Royal Bank of Canada Conceals Fair Lending and Layoff
Response to Merger Challenge
Byline: Matthew R. Lee of Inner City Press: News
Analysis
UNITED NATIONS, January 24 -- Royal Bank
of Canada is
seeking to conceal information
about not only its merger plans but also its purported fair lending plans, in a
response to the U.S. Federal Reserve Board a heavily redacted copy of which is
now online. At the end of 2007,
Fair Finance Watch challenged RBC's
application to acquire Alabama National BanCorporation,
based on racial disparities in RBC's lending and announcements of deal-related
layoffs before any regulatory approval had been obtained.
RBC denied the charges,
through a spokesperson. Then in a filing with the Federal Reserve which RBC was
required to send to Fair Finance Watch, RBC blacked-out almost
all of its response
on the layoffs and fair lending issues, for those pages click
here.
Whether the Federal Reserve will, as would seem to be required by the Freedom of
Information Act, release the withheld information remains to be seen.
According
to the most recent data Royal Bank of Canada has filed as required by the Home
Mortgage Disclosure Act, RBC in 2006 disproportionately excluded and denied the
applications of African Americans and Latinos. In the Charlotte, North Carolina
Metropolitan Statistical Area (MSA), RBC Centura denied the mortgage refinance
applications of African Americans 4.44 times more frequently than those of
whites. In the Atlanta, Georgia MSA in 2006, for conventional home purchase
loans, RBC Centura denied the applications of Latinos 2.9 times more frequently
than those of whites. Also in the Atlanta MSA in 2006, RBC Centura denied the
home improvement mortgage applications of African Americans 4.2 times more
frequently than those of whites, while also declaring "withdrawn" fully 38% of
home improvement applications from African Americans. Fair Finance Watch has
requested a public hearing on this.
RBC headquarters: what secrets lie
within?
While
demonstrably excluding people of color from its offers of normally-priced, prime
credit, RBC and RBC Centura have continued funding and enabling predatory /
fringe financiers such as high-cost pawnshops. Fair Finance Watch submitted
evidence to the Federal Reserve of RBC loans to E Z
Cash Pawn in Clayton County, Georgia and Pawn
Outlet of Skyland, Inc., of Skyland, North Carolina. Based on that showing, the
Federal Reserve Board on January 11 asked for description of RBC's "business
relationships with any unaffiliated alternative financial services provides."
In response, RBC admitted that it
"maintains relationships with some clients who are alternative service
providers. These clients include check cashing business and pawn shops." The
Federal Reserve also asked, based on the challenge filed by Fair Finance Watch,
about a report of deal-related layoffs, and about RBC's "consumer compliance and
fair lending policies and procedures." In its response, RBC blacks out more than
half the page, including an entire paragraph purportedly about fair lending.
What is RBC so embarrassed about? That remains to be seen.
Fair Finance Watch's filing with the Federal
Reserve concluded, "RBC's
proposals, including for RBTT Financial Group in Trinidad and Tobago in the
Caribbean, should be subject to enhanced regulatory scrutiny and public hearings
and, on the current record, should not be approved." RBC responded that its RBTT
proposal does not need Federal Reserve approval. Fair Finance Watch questions,
but shouldn't it? We'll see.
* * *
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