By Matthew R. Lee
NEW YORK, March 14 – Amid proposals in Washington even for a re-instituted modified Glass Steagall Act (Inner City Press is following the proposals of Tom Hoenig, even reported overseas), acquisitive bankers and their hangers-on around the United States are getting sassy.
As an example of acquisitive sass, Arkansas-based Simmons National's CEO George Makris in a January conference call was dismissive of the abuses raised by Fair Finance Watch to the Federal Reserve in opposition to his bank's application to acquire Hardeman Investments. Simmons has announced yet another proposed acquisition, of Southwest Bancorp in Texas.
Well, now the Federal Reserve has asked Makris' Simmons questions including this on the Community Reinvestment Act issues Fair Finance Watch has raised: "“This letter concerns the application dated November 23, 2016, by Simmons First National Corporation, Pine Bluff, Arkansas, to merge with Hardeman County Investment Company, Inc., and thereby indirectly acquire its subsidiary, First South Bank, both of Jackson, Tennessee, pursuant to section 3 of the Bank Holding Company Act of 1956, as amended. Upon review of the information in the record, staff of the Board of Governors of the Federal Reserve System (“Board”) requests the following additional information. Supporting documentation should be provided as appropriate.
1. Describe in depth the Community Reinvestment Act (“CRA”) related initiatives of Simmons Bank, Pine Bluff, Arkansas, in both the Little Rock, Arkansas, metropolitan statistical area (“MSA”), and the Memphis, Tennessee-Mississippi-Arkansas, MSA, since the bank’s 2013 CRA performance evaluation, performed by the Office of the Comptroller of the Currency. Your response should describe the specific CRA-related initiatives that Simmons Bank has undertook in these MSAs since its 2013 evaluation, as well as its CRA-related plans in both MSAs after consummation of the proposal. Please address your responses within eight business days...”
1. Describe in depth the Community Reinvestment Act (“CRA”) related initiatives of Simmons Bank, Pine Bluff, Arkansas, in both the Little Rock, Arkansas, metropolitan statistical area (“MSA”), and the Memphis, Tennessee-Mississippi-Arkansas, MSA, since the bank’s 2013 CRA performance evaluation, performed by the Office of the Comptroller of the Currency. Your response should describe the specific CRA-related initiatives that Simmons Bank has undertook in these MSAs since its 2013 evaluation, as well as its CRA-related plans in both MSAs after consummation of the proposal. Please address your responses within eight business days...”
This follows a February letter, here, from the Federal Reserve to Simmons, posing questions about the issues FFW has raised, such as these:
"This is a timely first comment by Fair Finance Watch opposing the Application by Simmons First National Corporation to acquire Hardeman County Investment Company Inc., and thereby indirectly acquire First South Bank.
Simmons First has a presumptive not-credible Home Mortgage Disclosure Act reporting record, which may in turn violate Equal Credit Opportunity Act rights. Now that it reports some denials, they are disparate.
In essence, the HMDA data still reflect that Simmons First “cooks the books” to not issue or acknowledge denials. For conventional home purchase loans in the Little Rock MSA in 2015, Simmons First reported 394 applications from whites, with fully 329 originations and 12 denials, a 3% denial rate. For African Americans, Simmons First's denial rate was 19% -- more than six times higher than for whites.
In the Memphis MSA for conventional home purchase loans in 2015, Simmons First's denial rate for African Americans was 100%, while it was only 4% for whites - an incalculable disparity.
Simmons First “plans to reduce Hardeman's annual noninterest expenses by $5.3 million.” How?
This acquisition application should be denied."
Simmons First has a presumptive not-credible Home Mortgage Disclosure Act reporting record, which may in turn violate Equal Credit Opportunity Act rights. Now that it reports some denials, they are disparate.
In essence, the HMDA data still reflect that Simmons First “cooks the books” to not issue or acknowledge denials. For conventional home purchase loans in the Little Rock MSA in 2015, Simmons First reported 394 applications from whites, with fully 329 originations and 12 denials, a 3% denial rate. For African Americans, Simmons First's denial rate was 19% -- more than six times higher than for whites.
In the Memphis MSA for conventional home purchase loans in 2015, Simmons First's denial rate for African Americans was 100%, while it was only 4% for whites - an incalculable disparity.
Simmons First “plans to reduce Hardeman's annual noninterest expenses by $5.3 million.” How?
This acquisition application should be denied."
Back on January 22, recently challenged BNC Bancorp announced it wants to be acquired by Pinnacle Financial.
But BNC has a weak record, as shown by Fair Finance Watch, and has made compliance commitments it has withheld and, it seems, has yet to implement.
As reported by Inner City Press in October, the 2015 Home Mortgage Disclosure Act data show that BNC's conventional home purchase lending to African Americans in the Charleston MSA has falling by over 80% from 2014 to 2015.
And in the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites.
In 2015, things got substantially worse. For conventional home purchase loans in the Charleston MSA in 2015, while BNC made 45 such loans to whites, it made only ONE to an African American (down from six in 2014).
So this will be challenged.
In the recent past the Winston-Salem Journal reported: "regulatory approval was delayed in part by two New York advocate groups challenging BNC's lending practices involving minority and underserved applicants in its markets. Inner City Press and affiliate Fair Finance Watch filed a protest with the Federal Reserve under the federal Community Reinvestment Act. It is a normal practice of those groups to challenge minority-lending practices when a significant bank purchase is announced. Fed officials asked for additional information Dec. 2. BNC responded and asked that its minority-lending data remain confidential. Rick Callicutt, the bank's chief executive and president, said in April that because BNC has surpassed $5 billion in total assets, it faces "a higher level of expectation to market more heavily to the underserved in its markets."
We'll have more on this.
