Bloomberg, Joe Schneider, 31 December 2007
Royal Bank of Canada's proposed $1.6 billion acquisition of Alabama National BanCorp. was challenged by a New York watchdog group that claims Canada's biggest bank engages in discriminatory lending practices.
Fair Finance Watch, a financial advocacy group for poor consumers, said it asked the Federal Reserve Bank of Richmond, Virginia, in a Dec. 28 letter for public hearings and all documents relating to the proposed buyout.
Royal Bank agreed Sept. 6 to buy Birmingham-based Alabama National for cash and stock in its biggest acquisition since expanding into U.S. consumer banking six years ago. Barred from merging at home, Canada-based banks are taking advantage of a stronger Canadian dollar to step up acquisitions abroad.
``RBC's proposal, on the current record, should not be approved or allowed,'' Matthew Lee, executive director of Fair Finance Watch, said in a letter to the Richmond Federal Reserve, a copy of which was made available to Bloomberg News. Officials at the regulator weren't immediately available for comment.
Citing the Home Mortgage Disclosure Act, Fair Finance Watch claimed Royal Bank's RBC Centura unit in 2006 denied mortgage refinance applications in Charlotte, North Carolina, to blacks 4.4 times more frequently than whites. In the Atlanta area, RBC Centura allegedly denied home improvement mortgage applications of blacks 4.2 times more frequently than whites, the group said.
`An Inquiry'
``There should be an inquiry,'' Lee said in the letter.
Judi Levita, a Royal Bank spokeswoman, said ``the lending practices of RBC Centura satisfactorily comply with all applicable requirements.''
Levita added the bank hasn't yet reviewed the letter.
Royal Bank also agreed in October to buy RBTT Financial Holdings Ltd. in Trinidad & Tobago for about $2.2 billion to double its Caribbean branch network. That acquisition also deserves heightened scrutiny, Lee claimed in the letter, addressed to Linwood Gill III and Dan Tatar at the Richmond Federal Reserve.
Both men were unavailable for comment, said Donna Tapscott, a spokeswoman at the Richmond Federal Reserve.
Will Matthews, spokesman for Alabama National, didn't return a call seeking comment. Royal Bank fell 88 cents to $51.04 at 4:02 p.m. in New York Stock Exchange composite trading.
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Royal Bank of Canada's proposed $1.6 billion acquisition of Alabama National BanCorp. was challenged by a New York watchdog group that claims Canada's biggest bank engages in discriminatory lending practices.
Fair Finance Watch, a financial advocacy group for poor consumers, said it asked the Federal Reserve Bank of Richmond, Virginia, in a Dec. 28 letter for public hearings and all documents relating to the proposed buyout.
Royal Bank agreed Sept. 6 to buy Birmingham-based Alabama National for cash and stock in its biggest acquisition since expanding into U.S. consumer banking six years ago. Barred from merging at home, Canada-based banks are taking advantage of a stronger Canadian dollar to step up acquisitions abroad.
``RBC's proposal, on the current record, should not be approved or allowed,'' Matthew Lee, executive director of Fair Finance Watch, said in a letter to the Richmond Federal Reserve, a copy of which was made available to Bloomberg News. Officials at the regulator weren't immediately available for comment.
Citing the Home Mortgage Disclosure Act, Fair Finance Watch claimed Royal Bank's RBC Centura unit in 2006 denied mortgage refinance applications in Charlotte, North Carolina, to blacks 4.4 times more frequently than whites. In the Atlanta area, RBC Centura allegedly denied home improvement mortgage applications of blacks 4.2 times more frequently than whites, the group said.
`An Inquiry'
``There should be an inquiry,'' Lee said in the letter.
Judi Levita, a Royal Bank spokeswoman, said ``the lending practices of RBC Centura satisfactorily comply with all applicable requirements.''
Levita added the bank hasn't yet reviewed the letter.
Royal Bank also agreed in October to buy RBTT Financial Holdings Ltd. in Trinidad & Tobago for about $2.2 billion to double its Caribbean branch network. That acquisition also deserves heightened scrutiny, Lee claimed in the letter, addressed to Linwood Gill III and Dan Tatar at the Richmond Federal Reserve.
Both men were unavailable for comment, said Donna Tapscott, a spokeswoman at the Richmond Federal Reserve.
Will Matthews, spokesman for Alabama National, didn't return a call seeking comment. Royal Bank fell 88 cents to $51.04 at 4:02 p.m. in New York Stock Exchange composite trading.
