“It’s good to know how the banks and certain politicians really feel about closing racial wealth gaps, fighting lending discrimination and supporting small businesses.”
By Kevin Stein,
Chief of Legal and Strategy
Bank of America – Recent Meeting and CFPB Enforcement Action
Someday your children will ask you where you were when we held our first in-person bank meeting as Rise Economy. And more than 50 of you will be able to say you actually attended the June 13 meeting in Oakland with Bank of America.
We thank the bank representatives for sharing and presenting valuable information about its performance, answering questions from Rise Economy members and agreeing to several follow-up items. Among the topic discussed were: Special Purpose Credit Programs and racial justice commitments, mortgage and small business lending, branch closings, contributions, community development lending and investment, and climate change. Toya Vick, a participatory defense organizer and housing and criminal justice advocate with Starting Over, Inc., told the bank representatives about the number of complaints her constituents had raised relating to the bank’s accounts, fees and consumer services. Read our follow-up letter to Bank of America that attempts to capture the discussion, our asks of the Bank, and potential next steps.
On the heels of our meeting, the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) found the Bank in violation of consumer protection laws and ordered Bank of America to pay $100 million to victimized consumers and $150 million in penalties and fines for 1) Deploying a double-dipping scheme to harvest junk fees 2) Withholding cash and points rewards on credit cards and 3) Misusing sensitive customer information to open unauthorized accounts.
Upcoming Bank Meeting: Banc of California SPCP meeting and CBA meeting
Banc of California, with nearly $10 Billion in assets and 40 offices throughout Southern California, agreed to a Community Benefits Agreement (CBA) during its merger with Pacific Mercantile Bank. The CBA was negotiated with Rise Economy and The Greenlining Institute members. As part of the CBA, Rise Economy pressed for the Bank to commit to a Special Purpose Credit Program, and we were very pleased that the Bank agreed to up to $200 million for an SPCP focused on undeserved small businesses. The Bank has also agreed to discuss its early thoughts for this program with us on Monday, Aug. 14. We will also have a larger in-person meeting with the Bank in Los Angeles on September 14 to discuss the Bank’s performance under the CBA. Topics will include CBA commitments to small business lending and referral programs, affordable housing and mortgages for underserved communities, anti-displacement measures and Community Land Trusts, and low-cost bank accounts and philanthropy. If you are interested in either the SPCP call or the meeting in Los Angeles, please contact Doni Tadesse.
Upcoming Bank Meeting: JPMorgan Chase
Rise Economy members have been eager to meet with JPMorgan Chase, the largest bank in the country. A meeting originally scheduled for December has been pushed up in light of Chase’s recent acquisition of the failed First Republic Bank. Rise Economy has urged JPMorgan Chase to fund all First Republic Bank (FRB) loans, investments and contributions in the FRB pipeline, halt branch closures in LMI communities of color, develop measurable and impactful climate commitments, and enter into a Community Benefits Agreement with California communities. Read our statement on the acquisition of First Republic Bank by JPMorgan Chase. Soon after acquiring First Republic Bank’s 84 branches and right after we urged the Bank to refrain from doing so, Chase announced its intention to close 21 branches. We have also expressed concerns about JPMorgan Chase’s record as the biggest funder of fossil fuels according to detailed research by our allies at RAN. We thank Chase for agreeing to meet on Thursday, Sept. 21 in Los Angeles to discuss these and other issues. If you are interested in attending this meeting, please contact Doni Tadesse.
Update on First Citizens Bank and Silicon Valley Bank
Rise Economy continues to press First Citizens Bank (FCB) to accept 100% of the $9 Billion in CBA commitments made to California communities by the failed Silicon Valley Bank, which FCB acquired back in late March. Rise Economy and NCRC had already entered into a separate CBA with First Citizens Bank when it acquired CIT, which provided $8 Billion for California communities. The Bank has asked for time to assess the purchase and integration of Silicon Valley Bank. We expect to talk with the Bank in August about the level of its commitment to the Silicon Valley Bank CBA and will convene Rise Economy members very soon thereafter to consider next steps.
Rise Economy continues to oppose Washington Federal Bank’s acquisition of Luther Burbank Savings
We continue to oppose the proposed merger of Washington Federal Bank and Luther Burbank Savings. Earlier this year, Rise Economy alongside 42 members and allies opposed the merger application of Washington Federal Bank to the FDIC, raising concerns about the financing of fossil fuel companies, mortgage lending disparities that left behind Asian American borrowers and communities, lending to problematic landlords as identified by our members and media reports, and links to attacks on the Consumer Financial Protect Bureau. Read our letter for more information. Despite a good faith dialogue with the Bank, we continue to oppose the merger due to its expected adverse impacts on communities without further mitigation measures. Subsequent to our conversations, Washington Federal has reported consecutive quarters with net charge-offs, and an increase in non-performing assets relative to total assets. We remain hopeful that the banks will enhance, or the FDIC will require, their commitments to transition away from fossil fuel finance while supporting climate resiliency efforts in BIPOC communities in California, redouble their efforts to fight blue-lining, develop a Special Purpose Credit Program for certain underserved, disaggregated Asian American mortgage borrowers in California, and strengthen their CRA and Fair Lending Plans for our state.
They Don’t Want to Let Us Have Nice Things: Bankers and Politicians Oppose Section 1071 Rule
Disappointingly, but not surprisingly, just weeks after the CFPB finalized the long-awaited section 1071 small business data collection rule, bankers and Congressional Republicans moved to attack it. In April, Rio Bank of Texas and the Texas Bankers Association filed a lawsuit challenging the rule in court. The American Bankers Association, whose member banks have professed concern about the racial wealth gap, discrimination and the plight of small businesses, later joined in as plaintiff to challenge the rule. On May 31, House and Senate Republicans filed Congressional Review Act Resolutions to invoke a procedural process whereby Congress can vote to overturn a newly passed agency rule.
Rise Economy members have fought against lending discrimination and for small business lending transparency for decades, we joined the lawsuit compelling the CFPB to develop the rule, we provided numerous and extensive comments in support of the rule, and we celebrated the release of the final rule in March. We think that the Section 1071 rule will be transformational in increasing access to credit for BIPOC and women-owned small businesses. We are not about to stop now. And it’s good to know how the banks and certain politicians really feel about closing racial wealth gaps, fighting lending discrimination and supporting small businesses.