Next City recently highlighted an important agreement for community reinvestment as part of the merger of New York Community Bank and Astoria Bank. AAFE helped negotiate the terms of the community reinvestment plan, along with the Association of Neighborhood and Housing Development (ANHD) and other local organizations.
Last fall, New York Community Bancorp applied with federal regulators to acquire Astoria Bank in a $2 billion deal. ANHD, of which Asian Americans for Equality is a member, submitted a formal objection. It urged the government to require the bank to submit a CRA Plan, a provision of the Community Reinvestment Act of 1977. New York Community Bancorp did not wait for regulators to weigh in, but agreed on its own to enter negotiations with ANHD members.
Next City talked with AAFE Executive Director Chris Kui about the resulting agreement:
“I think it’s one of the best CRA agreements that has come out in the past five to 10 years,” says Kui… Since 1986, AAFE has developed over 700 units of affordable housing around NYC, including the first affordable housing development in NYC to use low-income housing tax credits. But AAFE is much more than a housing organization. In the 1990s, AAFE established an economic development arm, the Renaissance Economic Development Corporation (EDC). Renaissance EDC has provided $28.5 million in affordable loans to 750 small businesses. They’re routinely a top 10 SBA microlender. So Kui couldn’t help but bring up small business lending as part of the NYCB negotiations. “NYCB didn’t have a big focus on small business lending, and at the same time we’ve seen a pullback of small business lending from bigger banks and banks in general, so we raised that question with them,” Kui says. When the bank said it didn’t quite have the infrastructure to do more small business lending, Kui suggested partnering with a local CDFI (community development financial institution) like Renaissance EDC. “As a result of dialog and discussion, we potentially have a program for them to work with a CDFI on small business lending,” Kui says. Specifically, a commitment to invest $4 million in a local CDFI (while also maintaining their existing small business lending and banking business). Regulators still have to give final approval on the plan. “This organizing effort is bringing back the effectiveness of the CRA. It’s a model,” Kui adds.
The plan covers many areas, including: branching and bank products, small business and residential lending, multifamily lending and community development loans and investments.
ANHD’s Jaime Weisberg recently wrote a blog post about the agreement, highlighting some of its key features:
NYCB is the largest multifamily lender in NYC, with a particular emphasis on more affordable rent-regulated multifamily buildings. While the bank has indeed been more responsive to community organizers in recent years, they are still lending to some bad-actor landlords. Thus, we are particularly pleased with their commitment to responsible lending through quality underwriting, stronger vetting of current and potential borrowers, and regular communication with tenant organizers to identify and deal with bad-actor landlords who harass and evict tenants… Key to the plan’s success is the ongoing collaboration with community organizations and tenant organizers. This provides a regular forum to evaluate what is and isn’t working and, in the case of multifamily lending, identify and deal with bad-actor landlords in a timely manner to address problematic conditions and behaviors, or avoid lending to them entirely. ANHD looks forward to working with NYCB to implement this plan and make it a success.
You can read more about the plan on AHND’s website.