By Matthew Russell Lee, Patreon Maxwell Book
SOUTH BRONX, Aug 8– Regional banks are being downgraded, by Moody's and others; the US bank regulators are encouraging mergers. But will they uphold the Community Reinvestment Act as they have, of late, not been? See below.
ecf Moody's cut ratings of 10 banks on Monday. Here's the list of banks downgraded: Commerce Bancshares BOK Financial Corporation M&T Bank Corporation Old National Bancorp Prosperity Bancshares Amarillo National Bancorp Webster Financial Corporation Fulton Financial Corporation Pinnacle Financial Partners Associated Banc-Corp
Moody's also said it placed six large banks under review for possible downgrades. They are: Bank of New York Mellon Corporation Northern Trust Corporation State Street Corporation Cullen/Frost Bankers Truist Financial Corporation U.S. Bancorp
Moody's also said it shifted the outlook of 11 banks from stable to negative. They are: PNC Financial Services Group Capital One Financial Corporation Citizens Financial Group Fifth Third Bancorp Huntington Bancshares Regions Financial Corporation Cadence Bank F.N.B. Corporation Simmons First National Corporation Ally Financial Bank OZK
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 reconsidering. This should not be countenanced - rather than conditional approval, denial is called for.
If the regulators at the Fed and FDIC mean what they claim, this application should be denied. Watch this site.
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