FirstSun Bid for First Foundation After Failure of Last Merger Leads to CRA Challenge to Fed

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX/Federal Court, Dec 5  – A proposed acquisition by FirstSun, whose merger bid failed, of First Foundation has given risen to a challenge under the Community Reinvestment Act.

  On December 5 Fair Finance Watch, reviewing Home Mortgage Disclosure Act data of 2022 and 2024, filed a CRA challenge to the merger with the Federal Reserve Board:

 This is opposition the Applications of FirstSun Capital Bancorp, Denver, CO (& Dallas TX) to merge with First Foundation, Inc., Irving, Texas, and thereby indirectly acquire First Foundation Bank. 

   FirstSun's flagship Sunflower Bank, in Texas in 2024, made 401 mortgage loans to whites, and only 46 to African Americans. Meanwhile it denied 12 applications from African Americans, and only 36 from whites.   

 This is disparate, and more disparate both than the aggregate in Texas.   

   Nationwide in 2022, Sunflower Bank made 2248 mortgage loans to whites, and only 104 to African Americans. Meanwhile it denied 24 applications from African Americans, and only 162 from whites.  

    FirstSun's record has grown even worse than in 2022, which Fair Finance Watch analyzed in commenting against FirstSun's ill-fated Home Street proposal. Now,  First Foundation is not only "unloved" - it has had massive CRE and other problems.   

  For the record, on managerial resources and otherwise, note that this proposal involved a complex restructuring, including a $3.4 billion downsizing plan, which is said to carry not only community harm but also execution risk. The price paid for First Foundation has also raised concerns among some analysts.  As with Fifth Third / Comerica, there has been a legal inquiry launched by a class action firm regarding the merger with First Foundation.

 FFW notes in the FDIC's pending proposal RIN 3064-AG10: "the FDIC has received a limited number of public comments in response to subpart C applications.... Therefore, the FDIC is proposing to eliminate the public notice and related public comment period from subpart C and to make conforming changes to subpart A of 12 CFR part 303 of the FDIC Rules."  

See, e.g., Sept 10, 2025: https://www.americanbanker.com/opinion/the-fdic-is-undercutting-a-key-element-of-the-cra  

 But now the Federal regulator(s) blithely propose(s) to eliminate public notice and public comment on banks' proposals to expand.  The above-quoted reasoning is that few comments are filed. So, that is now changing.

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