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Predatory Lender Republic Bank & Trust Faces CRA Challenge to CBank Merger Application

By Matthew Russell Lee, Patreon Maxwell book
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FEDERAL COURT / S Bronx, Nov 11 – Whether or not the U.S. Community Reinvestment Act will be again enforced under this Administration and its regulators including under the incoming Congress is an open question. The same is the case about predatory lending.

   Now Fair Finance Watch with Inner City Press on the FOIA has filed comments with the Federal Deposit Insurance Corporation against the application by notorious predatory lender Republic Bank & Trust to buy CBank:

November 11, 2022
FDIC Chairman Martin J. Gruenberg FDIC - Chicago Regional Director, John Conneely Deputy Regional Director, Teresa Sabanty
Re: Timely Comment opposition and requesting an extension of the comment period on the application by high-cost lender Republic Bank & Trust to acquire CBank and Commercial Industrial Finance, Inc.

Dear Chairman Gruenberg, Regional Director Conneely, Deputy Regional Director Sabanty:  

 On behalf of Fair Finance Watch and Inner City Press and in my personal capacity, this is a timely comment opposing and requesting an extension of the comment period on the application by high-cost lender Republic Bank & Trust to merge with CBank and its wholly-owned subsidiary, Commercial Industrial Finance, Inc. which "provides equipment leasing and financing to businesses nationwide." 

 Republic is a notorious high-cost lender. "Non-bank payday lenders try to get in on the action by putting a bank’s name on the loan, allowing them the pre-emption protection. One company engaged in this is Elevate Financial. Its line-of-credit product, Elastic, uses Republic Bank, which is chartered in Kentucky, to make the loans. Elevate supplies the underwriting software and therefore controls who gets a loan. Republic Bank holds onto the loans, but then sells a 90 percent “participation interest” to an affiliate of Elevate. Functionally speaking, Elevate issues and effectively owns the loans, but it has a legal fig leaf that enables it to point to Republic Bank as the actual lender. This enables Elevate to sell Elastic, which its financial disclosures say carries an annual percentage rate of 109 percent, in states like Minnesota, Montana, and Oregon, which cap interest rates at 36 percent. It also allows Elevate to sell what is effectively a payday lending/installment loan product called Rise in states where payday lending has been banned, like Arizona."

Note for the record on this application, subject to CRA, that Republic Bank and Trust enables Enova, which operates payday and installment lender CashNetUSA, to make NetCredit- branded installment loans at rates up to 99.99% APR.

  In terms of HMDA data, in 2021, Republic Bank and Trust in Kentucky made 2429 mortgage loans to whites with 162 denials. Meanwhile to African Americans it made 303 loans, while denying fully 51 applications.

  In Ohio in 2021, Republic Bank and Trust
made 72 mortgage loans to whites with seven denials. Meanwhile to African Americans it made ten loans, while denying four applications.  

  In Florida in 2021, Republic Bank and Trust made 260 mortgage loans to whites with 45 denials. Meanwhile to African Americans it made eleven loans, while denying six applications.    Public evidentiary hearings are needed.   

 FFW and Inner City Press have been deeply concerned about the rush by the FDIC to rubber-stamp smaller mergers by these sized redliners. This has been killing the Community Reinvestment Act and we timely request public hearings. The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.     Very Truly Yours,     Matthew Lee, Esq.   Executive Director  Inner City Press/Fair Finance Watch

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