by Matthew Russell Lee, Patreon Book Substack
SOUTH BRONX / SDNY COURT, Sept 18 – The Community Reinvestment Act directs bank regulators to consider banks' records of lending in poor neighborhoods when they apply to expand with mergers or, right in the statute, branches ("deposit facilities").
But now the Federal Deposit Insurance Corporation is quietly moving to eliminate public notice of, and public comment on, banks' branch applications. While Inner City Press has Freedom of Information Act requests pending, Fair Finance Watch commented twice to the FDIC, on the proposed change, and published an op-ed about it in the American Banker, here.
Truist Bank, successor to Suntrust and BB&T, also wrote in to the FDIC - to applaud the violation of the CRA and urge the FDIC to go further. Explanation: this comes as Truist CEO Bill Rogers brags of "building 100 new insights-driven branches, renovating more than 300 branches in high-opportunity markets, enhancing digital capabilities and hiring additional Premier advisors to serve clients with more complex financial needs." We'll have more on this.
Filed:
On behalf of Fair Finance Watch and in my personal capacity this is a timely comment opposing - including as illegal - the FDIC's proposals in RIN 3064-AG10.
The Community Reinvestment Act specifies that "the appropriate Federal financial supervisory agency shall (1) assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution; and (2) take such record into account in its evaluation of an application for a deposit facility by such institution." That is, the only enforcement mechanism of CRA is its consideration on applications for deposit facilities: branches.
But now the FDIC blithely proposes to eliminate public notice and public comment on branch applications. This is blatantly against the CRA. Ironically, the FDIC's reasoning is that few comments are filed. So, that must change.
And is: consider, among currently pending branch applications, these:
the pending application by Harmony Bank to expand with a deposit facility at "Suite 400 MIDLOTHIAN, TX" - no street address is given [!] FFW has reviewed the 2024 HMDA data - not in any CRA evaluation - of Harmony Bank. In Texas in 2024 it made 27 mortgage loans to whites and NONE to African Americans. * * *
Gulf Coast Bank and Trust Company for a branch at 25910 Canal Road ORANGE BEACH, AL. The application is listed as somehow received on September 1 with a comment period running through September 19. FFW has reviewed the 2024 HMDA data - not in any CRA evaluation - of Gulf Coast Bank and Trust Company. In Louisiana in 2024 it made 726 mortgage loans to whites and denied only 107 applications, 1 to 7. For African Americans, 220 loans and fully 54 denials: approximately 1 to 4. Worse in Alabama in 2024 Gulf Coast Bank and Trust Company made loans only to whites, none to African Americans. * * *
the pending application by TexasBank to expand with a deposit facility at 300 West Seventh Street, FORT WORTH, TX. The application is listed as filed on August 21 with a comment period running only through September 15. FFW has reviewed the 2024 HMDA data - not in any CRA evaluation - of TexasBank. In Texas in 2024 it made 1158 mortgage loans to whites and only FIVE to African Americans.
There are more.
Then: in the two weeks since FFW commented on the nine branch applications, with 2024 HMDA data analysis, only one of the FDIC banks has responded. The blame for the state of affairs that the FDIC presents in its RIN lies not with the public, but elsewhere. On the one bank that has at least responded, Somerset Trust Company, we have replied by email that "in Virginia in 2024, Somerset Trust Company made HDMA loans to whites - and NONE to African Americans. The same was true in 2024 in Maryland, where even the CRA PE puts SMT as "low satisfactory" in all three tests. In Virginia, Somerset Trust Company got Needs to Improve under two of the three tests, and Needs to Improve Overall."
This proposal to eliminate public notice and comment on branch applications must be withdrawn
Watch this site.
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