by Charlene Crowell, Special to The Informer<\/p>\n\n\n\n
As banks grow larger through mergers and focus on growing online and mobile services, serious concerns emerge on how fair and how accessible banking will be to traditionally underserved Black and Latino communities. In most cases, consumers and small businesses alike view bank branch accessibility and convenience as key to serving their communities. <\/p>\n\n\n\n
Consumer advocates currently are urging bank regulators to thoroughly examine a proposed TD Bank merger, particularly in light of the lender\u2019s record with home loans and overdraft fees. <\/p>\n\n\n\n
Earlier this year, TD Bank announced its plan to acquire First Horizon Bank<\/a> and its $85 billion in assets and 417 locations, largely in the South. If approved by federal regulators, the merger would create the sixth-largest bank in America. <\/p>\n\n\n\n TD Bank already has more than $1.3 trillion in assets, 27 million customers and over 1,100 locations spread across 15 states and the District of Columbia. In Atlanta and Dallas, the bank does business as TD Ameritrade. The states with the most branches are New York (367), Florida (355) and New Jersey (367). <\/p>\n\n\n\n According to its website<\/a>, \u201cBlack experiences, in all their diversity, are at the heart of our drive for positive, sustainable change.\u201d<\/p>\n\n\n\n But as Sportin\u2019 Life, a character in the immortal folk opera, Porgy and Bess, said: \u201cIt ain\u2019t necessarily so.\u201d Indeed, TD\u2019s business record sends a different message. <\/p>\n\n\n\n Earlier this year, WHYY, the National Public Radio station serving the Philadelphia metro area, reported<\/a> that in its region between 2018 and 2020, \u201cTD Bank was more likely to approve a mortgage loan for a low-income white applicant than a high-income Black applicant.\u201d <\/p>\n\n\n\n TD Bank had the lowest mortgage approval rate for Black applicants in its entire metro area. During this time, \u201cthe institution denied 20 percent of all purchase mortgages, but denied nearly 40 percent of all Black applicants,\u201d according to the data, which was culled from Home Mortgage Disclosure Act data. By comparison, the denial rate among white applicants was 20 percent.\u201d <\/p>\n\n\n\n A similar finding appeared in a 2018 investigative article by Reveal News<\/a>: \u201cAfrican American and Latino borrowers are more likely to get turned down by TD Bank than by any other major mortgage lender. The bank turned down 54 percent of black homebuyers and 45 percent of Latino homebuyers, more than three times the industry averages.\u201d <\/p>\n\n\n\n Then there\u2019s TD Bank\u2019s poor record on overdraft fees. <\/p>\n\n\n\n Just two years ago, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with TD Bank<\/u><\/a> that provided $97 million in restitution to 1.42 million consumers, and the CFPB charged the firm a $25 million civil penalty. The bank had illegally charged customers overdraft fees without first obtaining their consent before enrolling them in its optional overdraft. <\/p>\n\n\n\n Overdraft fees often exploit consumers\u2019 short-term cash needs. The vast majority of overdraft fee revenue comes from people with account balances that average less than $350. <\/p>\n\n\n\n TD Bank\u2019s business model relies far more on overdraft fees than other large banks. While some of its peer institutions eliminated overdraft fees, TD charges a $35 overdraft fee as many as three times a day. <\/p>\n\n\n\n Fortunately, consumer advocates are registering their serious concerns with federal regulators. <\/p>\n\n\n\n \u201cTD Bank cannot serve the needs of low-income communities while insisting on maintaining this large stream of revenue that, by definition, depends on consumers who lack funds,\u201d testified<\/u><\/a> Nadine Chabrier, senior policy and litigation counsel with the Center for Responsible Lending (CRL), at a recent hearing on the merger proposal. She noted that in deciding whether to approve a merger, government regulators, by law, must consider whether community needs would be served. <\/p>\n\n\n\n