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Amalgamated Bank Deal Off Amid CRA Protest For Closed Bronx Branch Now Lawsuit Threat

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

SOUTH BRONX / SDNY, March 23 – A CRA protest to Amalgamated Bank, which shuttered its South Bronx branch on Burnside Avenue with no mitigation, has been followed the Amalgamated proposal to acquire a Chicago-based bank falling apart. Fair Finance Watch and Inner City Press, which filed the CRA protest, say Good Riddance.

Now, a threat of litigation, in an SEC 8K: "Reference is made to the Current Report on Form 8-K of Amalgamated Financial Corp. (the "Company") filed with the U.S. Securities and Exchange Commission (the "Commission") on September 22, 2021, reporting that the Company had entered into a definitive agreement to acquire Amalgamated Investments Company ("AIC"), the holding company for Amalgamated Bank of Chicago (the "Merger Agreement"). On February 25, 2022, the Company issued a press release (furnished as Exhibit 99.1 to the Company's Current Report on Form 8-K furnished under Item 7.01 thereof) stating, among other things, that the Company had withdrawn its application for regulatory approval to acquire AIC due to an inability to obtain such approval and, as a result, the Company was is no longer proceeding with the transaction.  On March 15, 2022, the Company received a letter from AIC in which AIC declared the Merger Agreement terminated. Although the Company believes that there are no termination penalties in connection with the termination of the Merger Agreement, the Company has been advised by AIC's counsel that AIC may seek compensatory damages for an alleged breach of the Merger Agreement by the Company. The Company denies that it breached the Merger Agreement and would intend to vigorously defend any such claims by AIC." No honor among thieves.

The protest: October 23, 2021 Federal Deposit Insurance Corporation Attn: Frank Hughes, Regional Director and Robert P. Cordeiro, Scott D. Strockoz 350 Fifth Avenue, Suite 1200 New York, NY 10118-0110 Re: Timely First Comment on Application by Amalgamated Bank (NY) to buy Amalgamated Bank in Chicago

Dear Regional Director Hughes and others at the FDIC:   This is a timely first comment opposing and requesting an extension of the FDIC's public comment period on the Applications by Amalgamated Bank (NY) to buy Amalgamated Bank in Chicago. 

  As the FDIC surely knows, Amalgamated Bank New York outrageously closed branches including at 94 Burnside Avenue in the South Bronx when its customers needed it most.   

  This caused Fair Finance Watch to look more closely. And Amalgamated is not what it pretend to be. In 2020 in New York Amalgamated made only 41 home loans to African Americans, while denying more (67) - compared to its 962 loans to whites, with FEWER denials to whites (577).    That the Burnside Avenue closing has a negative impact is recognized even by state regulators: 'October 7, 2020 (TR-CRB) AMALGAMATED BANK 275 Seventh Avenue (Fourteenth Floor, New York, NY 10001  In accordance with Section 28-c of the Banking Law, the Superintendent of Financial Services has found that the closing of branch office at 94 East Burnside Avenue, Borough of Bronx, City of New York 10453, will result in a significant reduction of financial services in the community affected.' The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

The subsequent news: "New York-based Amalgamated Bank’s publicly traded parent Amalgamated Financial has walked away from its attempt to purchase the unaffiliated Amalgamated Bank of Chicago for $98 million dollars, Crain’s reported.   The banks were both founded by clothing workers’ unions, with organized labor still having a major stake in the New York institution, which has withdrawn its application for regulatory approval of the acquisition it announced it was seeking in September.   It cited an “inability” to obtain Federal Deposit Insurance Corporation approval in a statement after the close of trading Friday.  “As a result, AMAL is no longer proceeding with the transaction,” the statement said, using the parent company’s ticker symbol.  Amalgamated Bank of Chicago said the New York company does not have good cause to walk away from the deal.  “The terms of our agreement with Amalgamated Financial are clear on what triggers termination of this sale,” a spokeswoman for the Chicago bank said in an email to Crain’s. “They have not met that threshold as the door on addressing issues raised by the FDIC to obtain regulatory approval is still open. Amalgamated Financial has an obligation to address those issues, which we believe are not financial in nature, and move forward with refiling their application with the FDIC. Our goal is to help them overcome the issues that have been raised and we are confident that the sale can get back on track.” We say no. Watch this site.


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