The Bank Slate


Fed’s Bowman: Improvements needed for contested applications

While the Fed approved a branch application by Vantage Bank Texas in San Antonio, a member of its board raised questions about the review process.

The $3.5 billion-asset Vantage was seeking permission to open a location in Houston. At least two commenters objected, claiming that Vantage had discriminatory lending practices.

Despite unanimous board support,Fed Gov. Michelle Bowman said process improvements are needed.

“I support the approval of this application,” she said in a written statement that accompanied the approval. “I believe that the board should improve its approach to processing applications in cases where a member of the public has made an adverse comment, particularly when the recent supervisory record addresses the concerns raised and is consistent with approval.”

The Fed said it reviewed “reports of examination, other supervisory information, publicly reported and other financial information, information provided by Vantage Bank and the comments received” as part of the approval process.

One commenter objected to the proposal, alleging that the bank failed to offer small business and consumer loans to black communities in Fort Worth, Texas. Another claimed that Vantage discriminated against black neighborhoods and individuals in terms of branch locations, marketing and lending.

Vantage responded by pointing to its satisfactory Community Reinvestment Act record, noting that its past two exams found “no evidence of discriminatory or other illegal credit practices inconsistent with helping to meet community needs was identified.”

The bank stated that all but one of its branches are located in majority minority census tracts, including one of its two Fort Worth locations. The proposed Houston branch would be located in an upper-income majority-minority census tract.

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