Connecticut Attorney General's Office

Press Release

Attorney General Seeks Documents and Data From NewAlliance and First Niagara About Merger, Calls For Hearings and Scrutiny

December 7, 2010

           Attorney General Richard Blumenthal is demanding details from NewAlliance Bank and First Niagara about the impact of their proposed merger on employment and community lending, particularly involving small businesses, low and moderate-income families and minorities.

            Blumenthal is also calling on state and federal regulators to hold public hearings -- in New Haven -- to ensure that local citizens and organizations are provided a fair opportunity to express concerns and get answers.


            Blumenthal, New Haven Mayor John DeStefano and community leaders announced their parallel efforts at a press conference today.

            “My main concern is jobs,” Blumenthal said. “Will this merger mean more loans to local businesses creating more jobs -- or will it bring layoffs and fewer loans? Will it power economic growth and expand employment or restrain and reduce it?

            “We want answers that we can take to the bank -- money-backed assurances that adequate community lending and jobs will be protected.

“My office is demanding details from NewAlliance and First Niagara about jobs and local lending -- particularly impacting ordinary, middle class families and small businesses. I’m concerned about loan officers located only in Buffalo or New York solely responsible for decisions about loans to New Haven businesses and families.

“Connecticut consumers, businesses and community groups deserve an opportunity to give opinions and get answers at a public hearing -- held in New Haven, where they can attend in person. My office is calling on state and federal regulators, including the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency, to hold local public hearings.”

Blumenthal’s information request to NewAlliance and First Niagara seeks:

·         The actual number of job losses in Connecticut resulting from the merger, the specific categories of job losses, when cuts would take effect and specific categories of additional jobs available;

·         First Niagara announced plans to decentralize business functions, creating a New England regional market center in New Haven. Blumenthal wants details about how this will impact employment, as well as consumer credit and small business lending decisions. For example, will decisions regarding loans be made in New Haven if such loans are under and/or above a certain dollar amount? How have such decentralization plans worked elsewhere?

·         First Niagara claims it will provide new products and services not currently offered by NewAlliance. Blumenthal seeks specific examples;

·         First Niagara claims the merger will mean greater lending capacity, but Blumenthal wants details on credit and lending for residential, small business and/or consumer loans -- as well as loans to promote affordable housing or other areas targeting low to moderate-income borrowers. For example, will loan pools be available for new residential mortgage lending to low and moderate-income borrowers or urban minorities?

·         Detailed data regarding how many residential home loans First Niagara has in foreclosure, how many residential home loan modifications it has entered into with consumers and how many residential home foreclosures have been completed since January 2008;

·         A detailed and enforceable plan to ensure a commitment to community investment and lending -- particularly following First Niagara’s pledge to contribute an additional $7.5 million to support funding for nonprofit charitable organizations;

·         First Niagara’s policies and procedures regarding posting of debits to customers’ accounts and the charging of overdraft fees;

·         First Niagara’s policies and procedures regarding use of loan servicers and selling of First Niagara-originated loans into the secondary market.