Another advocacy group has signed off on the sale of Downtown L.A.’s City National Bank to Toronto’s Royal Bank of Canada, potentially easing the deal’s approval by regulators.
The National Diversity Coalition, an umbrella group of community organizations based in Daly City, announced Wednesday in a letter to federal officials that it has withdrawn its opposition to the deal. When deciding whether to sign off on bank mergers, regulators judge banks on their compliance with the Community Reinvestment Act, which requires lenders to serve small businesses and minority communities.
Opposition from community advocacy groups can kill a deal or at least stretch out the timeline for a deal’s completion. That’s been the case for the planned acquisition of Pasadena’s OneWest Bank by New Jersey lender CIT Group Inc., a deal several groups have opposed.
San Francisco’s California Reinvestment Coalition, a key OneWest-CIT opponent, and a handful of other groups opted to support the City National-RBC deal after City National announced an $11 billion Community Reinvestment Act plan in late April, but the National Diversity Coalition remained opposed. The group had called for a public hearing to review the deal, similar to the one held in February regarding the OneWest-CIT deal.
In its letter, addressed to Federal Reserve Chairwoman Janet Yellen, Treasury Secretary Jack Lew and other officials, the National Diversity Coalition said it was withdrawing its request for hearings “in the context of the commitments made by both CEOs that their CRA commitment, established in the written document, is just a part of a larger future-oriented commitment to work with underserved communities to develop a commitment of resources and innovation to the underserved that is as significant as City National has historically provided to the wealthy.”
City National Chief Executive Russell Goldsmith, in a statement to the Business Journal, said he is pleased the coalition has decided to support the deal.
“The coalition consists of organizations that are deeply committed to increasing economic opportunity in traditionally underserved communities,” Goldsmith said. “City National shares that commitment, and we look forward to working with the coalition and all of our community partners to make real progress in the years ahead.”
The Los Angeles Latino Chamber of Commerce, which supported the OneWest deal but initially opposed City National’s, is a member of the National Diversity Coalition. The chamber’s executive director, Theresa Martinez, was one of the letter’s signers.
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