Group drops op­po­si­tion to City Na­tional takeover

Los Angeles Times - - BUSINESS BEAT - By E. Scott Reckard scott. reckard@ latimes. com

Royal Bank of Canada’s planned takeover of City Na­tional Corp. in Los An­ge­les moved closer to re­al­ity Wed­nes­day when an ad­vo­cacy group for mi­nor­ity con­sumers, churches and busi­nesses re­versed course, sup­port­ing the deal.

The Na­tional Di­ver­sity Coali­tion dropped its de­mand for a Fed­eral Re­serve hear­ing on how the public would ben­e­fit from the merger, such as the one the Fed held in Fe­bru­ary to al­low com­ment on another bank merger, CIT Group’s pro­posed takeover of Pasadena’s OneWest Bank.

The Na­tional Di­ver­sity Coali­tion, based in Daly City, Calif., had gen­er­ated 4,200 protest letters to bank reg­u­la­tors. Its re­ver­sal makes it the third ma­jor ad­vo­cacy group to en­dorse Royal Bank’s $ 5.4- bil­lion pur­chase of City Na­tional, some­times called the “bank to the stars” be­cause of its ties to Hol­ly­wood and wealthy peo­ple.

The Green­lin­ing In­sti­tute and the Cal­i­for­nia Re- in­vest­ment Coali­tion in San Fran­cisco al­ready backed the merger, cit­ing City Na­tional’s pledge to de­vote $ 11 bil­lion in loans and other sup­port over f ive years to help low- in­come neigh­bor­hoods and small busi­nesses.

City Na­tional Chief Ex­ec­u­tive Rus­sell Gold­smith is­sued a state­ment say­ing his bank would be a staunch ad­vo­cate for ar­eas where pawn­shops, pay­day loan out­lets and car- ti­tle lenders out­num­ber bank and stock­bro­ker of­fices.

“We look for­ward to work­ing with the coali­tion and all of our com­mu­nity part­ners to make real progress in the years ahead,” Gold­smith said.

In ap­prov­ing bank merg­ers, the Fed con­sid­ers the banks’ per­for­mance and pledges un­der the 1977 Com­mu­nity Rein­vest­ment Act. The CRA re­quires banks to serve low- and mod­er­ate- in­come parts of their metropoli­tan ar­eas.

Sign­ers of the Na­tional Di­ver­sity Coali­tion sup­port let­ter in­cluded Faith Bautista, the head of an ad­vo­cacy group for Filipino and Viet- namese im­mi­grants, as well as rep­re­sen­ta­tives of African Methodist Epis­co­pal and evan­gel­i­cal Latino con­gre­ga­tions and lead­ers of the Los An­ge­les Latino Cham­ber of Congress.

The let­ter, posted on the web­site of Bautista’s Na­tional Asian Amer­i­can Coali­tion, said City Na­tional and Royal Bank had of­fered as­sur­ances that the $ 11 bil­lion in writ­ten CRA pledges is “just a part of a larger fu­ture- ori­ented com­mit­ment to work with un­der­served com­mu­ni­ties.”

The let­ter said the bank’s com­mit­ments in­cluded “spe­cific and in­no­va­tive ef­forts with faith- based in­sti­tu­tions to di­rectly as­sist un­der­served com­mu­ni­ties,” in­clud­ing pro­grams for home own­er­ship, small- dol­lar lend­ing and youth fi­nan­cial ed­u­ca­tion.

The pro­posed $ 3.4- bil­lion takeover of OneWest by New York com­mer­cial len­der CIT di­vided the ad­vo­cacy com­mu­nity and prompted the Fed to hold a public hear­ing on the mat­ter in Fe­bru­ary.

City Na­tional Bank

CITY NA­TIONAL,

with head­quar­ters in down­town L. A., is be­ing ac­quired.

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