Sterling Financial answers Fed: We've already addressed our CRA issue
Sterling Bancorp in Montebello, N.Y., has responded to a Federal Reserve disclosure about possible shortcomings in its Community Reinvestment Act procedures, saying that it has addressed issues raised in December by another regulator.
The $14.7 billion-asset company said in a press release Monday that it has “worked hard” to address weaknesses outlined by the Office of the Comptroller of the Currency and that it is “working closely” with its regulators “to craft a more detailed public response.”
Sterling also said it believes that there are no obstacles to gaining regulatory approval to buy Astoria Financial in Lake Success, N.Y. The $2.2 billion acquisition is the largest bank M&A deal announced this year.
Sterling said it decided to issue the release after the Federal Reserve “inadvertently made public confidential supervisory information” tied to the OCC’s assessment, which determined that the company’s CRA data for 2014 to 2016 was “not reliable.” The OCC also found that the bank lacked “an effective process for collecting, verifying and reporting such data.”
The Fed, as a result, requested a description of Sterling’s efforts to address the deficiencies.
Comments on Sterling's CRA-related deficiencies were part of a confidential section of a May 11 letter from the Fed to Astoria's legal counsel that was posted by Matthew Lee, executive director of Inner City Press/Fair Finance Watch. Lee and the OCC were given copies of the letter.
The Fed, in a public section of the letter, requested a timetable for branch closings and a description of Sterling’s CRA-related due diligence. The letter also asked Sterling to summarize its goals for a new five-year CRA plan and to identify any products or services that are expected to be discontinued or reduced.
Sterling received a "satisfactory" CRA rating following its last exam in January 2014.
Sterling has said it expects to complete the acquisition of the $14.6 billion-asset Astoria in the fourth quarter.