“It’s one or the other. You cannot have it both ways. Communities deserve better.”

What would happen if 100 CBOs wrote a letter to over 40 bank CEOs? Rise Economy Advocacy By the Numbers

In September, alongside 100 of our closest nonprofit organizational friends, we sent a letter to 39 bank CEOs expressing concern about harmful litigation and lobbying practices undertaken by banking trade organizations in their name that would undermine the work of Rise Economy members and allied organizations. 

The letter sought clarification on each bank’s position relating to critical areas of concern to our organization and our members including:

• An independent Consumer Financial Protection Bureau (CFPB),
• Efforts to eradicate discrimination as an unfair and deceptive practice,
• The final Section 1071 small business data collection rule which will aid enforcement against lending discrimination,
• Policies that slow climate change and climate change-related disasters. 

We also asked if bank lobbying and litigation decisions are informed by the opinions of bank staff closest to the community. Read the letter. 

So, what happened?

Of 39 letters initially sent:

• Ten banks responded in writing: Beneficial State Bank, East West Bank, U.S. Bank, HomeStreet Bank, PNC, Amalgamated Bank, Cathay Bank, Pacific Premier Bank, Citibank, and BMO Harris. (Capital One offered to discuss).
• Six of the written responses directly addressed all of the 5 questions we posed: Beneficial State Bank, East West Bank, HomeStreet Bank, PNC, Amalgamated Bank, and Pacific Premier Bank.
• Six responses were submitted to us in a timely fashion (we asked for responses within three weeks of the date of the letter): Beneficial State Bank, East West Bank, U.S. Bank, HomeStreet Bank, PNC, and Amalgamated Bank.
• Four responses came from the CEO of the bank: Beneficial State Bank’s Randell Leach, HomeStreet Bank’s Mark Mason, Amalgamated Bank’s Pricilla Sims Brown and Pacific Premier Bank’s Steven Gardner. (Banc of California’s Jared Wolf called to discuss).
• Three banks were clear that discrimination may be an unfair and deceptive practice. 
• Four banks expressed support for the CFPB (two unequivocally and two with nuanced language).
• Five banks expressed support for the Section 1071 rule or indicated they were preparing to implement the rule.
• Two banks indicated they were aligned with the Paris Agreement, and another referenced climate-related risks as a concern of the bank.
• Four banks asserted that CRA, community development and Environmental, Social and Governance (ESG) staff are involved in lobbying, litigation and/or policy decisions.
• Only two banks responded to questions posed with clear answers that are aligned with the opinions and perspectives of Rise Economy and our members: Beneficial State Bank and Amalgamated Bank each responded in a timely fashion, answered each question with an affirmative “YES,” and offered the following commentary on the issues at play:

Image credit: Adobe Stock

“Thank you so much for your work to support justice in the financial system; we appreciate what you are seeking to achieve in this process and believe that transparency and accountability are essential to a banking system that nourishes our communities and environment rather than extracts from them, especially in the era of greenwashing and greenhushing!” – Beneficial State Bank CEO Randell Leach

“With regards to banking trade associations, we are proud to be a member of the Community Development Bankers Association (CDBA), and equally proud to share that we are not members of the associations listed in your letter, and as such we are not party to any of the lawsuits challenging bank regulation that increases transparency, heightened anti-discrimination oversight, nor the lawsuits challenging the existence of the CFPB.” – Amalgamated CEO Priscilla Sims Brown

So, who didn’t respond one month after the letters were sent? Bank of America, Bank of CA (though its CEO called), Bank of Hope, California Bank and Trust, Capital One Financial Group (though they are arranging a meeting to discuss), Charles Schwab Bank, Citizens Business Bank, City National Bank, Columbia Bank, Comerica Bank, Community Bank of the Bay, First Citizens Bank, Flagstar Bank, Goldman Sachs, Heritage Bank, HSBC Bank, JPMorgan Chase, Lending Club, Luther Burbank Savings, Mechanics Bank, Morgan Stanley, Pacific Western Bank, Square Financial Services, Tri Counties Bank, Washington Federal Bank, Wells Fargo, and Zions Bank.

U.S. Bank, Cathay Bank, Citibank, and BMO Harris have responded but did not answer our questions directly. Instead, they merely provided information about what the bank was doing on related topics.

We sent another batch of letters last week. Of those, American Momentum Bank, BankFirst, Deutsche Bank, Frost Bank, Hancock Whitney Bank, and Prosperity Bank have failed to respond. 

We find this response rate to be unacceptable. If banks are going to allow their lobbyists to take extreme litigation and lobbying actions against community interests, they at least owe it to communities to explain their positions. 

One of two things is happening here: Either lobbyists are taking extreme positions inconsistent with the positions of their member banks or bank leaders just don’t believe that an independent CFPB should police financial abuses, that discrimination should be pursued and eradicated in all its insidious forms, that women and BIPOC small business owners are entitled to transparency and protection from lending discrimination, and that strong measures need to be taken to forestall the devastation looming from extreme weather events and disasters brought on by fossil fuel financed climate change. At least not if can hurt the bottom line.

It’s one or the other. You cannot have it both ways. Communities deserve better.

Rise Economy members negotiate a $4.1 billion commitment with Banc of California

Our members were pleased to negotiate a $4.1 billion commitment with Banc of California as the bank seeks to acquire Western Bank. 

Banc of California had previously made a $1.4 billion, five-year commitment with Rise Economy and The Greenlining Institute members in 2021 when it purchased Pacific Mercantile Bank. 

If this new merger is approved by the regulators, the bank will have approximately $36 billion in assets, with branches in Los Angeles, San Diego, Orange, Ventura, San Bernardino, Riverside, Santa Barbara and San Luis Obispo counties, with one branch in Fresno, Tulare, Kern, and Kings counties as well.

While we appreciate the 2021 CBA and Banc of California’s commitment to implement it, our members were clear-eyed in wanting to ensure that any new, bigger post-merger bank would make a commitment to communities that was commensurate with its new, bigger size. With this three-year $4.1 billion commitment, we think Banc of California has done so.

In addition to the overall dollars to be invested in California communities, we were also pleased to see the bank make a number of commitments consistent with Rise Economy’s priorities:

• Small business lending of $1.45 billion, including increasing participation in USDA Loan Programs and the State Small Business Credit Initiative, as well as promotion of products through ethnic minority media outlets.
• Community development lending of $2.3 billion focused on supporting long-term affordable housing.
• $300 million in community development investments to support low-income housing, homelessness prevention, small business investment companies and BIPOC and women-led community development financial institutions (CDFIs).
• Participation with and support for Community Land Trusts (CLTs), including consideration of new products to meet the unique needs of CLTs, and $20 million in investments that support Affordable Housing Preservation efforts by CLTs and affordable housing developers.
• Enhanced due diligence for the bank’s real estate lending to include tracking housing code violations, evictions, and other measures to be determined.
• The development of a strategy to support climate resiliency programs in LMI and BIPOC communities which will include a minimum of $250,000 in donations and other opportunities. 
• $500,000 to focus on strategic outreach, investment, support and engagement with tribal and indigenous communities, and a commitment to meet with Native American leaders in 2024, leading to the development of a plan in 2024 to serve the Native American community in the combined institution’s assessment area; and
• A commitment to coordinate activities in its new, non-urban county footprint in Fresno, Kern, Kings, and Tulare to ensure that the bank is helping to meet rural community credit needs.

On behalf of our members, we thank Banc of California for listening to community concerns and identification of needs, and for committing to a plan that we hope will have a strong positive impact on LMI communities of color in our state. We look forward to seeing the Bank implement this plan in the coming years.

A Central Valley merger

An aerial view of Modesto, California in Stanislaus County where Central Valley Community Bank has bank branches. Image credit: Adobe Stock

On Tuesday, Central Valley Community Bancorp and Community West Bancshares announced their agreement to combine, as Central Valley Community will seek to acquire Community West through application filings to banking regulators. 

The banks indicated that there are no plans to close branches. Currently, Community West has seven offices in Santa Barbara, Ventura and San Luis Obispo counties. Central Valley Community Bank has 20 branches in Fresno, Madera, Merced, Placer, Sacramento, San Joaquin, Stanislaus and Tulare counties.

This would be the sixth merger for CVCB in the last two decades. Upon closing, the combined company would have approximately $3.6 billion of assets.

Rise Economy members with questions or concerns about this merger can contact us.

Next up: Lots of bank meetings

We are planning for 3 more bank meetings in 2023:

1. JPMorgan Chase meeting – November 1 in Los Angeles, contact Doni Tadesse to participate.
2. Flagstar/New York Community Bank/Signature – 2023 TBD, contact Doni Tadesse, Southern California Organizer, to participate.
3. Mechanics Bank, 2023 TBD, contact Aliyah Shaheed, Northern California Organizer, to participate.