For well over a year, KleinBank has been working cooperatively with the U.S. Department of Justice on an inquiry about its lending practices. Banking is a highly regulated business, and, while inquiries by governmental agencies are fairly common, this is the first one from this particular federal agency in the bank's 110-year history.
"We have provided significant amounts of information in response to the DOJ's inquiry and we have cooperated with their requests in all respects," Hile noted, adding that the facts are that, "Minneapolis and St. Paul are not part of KleinBank's market, and we have virtually no business there. These are highly competitive markets and they are comprehensively served by well-established financial institutions with numerous branches and many years of history."
The complaint alleges, however, that KleinBank had a proactive duty to expand beyond its century-old roots in Carver County and western Minnesota to build branches in Minneapolis and St. Paul, which Hile termed "a baseless and unprecedented reach by the government."
Like all banks, KleinBank is subject to extensive and rigorous examinations by federal and state regulators. "Year after year, the results of these examinations have found that KleinBank has well served all of its constituents' needs. The markets that we serve and the regulations that we follow are continuously changing, often in complex ways. We have stayed true to our values and we have been meticulous and proactive in adapting to the changes," Hile said.
Hile added that he is confident that "a full and fair review of our practices will validate KleinBank's exceptional history of community lending and community responsiveness."
"We seek to be part of the solution to the challenges facing our communities and we will continue to work cooperatively with others who share this objective," Hile said.
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