| Adirondack Arrow Proposed
Bank Merger Opposed by Fair
Finance Watch on Redlining
by
Matthew Russell Lee, Patreon Book
Substack
FEDERAL
COURT,
April 24 – How
automatic do banks now think
merger approvals are? Amid
Iran impacts on the economy,
still some proposed mergers
are being moved forward on.
This week Inner
City Press filed against one:
On behalf of Fair
Finance Watch, this is
opposition to the application
of Arrow Bank and Adirondack
Bank to
merge.
Saratoga
National Bank & Trust in
2024 made 321 mortgage loans
to whites, and only 10 to
African Americans, while
denying four application from
African Americans.
Neither
Arrow Bank nor Glenn Falls
National appear to have
reported HMDA data for
2024.
For the record:
"A federal judge
approved a $850,000 settlement
in a class-action lawsuit
brought by shareholders of
Arrow Financial Corp. in Glens
Falls after previously
undisclosed accounting
problems revealed by bank
leaders led to a sell-off of
Arrow shares and the
resignation of its CEO in
early 2023. U.S. District
Court Judge Anne Nardacci
approved the cash settlement
on Feb. 13, although the
agreement had been agreed to
in principle in August.
Arrow Financial was the parent
company for two separate
banks, Glens Falls National
Bank and Trust Co. and
Saratoga National Bank and
Trust Co. Those two were
recently merged into one
entity called Arrow Bank. It
was not until March 31, 2023,
that Arrow disclosed its
problems with filing its 2022
financial results with the SEC
were part of a larger issue
with its conversion to a new,
more modern bank operating and
accounting system in 2022. The
implementation of the new
system presented challenges
from the beginning, according
to former employees
interviewed by the plaintiffs'
attorneys. They said the bank
went live too quickly with the
new system, leading to major
headaches for some employees
who were spending 15-hour days
at the bank trying to fix
problems with the system,
according to the shareholder
lawsuit... Arrow told
employees that the core
conversation was the most
significant undertaking the
bank had ever gone through,”
the lawsuit states.
“Notwithstanding, (one
confidential witness) stated
that Arrow rushed the core
conversion process leading to
myriad problems with the
bank’s essential reporting
functions.” “A lot went wrong”
during the conversion,” the
employee was quoted as saying.
“I don’t even know where to
start.” The problems were not
just difficult for employees
to handle. Things began to go
wrong with customer accounts
as well. “One of the first
problems (one former employee)
noticed was that after the
core conversion, debit card
fraud reports were not
populating correctly,” the
lawsuit states.
Additionally,
customers weren’t getting
their money when they were
supposed to. 'We were getting
massive complaints from
customers [that] fraudulent
charges on accounts weren’t
recovered, etc.,” the person
recounted. “I’m like, this is
people’s
money.'"
Given
this, a public hearing on this
proposed merger is required.
Despite the OCC's stated
solicitude for "community"
banks, this is one with a
recent record of fraud, and
disparate HMDA
data. Also
for the record, Adirondack
Bank in 2024 made 201 mortgage
loans to whites and only TWO
to African Americans, while
denying two (versus at less
than 25% denial rate for
whites).
The 2025
HMDA-LAR, there are issues,
but since the OCC has never
considered it, for the
record: The
low-income borrower denial
rate of 58.8% is the standout
number — more than half of
low-income applicants are
denied. The moderate-income
denial rate of 22.4% is also
well above middle-income
(10.5%). The LMI combined
denial rate of 31.8% versus
15.3% for non-LMI is a
textbook disparity.
Also, borrowers aged 55–64 had
the highest denial rate at
27.8% — a potential ECOA age
discrimination concern.
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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