Community groups skeptical of TD Bank-First Horizon merger

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WASHINGTON — A number of community groups on Thursday called on regulators to suspend approval of the Toronto-Dominion Bank’s deal to acquire First Horizon Corp. in Memphis, Tennessee, until banks agree to invest more in local communities.

The groups spoke at a virtual public hearing on the agreement – ​​a feature of the rulemaking that has been a more frequent occurrence during the Biden administration than in previous administrations. Acting Comptroller of the Currency Michael Hsu pointed to the “the value that public input can bring to mergers” as part of a broader review by regulators of how to approach bank mergers.

TD Bank has agreed to buy First Horizon for $13.4 billion in liquid. The acquisition would create a top-six bank in the United States by assets.

Community groups speaking at a virtual public hearing sponsored by the Office of the Comptroller of the Currency into TD Bank’s proposed acquisition of First Horizon Bank on Thursday. Many have expressed concern about the impact of the merger on minority and low-income communities.

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However, this is a tenuous period for a major regional bank merger. Regulators are considering imposing additional requirements on larger banking transactions in general, and TD Bank in particular has faced pushback in Washington over its past oversight shortcomings.

Sen. Elizabeth Warren, D-Mass., has urged the Office of the Comptroller of the Currency to reject the deal, citing a Capitol Forum report that TD used incentives similar to those that contributed to the fake account scandal at Wells Fargo. Previously, TD has agreed to a $122 million settlement with the Consumer Financial Protection Bureau in 2021 due to illegal overdraft practices.

Some groups at Thursday’s hearing cited those issues and called on regulators to block the deal until they craft new rules for large regional bank mergers.

“Banking regulators, along with the Department of Justice, urgently need to rethink bank merger guidelines to ensure members meet the needs of their communities,” said Tykeisa Nesbitt on behalf of Americans for Financial. Reform. “Until then, bank mergers, including this one, should be blocked.”

Other groups have called for regulators to approve the deal only on the condition of a community benefits agreement that would give the bank additional obligations to local communities. Rachel Labush, supervising attorney at Community Legal Services of Philadelphia, which sought a community benefits agreement for the acquisition, said that in Philadelphia, TD was less likely to approve a residential mortgage for a black income applicant. higher than a low-income applicant. white applicant.

“When you look at all the major US banks, TD Bank is the most likely to turn down a loan request from a black or Latino person,” she said.

Regulators have heard a lot about groups in the Southeast, where the Toronto-based bank would expand significantly by acquiring First Horizon.

Peter Skillern, executive director of Reinvestment Partners in North Carolina, said TD has been essentially absent from housing and community development discussions in the state since it bought Carolina First Bank in Troy, North Carolina. North, in 2010. First Horizon, however, has been actively engaged in the region, he said.

“This merger will have a big impact on North Carolina. Together, TD and First Horizon will have branches from Wilmington to the mountains,” Skillern said. “The question, however, that still remains unanswered is which banking culture will prevail; what will the banking culture do in terms of valuing diversity? What is the commitment to diversity at the local level, not just in the ‘together ?”

Bank executives at the hearing touted recent changes to banks’ overdraft policies, as well as a special credit program designed to increase homeownership in black and Latino communities.

“We are proud of the role we play in our communities and welcome the opportunity to expand our impact through our association with First Horizon,” said Leo Salom, Managing Director of TD Bank in the United States.

Some groups present at the hearing said they supported the deal.

“We support this merger because we hope it will bring additional resources to our community, but also to communities across the country that can benefit from a larger bank that essentially has more resources,” said William Stoudt, executive director of Rebuilding Together. New Orleans.

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