By Matthew Russell Lee, Patreon
SOUTH BRONX, July 15 – Pennsylvania, Delaware and Virginia are portrayed as diverse and ever progressive places. But their banks, not so much.
Consider for example the proposed merger on the rebound between New York-based Link Bank and Partners Bancorp, which recently broke off its proposed deal with OceanFirst.
Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on May 6 they filed a Community Reinvestment Act challenge with the Federal Reserve:
This is a timely first comment on the Applications of LINKBANCORP, Inc. Camphill, Pennsylvania; to acquire Partners Bancorp, Salisbury, Maryland, and thereby indirectly acquire The Bank of Delmarva, Seaford, Delaware, and Virginia Partners Bank, Fredericksburg, VA "and more."
Since Partners Bancorp's attempt to sell itself to Ocean Bancorp died amid reports of regulator concern, documents in that regard should be provided (and made part of the record on this application), too.
Fair Finance Watch has been reviewing LinkBank including its 2021 HMDA data not taken into account in any CRA exam and finds it troubling.
In Pennsylvania in 2021, Link Bank made 49 HMDA-reported loans to whites - and only TWO to African Americans, worse that its peers. When one expands the review to include loans beyond Pennsylvania, Link Bank's loans in 2021 to whites increase to 53, but to African Americans remains the same insufficient TWO.
Virginia Partners Bank is only slightly better. In 2021 it made 48 HMDA reported loans and only THREE to African Americans. While insufficient, that is still more than Link Bank's TWO. A terrible bank would be acquiring a bad bank, and making it even worse.
After Inner City Press' comments were filed, LINKBANK's outside counsel Luse Gorman PC by Agata S. Troy and Benjamin Azoff rather than addressing the disparities argued that they have no merit, including lying to the Federal Reserve that the FDIC considered them substantive, then urging the FDIC to reconsider.
On June 14, LINKBANK through counsel answered the Federal Reserve's questions including:
"The proposed acquisitions will increase LINKBANK’s size by approximately 150
percent and will increase its presence from one state (Pennsylvania) to five (with the
addition of Delaware, Maryland, New Jersey, and Virginia). Please explain your
plan to ensure continued satisfactory oversight of consumer compliance, CRA, and
fair lending matters, including any changes to staffing and committees.
LINK acknowledges that the increase in scale and geographic scope resulting from the
proposed transaction necessitates confirmation of a compliance management framework
that ensures sufficient oversight of bank activities, particularly with respect to consumer
compliance, CRA and fair lending matters.
LINK’s executive management team has significant experience leading larger community
banking institutions, ranging in asset size from $3 billion to $18 billion. Accordingly, as
LINK has developed and executed its growth strategy, it has placed a high priority on
building the infrastructure, including policies, procedures and systems, as well as the
senior management talent, necessary to support a significantly larger and more complex
organization, including early investments in compliance and related functions. For
example, LINK’s management team includes a legal, compliance and risk management
structure comparable to much larger institutions, including seasoned professionals in the
roles of Chief Risk Officer, General Counsel, Chief Compliance Officer and Senior Risk
Officer, which is robust for an institution the size of LINK. These individuals, together
with LINKBANK’s President, Chief Consumer Banking Officer, Director of Training
and Development, and senior leaders from deposit, lending and branch operations
functions, comprise LINK’s management Compliance Committee" -
who ARE these people?
On July 12, the FRBP asked Link questions, including "5. Discuss whether a compliance committee or any fair lending or CRA-related committees have been established by Applicant or LinkBank. If so, provide the minutes. If not, provide any minutes of the board of either Applicant or LinkBank since the March 22, 2021, Consumer Affairs Report of Examination discussing consumer compliance, fair lending, and/or CRA matters. 6. Provide LinkBank’s most recent consumer compliance risk assessment."
If the regulators at the Fed and FDIC mean what they claim, this application should be denied. Watch this site.
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