PacWest Merger OpposedFriday, October 4, 2013
A group that lobbies banks to do more lending in low-income communities is protesting the merger of CapitalSource Inc. and PacWest Bancorp, saying PacWest executives are not committed to community development activities.
The protest was announced Friday by a San Francisco non-profit organization California Reinvestment Coalition. The group has asked the Federal Deposit Insurance Corp. and the Federal Reserve to delay the acquisition, hold hearings on PacWest’s community development plans and require the bank to meet certain conditions.
The federal Community Reinvestment Act requires banks to make loans in low-income communities and to small businesses, as well as support non-profit groups and affordable housing programs. The Reinvestment Coalition has noted that regulators rate CapitalSource as “outstanding” in those activities, but PacWest has a “low satisfactory” rating.
The PacWest-CapitalSource merger is one of the biggest bank deals announced this year. It would create a commercial lender with $15 billion in assets and nearly 100 branches across California.
Kevin Stein, the Reinvestment Coalition’s associate director, said his group, which includes member organizations in Los Angeles, wanted to make sure CRA activities were considered due to the size of the merger.
“It would be in the top 10 in the state,” he said. “That’s a substantial institution. As institutions grow, we think they have an increasing obligation to serve their communities.”
PacWest executives on Friday did not immediately return calls for comment.