim that another agency, in this case the DOJ, did not act responsibly does not constitute a “substantive” protest. Furthermore, the Commenter provides no facts that could plausibly support a conclusion that, notwithstanding the results of the DOJ’s investigation, which the Commenter was not privy to, the DOJ Consent Order should have had a broader scope. 5 The Commenter also does not mention that New York is only a minimal geography for Lakeland’s mortgage lending activities. Lakeland’s 46 mortgage loans originated in the state in 2021 represent less than 3% of all mortgage loans originated by the bank in 2021. Eileen K. Banko Federal Reserve Bank of New York -5- Commenter’s suggestion that Provident only originates mortgages to white borrowers omits crucial facts: the Commenter does not mention that, in addition to these 20 mortgage loans, Provident originated 11 others in New York in 2021 for which the borrower’s race is not available in the HMDA data.6 The Commenter’s allegation relating to a purported violation of law by Provident is therefore “without any supporting evidence” and does not “otherwise warrant action by the Board.” The Commenter also notes that the Transaction is the subject of two lawsuits filed in the U.S. District Court for the Southern District of New York (the “Transaction Litigation”). The Transaction Litigation, which is of a type that frequently accompanies bank (and other) mergers, has no relation whatsoever to the Commenter’s purported concern about fair lending or any other CRA-related issues.7 The Transaction Litigation is entirely irrelevant to Lakeland’s or Provident’s mortgage lending activities..
Instead, the Commenter’s assertions are so clearly “make weight” that the Commenter’s purpose in the Comment Letter is to delay timely processing of the Application and to express general dissatisfaction with the Board’s processing of bank acquisition applications."

Federal Deposit Insurance Corporation Attn: Chairman Martin J. Gruenberg, Frank Hughes 350 Fifth Avenue, Suite 1200 New York, NY 10118-0110  Re: Comment on Applications by Provident Bank to merge with Lakeland Bank 

Dear Chairman Gruenberg, Regional Director Hughes and others at the FDIC:   This is a timely comment on, the Application of Provident Bank to merge with Lakeland Bank which appears on the FDIC website under "Applications In Process Subject to the CRA Report" with an initial comment periods running through December 1. This comment is timely. And as set forth below, the FDIC should extend its comment period, at least until December 15 to coincide with the Federal Reserve comment period on the proposed holding company merger.   

  Lakeland was sued by DOJ and settled, just before this proposed merger was announced. See here "The DOJ said that all of Lakeland’s branches were located in majority-white neighborhoods and that its loan officers did not serve the credit needs of Black and Hispanic neighborhoods...  Lakeland, a community bank, operates 68 branches in northern New Jersey and in New York’s Hudson Valley." 

  Notably, the settlement does not address in any way Lakeland's redlining in New York.

   But consider, for the record: in 2021 in New York based on its disparate marketing Lakeland made 27 mortgage loans to whites -- while making NO loans to African Americans. None. Zero. Zip. This must be addressed.  

And it would not be addressed by Provident, which in New York in 2021 made 20 mortgage loans to whites -- while making NO loans to African Americans. None. Zero. Zip. This merger should be denied.

   Note also that in the U.S. District Court for the Southern District of New York, this proposed merger is already the subject of two lawsuits: 22-cv-9946 and 22-cv-9980. 

Inner City Press is requesting an extension of the public comment period, public / virtual evidentiary hearings and that, on the current record, the applications not be approved      FFW and Inner City Press have been deeply concerned about the rush by the FDIC's to rubber-stamp mergers by redliners, money launderers and predatory lenders. 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.

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