Wednesday, November 20, 2019

$100-m Fruit of the Poisonous Tree

Fed approves BB&T “merger of equals” with SunTrust Banks, Inc. of Atlanta, Georgia.  

By Stephanie A. Stradford and Eric Stradford, U.S. Marine Corps, Retired

AMWS, November 20, 2019, Atlanta – As many Americans are consumed by politics of division, a faithful few have pressed toward the prize of community over chaos.  To be or not to be “one nation under God,” is the question.

Fruit of the poisonous tree” is just one biblically rooted legal metaphor that might apply to a century of bank mergers in the United States.  Recognizing that generations of underserved Americans can realize economic inclusion, some Money Smart Alliance members are promoting efforts to bring underserved consumers into the financial mainstream.

Youth Achievers USA Institute is a 501c3 public charity committed to helping children in low income American families grow up less poor.  YouthUSA has learned that finding the right bank partner is an essential step in transforming historical disadvantages into economically sustainable community enterprises. But what happens when a bank is too loose with the truth about treasury allocations?

The Federal Reserve Board has issued a consent order against SunTrust Banks, Inc. of Atlanta, Georgia for unfair and deceptive practices.  According to the Fed, “SunTrust made misleading or inaccurate statements between 2013 and 2017 to certain business customers about the operation and billing for certain add-on products.”  The Fed reported that SunTrust repaid approximately $8.8 million in fees to customers and promised millions more in community reinvestment. 

As the SunTrust footprint diminishes, an historically rotten reality must somehow bear good fruit.  A new brand promises to restore community trust in banking.  The Federal Reserve Board met yesterday (Nov 19, 2019) and approved an application by BB&T Corporation of Winston-Salem, North Carolina, to merge with SunTrust Banks, Inc. of Atlanta, Georgia.   

As a condition of the merger, BB&T has committed that the resulting bank will comply with the enforcement action, including implementing procedures to verify the refunds and providing additional refunds, if required.

Already efforts are underway to determine who is included and who will be excluded from a $60 billion Community Benefits Plan.  "The Community Benefits Plan exemplifies what Truist will stand for and how it will support local communities in the years to come," said BB&T Chairman and Chief Executive Officer Kelly S. King.

Truist committed to work with a Community Advisory Board composed of representatives of nonprofit organizations serving low-and moderate-income communities, with the goal of “providing information and updates on the progress of the plan, obtaining input and feedback on emerging issues,” and perhaps addressing challenges facing LMI families and communities.”

Armed Forces veterans and historically disadvantaged community entrepreneurs joined YouthUSA to engage low to moderate income Americans as economic beneficiaries in a $100-million Vibranium Trust .  TheEnterpriZe, LLC, a veteran-owned small business representing the YouthUSA Corporate Village has been tracking trust, or the lack thereof, following a 100-year history of bank mergers in the United States.

According to sources, the $60 billion Truist Community Benefits Plan is a three-year commitment.  It includes:

-$31 billion for home purchase mortgage loans to LMI borrowers, LMI geographies, minority borrowers and/or majority-minority geographies.

-$7.8 billion for lending to small businesses and to support the growth of businesses with revenues less than $1 million.

-$17.2 billion in Community Development Lending (CDL)to support affordable housing development, small business growth lending to nonprofits that support the LMI community.

-$3.6 billion in Community Reinvestment Act (CRA) Qualified Investments and Philanthropy, of which $120 million will be designated for CRA-qualified philanthropic giving.

The branding of Truist Financial Institution comes at a time when America must awaken from a nightmare to become “one nation under God.”   In an economically inclusive vision of the future, “The poor can stop being poor if the rich are willing to become even richer at a slower rate.” Economic advisor Hyman Bookbinder pointed to this path way back during the Lyndon Johnson administration.  He added, “…unless a substantial sacrifice is made by the American people, the nation can expect further deterioration of the cities, increased antagonisms between the races, and continued disorders in the streets.”