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The ANHD Blog raises the profile of our issues, and educates our member groups, city decision makers, and the general public on our core issue areas. The ANHD Blog offers sharp, timely and effective commentary on key public policy issues, as well as our work and the work of our member groups.

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BankUnited: Approved to Come to NYC. NOW What?

March 28, 2013

Not the track record New Yorkers need from a bank:  Back in January, as the Florida-based BankUnited was in the process of applying to operate four bank branches in New York City, ANHD asserted that this was decidedly not the kind of bank our city needs, for reasons including:  
  • In Broward and Miami-Dade counties, BankUnited made less than 10% of its loans to LMI borrowers.  
  • Even worse, they made no loans to African American borrowers in 2011 and just 4 in 2010 in those counties.  
  • They also have a very poor track record of working with local groups dedicated to community reinvestment in those same communities.  
ANHD, the National Community Reinvestment Coalition (NCRC), and a number of Florida NCRC members urged BankUnited's regulators at the OCC to give the bank a poor CRA Rating and deny their applications to acquire Herald Bank's branches and open new branches in the New York area.  Yet, the merger was approved with no explicit CRA requirements on the part of the bank.  Private communications by the bank to the Florida groups indicated some internal changes to improve their CRA performance, and one reference in a follow-up communication from the OCC implied a willingness to meet with community organizations, none of which are binding.  And that meeting has yet to happen in any meaningful way. ANHD is extremely disappointed with this outcome.  However, we know there will be further opportunities to comment on and influence their practices.  It is clear that BankUnited has bigger plans for NYC than operating the few branches approved by the OCC.  For one thing, BankUnited is aggressively hiring and building a strong NY team, targeting experienced New York bankers from other institutions.  This move is intended to build up their commercial lending department, which includes multifamily lending.  A new commercial lending team was just announced last month and will be led by Sam Giarusso, a long time M&T employee in charge of their commercial real estate lending division.  In addition, BankUnited seems to be positioning itself for more expansion and acquisitions.  Most recently, they sold about 20% of the total equity of the company that was held by several major investors - individuals and private equity backers.  According to American Banker, "The offering would give BankUnited a more traditional ownership structure and make it easier for it to pursue acquisitions." To be clear, NYC relies upon a healthy, active multifamily market with access to credit to purchase, refinance, and maintain the buildings that house a majority of New Yorkers.  Private multifamily housing is one of the key sources of affordable housing for millions of New Yorkers.  More lenders, and thus more competition, could be a positive addition to the city.  At the same time, we know firsthand the impact of bad multifamily lending, particularly by aggressive lenders seeking profits above people and making speculative loans that throw buildings into disrepair or displace families from their homes.  ANHD will be following BankUnited's activities closely and is eager to meet with its senior leadership to ensure that they are responsible lenders who contribute to the preservation and maintenance of our housing stock. 

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