Pearl River The crime is redlining, the pernicious policy of banks discriminating against lower income and minority communities particularly in mortgage lending. And, yes, despite passage of the Community Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA) not only is redlining still happening, but the impacts of its history are still having devastating impact on thousands of US communities. All of this was in the news when the Justice Department recently announced a record settlement of $31 million for redlining, only a few short days before I was talking to Richard Wise on Wade’s World about his lead story on fighting redlining in the current issue of Social Policy, where he wrote a docufiction short story called “Taking On the Slumlord”, an organizing tale much like his early book, Redlined: A Novel of Boston.
In late 2019, virtually on Christmas eve, I’d heard from a guy who was an insider-whistleblower of sorts who had done previous stints at the San Francisco Federal Reserve and at City National Bank in Los Angeles. Here’s what he had to say:
Basically, when City National was acquired by Royal Bank of Canada the Federal Reserve Bank held up the application and ended up attaching a $10 Billion commitment Sunshine Provision under Gramm-Leach-Bliley for them to invest over the next 5 years. We are entering the last year and a half and I have grave questions about their performance to plan. Royal Bank of Canada bought CNB as an entre’ into the US so they have aspirations of expansion and a CRA black eye would matter to them. My dealings with RBC President McKay and former CNB Chairman Goldsmith suggest they really want to be better but are just so far removed from “the people” in low-mod areas, they need help.
He had reached out to me because from his experience with the Fed, he well knew ACORN’s reputation and record of success in forcing banks to comply with the CRA, so he wanted us to lean on City National, wave the ACORN flag, and essentially pressure them to get their act together and do right. In essence, he wanted ACORN to be the “help”, then needed. We went back and forth over several pre-Christmas emails, I promised him I would discuss this with ACORN’s affiliate in Canada to see if they were comfortable in joining with me to tighten the screws, but promised I would follow-up. Getting the go-ahead from Judy Duncan, ACORN Canada’s head organizer, I did so.
We got nothing from RBC but a brushoff, but I did get some reaction from City National, and they sent me an email with a PDF of their “public file.” That didn’t do it, so with some more back and forth, on March 9, 2020, a huge box of documents came into my office (and is still there!) of materials from City National. I reached out for Judy to see if she had received the same thing, which she hadn’t. If you’re following these dates, you know what happens next, because this aligns with the pandemic shutdown.
Nonetheless, we maintained our pursuit into the spring, finally doing a telephone conference with RBC-City National executives, leaders from ACORN Canada, Judy, and me. Nothing much came of it, as I reported to our insider via email:
call was good for ACORN Canada leaders, and there will be follow-up with several other executives, but…
they had thrown a senior VP in retail into the soup to handle this. they had told her someone else was reaching out for me directly on the LA bank and CRA question, so she was caught flatfooted when i raised these issues and told her that I had heard from no one. promised follow-up.
But there was no follow-up. After several more efforts to get City National to respond, under the fog of the pandemic, office shutdowns, travel curtailment, and more, we were ghosted by both City National and our whistleblower.
In 2020, the Trump administration was still in the driver’s seat, and there were competing efforts to modify or gut the CRA, so likely City National felt no heat on their necks to do right. With a new sheriff in town with the Biden administration’s Justice Department promising to finally really enforce CRA, maybe we had actually done our part and served a purpose. The headlines on the settlement speak to the fact that they didn’t market to Latino and Black neighborhoods in Los Angeles and that they hadn’t opened a branch in those areas in 20 years, but I would bet the fact that with some impunity they didn’t fulfill the terms of the earlier settlement and make the committed investments that they had promised is what really ran up the bill to $31 million.
Hopefully, this is ending well, and we played our part. I’m just sorry, we weren’t able to keep our feet on their necks until they did right, but glad that Justice stepped in hard on this gang.