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Citizens Bank Gets Pot & Lending Qs from Fed After Investors Bank Hit With FDIC Conditions

By Matthew Russell Lee, Patreon Story Order
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FEDERAL COURT / S Bronx, Nov 10 – 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 acquisition of Investors Bank by Citizens Bank NA is litmus test.

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 ha  been raised on Citizens' application, to the Fed and OCC, below.

On Nov 10, the Federal Reserve asked Citizens questions including "This correspondence relates to the application filed on behalf of Citizens Financial Group, Inc., Providence, Rhode Island (“CFG”), to acquire Investors Bancorp, Inc. (“Investors”), and thereby indirectly acquire its subsidiary bank, Investors Bank, both of Short Hills, New Jersey, pursuant to sections 3(a)(3) and 3(a)(5) of the Bank Holding Company Act of 1956, as amended. Based on staff’s review of the current record, the following additional information is requested. Please provide responses to the items in the Confidential Annex. Supporting documentation should be provided, as appropriate. Financial and Managerial  1. Discuss the extent to which CFG and Investors provide any services to marijuana- related businesses (“MRBs”). Discuss any plans contemplated at the pro forma  organization to provide services to MRBs. Discuss any policies and procedures regarding how CFG and Citizens Bank, NA would comply with relevant state laws and the guidance issued by the Financial Crimes Enforcement Network related to servicing MRB customers.1 2. Please update all financial and pro forma information presented in the application to reflect September 30, 2021 financial data.  1 See marijuana-related-businesses.  Competition 3. In the response to question 14 of the first additional information request (“AI request”), CFG stated that it would provide the total loan origination amount to small businesses (a business or farm with gross annual revenues of $1 million or less) in 2019 and 2020 associated with each branch CFG acquires from HSBC as soon as such information becomes available. Provide an estimated date by which CFG expects to provide this information. Legal 4. The application states that “Investors Bank also has lending offices in Danbury, Connecticut and Charlotte, North Carolina.” Confirm, if such is the case, that these offices have not been approved as branches and are not operated as branches. Additionally, confirm, if such is the case, that Investors Bank does not operate any branches in Connecticut or North Carolina." Full letter on Patreon here.

The FFW protest: "Re: Timely First Comment Opposing Citizens to acquire Investors Bank

Dear Ms. Cummings and others in the OCC, including at "Large Banks": 

This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Applications by Citizens to acquire Investors Bank.  

  Before getting to the data, 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."   

Citizens cannot, as of now, be allowed to acquire this hot mess.  As noted:  The applicant 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.  

  Here's some of Investors' 2020 HMDA data:  Investors Bank in 2020 in New York State based on its disparate marketing made 164 mortgage loans to whites, with 76 denials to whites -- while making only THREE loans to African Americans, with SEVEN denials. This is far out of keeping with the demographics, and other lenders, in NYS - this is outrageous.

This is a pattern. Investors Bank in 2020 in New Jersey based on its disparate marketing made 1580 mortgage loans to whites, with 281 denials to whites -- while making only 64 loans to African Americans, with 28 denials. This is far out of keeping with the demographics, and other lenders, in New Jersey. The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

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