We appreciate that the Federal Reserve and OCC did the right thing by extending the public comment period, holding a public hearing and providing the opportunity for over 21,000 people and 100 organizations to express their concerns about this merger. We hope that in future mergers, these regulators will similarly provide the fullest opportunity to consider important public matters.
We also appreciate that the regulators are requiring both a business plan and public CRA plan. We believe these requirements are the direct result of the overwhelming opposition to this merger.
It is promising that the CRA Plan requires measurable annual goals and timetables, complete descriptions of the actions necessary to meet community credit needs, product committees, progress reports to the OCC, and will factor the bank’s progress in meeting these goals into its CRA exam.
However, we are concerned that the OCC has not made public any standards by which it is going to evaluate the bank’s CRA Plan or its comprehensive business plan.
The OCC and the Fed just created a Systemically Important Financial institution via merger, for the first time ever. We can only hope that communities, taxpayers, and the FDIC won’t be left with a bad check (for the third time) as a result of this merger being approved.
In its approval, the OCC requires the bank to develop a CRA plan subject to a “no objection” approval without any indication of how the OCC will evaluate the plan. We suggest that the OCC compare the CIT plan with those of their peer banks, including City National, which recently committed to an $11 billion CRA plan – more than double what CIT and OneWest have proposed.
We must ask, is there a basis upon which the regulators will object to the bank’s CRA plan or is this requirement a mere formality? Given the nearly fifty pages of issues with this merger cited in the regulator’s approval order, we believe regulators should require the bank to make its draft CRA plan publicly available for a minimum of 30 days for the public to comment on it, and regulators should use this input in making any decision on approving the plan.