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Fed On Community Reinvestment Act While Prepares Rubber Stamp for M&T, Old National

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

FEDERAL COURT / S Bronx, July 20 – 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 the proposed merger of two redlining banks, M&T and People's United, will be a litmus test, see below.

On July 20, the Federal Reserve announced that "it is committed to working together with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) to jointly strengthen and modernize regulations implementing the Community Reinvestment Act (CRA). "We are delighted to work together to develop a joint Notice of Proposed Rulemaking building on the Board's September 2020 Advance Notice of Proposed Rulemaking, which was intended to provide a framework for a joint rulemaking that ensures the CRA remains a strong and effective tool to address inequities in access to credit and meet the needs of low- and moderate-income communities and garners broad support," said Federal Reserve Governor Lael Brainard."

The inter-agency statement: "WASHINGTON -- The Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) are committed to working together to jointly strengthen and modernize regulations implementing the Community Reinvestment Act (CRA).  The agencies have broad authority and responsibility for implementing the CRA. Joint agency action will best achieve a consistent, modernized framework across all banks to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods."

And another litmus test: Old National's proposal to buy First Midwest. On June 28, Fair Finance Watch and Inner City Press on the FOIA) filed this with the Fed:

Dear Chair Powell, Secretary Misback and others in the FRS: This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by Old National Bancorp, Evansville, Indiana; to merge with First Midwest Bancorp, Inc., and thereby indirectly acquire First Midwest Bank.    

 The applicant Old Nationa in Indiana in 2019 based on its disparate marketing made 3312 mortgage loans to whites, with 1060 denials to whites -- while making only SIXTY TWO loans to African Americans, with more than that in denials: 65. This is outrageous.   This is unacceptable.  

Worse, in 2020 in Indiana Old National made MORE loans to whites than in 2019 (3976) and essentially the same to African Americans (65). 

 In 2020 in Minnesota, based on its disparate marketing, Old National made 1387 loans to whites, and only fifty to African American.    This is totally unacceptable.  

So is this: "First Midwest CEO likely to see pay jump following Old ... First Midwest's merger with the Evansville, Ind.-based parent of Old National Bank will have the unusual distinction of employing two bank CEOs and two bank...."- Crain's Chicago Business    There is no public benefit to this proposal.     FFW and Inner City Press have been deeply concerned about the rush by the FRS' penchant to rubberstamp mergers by redliners, particularly during the pandemic. We note the Fed's recent website statement that a comment period has been extended to allow participation amid the Coronavirus crisis. This should be done, by the Fed's logic, on this and other applications. Inner City Press has already filed a FOIA request with the Board for records, today, with the application still not on the Board's website, which has no comment period running past June 17 - the responsive records must be provided before the comment period can close.

 Inner City Press (and Fair Finance Watch, on the HMDA) will have more to say about this. Watch this site.

  While M&T - People's United still pends in the Federal Reserve, with a promised expedited FOIA response still not forthcoming, the Fed in mid May approved PNC - BBVA, with a rare abstention by Governor Lael Brainard, albeit on antitrust and not CRA or fair lending grounds.

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