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Webster Bank Games CRA with Health Savings Accounts Fair Finance Watch Challenged to OCC

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - CJR - PFT

SDNY COURT, March 13 – Among the comments on the Community Reinvestment Act submitted to the Federal Reserve is one from Webster Bank, arguing that Health Savings Account "deposits should not be considered when determining whether the requirement would apply or when delineating such assessment areas" and should be excluded from the definition of "retail domestic deposits."Consequently, HSAs should also be excluded from  Community Development Financing Metric.

This is scam. 

  Back on May 2, 2020 Fair Finance Watch, and Inner City Press on FOIA, filed a formal challenge with Otting's OCC to the application by Webster Bank to acquire State Farm Bank FSB, its problematic health savings accounts, no less. Here is some of it:

"This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by Webster Bank NA to acquire State Farm FSB / Health Savings Accounts. Given complaints against State Farm's HSAs, and Webster Bank's PPP performance, public hearings are needed when they are not, as now, prohibited by social distancing rules. The CRA deform proposal should be shelved.

While Comptroller Otting has said he never saw discrimination (except being told by family members about it), consider for the record on this application that even as reflected by the too-limited 2018 HMDA data available on the CFPB's website, Webster Bank in New York State in 2018 made 270 loans to whites - and only NINE to African Americans, out of proportion to the demographics of its service area and of other lenders' activities in it.       While making only NINE loans to African Americans in NYS in 2018, Webster denied 16 applications from Africans, much more disparate that its ratio for whites: 270 loans made, 145 denial: significantly more disparate to African Americans.

      This application should be denied. And for the record, the CFPB's elimination of the HMDA information that has been available on the FFIEC's and even its own website for 2017 data is part of the destruction of CRA and HMDA of which the OCC is a part.    

   Consider for the record that "the head of Waterbury-based Webster Bank admitted his company can improve its performance in getting money into the hands of loan applicants.  “Certainly we wanted to help every small business borrower and customer of Webster that we could,” said CEO John Ciulla, speaking Tuesday on a conference call. “We got through approximately 30 percent applications approved (and) 30 percent funded, plus or minus a few percentage points on both sides of that."  Webster Bank has the third biggest base of deposits in Connecticut, offering both traditional savings and loans accounts as well as a health-savings account business that is among the largest in the nation. On Tuesday, Webster bolstered its HSA Bank subsidiary with the acquisition of 24,000 health-savings accounts from State Farm totaling $140 million."     

 No, that has not been approved. And it should not be. #TreasureCRA. And see NCRC's dashboard of comments, here. 


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