(Toronto) TD Bank was asked Thursday to make firm commitments to be more accessible to underserved communities in the United States during a public meeting on its proposed acquisition of First Horizon Bank, based in Memphis.
Posted yesterday at 10:55 a.m.
The virtual meeting, convened jointly by the US Federal Reserve Board and the US Office of the Comptroller of the Currency reviewing the proposed $13.4 billion deal, heard from several groups concerned about TD’s track record when it comes to serving black and Latino customers.
Rachel Labush, supervising attorney at Community Legal Services of Philadelphia, highlighted a 2018 investigative report that found TD was the most likely of the major banks to deny a loan request from a black or latin american person.
His organization’s own research found that over the past three years of residential mortgages in Philadelphia, TD tied among its peers for the lowest percentage of mortgages to Blacks and Hispanics, and was less likely to endorse a high-income black candidate than a low-income white candidate, adds Mme Labush.
In our survey, TD Bank stood out among banks for racial disparities in mortgage lending.
Rachel Labush, supervising attorney at Community Legal Services of Philadelphia
Like several other speakers, she urged regulators to make merger approval conditional on a strong community benefits agreement, with commitments including increased access to mortgages for visible minority borrowers, more loans to small businesses and an increase in branches in underserved neighborhoods.
Other groups that have worked with and received support from TD or First Horizon have expressed support for the agreement and the community involvement of both banks.
“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, Director general of Rebuilding Together, in New Orleans.
Leo Salom, managing director of TD Bank in the United States, highlighted the bank’s recent measures, including a special credit program designed to increase homeownership among “communities of color”, a US$105 million stock the bank created last year to support minority-owned small businesses and its work through the TD Charitable Foundation.
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.
Leo Salom, Managing Director of TD Bank in the United States
He also touted changes to the bank’s overdraft policies, which raised the fee threshold and introduced a grace period. However, the bank has also been criticized for still charging overdraft fees while some other major US banks have waived them, particularly after TD faced a US$122 million settlement with US regulators in 2021 resulting illegal overdraft practices.
While Mr. Salom pointed out that the bank plans to open more branches and boasted that some branches are open seven days a week, Leo Williams of Springfield Neighborhood Housing Services countered that he was concerned about the potential closure of a TD Bank branch in a predominantly black and Latino neighborhood, which is currently only open two days a week.
The public meeting was not a requirement of the takeover review, but was called at a time when regulators called for increased scrutiny of merger activity in the banking sector. TD executives say they expected no delays to the merger and it is expected to close in the first quarter of its 2023 fiscal year.
U.S. federal agencies also held a town hall meeting in mid-July for BMO’s proposed $16.3 billion takeover of Bank of the West, where many community groups called for the deal to be stalled until that a solid agreement on community benefits can be reached.
The bank has also been criticized for the proportionately low number of mortgages given to black and Latino people, while many community associations that have received funding from BMO have expressed support for the deal.