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Justify That Merger

by Staff | Sep 2, 2010 6:14 am

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Posted to: Business/Labor/ Economic Development

Connecticut Attorney General Richard Blumenthal added his voice to those questioning the the proposed takeover of NewAlliance Bank, promising to “investigate” the deal.

Blumenthal Wednesday released a letter he wrote to NewAllliance and First Niagara, the Buffalo-based bank seeking to buy the New Haven-based lender for $1.5 billion. Blumenthal—who’s also the Democratic candidate for an open U.S. Senate seat—asked the banks to list what new services a merged entity would offer, its plans for helping stem foreclosures and lend money to local small businesses, its scheduled compensation for top execs, the number of branches it would close, and what kind of credit card and overdraft fees it will charge.

In other words, Blumenthal asked them to prove the merger would benefit people in Connecticut rather than simply enrich the dealmakers at the public’s expense.

Critics, from New Haven Mayor John DeStefano to shareholders filing a class action lawsuit to stop the deal, have been arguing the latter.

Blumenthal said Wednesday’s he’s “concerned” about the impact on local workers and small businesses as well as “the availability of mortgages, and foreclosure and debt relief to homeowners as well as possible abusive credit card and overdraft fee practices and decision-making responsive to local businesses and community needs.”

Bank officials have promised that the new entity would contribute to community causes and be responsive to local customers through a regional headquarters still based in New Haven.

Read Blumenthal’s release here.

First Niagara told media outlets Wednesday they’ll comply with Blumenthal’s request and expect him to conclude that the merger will benefit the region.

 

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