American Banker: New York Community and Flagstar delay merger, shift regulatory strategy

American Banker, April 27, 2022, New York Community and Flagstar delay merger, shift regulatory strategy

New York Community Bancorp and Flagstar Bancorp are extending the deadline for their merger until late October and have decided the combined entity would be a national — not a state-chartered — bank.

The change in strategy comes three months after New York Community said it would provide $28 billion in loans and other support to neighborhoods and small businesses across both banks’ footprints. The plan, which was negotiated with the National Community Reinvestment Coalition, is among a recent string of such agreements that are thought to help pave the way for bank mergers as federal regulators apply greater scrutiny to how such deals affect communities.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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