Housing Groups Urge Regulators To Block Valley National Bancorp Purchase Of Florida Bank

Housing groups look to block Valley acquisition of Fla. lender

The Record ( — Thursday, July 17, 2014

The Record

State and national housing groups have asked a federal regulator to block Wayne-based Valley National Bancorp's pending acquisition of 1st United Bancorp Inc. in Florida, saying the New Jersey lender needs to improve a poor record of lending to minorities and in lower-income neighborhoods in its home state.

New Jersey Citizen Action said Wednesday that it has joined with a coalition of about a dozen community groups in three states to urge the Office of the Comptroller of the Currency to stop the proposed merger with the Boca Raton, Fla.-based institution. The deal would create a bank with more than $18 billion in assets and more than 230 branches in New Jersey, New York and Florida. The housing and community groups, led by the National Community Reinvestment Coalition, want the OCC to hold public hearings on the merger in all three states where the combined banks would operate.

Valley, which rebuts the groups' claims, said in May it was buying 1st United, Florida's seventh-largest publicly held bank, in a stock deal valued at $312 million. The acquisition would be Valley's first outside the Northeast.

Marc Piro, spokesman for Valley, said the bank is "in the process of filing a response with the OCC, which refutes these claims" and that the bank is confident the OCC will approve the merger application.

Affordable-housing and community-investment advocates often challenge bank merger applications on the basis of minority and low-income lending data gathered by the federal government under Home Mortgage Disclosure Act requirements.

But it is rare for a deal to be blocked. Often the merging banks negotiate a deal with the community groups, pledging to meet specific goals for community lending and investing.

New Jersey Citizen Action also has challenged Buffalo, N.Y.-based M&T Bank Corp.'s still-pending 2012 application to acquire Paramus-based Hudson City Bancorp. M&T has been in talks with NJCA about a potential community reinvestment pledge and the talks are going well, Phyllis Salowe-Kaye, NJCA's executive director, said Wednesday.

"We have notified the regulator that we are working with M&T and we would welcome them," she said.

Most of the group's complaints about that merger are related to Hudson City's minority lending record, she said.

Community reinvestment pledges typically include lender promises to meet specific targets for mortgages, business loans and community development financing in low- and moderate-income neighborhoods.

The M&T-Hudson City deal has been held up, but for a different reason. The Federal Reserve Bank of New York has required M&T to address concerns about its anti-money-laundering programs.

Valley received a "high satisfactory" rating in lending and service tests in its most recent Community Reinvestment Act exam performed last year by federal examiners. But the community groups, citing 2012 government data, say the bank made just 4.5 percent of its home loans in northern New Jersey and New York City to low- and moderate-income borrowers, even though 41.5 percent of households in those areas are in that category.

Only 1.5 percent of all of Valley's home loans in northern New Jersey and New York City in 2012 went to African-American borrowers, even though African-Americans make up 20.5 percent of the population there, the community groups said.

The acquisition "would not create clear public benefits in the form of responsible lending and investment in the community, as required by the law," Salowe-Kaye said.

"Valley National has chosen to thumb their nose at communities of color."

Top Top | NJCA in the News | NJCA Homepage