By Matthew Russell Lee, Patreon
SOUTH BRONX, July 22 – 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 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."
On July 19, Link admitted it has misspoken to the FDIC and tried to amend it: "Dear Ms. Goñi: On behalf of LINKBANK, Camp Hill, Pennsylvania, a Pennsylvania chartered commercial bank, we would like to revise LINKBANK’s responses to comments received ... as follows: Subsidiaries and Affiliates 1. Describe ownership details for the two subsidiaries partially owned by the Virginia Partners Bank (Johnson Mortgage Company) and the Bank of Delmarva (FBW LLC) and what will happen to these subsidiaries and all the other subsidiaries of each bank as part of the merger transactions. LINKBANK would like to retract the following statement made in LINKBANK’s response to comment 1, “The parties expect to dissolve all of the subsidiaries of TBOD and VPB at or following consummation of the closing of the Transaction with the exception of Johnson Mortgage and 410 William Street, LLC.” LINKBANK will acquire all of the current subsidiaries of TBOD and VPB in the Bank Mergers and none of these subsidiaries will be dissolved at or prior to the consummation of the transaction. Prior to dissolving any subsidiaries post-closing, LINKBANK will conduct an analysis pursuant to 12 U.S.C. 1828(c)(1)(A) and contact FDIC staff to confirm whether any notice or application is necessary."
If the regulators at the Fed and FDIC mean what they claim, this application should be denied. Watch this site.
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