Beneficial Mutual Bancorp in Philadelphia is the subject of a governmental investigation into its residential real estate lending.
The Department of Justice's probe will postpone the mutual thrift's plans to convert to a stock-owned organization. The investigation is being conducted under "the Equal Credit Opportunity Act and the Fair Housing Act," Beneficial said.
The company said the Federal Deposit Insurance Corp. made a referral to the Justice Department about its origination of home equity and residential mortgage loans. A spokesman for the FDIC declined to confirm whether it made a referral.
"The bank is cooperating fully with the DOJ to resolve this matter," the $4.8 billion-asset thrift said in a press release Thursday. The statement was disclosed as part of Beneficial's first-quarter earnings report.
Beneficial, which is majority owned by a mutual holding company, had been considering a second-step conversion. "Until this investigation is completed, it is unlikely that Beneficial will be filing any regulatory applications related to strategic expansion or regarding a second-step conversion, which the board had been actively evaluating," the company said.
In Beneficial's annual report, filed on Feb. 27, the company said 1-to-4 family residential loans totaled $667 million, or 27% of total loans. At Dec. 31, loans for 1-to-4 family residential properties totaled $1 billion, or roughly half of Beneficial's $1.9 billion loan book, according to FDIC data.
