Mechanics Bank agrees to $9.5B CRA investment as part of Rabobank deal
Mechanics Bank has agreed to make a $9.5 billion investment in Community Reinvestment Act activities over the next five years as part of its acquisition of Rabobank announced earlier this year.
The Walnut Creek, Calif., bank said it will will supply 0.25% of deposits toward community development investments, annually, with at least 50% in affordable housing development, small-business lending, community development financial institutions, certified development companies and other nonprofit funds.
The announcement was praised by consumer groups which had been calling on Mechanics Bank to strengthen its CRA commitment as part of the merger deal.
“At a time when the CRA is under attack in Washington, we applaud Mechanics Bank for making a strong commitment to the California communities where it does business,” said Paulina Gonzalez-Brito, the executive director of the California Reinvestment Coalition.
Mechanics Bank currently has 44 branches across the Golden State and more than $6 billion in assets. It announced the deal with Rabobank in March and plans to operate under the Mechanics Bank name with 144 branches and more than $17 billion in total assets by the third quarter of 2019. It said it will start its new CRA investments in January 2020.
“When a bank merger takes place, the CRA gives the public the opportunity to weigh in with regulators on how well the merging banks are meeting the needs [of] low and moderate income communities,” Gonzalez-Brito said, calling CRA commitments like Mechanics’ a "win-win" for banks and the community they service.