Community Groups Announce Agreement with Midland States Bank that Increases Access to Financial Services for Minority Communities

For Immediate Release

October 2, 2014

St. Louis, MO – The St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA), a coalition of non-profit and community organizations, announced today an agreement with Midland States Bank that includes a $16.6 million commitment that will increase access to home mortgage products and financial services for minority communities in St. Louis and other parts of Illinois. Additionally, the bank agreed to open two full-service bank branches and a loan production office in predominantly minority neighborhoods.

SLEHCRA, along with the National Community Reinvestment Coalition (NCRC) and the Woodstock Institute, challenged Midland States Bank’s application to acquire Heartland Bank based on concerns with the bank’s service to minority borrowers and communities in mortgage lending and location of branches. A SLEHCRA member organization filed a fair housing complaint with the U.S. Department of Housing and Urban Development (HUD) Office of Fair Housing and Equal Opportunity over the concerns. The agreement with Midland States Bank announced today resolves the fair housing complaint and demonstrates a significant commitment to serve minority communities throughout the bank’s footprint.

This commitment represents the ongoing efforts of SLEHCRA members and other partners to increase investment in low-income communities and in minority communities. SLEHCRA recognizes Midland States Bank’s efforts to expand access to quality home mortgage products, financial services, branch locations, and financial education for all people in our community.

As part of the Agreement, Midland States Bank agrees to the following commitments over the next three years:

• Opening of two new full-service bank branches and a loan production office in predominantly minority communities in St. Louis and in Joliet, Illinois.
• Nearly $1 million in direct assistance to borrowers in minority communities for home purchase, home refinance, or home repair loans through subsidies or discounts to qualified borrowers.
• A $15 million commitment in home purchase, refinance, home repair, and multifamily lending in predominantly minority communities.
• Commitments for affirmative marketing in African American and Hispanic communities, financial education, and community reinvestment training for the public and community organizations.
• The creation of a Corporate Community Development Plan with the consultation of community groups, including SLEHCRA, NCRC and the Woodstock Institute, that will guide long-term community development practices throughout the bank’s service areas.

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Press Release: Community Groups Announce Agreement with Midland States Bank that Increases Access to Financial Services for Minority Communities [PDF]

For Immediate Release:

Community Groups Oppose Midland States Bank Acquisition of Heartland Bank

October 29, 2013 – SLEHCRA, a coalition of non-profit and community organizations, filed a public comment letter yesterday with the Federal Reserve Bank of St. Louis challenging Midland States Bank’s acquisition of Heartland Bank. Midland States Bank, based in Effingham, Illinois, announced its acquisition of Heartland Bank, of St. Louis, Missouri, on September 12, 2013. The bank filed an application for the acquisition with the Federal Reserve Bank of St. Louis, which is subject to regulatory review and public comments.

SLEHCRA’s public comment letter states that the bank acquisition will not result in a benefit to the public, particularly low- and moderate-income communities and minority communities, as required by law. SLEHCRA points out serious concerns with Midland States Bank’s service to minority communities and low- and moderate-income communities.

The Bank Holding Company Act requires banking regulators to consider the public interest when approving or denying bank mergers or acquisitions. Banks applying to acquire another institution must state what public benefits can reasonably be expected to result from the proposed transaction.

Based on analysis of home mortgage lending, small business lending, and branch locations, SLEHCRA is concerned that Midland States Bank is not adequately meeting the needs of the community in their St. Louis market, as well as in other market areas in Illinois. Specifically, in the St. Louis market, Midland States Bank received only 6 home loan applications from African-American borrowers out of a total of 1,530 loan applications in the last four years (2009-2012). African-Americans represent only 0.39 percent of the bank’s loan applicants during that time period, despite that 20.7 percent of households in the bank’s St. Louis market area are African-American. The bank received 7 loan applications from Hispanic borrowers in the St. Louis market, which represent 0.46 percent of applicants over the last four years. Hispanics represent nearly 2 percent of households in the St. Louis market. Similarly, the bank’s market penetration to African-American and Hispanic borrowers is also extremely low in the bank’s market areas of Champaign, Illinois and in Joliet, Illinois, both of which are areas with significant minority populations. Additionally, SLEHCRA is concerned that the bank’s home mortgage lending to low-income borrowers and communities lag behind the aggregate lending record over the last two years in the bank’s St. Louis market area. In contrast, Heartland Bank’s performance in serving the community is much better. Heartland Bank is one of the top mortgage lenders in the St. Louis area, and their market penetration to minority borrowers and low- and moderate-income borrowers is above the aggregate lending

Based on fair lending concerns with Midland States Bank’s extremely low market penetration to minority borrowers, the Metropolitan St. Louis Equal Housing and Opportunity Council (EHOC), a SLEHCRA member, filed a fair housing complaint with the U.S. Department of Housing and Urban Development (HUD) against Midland States Bank. SLEHCRA is asking that the Federal Reserve not approve the acquisition until the fair housing complaint is resolved and that the bank clearly define the benefits the public can expect as a result of the acquisition.

Additionally, the National Community Reinvestment Coalition, in Washington, D.C., and the Woodstock Institute in Chicago, Illinois, also filed public comment letters with the Federal Reserve Bank of St. Louis challenging Midland States Bank acquisition of Heartland Bank. The public comment letters are posted online at www.slehcra.org.

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Press Release, October 29, 2013 [PDF]

SLEHCRA Public Comment Letter, October 28, 2013 [PDF]

Woodstock Institute Public Comment Letter, October 28, 2013 [PDF]

National Community Reinvestment Coalition Public Comment Letter, October 28, 2013 [PDF]

August 2, 2013 –  Today, the Federal Deposit Insurance Corporation (FDIC) released the Community Reinvestment Act (CRA) evaluations for banks that were recently evaluated on how services are meeting the credit needs of the community. Eagle Bank and Trust Company of Missouri received a “Needs to Improve” rating on their CRA exam dated May 21, 2012.

The St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA) provided a public comment letter in March 2012 to the FDIC for consideration in Eagle Bank and Trust’s CRA exam. The comment letter detailed concerns with the bank’s service to low- and moderate-income communities and minority communities. SLEHCRA was concerned that the bank’s assessment area excluded portions of north St. Louis City and north St. Louis County. Both of these areas have substantial minority populations and low- and moderate-income communities. SLEHCRA was also concerned with low levels of lending to minority borrowers and communities, and urged the FDIC to conduct a thorough fair lending investigation.

According to Eagle Bank and Trust’s CRA examination, the FDIC found substantive fair lending violations of the Equal Credit Opportunity Act and the Fair Housing Act. The FDIC also found violations in how the Bank designated their assessment area that excluded low- and moderate-income census tracts. The FDIC revised the Bank’s assessment area to include all of St. Louis County, St. Louis City and Jefferson County. SLEHCRA’s concerns are also detailed in the Bank’s CRA examination.

This is the first time that the FDIC has given a “Needs to Improve” rating to a bank in the St. Louis metro area since 1995. SLEHCRA applauds the FDIC for taking steps to better enforce the CRA. In giving banks lowered ratings for poor performance, the FDIC is ensuring that banks are held accountable for services provided to the community, particularly communities that have been underserved by mainstream financial institutions. SLEHCRA hopes that the FDIC continues to conduct rigorous CRA and fair lending exams, and continues to take action on serious community concerns related to bank performance.

Eagle Bank and Trust Company of Missouri is headquartered in Hillsboro, Missouri, and operates 14 branches. The bank reports $893 million in assets. The FDIC’s Kansas City regional office conducted the bank’s CRA examination, which is available online here: http://www2.fdic.gov/crapes/2012/17691_120521.PDF

SLEHCRA is a coalition working to increase investment in low- and moderate- income communities, regardless of race, and in minority communities, regardless of income, by ensuring that banks are meeting their obligations under the CRA and fair lending laws. SLEHCRA regularly reviews bank performance and provides public comment letters on CRA and fair lending performance. All bank analyses and public comments are posted online at www.slehcra.org. SLEHCRA also partners with banks to assist in developing strategies to better serve all parts of the community. SLEHCRA member organizations stand ready and willing to partner with Eagle Bank and Trust to help identify ways of improving performance to low- and moderate-income communities and communities of color.

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