NJ Citizen Action Challenging M&T Acquisition Of Hudson City Bancorp

The Record ( — Tuesday, November 20, 2012

The Record

A statewide consumer watchdog is challenging M&T Bank's planned $3.7 billion acquisition of Paramus-based Hudson City Bancorp Inc., citing concerns about Hudson City's minority lending record.

New Jersey Citizen Action said Monday that it has asked Ivan Hurwitz, vice president of the Federal Reserve Bank of New York, to hold public hearings in Newark and to extend a public comment period until Jan. 5.

Phyllis Salowe-Kaye, the group's executive director, said Hudson City made only five conventional home purchase loans to African-Americans in the New York City metropolitan area last year, and made just 14 to Hispanics. The lender made 765 loans to white borrowers in that time, said Salowe-Kaye, citing federal Home Mortgage Disclosure Act data.

"M&T has got to say how they are going to fix this horrible lending record," she said Monday by phone.

New York City-based Inner City Press/Fair Finance Watch filed a similar complaint last month based on alleged Community Reinvestment Act discrepancies, and has also requested public hearings on the deal, which the banks expect to complete by mid-2013.

Both non-profits say they want Buffalo-based M&T to make specific commitments on post-merger lending in low- and moderate-income neighborhoods.

They and other non-profit organizations persuaded the Fed to hold public hearings in 2004 on Bank of America Corp.'s purchase of FleetBoston Financial Corp., a deal that made Bank of America the top lender in New Jersey. Bank of America ultimately agreed to make community reinvestment commitments in New Jersey, Salowe-Kaye said.

Neither the New York Fed nor Hudson City immediately responded Monday to requests for comment. Hudson City, primarily a suburban savings bank that specializes in selling certificates of deposit and higher-end mortgage loans in New Jersey, New York and Connecticut, received an overall "satisfactory" CRA rating in its last review in March 2011.

M&T, a full-service commercial bank, last year received an "outstanding" rating, the highest possible, in its community reinvestment review from the Office of the Comptroller of the Currency.

"We are proud to stand on our outstanding ratings, which we have held on every exam since 1982," said Michael Zabel, an M&T spokesman, said Monday by phone.

Zabel said 21 non-profit housing and community organizations M&T has worked with in the past — including Cypress Hills Local Development Corp. in Brooklyn, N.Y.; Belmont Housing Resources for WNY Inc. in Buffalo; and Healthy Neighborhoods in Baltimore — have urged the Fed to approve the acquisition. Also, he said the data Salowe-Kaye cited does not include loans to minorities made through government-backed programs such as the Federal Housing Administration and the Veterans Administration, and the bank's own proprietary programs for low and moderate income borrowers.

Salowe-Kaye said Monday she plans to meet with representatives from M&T on Dec. 13 in Newark, to discuss community reinvestment in New Jersey, where the bank currently has no retail branches.

"We also want to know how they are going to mitigate foreclosures," Salowe-Kaye said. "Hopefully, they will come to the table for a good-faith negotiation and we can tell the regulator we have a deal," Salowe-Kaye said.

A previously scheduled meeting was postponed by superstorm Sandy.

Zabel was noncommittal when asked if M&T was willing to forge a community reinvestment agreement with New Jersey Citizen Action.

"We are very much looking forward to having a productive meeting and having a productive relationship with the organization," he said. "We will have to see where it goes from there."

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