| As Coastal
Bend Bancshares Tries to
Expand in Texas Disparate
Loans More Secret Filings so
FOIA
by
Matthew Russell Lee, Patreon Book
Substack FEDERAL COURT, July 7 – Coastal Bend Bancshares proposes to expand in Texas by buying First National Bank in Port Lavaca. Fair
Finance Watch, after the
Federal Reserve refused to act
to ensure public access to
Home Mortgage Disclosure Act
data, has commented to
the Fed on the 2024 and now
2025 HMDA data. On June 2, the
Fed asked Coastal Bend some
questions - but withheld two
of them. While less redacted
than on Enova, it is still
problematic. This while
Coastal Bend CEO W. Wes.
Hoskins wrote in that he takes
no position on Inner City
Press "purported Freedom of
Information Act ('FOIA')
request." Purported? On July 7
notice of appearance was
belatedly filed for the Fed in
SDNY - but still no answer. While in 2024
First National Bank of Port
Lavaca made 35 loans to whites
- and NONE to African
Americans. It grew even more
extreme in 2025: FORTY THREE
loans to whites, and again
none to African
Americans.
As to the July 7 submission by
Coastal Bend: the applicant
has now resubmitted, "on a
non-confidential basis," its
responses to Questions 3 and 4
— the very responses it
improperly filed
confidentially on June 12,
2026, and which FFW
challenged. This
comment must be considered by
the Board on this basis alone
- Coastal Bend gamed the
system. That belated
disclosure vindicates FFW's
position that these materials
never qualified for
confidential treatment. What
they reveal also explains why
the applicant preferred to try
to keep them from the
public. The
applicant's now-public
response to Question 3
confirms that consummation of
this merger will result in
concrete reductions in banking
access and increases in cost
for the customers of First
National Bank in Port Lavaca —
a community bank whose
branches in Port Lavaca,
Seadrift, Port O'Connor, and
Victoria serve rural Calhoun
County and surrounding areas.
It appears: The minimum
balance requirement for NOW
accounts will increase 50%,
from $1,000 to $1,500;
The minimum balance
requirement for Money Market
accounts will increase 150%,
from $1,000 to $2,500;
Education IRAs will be
eliminated; The Club
account with insurance
services will be closed to new
customers; Official
checks, money orders, and wire
transfers 'may be
discontinued' for individuals
who do not maintain a deposit
account — cutting off unbanked
and underbanked residents of
rural Calhoun County from
basic payment services they
currently obtain at FNB's
branches; Trust
services, which FNB offers and
First Community Bank does not,
may be discontinued entirely:
the applicant 'reserves the
right to discontinue trust
services if it is unable to do
so on a viable
basis.' Increased minimum
balances fall hardest on low-
and moderate-income
depositors, who are most
likely to be pushed below
thresholds and into fees or
out of the banking system. The
potential elimination of
official checks, money orders,
and wire transfers for
non-customers is particularly
consequential in a non-MSA
rural county where
alternatives are scarce and
where such services are
disproportionately relied upon
by lower-income residents.
These are precisely the
convenience-and-needs harms
that the Bank Holding Company
Act, 12 U.S.C. § 1842(c)(2),
requires the Board to weigh —
and they were disclosed only
after FFW's challenge, weeks
into the comment
process.
Coastal Bend now argues —
citing the Board's April 21,
2026 Updated Statement of
Supervisory Operating
Principles — that "the Federal
Reserve may be able to satisfy
the applicable statutory
criterion regarding community
credit needs by reference to
the existing CRA ratings" of
the two banks, without further
analysis. The Board should
decline this invitation to
abdicate its statutory
duty. The
convenience and needs analysis
under section 3(c)(2) of the
BHC Act is an independent
statutory obligation of the
Board in acting on this
application. It is not
satisfied by the existence of
backward-looking CRA ratings —
particularly "Satisfactory"
ratings, which are assigned to
well over 90% of examined
institutions and are therefore
of limited analytical value in
distinguishing among
applicants. Nor can prior
ratings answer the question
actually before the Board: not
how each bank performed
separately in the past, but
what this combination will do
to the communities served
going forward. The applicant's
own Question 3 response
answers that question — higher
minimums, discontinued
products, and reduced services
for non-customers. A
supervisory statement about
examination resource
allocation cannot amend the
BHC Act, and the applicant's
attempt to convert it into a
substantive safe harbor from
convenience-and-needs scrutiny
should be rejected on the
record of this
application.
FNB
customers currently rely on
its trust services; First
Community Bank offers none.
The applicant states only that
it is "evaluating"
continuation, possibly through
outsourcing, and reserves the
right to discontinue. If the
Board approves this
application — which FFW
opposes on this record — it
should at minimum condition
approval on a binding
commitment regarding
continuity of trust services
for existing FNB trust
customers, and require the
applicant to state on the
record, before the comment
period closes, what its
determination is. A merger
application is not the place
for material terms to be left
as reservations of
rights. The
applicant's July 7, 2026
submission continues to
withhold Confidential Exhibit
B in full, under a boilerplate
confidentiality request
indistinguishable from the one
it has just been forced to
abandon as to Questions 3 and
4. Inner City Press late
yesrterday filed a FOIA
request with the Board seeking
Confidential Exhibit B and
related materials. FFW
requests that the Board: (a)
independently review the
applicant's remaining
confidential designations now,
in light of the applicant's
demonstrated practice of
over-designation, rather than
await the FOIA process; (b)
place the released materials
in the public record of this
application; and (c) extend
the comment period to permit
comment on whatever is
released. The June 12/July 7
sequence shows that material
consumer-impact information
was kept from FFW for weeks of
the comment period; the remedy
for that is
time.
On the current record —
disclosed consumer harms, an
unresolved trust services
question, and an applicant
urging the Board to
rubber-stamp its own prior
ratings rather than analyze
this transaction — the
application should not be
approved. Watch this site.
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Friday, July 10, 2026
As Coastal Bend Bancshares Tries to Expand in Texas Disparate Loans More Secret Filings so FOIA
