Feds to investigate Hudson City for alleged discriminatory lending

Probe could impact company's proposed merger with M&T Bank

TRD New York /
April 16, 2015 12:05 PM

Federal authorities have launched an investigation into Hudson City Bancorp for alleged discriminatory lending practices.

The Justice Department and Consumer Financial Protection Bureau are investigation whether or not Hudson City violated the Fair Housing Act by denying loans to members of minority communities, sources told Bloomberg. The investigation could cause problems for the long-delayed sale of the company to M&T Bank, according to the website.

What the effects of the investigation will be on the pending merger is still unclear. The transaction has been delayed by nearly three years and a total of three times, due to a money-laundering issue, according to Bloomberg.

Hudson City has been valued at about $5 billion. If the $3.7 billion deal falls through, its market value could drop by 70 percent, Morgan Stanley analyst Ken Zerbe wrote in a note earlier this month, according to Bloomberg. Zerbe predicted that Buffalo-based M&T shares could drop 11 percent. [Bloomberg] — Claire Moses

Related Article

M&T CEO René Jones and Brookfield managing partner Ben Brown with 5 Manhattan West (Credit: M&T, Brookfield, and Wikipedia)

Brookfield lands $184M refinancing for Manhattan West retail

Long Island Cheat Sheet: Suffolk County senior housing development gets $57M construction loan, construction employment spikes … & more

Friedland lands $84M in financing for 817-827 Madison Avenue

Durst Organization refinances Harlem project with $95M loan