Oppose Rabobank's Acquistion of Mid-State Bank

Rabobank is currently in the process of acquiring Mid-State Bank & Trust. Mid-State Bank & Trust is an independent community bank serving San Luis Obispo, Santa Barbara and Ventura counties. Rabobank is quickly becoming one of the largest banks in rural California. In 2002, Rabobank had just 12 branches in California. Today Rabobank has 40 branches and 6 loan centers. If Rabobank’s application to acquire Mid-State is approved, their branch network will double to 81 branches and 13 commercial loan centers. The rural contingent of CRC has been negotiating with Rabobank to enter into a CRA agreement. CRC and members met with Rabobank on January 16, 2007 and presented to them a model
CRA Commitment for Rural California. The Bank did not agree to this commitment so CRC is encouraging those concerned to send a letter of opposition to their regulator.
Below is a sample letter that you can use to send to the Office of the Comptroller of the Currency. 

Letters can be emailed to Ellen Tanner Shepherd of the OCC at:

WE.Licensing@occ.treas.gov

You can also cc your letter to:

Rick Arredondo, fax # 916-784-2347
and
Barry R. Wides, fax # 202-874-4652

Sample Letter:

January 19, 2007

E-mail:  WE.Licensing@occ.treas.gov
Ellen Tanner Shepherd, Licensing Manager
Licensing Division
Comptroller of the Currency
1225 17th Street, Suite 300
Denver, CO 80202

Re:  Opposition to Rabobank’s merger of Mid-State Bank & Trust

Dear Ms. Tanner Shepherd:

The California Reinvestment Coalition (CRC) recently met with Rabobank on January 16, 2007 to discuss their pending merger of Mid-State Bank & Trust.  On November 29, 2005, CRC also met with Rabobank due to merger negotiations for the acquisition of Community Bank of Central California.  For both of these meetings the main agenda item has been the same – a CRA agreement.  During both of these meetings, CRC has asked Rabobank to develop and adopt a CRA agreement.

While Rabobank has concurred that many of our recommendations are good and that Rabobank would consider implementing them, these promises have not been fulfilled.   At both of these meetings the following products, services and programs have been discussed at length: an auto loan for agricultural workers, an alternative payday loan, a remittance/debit card, a starter bank account, second chance small business loans, IDA accounts and lower cost CDFI loans.  Rabobank has effectively turned down these concrete proposals given they have not offered any counter-proposals.

YOUR ORGANIZATION

Rabobank has grown rapidly in California.  In 2002, Rabobank had just 12 branches in California. Today Rabobank has 40 branches and 6 loan centers.   When Rabobank merged with Community Bank of Central California in early 2006, it became a $4 billion-asset, 40-branch operation stretching from California's central coast to the Mexican border.   If Rabobank’s acquisition of Mid-State Bank is approved, they will double their branch network to 81 branches and 13 commercial loan centers.   Rabobank is not a small bank.  If the acquisition of Mid-State is approved, Rabobank will have over $7 billion in assets for just its California footprint.  Worldwide, they stress that they are a $600 Billion bank in asset size, significantly larger than all but a few banks worldwide. 
Rabobank admitted to us that their previous acquisition of Community Bank has led to the almost complete loss of Community Bank’s lending staff as well as a decrease in deposits and local credibility.  This is of genuine concern to us. 

Rabobank has asserted that they are a different type of bank, committed to relationship banking and lending.  Rabobank has pointed out that they are not beholden to shareholders since they are managed as a cooperative.  Rabobank has stressed on several occasions that they have the desire to be innovative in their community development approaches.

Unfortunately, Rabobank has not connected its unique values with its customer base or the staff of the acquired banks.  There is no reason that during the past year a bank which values community development cannot reach an agreement with a coalition of community development organizations, if only to  follow the lead of other large money center banks.  In fact we stressed that customers might better understand the bank’s values with this kind of concrete, verifiable action.   

Without a CRA agreement, community development organizations are denied the opportunity of creating goals with a bank in which both parties commit to achieving. Without measurable goals, CRA lacks any real effectiveness.  Rabobank’s refusal to enter into a CRA agreement demonstrates that they are unwilling to cultivate a relationship in which both entities can work on mutually agreed upon goals.  Without a CRA agreement, YOUR ORGANIZATION has no other choice but to oppose Rabobank’s proposed acquisition of Mid-State Bank.

Thank you for your consideration.

Sincerely,



Cc:      California Reinvestment Coalition
             Rick Arredondo, President, Rabobank, N.A.
             Barry R. Wides, Deputy Comptroller, Comptroller of the Currency