On October 18th, we posted “Just How Healthy Is NYCB?” . Many of you amazing readers have responded and we want you to know WE HEAR YOU and WE WANT TO JOIN FORCES!
Please contact Elyssa White at 212 479 3336 or firstname.lastname@example.org if you are interested in acting together to make New York Community Bank regret its bad lending and employment practices! We are in this together and we should stand together to say something!
We have ideas, but we also want to hear yours. Get in touch!
In the past months, we’ve met with New York Community Bank several times in order to discuss what we perceive to be a serious problem of overleveraging in their New York City multi-family portfolio. Each time, the bank has claimed that foreclosure housing is a merely a minuscule part of their overall healthy portfolio. In their 2010 Annual Report New York Community Bank claimed they had a successful year thanks to their conservative, risk-averse underwriting standards.
We know a different story: NYCB frequently makes unsustainable loans and their underwriting is shaky at best. They have many mortgages in default or in foreclosure. Many buildings that they lend on are in terrible physical condition. For months, we’ve been fighting to draw attention to the ways in which NYCB loans put tenants and low-income housing at risk. The bank has attempted to discredit our research, stating that they are a responsible lender with roots in New York City communities. They claim that their high underwriting standards have protected their portfolio and allowed them to be healthy and profitable throughout financial crisis.
But in late September, research analysts at Susquehanna downgraded NYCB shares. And last week, the Long Island Business News published “Mass Layoffs at New York Community Bank.” The article indicates that NYCB laid off 30 branch staff last week, a significant number for the relatively small bank that nonetheless is a major employer on Long Island. Typical of New York Community Bank, layoffs occurred in a barely legal and seemingly dishonest fashion. The bank’s compliance with the NYS Worker Adjustment and Retraining Notification Act was questionable. The WARN Act requires 90 days notice to workers if 25 or more employees of a certain company are to be laid off. New York Community Bank got away with their recent round of layoffs through a loophole: they fired employees at separate branches across Long Island and Staten Island.
All this begs the question: Just how healthy is New York Community Bank? Layoffs and lowered credit ratings are hardly indications of institutional health. It seems that there is a large discrepancy between their words and their actions. Could they be getting ready to admit that they have made some mistakes? Are they ready to take responsibility for their non-performing loans?
Update, 10/20/2011: Many reports now indicate that the number laid off was far higher than 30 employees, in the 300-500 area region-wide.