August 23, 2017/Press

ICYMI WRAL: Holding voted against funding for investigations like one targeting family’s bank

WRAL: Holding voted against funding for investigations like one targeting family’s bank
By Travis Fain
August 23, 2017

Republican 2nd District Congressman George Holding voted for a handful of amendments two years ago to block federal funding for fair housing investigations similar to one targeting his family bank.

Congressional rules didn’t forbid the votes, but ethics watchdogs said last week that Holding should have recused himself. Not doing so, “reflects poor judgment,” said Paul S. Ryan, an attorney with Common Cause in Washington, D.C.

Holding said the measures were broad in effect, affecting a number of industries the same way they were likely to affect First Citizens Bank & Trust, where his brother Frank is chairman and chief executive. The congressman himself owns between $1 million and $5 million worth of stock in the bank, according to his latest financial disclosure.

During the summer of 2015, George Holding and other congressional Republicans voted on a series of amendments blocking funding to the U.S. Department of Justice and U.S. Department of Housing and Urban Development. The amendments forbid funding for investigations brought under a theory called “disparate impact,” which is used to bring cases when potentially discriminatory business policies are not openly racial, but their results clearly show disparate impacts on minorities.

Conservatives and a number of business interests were pushing back at the time against the Obama Administration’s use of this methodology to pursue fair housing claims.

At the time, First Citizens Bank & Trust was the subject of a HUD inquiry into whether the bank discriminated against minority loan applicants. The case against was investigated both under the theory of disparate impact as well as a methodology that looked at actual intent, the department said.

Congressional ethics rules leaves it to members to decide whether they should recuse themselves from votes that could affect family business. In fact, the rules press members to vote unless they have “a direct personal or pecuniary interest,” noting that, otherwise, the hundreds of thousands of people each member represents in Congress “are denied a voice on the pending legislation.”

Ethics watchdogs said last week that Holding’s votes on disparate impact meet the letter of that rule, but the rule is a weak one, and he should have gone beyond it.

“There is a conflict here,” Ryan said.

“You don’t see family members very often stepping into that type of litigation,” said Craig Holman, government affairs lobbyist for consumer advocacy group Public Citizen. “I would strongly recommend that he should have recused himself.”

HUD’s inquiry involved statistical analysis of loan rejections dating to 2010. The department accused the bank’s South Carolina branches of rejecting mortgages for black and Latino applicants at disproportionate rates, showing preferential treatment of white applicants. The bank, HUD said in case documents, could not explain these discrepancies away.

At the time reviewed, First Citizens in South Carolina was separate from First Citizens in North Carolina, though the Holding family held controlling interests in both and the two have since merged. In addition to a new training program and new hires required by the settlement, the bank agreed to give at least $140,000 to nonprofits that provide financial literacy services to first-time homebuyers and to spend $20,000 marketing products to majority-minority areas in South Carolina.

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