Financial Services in South Holyoke: A Review of the Access

Financial Services in South Holyoke:
A Review of the Access, Services, and Community
Development Activities of Banking Institutions.
May 2013
Geography & Regional Planning
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This report was prepared for Nueva Esperanza of Holyoke, Massachusetts by
Westfield State University Regional Planning majors Ashley Eaton, Ivette Morillo
and Jimmy Pereira working with Executive Director Carlos Gonzales and Assistant
Professor Marijoan Bull, AICP, during the spring semester of 2013.
Table of Contents
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Inventory of Financial Services in Target Area
The Importance of Financial Services
4
Map 1: Target Area
4
Table 1: Banks in and around Holyoke, MA
5
Map 2: Banks in Holyoke
6
Map 3: ATMS in South Holyoke
7
Table 2 ATMs in Census Tracts 8114 and 8115
8
Table 3: Check Cashing Services near Census Tracts 8114 and 8115
9
Map 4: Check Cashing South Holyoke
Figure 1: Basic Banking vs. Citizens Bank’s Affordable Account
Figure 2: Bankon Information on Holyoke
Table 4: Holyoke Banks Participating in Basic Banking for Massachusetts
Table 5: Total Deposits in Bank Branches as of June 30, 2012
10
12-13
11
1
Community Reinvestment Act
Background
Massachusetts CRA
Figure 3: Goals of the Community Reinvestment Act
14
Table 6: Contacts Made with Banks to view Public CRA Files
16
Table 7: Summary of CRA Performance Evaluations
17
Recommendations
27
Reference List
29
The Importance of Financial Services
Financial services come in a variety of forms and their presence in neighborhoods is
essential to a healthy economy where residents can save and exchange, and businesses can
access needed support services. Such services include banks—main and branch offices—ATMs,
and check cashing services. Some services have a more positive effect on the community than
others. For example, having a bank in an area allows individuals to open a checking or savings
account and use it for managing their funds. Studies have proven that individuals that have
access to a bank are more likely to spend less and in turn save money. Businesses, from small to
large, also rely on banking services for loans, payroll processing, and managing day to day
operations. In short, financial services present in a neighborhood can make acquiring and
managing money that much easier for those living and doing business in the area which can
translate into a thriving economy for the area.
The fact that there are no banks in South Holyoke limits the residents that live there in
many areas of their lives, specifically financially. Those without access to banks are also more
likely to pay high fees to cash checks and access money by using check cashing services instead
of savings and checking accounts. Being able to have a bank account and maintaining it helps
individuals with their credit record, along with promoting financial stability, giving residents the
opportunity to obtain credit cards, loans or mortgages. Not having banks in their neighborhood
can lessen the chances of homeownership as well as business ownership. Upward mobility is
also limited by the lack of a bank account or financial education. Finally the lack of banks can
decrease the knowledge of bankers about an area and limit the investments in areas that may be
able to support business development.
Target Area
For the sake of this project, we are focusing on downtown Holyoke and more specifically
census tracts 8114 and 8115. We have focused on this area because it is the area in which Nueva
Esperanza, the Community Development Corporation we are working with, focuses (see Map 1:
Target Area.) There are no main offices or bank branches located within our target area. Outside
of the project area, several banks operate within Holyoke. Residents within the Target Area have
the option to use these banks, but getting to them can be a challenge. In the area of Holyoke there
are approximately 20 bank locations owned by nine different financial institutions. We have
inventoried all the banks in Holyoke and others, right over the city border, in Chicopee and
Springfield. Table 1 below shows all of the banks, locations and additional information. Map 2
indicates the location of these banks.
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Map 1 Target Area. This map shows what is being reference to as the project area in terms of this study.
Banks in Holyoke:
Table 1: Banks in and around Holyoke, MA
Bank Name
Bank Of America
RBS Citizens,NA
First Niagara Bank
Holyoke Credit Union
People’s Bank
People’s United Bank
TD Bank
United Bank
Westfield Bank
Address
50 Holyoke Street
Holyoke, MA 01040
40 Lincoln Street
Holyoke, MA 01040
477 Newton Street
Holyoke, MA 01075
638 Memorial Drive
Chicopee, MA 01020
28 Lincoln Street
Holyoke, MA 01040
2265 Northampton St
Holyoke, MA 01040
672 Memorial Drive
Chicopee, MA 01020
1283 Memorial Drive
Chicopee, MA 01020
378 High Street
Holyoke, MA 01040
637 Front Street
Chicopee, MA 01013
490 Westfield Road
Holyoke, MA 01040
314 High Street
Holyoke, MA 01040
825 Hampden Street
Holyoke, MA 01040
596 South Street
Holyoke, MA 01040
330 Whitney Ave
Holyoke, MA 01040
1515 Northampton St
Holyoke, MA 01040
50 Holyoke Street
Holyoke, MA 01040
1830 Northampton St
Holyoke, MA 01040
1642 Northampton St
Holyoke, MA 01040
Website
www.bankofamerica.com
Comments
Inside of Holyoke
Ingleside Mall
www.bankofamerica.com
www.bankofamerica.com
www.bankofamerica.com
www.citizensbank.com
Inside Stop and Shop
www.citizensbank.com
Inside Stop and Shop
www.citizensbank.com
Inside Stop and Shop
www.citizensbank.com
www.firstniagra.com
www.firstniagra.com
www.holyokecu.com
www.bankatpeoples.com
www.bankatpeoples.com
www.bankatpeoples.com
www.bankatpeoples.com
www.peoples.com
www.tdbank.com
www.bankatunited.com
www.westfieldbank.com
Inside of Holyoke
Ingleside Mall
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Map 2: Banks in Holyoke. This map shows all of the banks in the area that someone living in census tracts 8114
and 8115 might have access to. As you can, there are no bank branches located within the two project areas.
ATMs in the Target Area:
While there were no banks in the area, there were a number of ATMs present. These
ATMs were all located in gas stations, convenient stores and markets. In our project area, there
were a total of 8 ATMs. These ATMs were either owned by banks or private ATM owner
groups. Fees assessed for taking money out at these ATMs varied from $1.70-$3.50 a
transaction. Information regarding the ATMs can be found on Table 2 below.
Map 3: ATMS in South Holyoke. This map shows all of the ATMs in the target area as of February 2013.
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Table 2: ATMs in Census Tracts 8114 and 8115
Name of Business
Located Within:
Address
Names of ATM
Operator
Almonte’s Market
549 So. Bridge Street
Holyoke, MA 01040
46 Canal Street
Holyoke, MA 01040
13 Cabot Street
Holyoke, MA 01040
522 So. Bridge Street
Holyoke, MA 01040
36 No. East Street
Holyoke, MA 01040
636 Main Street
Holyoke, MA 01040
4 Adams Street
Holyoke, MA 01040
330 Main Street
Holyoke, MA 01040
Access to Money
$2.00
Ocean ATM
$1.99
People’s Bank
$3.50
R.J.’s Amusements LLC
$2.00
Metabank/ Eddies Cash
System
Access to Money
$2.00
Metabank
$2.00
Merrimack ATM Group
$1.99
BJ’s Liquor
C-Town Grocery
D&M’s Variety
Flat’s Market
Honey’s Petroleum
Noni’s Market
Racing Mart
Transaction
Fee
$1.70
Check Cashing in and around the Target Area:
Check cashing services are often found within convenience stores and establishments of
the like. These services are used by individuals that do not have a bank account to cash a check.
A fee is usually assessed for the service and is determined based on the amount of the check.
There were no check cashing services provided within the project area, but two services were
found directly on the outskirts of the project area. Information regarding check cashing services
in this study can be found below.
Check Cashing business in Chicopee.
Check Cashing business at Holyoke Mall.
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Table 3: Check Cashing Services near Census Tracts 8114 and 8115
Check Cashing
Establishment
Money Stop Pawn Shop
Holyoke Liquors
Address
Fee Assessed
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1098 Chicopee Street
Chicopee, MA 01013
2217 Northampton Street
Holyoke, MA 01040
2% of everything over $100
2% of everything over $100
Map 4: Check Cashing South Holyoke. This map shows checking cashing services around the project area. There
are none present within the target area, but two located right outside the target area.
Massachusetts Basic Banking
Massachusetts Division of Banks, launched basic Banking in 1994 to promote banking to people
that have a modest income. The intent is to have people establish banking relationships. Basic
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Banking also mobilized to expand access to bank products and services Basic Banking also
invites banks to voluntarily participate and encourages them to provide low-cost checking and
savings accounts. Many banks choose not to participate for business reasons, as they do not
want to have multiple products to operate and maintain. Table 4 indicates which banks with a
Holyoke presence participate in basic banking. Figure 1 compares the features of Basic Banking
with the low fee checking account of Citizens Bank.
The Unbanked and Underbanked
A report done by BankOn, and based on a survey by the FDIC, shows that 13.8% of households
in Holyoke are unbanked which means that they possess no checking or savings account. The
study also shows that 17.0% of the households of Holyoke are underbanked, which means that a
household does have an account but continues to depend on alternative financial services such as
payday loans rent to own agreements pawn shops, or check cashing services. Figure 2 is a
summary of a report on Holyoke generated by the Bankon website. The 13.8 % unbanked is
very high – as it compares to an overall Massachusetts value of 4.1%.
Table 4: Holyoke Banks Participating in Basic Banking
Massachusetts
Bank Name
Bank Of America
RBS Citizens
First Niagara Bank
Holyoke Credit Union
People’s Bank
People’s United Bank
TD Bank
United Bank
Westfield Bank
Participates
in Checking
No
Participates
in Savings
No
No
No
No
Yes
Yes
No
Yes
Yes
No
No
No
Yes
No
Yes
No
No
Basic Banking For
Massachusetts
Checking Account
Guideline
Citizens Bank
Figure 1. Basic Banking for Massachusetts v.
Citizens Bank’s Most Affordable Account Option –
Graphic by Jimmy Pereira
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Figure 2. Bankon Information sheets on Holyoke. Available at:
http://webtools.joinbankon.org/community/profile?state=MA&place=Holyoke
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Deposits
The FDIC website provides basic information on the condition of banking institutions that are
covered by FDIC insurance. Table 5 provides a summary of the deposit totals reported by the
Banks for each location within Holyoke. The Table also indicates what percentage the Holyoke
deposits are of each bank’s total Hampden County deposits, and Massachusetts deposits.
PeoplesBank headquartered in Holyoke, is clearly the largest institution –with deposits 20 times
those of the smallest institutions. The next two largest, as determined by deposits, are United
Bank and Bank of America.
Table 5: Total Deposits in Bank Branches as of June 30, 2012
Bank
Bank of America, NA
First Niagara, NA
PeoplesBank
People’s United Bank
RBS Citizens, NA
TD Bank, NA
United Bank
Westfield Bank
FDIC #
3510
16004
90213
27334
57957
18409
26486
90300
Branch
Address
50 Holyoke Street
40 Lincoln Street
Holyoke Total
378 High Street
314 High Street
825 Hampden Street
596 South Street
Holyoke Total
1515 Northampton
225 Northampton
28 Lincoln Street
Holyoke Total
50 Holyoke Street
1830 Northampton
1642 Northampton
Deposits
58,958,000
16,503,000
75,461,000
16,363,000
148,233,000
96,799,000
99,769,000
344,801,000
35,435,000
3,926,000
10,573,000
14,499,000
24,836,000
90,438,000
23,033,000
% of Bank’s
Total
Hampden
County
Deposits
% of
Bank’s
Total
MA
Deposits
7.1%
4.9%
.1%
4.8%
32.7%
16.0%
25.5%
1.1%
4.4%
1.8%
8.8%
3.1%
.05%
.2%
7.1%
3.1%
Source: www2.fdic.gov; Get data by choosing FDIC Institution Directory, then FIND BANK function, then chose
latest financial information, and finally Summary of Deposits.
Community Reinvestment Act Background
Congress enacted the Community Reinvestment Act (CRA), Title VIII of the Housing and
Community Development Act in 1977, to ensure banks met the credit needs of the communities
where the banks are chartered, and to protect working class and minority neighborhoods from
financial decline. Banks receive many benefits from different providers including the federal
government, public subsidized insurance from government entities such as the Federal Deposit
Insurance Corporation and regulation of the sector to ensure stabilization. Banks receive low
interest loans from the government and in return banks are expected to provide public services
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and meet the needs of their communities and the CRA ensures that banks are meeting the
requirements in order to receive benefits and approval (Marsico, 2005, 16).
The CRA states that “regulated financial institutions have continuing and affirmative obligations
to help meet the credit needs of the local communities in which they are chartered” (National
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Community Reinvestment Coalition, 2007, 6). The act would help stop unfair redlining
practices- the red outlining on a map that separated particular neighborhoods that would most
commonly be low income, inner-city, urban communities along with rural or small town
neighborhoods. The CRA would also stop capital export, which is the practice of taking deposits
from poor communities and loaning it to other communities. The red line defined a
neighborhood with having high credit risk based only on the ethnicity of residents, and resulted
in the denial of services such as banks and supermarkets. Other discriminatory acts include
denying loans and mortgages in predominantly inner city low to moderate income neighborhoods
based only on perceived high risk and not the credit worthiness of the applicants. In addition, the
CRA would hold banks accountable to being transparent about their outreach efforts and their
lending activity (Immergluck,2004,192).
Today the CRA requires that banking institutions record their data in order to be examined and
reviewed periodically based on investments made in their Assessment Area (AA) (which is the
area banks define as their service area), the loans given out in the AA, and community
development activity and services in the AA. The CRA also required federal agencies to
supervise, administer and review the CRA reports. On a periodic basis, these agencies review
the Banks’ reports and issue a Performance Evaluation that is a public document accessible to
anyone.
The four federal reviewing agencies are:
The Board of Governors of the Federal Reserve System (FRB), who examines state
chartered banks;
The Federal Deposit Insurance Corporation (FDIC) also evaluates state chartered banks;
The Office of the Comptroller of the Currency (OCC) The OCC’s primary mission is to
charter, regulate, and supervise all national banks and federal savings associations.
The Office of the Thrift Supervision (OTS) who once surveyed savings and loan
institutions. The OTS merged with the Office of the Comptroller of the Currency on July
21, 2011; it ceased to exist after October 2011. ((National Community Reinvestment
Coalition, 2007, 24).
The exams evaluate the banks level of lending, investing, and servicing in moderate and lowincome neighborhoods in comparison to the needs of these areas, and grade the banking
institutions on their level of service. CRA does not establish a quota of lending to these areas, as
banks feared being required to give out high-risk loans. Instead the federal examiner considers
the banks efforts to meet the needs in their Assessment Areas, and compares the activity level
among banks in the same market area. Banks are not expected to meet all of the needs within the
service area. The grades are Outstanding, Satisfactory, Needs Improvement, or Substantial Non
Compliance.
A bank placed in a neighborhood can do far more than just provide a way for its patrons to
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access money. A bank can also give mortgages and business loans to those that live in the
communities the bank collects business from. These additional financial services can help
enhance the well-being of the community. The Community Reinvestment Act was put in place as
a way to hold banks accountable for giving back to the communities they serve. Without the
existence of the Community Reinvestment Act, many banks would be able to discriminate
against moderate or low-income households and neighborhoods. Therefore CRA is very
significant to social justice provocateurs, moderate and low-income households, and businesses
in low income geographies.
There have been several legal modifications to the CRA. Since the enactment of the Community
reinvestment act, there have been few amendments to the law. These amendments include
requiring a Public Evaluation, requiring multistate examinations to include state-by-state CRA
analysis, allowing regulators to give credit for investments in minority- and women owned
banks, requiring Satisfactory or better CRA ratings in order for a bank holding company to
become a financial holding company, and providing some regulatory relief for small banks
(American Bankers Association) the merging of OTS with OCC also recently took place Another
recent change is the exemption of mid-sized banks to report small business or community
development lending data. In 2005, federal agencies developed a universal plan for small banks.
These small banks would be evaluated by a lending test where their lending history and
development in communities are reviewed.
On May 1, 2013, we spoke with Bonita Irving who is a District Community Affairs Officer at the
Office of the Comptroller of the Currency. She has been actively been involved with the
Community Reinvestment Act for a number of years. In discussing CRA’s current level of
effectiveness, Ms. Irving mentioned seeing a big change since the 1980s and 1990s. The shift,
she believes, is for two reasons. The first is that there seems to be a decrease in community
awareness. That is to say that individuals and Community Development organizations are
unaware of how to use CRA reporting to their benefit. Because of this, one of the aspects of Ms.
Irving’s job is to travel around New England and meet with CDCs to teach them about CRA and
how they can advocate for themselves under it. The other reason for a decrease in CRA
effectiveness comes from a shift in the banks. The only time a bank’s CRA reports and scores
has leverage, is when they are trying to expand or merge. If their CRA rating was bad, this is
when the government could say they aren’t able to open a new branch or purchase a smaller
institution. This was a big deal in the 1990s when a few large banks were attempting to buy out
all of the small banks. This also meant that public hearings regarding expansion happened often
in the 1990s, so CRA was more likely to be on the forefront of people’s minds. The United
States is currently dominated by a few mega-banks and then even less small local banks.
Currently, due to the banking collapse and slow economy, there isn’t a large amount of
expansion or acquisition happening from any of the banks, so public hearings and repercussions
from low CRA scores aren’t really happening. It seems that CRA was very effective in the time
period it was created for, but as the banking world has changed, this policy should be revised to
remain applicable and effective to holding the banks accountable in the communities they serve.
Massachusetts Community Reinvestment Act
Massachusetts is unique in having a state level CRA framework. The Massachusetts Community
Reinvestment Act (CRA) requires the Division of Banks (Division) to use its authority when
examining financial institutions subject to its supervision, to assess the institution's record of
meeting the needs of its entire assessment area, including low and moderate-income
neighborhoods, consistent with the safe and sound operation of the institution. Upon conclusion
of such examination, the Division must prepare a written evaluation of the institution's record of
meeting the credit needs of its assessment area. This written evaluation is public information and
can be obtained through the institution or its supervisory agency. While the content of the Public
Evaluation might vary depending on the nature of the institution examined and the assessment
method used, the public portion of the evaluation generally contains the following information:
The institution's CRA rating.
A description of the financial institution.
A description of the financial institution's assessment area.
Conclusions regarding the financial institution's CRA performance, including the facts,
data, and analyses that were used to form such conclusions.
Non-state chartered banks need to complete a federal evaluation in addition to completing a
Massachusetts CRA evaluation. According to Bonita Irving, the Director of Community Affairs,
(2013) there are a couple of differences between federal CRA and Massachusetts CRA; they are
virtually identical but the Massachusetts CRA has a 5th rating of ‘highly satisfactory’ and the
federal CRA only has four, with ‘satisfactory’ being its highest form of rating. Banks in
Massachusetts are examined by both the federal and Massachusetts CRA, which usually occurs
at the same time as the state and federal regulators try to coordinate these actions (2013). Federal
CRA was established in 1977 and Massachusetts established CRA in 1991 (Campen, 2011, 1).
The Massachusetts CRA ratings are:
O - Outstanding
HS - High Satisfactory
S - Satisfactory
NI - Needs to Improve
SNC - Substantial Noncompliance
(Massachusetts Office of Consumer Affairs & Business Regulation).
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2
1
3
Figure 3: Goals of the Community Reinvestment ActGraphic by Elizabeth Keenan.
Performance Evaluation Reviews of Public Disclosure under CRA
Our process for approaching the banks about viewing their public CRA file was the same for
every institution. Phone numbers and locations were found on each bank’s website. Each bank
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was then called, and we explained to the person who answered that we wanted to know the
process for viewing the bank’s public CRA file. Here is where the process began to vary. Some
bank’s immediately told us to just come in and ask to see it. At some banks our call was
forwarded to the bank manager who wanted to know why we were interested in viewing the file.
At every bank, we set up a day and general time (ex: Early morning) to go in and view the file to
guarantee that it would be prepared.
We then went in on the day that was scheduled and viewed the file. Here there were a
range of responses and reactions to our inquiry about the public CRA file. Our experiences range
from being set up in a conference room on our own to browse the file at our leisure to being
crammed into a small office where we were able to view the large document in our laps, while
being meticulously watched by the branch manager. Some banks were very helpful at attempting
to explain things in their file, although it was sometimes a challenge for the workers as well
because it was for many of them, the first time they had also viewed the file.
After our visit, some banks gave of copies of the public disclosure files in print or were
sent to use electronically, while others did not. We were aware that by law banks are required to
provide a copy of the file at a reasonable fee if we so requested it, some bank workers however
were unaware of this and told us it was simply impossible to get a copy of the report. Once we
visited all of the banks with branches in and around our target area, we used the information
provided in the Public Disclosure reports from each bank to draft up the recommendations you
will find at the end of this report.
Table 6: Contacts Made with Banks to View Public CRA Files
Bank
Date
Visited
Address
Person Meet With
People’s United
Bank
04/02/2013
04/11/2013
State Street
Springfield, MA
Martha Cardaropoli
Branch Manager
Westfield Bank
04/04/2013
Elm Street
Westfield, MA
Sharon Czarnecki
Assistant Vice President
RBS Citizens
04/11/2013
950 Main Street
Springfield, MA
Stephen Foy
Branch Manager
United Bank
4/11/2013
95 Elm Street
West Springfield, MA
Terry Bennett
Administrative Officer
Peoples Bank
4/18/2013
281 East Main Street
Westfield, MA
Michelle Crosby
Branch Manager
TD Bank, USA
4/18/2013
60 Main Street
Westfield, MA
Greg Desmarais
Assistant Vice President
Bank Manager
Bank of America
4/18/2013
10 Main Street
Westfield, MA
Erick Burgos
Personal Banker
First Niagara
April 2013
Contact was through
email.
Charles Peterson
Community Development
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Bank Name
Exam Date
Bank of America
3/31/2009
RBS Citizens, NA
04/03/2010
First Niagara Bank
Not Available*
Holyoke Credit
Not Applicable**
Union
People’s Bank
11/07/2011
People’s United
10/05/2009
Bank
TD Bank, USA
12/31/2011
United Bank
10/29/2012
City, State
HQ
Charlotte, NC
Providence, RI
Locksport, NY
Holyoke, MA
Overall CRA
Rating
Outstanding
Satisfactory
---------------------------------
Holyoke, MA
Bridgeport, CT
Satisfactory
Outstanding
Regulator
OCC
OCC
FDIC
OCC
Portland, ME
Outstanding
OCC
West Springfield,
Satisfactory
OCC
MA
Westfield Bank
04/05/2010
Westfield, MA
Satisfactory
OTS
*Not Available= latest released Performance Evaluation predates Massachusetts holdings.
**Not Applicable = Not subject to federal review.
Table 7: Summary of Federal CRA Performance Evaluations
Findings from Review of Federal CRA Performance Evaluations
Bank of America
2009 Performance Evaluation
Bank of America, NA is the largest financial institution in Massachusetts. The 2009 Public
Disclosure review indicates that 55% of the bank’s Massachusetts deposits are from locations
within the Springfield MSA (which includes Holyoke) – but this same Assessment Area
represents only 36% of the Bank’s Massachusetts lending activity (p. 127). The review notes the
Community Development activity of the Bank is only “adequate” with the Bank of America
reporting it has worked with 3 organizations in the Springfield MSA. No other details are
provided, although there is a notation that the Bank sponsored homebuyer education and through
a loan fund managed by a non-profit, 607 loans were made to income eligible homebuyers. It is
also noted that the Bank worked with the Massachusetts Housing Partnership. There is not
enough detail to determine if any of the Community Development loans were related to activity
in Holyoke. As far as small business loans activity goes, Bank of America reports providing
4,816 small business loans totaling $84,499,000 within the Springfield MSA. Table 6 on page C262 of the Performance Evaluation notes that 11.48% of businesses in the Springfield
Assessment Area are in low income geographies while the loans made by Bank of America to
these areas was only 8.99% of the Bank’s small business loans.
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Westfield Bank
2010 Performance Evaluation
According to 2000 census data, 40.8 percent of the families in Westfield's bank assessment area
is considered low-to-moderate income with about eleven percent (11.2) living below the poverty
line. The loan to deposit ratio in 2009 was 75.1%. In the years of 2007 to 2009 911 small
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businesses loans were given out in the Assessment Area. Of those loans 106 were to low income
communities $17,589,000 in total dollars. Seven (7) community development loans were given
out in the assessment area, with the majority being able to be identified as projects in Westfield.
The bank also gave out a total of $2.2 Million to organizations like homeless shelters, a nonprofit
organization, commercial construction, Elm Street commercial (Westfield) and residential
redevelopment, affordable housing and people with mental disabilities. Unfortunately, we could
not tell if any of these were in Holyoke specifically.
People's United Bank
2009 Performance Evaluation
As of the 2000 census there were 33,266 low income families in this bank’s Assessment Area
making it 22.1% of the population. Between the 2007-2009 period one hundred and sixty six
(166) small businesses loans were provided, that was 15.1% of all loans. Donations and grants
varied from $3,000-$50,000 to the Boys & Girls club in Chicopee, Hamden County Bank
association, Urban League of Springfield, Western Enterprise Fund Inc., and the Junior
Achievement of western Mass. Also, there was a variety of CDC lending: $7 Million for
affordable housing, $2.7 Million for a Northampton grocery store, and almost $5 million for
more affordable housing. Unfortunately, we could not tell if any of these were in Holyoke
specifically.
TD Bank
2011 Performance Evaluation
TD bank has five assessment areas throughout the state of Massachusetts. The information about
the community development loans is about all assessment areas. The Springfield MSA has
Holyoke Massachusetts included. According to the CRA evaluation there are two community
development organizations operating in the AA. These organizations confirmed the community
needs identified by the bank and additionally have identified workforce development, technical
assistance for minority-owned businesses, and community revitalization efforts that will help
attract new businesses and more people to the downtown areas and central business districts in
the area, particularly in Springfield and Holyoke. Seventeen (17) community development loans
with a total of $16.9 million were given with 30% community services and 18% economic
development and stabilization revitalization of LMI geographies. A total of 1720 small business
loans for a total of $212,937,000, or 33.46%.of all loans. TD Bank also has a lot of experience
with financial literacy programs.
RBS Citizens
2010 Performance Evaluation
Citizen’ most recent Public Disclosure report states that almost one-third of the bank’s deposit in
Massachusetts come from the Springfield Assessment Area. According to 2010 census data, 21% Page | 24
of the families living within this assessment area were considered low-income and another 17%
were considered moderate-income. Citizen’s Bank has done some community development work
in their Springfield Assessment Area. Due to vagueness in reporting, it is difficult to say if the
bank supported Holyoke specifically in any way. During their evaluation period, Citizen’s Bank
gave out 5 CD loans equaling five million dollars. Two of these loans, equaling almost 2.25
million dollars, were to help in the preservation of affordable housing units. The other three
loans were given to organizations that help to provide services to low- and moderate-income
individuals. Unfortunately, it didn’t note the organizations or what types of services they may
provide. Banks are also required to report what they have done in regards to community
development services. This can mean a variety of things including having bank workers sit on
various community boards or running workshops to help the community. Citizen’s “performance
in providing CD services in the Springfield AA was poor. There were no community
development services reported in the Springfield AA.” (Page 55) This means that pressure could
be placed upon Citizen’s Bank to provide more to the community in terms of time and service.
Out of all the small business loans given in the Springfield Assessment Area, 11.48% of the
loans went to those in low-income geographies and 16.53% went to those living in moderateincome geographies. This means that 29% of business loans went to those in low- to moderateincome geographies, while almost 40% of the families living in the area are considered to have a
low- to moderate-income. There is a bit of mismatch here, and Citizen’s Bank could work to
make sure their disbursement of loans matches more evenly with their range in incomes over
population.
United Bank
2012 Performance Evaluation
United Bank’s main assessment area is the Springfield Metropolitan Statistical Area, an area
established by the census. Approximately 14% of the census tracts within this assessment area
are considered low-income. According to the Performance Evaluation prepared by the OCC,
United Bank’s Community development lending was good and had a positive impact on their
lending tests. During its’ evaluation period United Bank gave out nine qualified community
development loans totaling 1.1 million dollars. The current structure of reporting doesn’t require
banks to state who the loans went to or even where the organizations are based. Because of this,
it is difficult to say whether or not their community development loans are spread throughout the
assessment area or concentrated in one location. The loans from this bank were given to a variety
of organizations that provided support to a range of populations. Loans were given to
organizations that gave support to homeless veterans and children who suffer from homelessness
and abuse, organizations promoting youth and health and human services, a non-profit charter
school and a redevelopment project that is slated to spur local economic growth at its
completion. United Bank also did really well when it came to community development service
in the Springfield Assessment Area. Bank management and employees provide services to
approximately 13 qualified community development organizations and programs within their
Assessment Area. United Bank gave 11.05 % of its’ small business loans to those located in low- Page | 25
income geographies. When you consider that 14% of the assessment area is considered lowincome, there could be some improvement to fairly match these numbers.
People’s Bank
2011 Performance Evaluation
People’s Bank has defined its’ assessment area as the Springfield Metropolitan Statistical Area.
Using data gathered from the census, People’s Bank has indicated that 13.7% of the census tracts
within the assessment area are considered low-income. People’s Bank’s Performance Evaluation
reported more detail about the organizations who received community development loans.
People’s Bank gave out 8 community development loans totaling 1.2 million dollars, during the
period of its evaluation. Of these loans, at least two were given to organizations in Holyoke. A
loan for $160,000 was given to a local housing authority in Holyoke to finance the building of
eight affordable units. Another $200,000 was loaned to a real estate development company to
renovate six foreclosed units in Holyoke. The other loans were given to organizations based in
Chicopee, Springfield and Ludlow. People’s Bank also highlighted what they called qualified
donations in their CRA Public Disclosure File. Donation breakdowns can be found below:
78.6% ($953,319)- community services targeted at low- to moderate-income persons
17.2% ($208,032)- economic development
4.2% ($50,830)- affordable housing
When it came to community development services, it was clear that the bank has a presence in
the community. The report stated that “The Bank’s initiatives are especially responsive to the
needs of the low- and moderate-income households and small businesses in Holyoke, MA”
(p.23). Highlights in the reports included workshops educating first time homebuyers,
approximately 70 financial literacy programs in area schools and the involvement of officers and
employees in many CDCs or non-profit agencies.
People’s Bank noted in their Small Business lending section that 11.3% of all small businesses in
their assessment area were located within low-income neighborhoods. Out of all of the business
loans given during this evaluation period, People’s Bank gave out 10.7% of their loans to those
located within low-income areas. While the bank is close to serving all its’ populations fairly,
some work could be done to reach total equality. One thing that is important to note, is that from
2009 to 2010 there is 5.6% drop in the percentage of loans given to those in low-income area.
The report doesn’t go into detail as to why this may be, but it is important to make sure that this
doesn’t continue to drop.
Observations from Experience
Page | 26

Personnel who shared the documents were misinformed about the disclosure and copying
provisions of the law.

All personnel we interacted with stated they had never had a request to view the CRA
documents—even employees with tenures over 20 years.

Bank websites are difficult to use with little information on CRA and an inability to get
direct phone numbers for CRA Officers or branch offices.

The regulator websites and databases, that of the Office of the Comptroller of the
Currency (http://www.occ.gov/tools-forms/tools/compliance-bsa/cra-perf-evalsearch.html ) and that of the Federal Financial Institutions Examination Council
(http://www.ffiec.gov/cra/), are both difficult to navigate. There is no listing of
individuals to contact with questions, and a challenge to find the most recent review of
institutions. It works best if you know the review you are looking for, then if you are
starting with just the title of the institution.

The regulations are written in such a way that the Banks define and report data on their
Assessment Areas (AA) at a large scale—typically nothing smaller than a MSA and often
a combination of MSAs, or MSAs with rural surroundings. This makes reviewing at the
neighborhood or community level impossible.

In many circumstances the information reported for Community Development loans and
other community development activity, such as involvement on Boards of non-profits,
was generic and vague. The reports note a bank employee serves on the board of a
homeless organization or a community development loan to support affordable housing
was given. While privacy may be an issue, without a more specific geography it is
difficult to determine where the CD activity is happening.

Our experiences varied from very cooperative, satisfactory and comfortable environments
to people who were nervous, skeptical, frightened, and made us feel uncomfortable and
awkward. Most people made it seem as if this document was not available to the public
and even as if it shouldn't be seen. Almost every bank we went to treated their CRA
public file as if it were an item of grand secrecy. We were able to find almost all of the
files we were looking for online at various government websites and even had some
before we went in person to request the file. Banks should be aware that these files are in
fact for the public to view and that keeping them locked away by complicated viewing
processes won’t necessarily stop people from seeing the Public disclosure file.

The Westfield Bank PE included the following paragraph on the needs of the Assessment
Area (AA):
“An organization involved with community development was contacted during the
evaluation. The contact stated that the amount of affordable housing for LMI individuals Page | 27
in West Springfield was, in their opinion, satisfactory and that further development
opportunities were limited due to the town having already developed most available land.
The contact stated that as a result, local financial institutions had a more limited role and
that they could better serve the community by providing financial services and
foreclosure prevention programs to LMI individuals and senior citizens.” (Westfield
Bank PE, p.6).
This statement is a very limited and inaccurate one. First, West Springfield is only a part
of the AA so this does not speak to need in the entire AA, including our area of interest,
Holyoke. In addition, West Springfield itself fails to meet the Massachusetts state goal of
10% affordable housing. As of April 2013 it had only 3.4 % of its housing stock
qualified for the state’s Subsidized Housing Inventory. Clearly West Springfield could
use more affordable units – and there are many ways to do this beyond new construction
including adaptive reuse and rehab of existing units.

We noted there is no way to know if a bank was approached to participate in a CD loan
or project and declined. Without a specific complaint being filed, evaluators have no way
of tracking a bank’s decision to not participate in CD services or loans.
Recommendations for Nueva Esperanza

Nueva Esperanza should regularly ask to view the CRA review as a way of letting banks
know someone cares about this aspect of its performance.

Nueva should approach Citizen’s Bank when they are looking to run financial literacy
workshops for people in the neighborhood. Citizen’s Bank would be good to approach
because they currently have no community development services to report in the area.
You could approach it as their participation being a way to help improve their service test
score on their next CRA evaluation. In regards to financial literacy programs, TD Bank
might also be useful to contact. They pride themselves on running financial literacy
programs for neighborhoods.

PeoplesBank would be good to approach for Community Development Loans. Because
they are headquartered in Holyoke and has the largest amount of deposits in the area,
there is even more of a reason for them to be responsive to groups in Holyoke. They
currently give out over 75% of their qualified donations to organizations that provide
community services targeted at low- and moderate-income persons. According to the
2010 census, the census tracts within our target area (8114 and 8115) have 42.9% and
70.3% respectively of families living below the poverty line. Nueva Esperanza,therefore
aims to serve low- and moderate-income persons and may be eligible for these qualified
donations.

The OCC Outreach Division is available to do training on CRA for CDCs and other local
groups. Bonita M. Irving, the District Community Affairs Officer for OCC out of Boston
Page | 28
schedules these throughout New England. Nueva may want to contact her to arrange a
training session in Holyoke. Her contact information is:
Bonita M. Irving
District Community Affairs Officer
Office of the Comptroller of the Currency
U.S. Department of the Treasury
99 Summer Street, Suite 1400
Boston, MA 02110
Telephone: (617)737-2528 ext 223
Recommendations for Federal Regulators/CRA Advocacy groups

More CRA education is needed for the customer contacts of Banks (both via phone
contacts and in-person contacts). Staff (from the employees that answer phones to those
in management positions) should be prepared to provide information when asked about
the CRA documents. People should not be placed in an uncomfortable position when
asking for this document nor should staff hesitate to provide information on a public
document. It might also be helpful for bank personnel to know that the Performance
Evaluations are available from the regulators on the internet.

Banks could support interested people by putting information on their websites about
how to directly contact the CRA Officer – the one that would be knowledgeable about the
process and documents. This information is not available resulting in a timely and
confusing search.

In order to promote communication and a greater awareness of CD activity, a bank’s
CRA should include a current listing of the CDCs and CDFIs working within its AA with
contact information. In this way the bank would at least know of groups working on
relevant concerns.
Reference List
BankingOn (n.d.). “What is bankon?” Retrieved from: http://joinbankon.org/about/.
Campen, J. (2011). CRA Ratings of Massachusetts banks, credit unions, and licensed mortgage
lenders in 2010. Dorchester, MA: Massachusetts Affordable Housing Alliance. Retrieved from:
http://www.mahahome.org/sites/default/files/CRAratingsreport2010.pdf .
Immergluck, D. (2004) Credit to the community: Community reinvestment and fair lending
policy in the United States. Armonk, NY: M.E. Sharpe.
Irving, B. M. District Community Affairs Officer Office of the Comptroller of the Currency,
Boston, MA (personal communication, May 1, 2013).
Marsico, R. (2005) Democratizing capital: The History, law and reform of the CRA. Durham,
NC: Carolina Academic Press.
Massachusetts Office of Consumer Affairs & Business Regulation. (n.d.) “CRA for Banks and
Credit Unions - Ratings and Public Evaluations.” Retrieved from:
http://www.mass.gov/ocabr/consumer/banks-banking/selecting-banks/community-reinvestmentact/cra-ratings.html
National Community Reinvestment Coalition. (2007). CRA Manual. Retrieved from:
http://www.ncrc.org/images/stories/pdf/cra_manual.pdf
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