California Reinvestment Coalition

Bank Mergers in California

As part of our Community Reinvestment Act advocacy, CRC and our members often weigh in on proposed bank mergers as part of the public comment process.  Below is a list of the mergers where CRC is pressing the banks (and their regulators) to do more for California communities.

PacWest acquisition of Square 1 Financial.  

You can read CRC's letters to the regulators here (April 30, 2015) and here (July 2, 2015).  You can read press about this proposed acquisition here: 

In this merger, CRC is focused on several issues, including:

1) PacWest should NOT exclude nearly 50% of its deposits for CRA plan purposes.  

Why does this matter?  PacWest's current CRA plan calls for the bank to engage in reinvestment activities at an amount equal to 14% of  the bank's 'core deposits.'  However, the bank's definition of 'core deposits' excludes certificates of deposits (CDs) and brokered deposits. In plain English, the bank's CRA commitment is about 50% less than it would be if included CDs and brokered deposits.  In other words, its CRA commitment is closer to 7% of deposits, not 14%.

2) PacWest can and should develop a multi-year CRA commitment. CRC advocates for banks to make multi-year commitments to the communities they serve (see examples of multi-year commitments on our bank CRA page.) But, PacWest initially proposed a CRA plan that was less than one year.

3) PacWest should develop a Minority, Women, Disadvantaged Business Enterprise (MWDBE) program. PacWest is rare among its peers for not having a MWDBE program.

4) PacWest's CRA plan should be available to the public and posted on the bank's website.

5) PacWest can and should make a stronger commitment to serving its rural communities. PacWest has a weak record of serving its rural communities, and CRC recommends that bank regulators determine that one of its rural counties be subject to a "full scope" (more in-depth) review for its CRA examinations.

If you have questions about CRC's protest of this merger, please contact Kevin Stein, associate director at CRC (kstein AT calreinvest.org) 

CIT Merger with OneWest Bank 

After a year-long process, on July 21, 2015, the OCC gave CONDITIONAL approval to the OneWest merger with CIT Group. The conditional approval calls for the bank to rework and resubmit its Community Reinvestment Act plan within 90 days of the July 21st date.  CRC members are working to ensure that the bank actually does rework its plan. Fortunately, there is a helpful, recent precedent in the OCC's recent work on another merger, that of Valley National Bank acquiring 1st  National Bank in Florida.  As part of that merger, the OCC facilitated the bank meeting with organizations that had opposed the merger, and as a result, these community reinvestment experts were able to share their perspectives and expertise with the bank as it developed a new CRA plan.  The end result is a more robust CRA plan that makes a strong, multi-year, transparent commitment to the communities affected by the merger.  

To read more, visit our Op-Ed, co-written by CRC's executive director, Paulina Gonzalez, and by Orson Aguilar, executive director of the Greenlining Institute: Regulators Should Hold CIT Accountable for Strong CRA Plan.

There is an extensive record of the protest against the CIT/OneWest merger (a rare public hearing was held in February 2015), and information is compiled at these sites:

Bad Bank Merger website

OneWest Bank and CIT Group Merger Resource Center

Impacted Homeowners, LA Community Leaders Speak Out Against Proposed Merger of OneWest Bank and CIT Group at Federal Reserve Hearing

OneWest Bank Foreclosure Tracker: How Many Families Are Losing Their Homes?