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As Garland Talks Trustmark Citizens Bank Thumbs Nose At CRA On Investors Bank Test

By Matthew Russell Lee, Patreon Story Order
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Oct 22 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And not the proposed acquisition of Investors Bank by Citizens Bank will be a litmus test, one that both Citizens and the regulators are failing.

 DOJ claims to be enforcing, with Merrick B. Garland on October 2 intoning, "settlement with Trustmark National Bank. The agreement resolves allegations that Trustmark engaged in lending discrimination by redlining predominantly Black and Hispanic neighborhoods in Memphis, Tennessee. We commend Trustmark for its cooperation in swiftly resolving this matter. Through this settlement, Trustmark has shown an interest in remedying past practices and in promoting equal access to credit." But what about larger banks like Citizens and Investors Bank it wants, through a white shoe law firm?

   Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here. This was raised on Citizens' applications: "be aware that based on Fair Finance Watch's comments to the FDIC about Investors, it recently imposed a condition on Investors. Investors has yet to meaningfully implement the required improvements; this application should not be approved, much less at this time.    The FDIC wrote:

 "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019... The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas. The Action Plan  should include, at a minimum, the following: a. The Bank will regularly monitor application and origination activity of home  mortgage loans in majority-minority census tracts and from Blacks throughout the  Bank’s assessment areas.  b. The Bank will ensure marketing and outreach efforts are inclusive of all communities,  including minority communities within all the Bank’s assessment areas. The  marketing and outreach efforts should focus on home mortgage product awareness.  Marketing activities should use materials and media that reflect the racial and ethnic  composition of the targeted communities. The Bank should also have specific  advertising and outreach goals, and the results of these efforts should be documented,  monitored, and evaluated for effectiveness.  5. Upon Board approval of this Order, the Bank will provide a copy of the signed Order to  the FDIC's New York Regional Office within 30 days.  6. Upon Board approval of such Action Plan, the Bank will provide a copy of the Plan  to the FDIC’s New York Regional Office. 7. The Bank will provide the FDIC’s New York Regional Office with quarterly  updates detailing its progress in meeting the goals listed in the Action Plan."

  But in response to this, Citizens only said dismissively that the record of the acquiree doesn't matter. So they could buy OneCoin? It is major law firm making this argument. It is an embarrassment. And the Federal Reserve's question letter of October 22 (on Patreon here) does not address it, and Citizens' law firm late provide its "answer" and two responses to the Fed.

This application should be denied.  

 Citizens in 2020 in New York State based on its disparate marketing made 7183 mortgage loans to whites, with 3116 denials to whites -- while making only 323 loans to African Americans, with more than that in denials: 336.  

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