News Column

Evans Bancorp sets aside $1 million for fair lending fight

August 4, 2014

By Jonathan D. Epstein, The Buffalo News, N.Y.

Aug. 04--Evans Bancorp has been unable to reach an agreement with New York Attorney General Eric Schneiderman over state allegations that the bank's mortgage lending practices may violate fair lending laws, prompting the bank to set aside $1 million in reserve to cover expenses or possibly even a fine.

The Hamburg-based community banking company, which first disclosed the state investigation in Securities and Exchange Commission filings, cited the litigation expense when it reported second-quarter earnings on Monday. The bank said it has not yet "incurred actual payments related to the investigation," but "recorded a reserve based on estimated outcomes from legal proceedings."

"We are disappointed that we have thus far been unable to reach agreement with the State Attorney General," said Evans President and CEO David J. Nasca. "Our bank has a long, demonstrated history of community involvement and positive reports regarding our banking practices from our primary federal regulator, the Office of the Controller of the Currency, more commonly known as the OCC."

In an interview, Nasca declined to go into details about the state's investigation of the bank's mortgage lending, which he said is "ongoing," but he also said the bank didn't know exactly what the state was looking at. He said Evans was "still in discussions" with the state "about what we agree with or disagree with."

But he also defended the bank's actions and practices, and insisted that the bank would hold firm. "It's our expectation that our practices are right where they're supposed to be," Nasca said. "We've received that kind of information from the OCC in the past. It's in our public record that our lending practices are appropriate, and they're questioning some of those. We're confident and steadfast in our claim that we've done all the right things."

The reserve is expected to cover any costs that may be incurred, whether it's legal fees, a settlement or a fine. "We're not sure which way it will go," Nasca said. "Our hope and our expectation is that it will go in a direction for what we believe, that what they're looking into is unfounded and without merit. We believe that we've done all the right things here."

Nasca also said the bank "has built a culture that encourages and supports community involvement."

"We remain fully committed to the Western New York community we serve and will continue to reach out with financial literacy programs, specialized loan product offerings and accessible ATMs, as well as partnering with community development groups."



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Source: Buffalo News (NY)

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