New York Community Bancorp has reached an agreement with a key community advocacy group as it seeks to pave the way for approval of its merger with Flagstar Bancorp.
Under the deal with the National Community Reinvestment Coalition, New York Community will provide $28 billion in loans and other support to neighborhoods and small businesses.
The agreement, which comes at a time when the Biden administration is signaling plans to apply more scrutiny to bank mergers, could help the $57.9 billion-asset Long Island company win approval for the Flagstar deal. The community reinvestment plan covers both banks’ footprints.
“This multi-year agreement reflects our commitment to provide greater economic opportunities” for low- and moderate-income communities and communities of color, and to “bridge the racial wealth gap that exists today,” New York Community Chairman and CEO Thomas Cangemi said in a press release.
Jesse Van Tol, the chief executive of the NCRC, said in the same release that the agreement represents “a significant commitment to increase investments, services and loans for low- and moderate-income communities and neighborhoods of color where these banks operate.”
New York Community's deal for Flagstar, which is based in Troy, Michigan, was announced in early 2021 and was initially expected to close by the end of last year. In October, New York Community executives
As part of the agreement announced Monday, the combined bank, which is expected to have $85 billion of assets, will provide $21.7 billion in community development loans and investments. Some of the funds will be used to help develop affordable housing strategies with local organizations, according to the press release.
New York Community will also provide $5.7 billion in new mortgages, refinances and home improvements, $10 million in down payment aid, $542 million in small-business loans and $16.5 million in philanthropy.
The bank also committed to maintaining customers’ access to some Flagstar products and to hiring for existing branches from their communities. Flagstar currently operates branches in Michigan, Indiana, Wisconsin, Ohio and California.
The Biden administration has ordered federal regulators to look for ways to update their procedures for reviewing bank mergers in order to
The National Community Reinvestment Coalition negotiates for payouts to communities of color and lower-income areas affected by bank mergers. Since 2016, it has negotiated for $417 billion in investments from 17 banking groups.
