January 11, 2022 – This past week, St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA) and Woodstock Institute entered into a Community Benefits Agreement (CBA) with First Mid Bank & Trust. The National Community Reinvestment Coalition (NCRC) is also supportive of the newly reached agreement. The agreement comes after SLEHCRA, NCRC, and Woodstock Institute filed comments with the Federal Reserve opposing First Mid’s proposed merger with Jefferson Bank and Trust. In October 2021, the advocates’ submitted opposition letters detailing concerns of redlining and low levels of service to Black borrowers and communities, as well as low- and moderate-income communities across the bank’s market area. Based on these concerns, the advocates’ alleged that First Mid was failing to comply with fair lending laws and the Community Reinvestment Act (CRA).
Since first engaging with the bank and submitting the comment letter, the advocates’ have had productive dialogue with the bank about how to improve performance to communities of color and LMI communities throughout their market area. This culminates in a significant Community Benefits Agreement (CBA). Highlights of the 3-year agreement include:
- Two new service locations in St. Louis and in Champaign, IL market areas. These new locations will be located in LMI and minority communities. The bank further committed to maintaining current branches in LMI and minority communities.
- Target lending goals for mortgage applications and originations to minority borrowers, Black borrowers, minority census tracts, LMI census tracts and LMI borrowers. The bank will also offer affordable home mortgage products and programs, including FHA, VA, and USDA loans, and will hire community mortgage loan officers in markets of St. Louis and Champaign that are focused on communities of color and LMI communities.
- Target lending goals for small business loans to LMI communities, as well as increasing financing opportunities to minority and women-owned small businesses. The bank will also provide $100,000 in small business loan subsidies to small businesses in LMI and minority communities.
- An executive Community Development Officer and CRA market leaders in each market that develop and lead community development strategy, as well as create an internal Community Development Committee of bank representatives.
- The bank will also create an external Community Advisory Board composed of external partners and members representing LMI and minority communities.
- First Mid agrees to target community development loans and investments at 2% of the bank’s asset size, including providing $150,000 annually in CRA-eligible donations that will increase by 5% each year.
- Providing $50,000 annually to support financial education to LMI borrowers and communities.
- Agreements to proactively increase racial and ethnic diversity within the staff, leaders, and board of directors of the bank.
- Commemorate the civil rights history of Jefferson Bank with a $10,000 donation to the Griot Museum of Black History.
This forward-looking and substantive CBA shows that the bank is willing to be proactive in remedying concerns of CRA activists across both Missouri and Illinois. As such, advocates have dropped their request that the Federal Reserve block the proposed bank merger. Advocates believe it stands as proof that the bank is committed to taking its CRA obligations seriously.
“Once again, we’ve shown that community advocates can and should demand better from our region’s lenders. We believe that this agreement’s provisions show a significant commitment to improving First Mid’s lending performance in communities of color, including commitments on expanded branching, loan targets, and significant dollars committed for community development. Our work with First Mid is not done, and we look forward to continue working productively to implement this CBA and increase access to financial services for all in our community,” said Elisabeth Risch, SLEHCRA Co-Chair.
“These commitments both recognize a need for change and also the historic nature of the Jefferson Bank protests. We’re especially happy to have secured a donation to the Griot Museum of Black History, which will help preserve the story of this and other civil rights struggles in our region,” added Jackie Hutchinson, SLEHCRA’s other Co-Chair.
“We’ve completed a Community Benefits Agreement with First Mid that addresses our concerns, but the sale points to a major outstanding issue: if we want more loans in African-American or other majority people of color communities, we must demand federal bank regulators raise the standards they use to grade lenders,” said Horacio Mendez, CEO of Woodstock Institute. “This year we have several important opportunities to reform CRA on the table – national reforms planned by the federal bank regulators and the creation of an Illinois CRA stand out among them. If we raise standards for all lenders and get more high-performing loans out to more low- and moderate-income communities and predominantly Black, Latino and other communities of color, doing better can become the norm.
“We’re pleased to see this new and meaningful commitment to address concerns and I want to congratulate SLEHCRA and the Woodstock Institute for their leadership and work with First Mid to expand services, mortgage and small business lending and investments in lower-income communities and communities of color,” said Jesse Van Tol, President & CEO of NCRC.
See the full CBA here: [First Mid Community Benefits Agreement – 1-5-2022]