June 24, 2015
Chair Janet Yellen
Governor Stanley Fischer
Governor Daniel Tarullo
Governor Jerome Powell
Governor Lael Brainard
Constitution Avenue Northwest, Washington, DC 20551
Secretary of the Treasury Jack Lew
US Comptroller Tom Curry
|CC: Ivan Hurwitz|
Minority Church, Small Business and Nonprofits Withdraw Request for Public Hearing: Royal Bank of Canada Acquisition of City National
Dear Chair Yellen and Governors Fischer, Tarullo, Powell and Brainard, and Secretary of Treasury Lew and Comptroller Curry,
Despite the National Diversity Coalition members filing more than four thousand two hundred (4,200) written requests for public hearings in the Royal Bank of Canada/City National case, the National Diversity Coalition, on behalf of the 4,200 protestants, withdraws its requests for public hearings and withdraws its protest of the proposed merger.
We do so in the context of the revised City National commitment, fully endorsed by the CEO of Royal Bank of Canada, David McKay. Most importantly, we do so in the context of the commitments made by both CEOs that their CRA commitment, established in the written document is just a part of a larger future-oriented commitment to work with underserved communities to develop a commitment of resources and innovation to the underserved that is as significant as City National has historically provided to the wealthy.
The withdrawal is consistent with Federal Reserve Chair Janet Yellen’s comments of June 17th that the Federal Reserve “is examining ways to improve its implementation of the Community Reinvestment Act amid concerns that regulators are letting too many poor communities go unserved by banks” (emphasis added) American Banker, “Yellen: Fed Looking for Ways to ‘Improve’ CRA Rules”, June 17th 2015.
We make this withdrawal recognizing Chair Yellen’s further comments that the Federal Reserve takes:
“CRA very seriously and … for those banks that we supervise, we have a set of guidelines and are very conscientious in attempting to evaluate CRA performance. But we are looking at CRA and will continue to look to see if there are ways in which implementation can be improved” Ibid, emphasis added.
This withdrawal is also in the context of Senator Elizabeth Warren and Congressman Elijah Cummings May 11th letter to the Government Accountability Office, “asking the agency to examine ways to use CRA to ‘responsibly increase access to basic banking services’” Ibid.
In order to address the Federal Reserve’s interest in improving CRA, particularly to underserved communities, and avoiding as the American Banker states, additional Ferguson and Baltimore unrest, both CEOs have committed to working closely with the National Diversity Coalition and its members. For example, the CEO of Royal Bank of Canada will informally be meeting in Los Angeles with the members of the National Diversity Coalition to discuss a future consistent with that raised both by the Federal Reserve and the U.S. Comptroller of the Currency, Tom Curry.
Some of the most innovative efforts committed to include:
Very specific and innovative efforts with faith-based institutions to directly assist underserved communities. This includes homeownership, micro- and small-business lending and youth financial education.
To date, few financial institutions have made this cost efficient and well respected mechanism a priority. It is our expectation that as the leaders of our nation’s 5,000 African Methodist Episcopal churches and 40,000 Latino evangelical churches including 3,500 over 4,000 in California alone develop cost-efficient and effective programs, this will have a positive impact on other financial institutions, including both regulated and unregulated, such as hedge funds. It is also our hope that this will serve as an incentive to foundations throughout the nation to co-invest with financial institutions and faith-based institutions in innovative programs designed to minimize growing wealth and income inequality and minimize social and economic unrest in our inner cities. 
Another innovation committed to by the CEOs of the banks (that could have far reaching but still unknown consequences) is creating large matching CRA funds from other financial institutions. Few banks, particularly those below the level of “Too Big to Fail” have the resources on their own to make fundamental change, particularly in large communities such as LA County with a population of ten million including five million Latinos and 200,000 Latino-owned businesses.
As Pastor Mark Whitlock, the Senior Pastor at Christ Our Redeemer AME Church in Irvine, (with a congregation of 3,500) who is also the Chair of Corporate Partnerships for 5,000 AME churches stated, “Black and Latino churches are one of the most effective mechanisms for achieving CRA results. It is my hope that banks as well as foundations across the nation will carefully observe what we are seeking to do and soon replicate this with their own innovations.”
Senior Pastor Jesse Miranda, the former Chair for the National Hispanic Christian Leadership Conference (consisting of 40,000 Latino evangelical churches) and the Director of the Jesse Miranda Hispanic Leadership Institute, strongly echoed Pastor Whitlock’s statement, “Our new relationship with Royal Bank of Canada and City National is based on faith. Our faith and belief that both CEOs are as committed as we are to elevating our communities through job creation, small business ownership, financial education, home ownership and consumer empowerment.”
Faith Bautista, the President and CEO of the National Asian American Coalition said, “A large number of the community leaders who joined us in requesting public hearings were Asian American, particularly our state’s two million Filipino Americans. Filipino Americans remember with great pride, the peaceful ‘People Power Revolution’ of 1986. They therefore are withdrawing their protest, primarily because they share the perspective of the Black and Latino pastors that the most effective way of achieving the Federal Reserve’s CRA goals is through a peaceful revolution led jointly by the communities and the banks’ CEOs.”
Gil Vasquez, the Chair of the largest Latino business chamber in the West, the Los Angeles Latino Chamber of Commerce (which serves 200,000 Latino-owned businesses in the LA area) stated, “The unfair realities of underserved communities next door to well-served wealthy communities led to this protest. We withdraw our protest based on the commitments and expectations that the new bank and its CEO will enable more than one million Latino-owned businesses in California to flourish. Working together, we will accomplish this and be a model for other financial institutions and corporate America as a whole.”
In conclusion, this withdrawal of the request for a Public Hearing and protest of the proposed merger recognizes that far better and more effective CRA plans are necessary if banks wish to have their mergers approved with limited or no conditions and/or expedited. See for example, American Banker, June 19th, “The New Merger Requirement: A Better CRA Plan.” It discusses that the $19 billion Valley Bancorp of New Jersey was forced to substantially upgrade its CRA commitments despite receiving from the OCC a “High Satisfactory” on the most important part of the CRA test — lending. This CRA upgrade led to the approval of its expansion into Florida.
All the members of the National Diversity Coalition, including 4,200 community members requesting a public hearing, look forward to Royal Bank of Canada (as it acquires City National), becoming an outstanding bank in community service as viewed by the community, including church based groups. And, it is our expectation that Royal Bank of Canada will attain, if possible, the highest regulatory evaluation, “Outstanding”, in lending, services and investments to the community. 
Therefore, it is our request that Royal Bank of Canada’s request to acquire City National be expedited and no Public Hearings be held. An expedited approval will send a strong message to all other banks regarding the importance of robust and innovative CRA commitments to become “outstanding” through the active support and involvement of the CEO.
Most Respectfully Submitted,
|/s/ Faith Bautista
President & CEO, National Asian American Coalition
|/s/ Mark Whitlock
Senior Minister, COR AME Church, Irvine, CA
Director of Corporate Partnerships, 5,000 African Methodist Episcopal Churches
Executive Director, Ecumenical Center for Black Church Studies
Chair, Orange County Interdenominational Alliance
|/s/ Charles Dorsey
Associate Pastor – Youth and Young Adults, Christ Our Redeemer AME Church, Irvine, CA
|/s/ Jack Miranda
Vice Chair, Orange County Interdenominational Ecumenical Council
|/s/ Lee de Leon
Pastor, Templo Calvario
|/s/ Jesse Miranda
Founder, Jesse Miranda Center for Hispanic Leadership
Former CEO, National Hispanic Christian Leadership Conference
|/s/ Gilbert Vasquez
Chair, Los Angeles Latino Chamber of Commerce Serving 250,000 Latino Businesses
|/s/ Theresa Martinez
Chief Executive Officer, Los Angeles Latino Chamber of Commerce
|/s/ Vivian Araullo
Executive Director, West Bay Pilipino Multi-Service Center
|/s/ George McDaniel
Co-Chair, African Americans for Economic Justice
|/s/ Alex Anderson
Co-Chair, African Americans for Economic Justice
|/s/ Jin Sung
Executive Director, Oasis Center International, Inc.
 Members of the National Diversity Coalition met with Chair Janet Yellen and Governor Brainard on this issue on November 14, 2014 and some met with Comptroller of the Currency Tom Curry on December 2nd and with Secretary of the Treasury, Jack Lew on December 9th 2014. They have also discussed this on October 3rd, 2014 with Richard Cordray, the Director of CFPB and on December 2nd, the Chair of the FDIC, Marty Gruenberg.
 Comparable City National commitments have been made by their CEOs to minority business chambers and non-profits that are members of the NDC and/or work closely with the NDC. Note, for example, that the California Black Chamber of Commerce, based largely on the CEO commitments, will also be withdrawing its request for Public Hearings and protest of the merger.
 The Latinos population presently exceeds even the white population in California and is projected by the Pew Institute to be close to a majority of California’s population within one to two generations. Presently, the Z Generation in California includes a public school population that is 75% minority including a majority whom are Latino. See The Economist, June 20th “Latino Mojo.”
 Please note the contrast in significance and accuracy of gauging the community concerns by the fact that all 4,200 requests for public hearings were in writing and most of the writers of letters and the signers of petitions were committed to appearing at the Federal Reserve Public Hearing. This is in contrast to the potential “rigging” of any online or other non-verifiable requests to the Federal Reserve. See, for example, Wall Street Journal showing how online voting for the Major League Baseball All Star Game has been artificially “rigged” so that all eight position players at the All Star game could be from one team, Kansas City. This has occurred even though its second baseman and so-called “All-Star” is the worst hitter in all of Major League Baseball. “A Royal Flush for Kansas City in All-Star Voting, Wall Street Journal, 6/17/2015