Nov. 9, 2021
The Anti-Eviction Mapping Project, Esperanza Community Housing Corporation, Fair Housing Council of the San Fernando Valley, Inclusive Action for the City, and The Greenling Institute, among the groups calling for a ‘strong commitment’ from U.S. Bank
SAN FRANCISCO – The California Reinvestment Coalition along with 60 community-based organizations on Monday submitted a comment letter to bank regulators formally opposing the proposed merger of U.S. Bancorp and MUFG Union Bank unless the banks make significant community reinvestment commitments. In the letter, CRC calls for public hearings on the merger to be held in Los Angeles, San Francisco and Fresno, as well as an extension of the comment period through either the end of the public hearings or the end of 2021, whichever comes later.
“We thank U.S. Bank for beginning such discussions, and for making its CEO and key staff available to listen to over 40 California nonprofit organizations describe community credit needs and concerns,” the letter reads.
CRC raised concerns relating to community reinvestment, consumer issues, and anti-competition. CRC asserts that without a strong Community Benefits Agreement in place before the merger is approved, the combined bank will close branches in low-to-moderate income (LMI) neighborhoods and communities of color, oversee a reduction in financing for critically needed affordable housing, exacerbate the racial wealth gap by failing to extend mortgages to all qualified borrowers and communities, and fail to finance and support the smallest businesses, which hire local residents, serve local communities and have been most affected by the pandemic.
“When banks merge, there is a risk for harm to rural communities and communities of color,” said CRC Executive Director Paulina Gonzalez-Brito (they/them/elle). “This merger proposes an outsize risk to these communities considering this is the biggest bank merger in California in the last decade. The loss of Union Bank will have a significant impact on the state, but there remains tremendous potential for these two banks to invest directly in these communities by way of affordable housing, safe mortgages, and community development.”
“We need to see a strong commitment from U.S. Bank to ensure that the communities it serves benefit from the proposed merger with MUFG Union Bank,” said Jesse Van Tol, President & CEO of the National Community Reinvestment Coalition. “We share the concerns of CRC and community leaders in California and we’ll continue to work closely with them, with the banks and with our members in 25 states served by these banks to seek a clear, specific and ambitious plan for community benefits from this proposed merger. Federal regulators should not approve this or any merger without a community benefits plan developed collaboratively with representatives of the communities that will be directly impacted by any change in ownership. Banks have a responsibility to serve the communities where they take deposits and mergers are a privilege, not a right, that should be contingent on clear public benefits.”
Minneapolis-based U.S. Bancorp/U.S. Bank agreed in September to acquire MUFG Union Bank for approximately $8 billion. U.S. Bank currently has 469 branches in California — which accounts for roughly 20% of all of its total branches—and $51 billion in deposits in the state. Union Bank has 284 of its 305 Branches in California and $98 billion in deposits statewide. Combined, the bank would become the fifth largest in deposits in California if the merger is approved.
“In 2021 alone, we have witnessed the banking sector becoming more and more dominated by the largest banks. Regional and community banks who have been strong community partners are being devoured by larger competitors, resulting in higher costs for consumers, decreased access to financial products and services and increased systemic risk to our financial systems — particularly for low- and moderate-income communities of color. We need to constrain corporate banking power more than ever, and we see this merger as a true test for the Department of Justice and the relevant regulators to address the community concerns around antitrust and financial instability,” said Debra Gore-Mann, President and CEO of The Greenlining Institute.
In the letter, CRC urged the bank to agree to a five year, $90 billion CBA that includes:
- Refraining from closing any bank branches in LMI communities or communities of color, and retaining all CRA and front line Union Bank workers;
- An annual increase mortgage originations for LMI borrowers, Black, Latine, Asian American and Native American borrowers;
- Sign CRC’s Anti Displacement Code of Conduct and support CFPB’s section 1071 data collection rulemaking efforts;
- $37.5 billion in small business lending, which includes lending to small business owners that do not have a social security number and use ITIN;
- Commit to $15 billion in Community Development lending and $5 billion in Community Development investments to support affordable housing and economic development initiatives;
- Supporting local efforts to connect underserved communities and residents to high-speed broadband;
- Commit to reconfigure all ATMs to waive out-of-network surcharges for California public assistance recipients who use Electronic Benefits Transfer Cards (EBT), as well as continuing to offer, actively market and service an account that serves the banking needs of the unbanked, underbanked, and LMI communities;
- Increase charitable contributions by 50 percent over past performance;
- Commit to establishing leadership comprised of at least 50 percent from underrepresented groups;
- Conduct a racial equity audit;
- And, increase its spending with diverse suppliers by 20 percent.
Since January, CRC has negotiated Community Benefits Agreements with Banc of California, Silicon Valley Bank, and First Citizens Bank, totaling nearly $20 Billion in reinvestment for the California communities.
Endorsers of the letter include the following organizations:
- AmPac Business Capital
- Anti-Eviction Mapping Project
- Asian Pacific Islander Small Business Program
- Asian Pacific Policy & Planning Council
- Bay Area Organization of Black Owned Businesses – BAOBOB
- Black Business Association
- BRIDGE Housing Corporation
- Burbank Housing
- Business Resource Group
- CAARMA Consumer Advocates Against Reverse Mortgage Abuse
- California Capital Financial Development Corporation
- California Community Land Trust Network
- California Housing Partnership
- California Reinvestment Coalition
- CAMEO- California Association for Microenterprise Opportunity
- CDC Small Business Finance
- Chinatown Community Development Center
- Committee for Better Banks
- Community Economics, Inc.
- Community Housing Development Corporation
- Consumer Action
- Courage California
- EAH Housing
- East Bay Asian Local Development Corporation
- East Bay Housing Organizations
- East LA Community Corporation
- Esperanza Community Housing Corporation
- Fair Housing Council of the San Fernando Valley
- Faith and Community Empowerment(formerly KCCD)
- First Community Housing
- Fresno Native American & Business Development Center Haven Neighborhood Services
- Housing and Economic Rights Advocates
- Housing Leadership Council of San Mateo County
- Housing Rights Center
- Inclusive Action for the City
- Jakara Movement
- Los Angeles LDC
- LTSC Community Development Corporation
- Microenterprise Collaborative of Inland Southern California Mission Economic Development Agency
- Multicultural Real Estate Alliance for Urban Change
- NEW Community Investments
- New Economics for Women
- Non-Profit Housing Association of Northern California
- Nor-Cal FDC
- Oakland Community Land Trust
- Public Counsel
- Reinvent South Stockton Coalition
- SF Public Bank Coaltion
- Tenderloin Neighborhood Development Corp.
- The Central Valley Urban Institute
- The Fair Housing Council of San Diego
- The Greenlining Institute
- The Public Interest Law Project
- The Unity Council
- Unite A Nation
- Westchester United Methodist Church, Los Angeles
- Western Center on Law & Poverty
- Youth Finance Institute of America
Read CRC’s letter to the Office of the Comptroller of the Currency
Read CRC’s other CBA
About the California Reinvestment Coalition
The California Reinvestment Coalition(CRC) works to build an inclusive and fair economy that meets the needs of low-income communities and communities of color by disrupting systems of oppression. CRC is the largest statewide community reinvestment coalition in the country, with over 300 member organizations across California that provide services to thousands of Californians. CRC members include affordable housing developers, community development financial institutions, housing counseling agencies, small business technical assistance providers, legal services agencies, and community-based organizations.
About The Greenlining Institute
Founded in 1993, The Greenlining Institute envisions a nation where communities of color thrive and race is never a barrier to economic opportunity. Because people of color will be the majority of our population by 2044, America will prosper only if communities of color prosper. Greenlining advances economic opportunity and empowerment for people of color through advocacy, community and coalition building, research, and leadership development. We work on a variety of major policy issues because economic opportunity doesn’t operate in a vacuum. Rather than seeing these issues as being in separate silos, Greenlining views them as interconnected threads in a web of opportunity.
The National Community Reinvestment Coalition and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business. NCRC was formed in 1990 by national, regional and local organizations to increase the flow of private capital into traditionally underserved communities. NCRC has grown into an association of more than 600 community-based organizations in 42 states that promote access to basic banking services, affordable housing, entrepreneurship, job creation and vibrant communities for America’s working families. More: www.ncrc.org