Updated July 26, 1999
T. Rowe Price: This mutual fund company applied to the Office of Thrift Supervision in September, 1998, for a savings bank charter. ICP requested a copy of the application, in which T. Rowe said that its savings bank would collect deposits nationwide, but would not lend. ICP opposed the application, since the main principle of the CRA is that if an FDIC-insured institution collects deposits in a community, it must seek to meet that communitys credit needs. ICPs challenge was reported in the Baltimore Business Journal -- click here to see the article.
By means of a Freedom of Information Act (FOIA) request, ICP learned that T. Rowe was arguing that it should be exempt from the CRA, as a so-called special purpose institution. ICP opposed this designation, pointing out that to date, it has only been given to trust only or processing only banks.
In early 1999, the OTS sided with ICP, and informed T. Rowe Price that its request to be treated as a special purpose institution, exempt from CRA, is being denied. The OTS directed T. Rowe Price to come up with the CRA strategic plan. But, as provided to ICP, the plan was without substance, involving little more than T. Rowe Price buying mortgage-backed securities. ICP opposed the plan, and requested further information under FOIA (which was never provided). ICP also put before the OTS information concerning pending employment discrimination litigation against T. Rowe Price (in light of the first sentence of T. Rowe Prices proposed CRA plan, which claims that T. Rowe will of course comply with CRA, because it is a major employer in Baltimore.. aware of community development).
On July 23, 1999, the OTS issued an approval order for T. Rowe Price. The Order says that the OTS considered "the Community Reinvestment Act, 12 U.S.C. Section 2901, et seq., and the OTS regulations thereunder.... The OTS has considered comments on the Applications submitted by Inner City Press/Community on the Move and Inner City Public Interest Law Center, Bronx, New York." So at least it does not appear that the OTS backtracked and acccepted T. Rowe Price's argument that it should be exempt from CRA. The OTS says that if and when T. Rowe Price thrift begins making loans, or otherwise deviates from its business plan, it must check in with the OTS. There is no indication that there would be public notice or a comment period on such a change. But there are no conditions about CRA in the approval order itself, such as even the OTS' Grange, Shelter Mutual and other approval orders had. Some opine that the OTS is back-sliding, in the face of criticism from the anti-CRA Senator, Phil Gramm (R-TX). This remains to be seen. ICP will be continuing to scrutinize the OTS, and T. Rowe Price and its thrift.
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