Inner City Press Bank Beat Archive
here to see
Welcome to Inner
City Press’ Bank
Beat. We aim to scrutinize the industry, from high to low.
Our other Reporters cover
Reinvestment, the Federal
Reserve, and other beats.
published a (double) book about
Bank Beat-relevant topic of predatory lending - click here for
sample chapters, an
information. The Washington
Post of March 15, 2004,
calls Predatory Bender: America in the Aughts "the
first novel about
predatory lending;" the London
Times of April 15, 2004, "A Novel Approach," said it "has
a cast of
colorful characters." See also, "City
Roman a Klepto [Review of 'Predatory Bender']," by Matt
Limits, Sept.-Oct. 2004. The Pittsburgh
Paper says the 100-page afterword makes the "indispensable
predatory lending is now being aggressively exported to the rest
of the globe." Click
review; click here to Search This
December 31, 2012
From the land of dirty deals, Investors
Bancorp is gunning to buy Roma Financial Corp in New
Jersey. Investors is in New York as well, and its
record is disparate. We'll have more on this.
Talk about sleaze: EZCORP Inc. on Dec. 20
announced the completion of several acquisitions,
including its previously announced purchase of online
lender Go Cash. The acquisition was part of a share
placement by Cash Converters and preserves EZCORP's
ownership percentage at about 33%, according to SNL
Financial. The company also moved into the Arizona
market through its acquisition of 12 USA Pawn &
Jewelry stores in Tucson and Bullhead City.
So HSBC settles for money laundering for drug
dealers, but there's no criminal sentence, no jail
time, nothing. Meanwhile, SNL Financial reports that
"Synovus Financial Corp.'s bulk sale of distressed
assets as a net positive that could boost interest in
the company as an M&A target. On Dec. 13,
Columbus, Ga.-based Synovus announced the completion
of a bulk sale of distressed assets. Including this
transaction, the company expects to sell distressed
But Synovus is a rogue - who would buy it?
Watch this site.
If Spain's Bankia tries to sell Miami-based
City National Bank of Florida, well, "there will be
blood," given that bank's disparities. Watch this
December 3, 2012
IMF Won't Answer on Rwanda, Sudan or
Hungary, Does on Bosnia and Sri Lanka
UNITED NATIONS, November 29, updated --
The International Monetary Fund is much in the news, and not
only on Greece and Egypt.
But Press questions submitted to the IMF
for its Thursday briefing questions on Rwanda, Bosnia,
Hungary, Sudan and South Sudan, as well as a long IMF
dodged question on Sri Lanka.And none, by deadline, were
answered. Here were the questions:
On Rwanda, Mr. Shinohara's
statement did not directly mention aid cuts offs amid the
M23 controversy. What *is* the IMF's position on that?
On Sudan and South Sudan, how does Khartoum's announcement
that no South Sudan oil can flow through for now impact
the IMF's views and programs?
In Bosnia, will the opposition boycott of one of the
regional governments impact the IMF's relationship and
program, impacting public servants getting paid, as
Bosniak-Croat federation prime minister Nermin
Niksic has said? [Update: this was later answered
IMF Spokesperson: “During the
mission earlier this month, staff had reached agreements
with the authorities in Bosnia and Herzegovina on
government budgets for 2013 that are consistent with the
objectives of the Stand-By Arrangement. Once these budgets
are adopted by the respective parliaments, we can proceed
with presenting the first review under the arrangement to
the IMF’s Executive Board.”]
On Hungary, what does the IMF think of the country's
new foreign currency bond plan? Does it mean no IMF
program any time soon?
On Egypt (obviously), what is the effect of Morsi's moves
on the IMF program?
Gerry Rice, spokesman, ran the briefing
mostly "in the room," taking an online question on
Argentina and the New York court ruling, on which he would
not comment. But how about this?
The International Monetary Fund lent
into Sri Lanka's military build-up, then when
to downplay it.
Two weeks ago, Inner City Press asked the IMF to
comment on the Rajapaksa government's new 2013 budget,
which reportedly has $2.2 billion for defense / "urban
development," a 26% increase over 2012. Inner City Press
asked, "Given past IMF claims defense spending was not
rising, what is IMF comment now?"
The IMF did not give a substantive response, but
a spokesperson replied, "On Sri Lanka, the 2013 budget
is expected to be finalized and presented in early
November (we understand November 8). We have not yet
seen the 2013 budget, and thus would not be in a
position to comment at this time."
The spokesperson, asking to be identified as
such, told Inner City Press "it would be the best if you
could follow up on this later this month."
And so at the IMF briefing two weeks ago and
today, after the Sri Lanka budget was released, Inner
City Press asked again: "On Sri Lanka, now that the
budget is out: given past IMF claims defense spending
was not rising, what is IMF comment now?"
In light of news all
over the world this month, Inner City Press also
asked, "in light of this week's UN
report on its failures in Sri Lanka during the
killings in 2009, does the IMF as a member of the UN
system have any review of or comment on its performance
with regard to the killings, accountability and defense
spending in the country?"
But during the IMF's embargoed briefing two
weeks ago and this morning, alongside question after
question on Greece, no answer was given. [Update: the Sri Lanka
question was later answered, below]
What about the fortnight old questions on Mali
and Romania which Inner City Press submitted, and those
above, through the IMF Media Center and by email?
Inner City Press e-mailed
again, asking for an explanation before deadline /
embargo time. None was received. Then later, these,
which we publish in full:
On Sri Lanka:
IMF spokesperson: "The 2013 budget envisages
only a moderate increase in defense spending, less than
the budgeted increase in total spending and below the
projected growth of GDP. As a result, the share of
defense spending in total spending and in GDP is
declining. This is a welcome development, in line with
the Fund recommendation to gradually reduce the defense
spending and create room for increased capital
In Bosnia, will the opposition boycott of one of the
regional governments impact the IMF's relationship and
program, impacting public servants getting paid, As
Bosniak-Croat federation prime minister Nermin Niksic has
IMF Spokesperson: “During the mission earlier this month,
staff had reached agreements with the authorities in
Bosnia and Herzegovina on government budgets for 2013 that
are consistent with the objectives of the Stand-By
Arrangement. Once these budgets are adopted by the
respective parliaments, we can proceed with presenting the
first review under the arrangement to the IMF’s Executive
Hurricane Sandy's impact: the New York
Department of Finance Services went weeks without
issuing a Weekly Bulletin of merger applications. So
the Apple - Emigrant comment period must still be
open, right? Especially since the Department only now
acknowleged receipt of Inner City Press' Freedom of
Information Law request for a copy of the application,
and STILL hasn't provided it...
So Citizens Republic "would have to improve
its operating metrics and be able to participate in
FDIC-assisted deals. However, in the spring of 2012,
concerns surfaced that due to "the uncertain economic
recovery, a continued low interest rate environment,
fewer opportunities for accretive FDIC-assisted
transactions and increasing regulatory compliance
costs," it would be more difficult than expected to
achieve management's long-term goals. As such,
Citizens decided to reevaluate its long-term plans in
July 2012, hiring financial adviser J.P. Morgan
Securities LLC to help with the process. J.P. Morgan
initially provided a list of 15 potential strategic
partners for the company. Citizens authorized J.P.
Morgan to contact six of these companies on an
anonymous basis to determine whether there was an
interest in considering a potential strategic
transaction," per SNL Financial.
Must have been hard to figure out which the
"anonymous" target was. And there was FirstMerit. And
now, here's the challenge. Watch this site.
Inner City Press / Fair Finance Watch filed
timely comments on FirstMerit's application to acquire
Reviewing 2011 HMDA data, the more recent data
available (and largely unaddressed in existing CRA
performance evaluations and fair lending exams), in the
Akron MSA that year for conventional home purchase loans
FirstMerit Bank made 140 such loans to whites, and only 12
such loans to African Americans (and only two to Latinos).
It denied African Americans 1.97 times more frequently
than whites; it denied Latinos 2.63 times more frequently
Citizens Republic's Citizens Bank in Akron in
2011 made three such loans to whites, none to African
In the Cleveland MSA in 2011 for conventional
home purchase loans FirstMerit Bank made 163 such loans to
whites, and only THREE such loans to African Americans
(and NONE to Latinos). It denied African Americans 2.02
times more frequently than whites; it denied Latinos 3.54
times more frequently than whites.
Citizens Republic's Citizens Bank in Cleveland in
2011 made eight such loans to whites, none to African
FirstMerit in the Toledo MSA in 2001 made 17 such
loans to whites, none to African Americans.
the record, and in support of ICP's request for a hearing,
there are integration worries:
Standard & Poor's
Ratings Services on Sept. 13 revised its outlook on Akron,
Ohio-based FirstMerit Corp. to negative from stable,
believing the company's deal to acquire Flint, Mich.-based
Citizens Republic Bancorp Inc. could pose integration and
risk-management difficulties...The transaction is the
largest acquisition in FirstMerit's history. The rating
agency further noted that though Michigan and Wisconsin
are to a large extent similar to FirstMerit's traditional
market of Ohio, they present new challenges and
potentially different competitive dynamics.
If the integration is
unsuccessful, unexpected asset quality problems exceeding
the marks taken at the time of the acquisition rise, or
risk-adjusted capital falls below 7%, the ratings could be
cut. On the other hand, in the long term, if FirstMerit
effectively grows in these new markets, S&P could
revise the outlook back to stable.The agency does not
expect to upgrade the ratings in the near to immediate
Moody's shared a similar
perspective of the deal Sept. 13.
Despite this, FirsMerit is already
talking about further acquisitions, with Executive Vice President
and Chief Credit Officer William Richgels telling analysts that
"We are going to be keeping in touch with those that we have been
speaking with, and we're going to continue to evaluate other
opportunities for growth."
There is also litigation. According
to SNL Financial:
Mich.-based Citizens Republic Bancorp Inc. ($9.67 billion); its
board; and Akron, Ohio-based FirstMerit Corp. ($14.62 billion) are
facing four class-action lawsuits for allegedly having breached
their fiduciary obligations to shareholders in relation to their
stock-for-stock merger agreement, mlive.com reported.
value of $22.50 per Citizens Republic share — which Citizens
shareholders are to get when exchanged with 1.37 shares of
FirstMerit under the agreement — has dwindled because of
FirstMerit's receding share price, the lawsuits claim.
One lawsuit, by
Cecily Hoogerhyde, said FirstMerit had been trading at more than
$17 per share before the announcement, which then decreased to as
low as $14.94, "causing the implied consideration to drop nearly
10[%], to less than $20.50 per share" as opposed to the original
implied value of $22.50, which the lawsuit said was also
"inadequate," according to the Oct. 10 report.
lawsuits were filed by Michael Decker, Peter Block and a fourth,
unidentified plaintiff, the news outlet reported.
The cases have
been lodged in the 7th Circuit Court in Genesee County, Mich.,
before Circuit Court Judge Richard Yuille
On the current record, FirstMerit's
applications should not be approved.
November 12, 2012
And now it can be
said - this was filed:
November 2, 2012
Southern District Office
Director for District Licensing
500 North Akard Street, Suite 1600
Dallas, TX 75201
RE: Timely Opposition to BankUnited's application to
acquire Herald National Bank
Dear Director for District Licensing:
Inner City Press / Fair Finance Watch has serious
concerns about BankUnited’s proposal to acquire Herald
National Bank and its branches in affluent Manhattan
and suburban Long Island, as well as to open four
branches in New York -- three in the most affluent
parts of Manhattan and one in suburban Suffolk County,
totally excluding upper Manhattan, The Bronx, Brooklyn
Our organization and several NCRC members in Florida
have raised concerns in connection with BankUnited
currently underway CRA exam -- these applications for
branches in affluent parts of New York should be
postponed until that exam is finished and public;
right now, they should be denied.
As recently as August, it's reported that BankUnited
is still entertaining offers to be bought -- all the
while having put Herald National Bank "on ice" during
non-compete litigation. Bank expansion applications
subject to CRA shouldn't be allowed to be an
enticement for wheeling and dealing, but to serve
communities and public benefits. These do not.
It has been reported that BankUnited couldn't even
make this proposed acquisition, and open these
branches until February 1 -- we suggest that the
applications be adjourned or withdrawn until then. For
"Kanas settled a lawsuit from Capital One, which had
accused him of violating a non-compete agreement in
the New York market. By Feb. 1, BankUnited will be
able to open branches in New York and more
aggressively pursue clients and employees there.
And, now it’s clear exactly where those branches would
The applications received by the Office of the
Comptroller of the Currency on Sept. 27 state that
BankUnited wants to open branches at 299 Park Ave.,
136 E. 57th St. and 960 Avenue of the Americas in New
York City. It also wants a branch in Long Island at
445 Broadhollow Road in Melville.
Herald National Bank, which will be merged into
BankUnited soon, already has branches at 623 Fifth
Ave. in New York City and at 58 S. Service Road in
At the same time, BankUnited notified the OCC about
three branch closures in Florida. It closed two
branches in Port St. Lucie on Sept. 28 and plans to
shutter a branch in Sun City Center in Hillsborough
County in the coming
So the plan is to open branches in affluent parts of
New York, and to close them in Florida. The OCC should
Inner City Press / Fair Finance Watch is concerned
about the following data about BankUnited, which has
been collected by NCRC and provided to members
and partners at their request: In Miami-Dade County,
BankUnited made just 9.8 % of its home loans to low-
and moderate-income borrowers in 2010 and decreased it
lending to 8.8% in 2011. By contrast, all lenders, as
a group, issued 16.5% of their loans to LMI borrowers
in 2010 and 17.6% in 2011.
The lending data is even more striking when you
consider that 39.3% of households in Miami-Dade County
are low- and moderate-income.
In Broward County BankUnited made 30% of its loans to
low- and moderate-income borrowers in 2010 but
significantly decreased its lending in 2011 making
just 6.3% of its loans to these borrowers. In
contrast, all lenders, as a group made 26.9% of their
loans to LMI borrowers in 2010 and 23.3% in 2011.
The lending data is even more striking when you
consider that 38.8% households in Broward are low- and
BankUnited’s lending to African Americans is a fair
BankUnited record of meeting the needs of African
American borrowers is poor.
In Miami-Dade County BankUnited made just one loan to
an African-American borrower in 2010 and zero in 2011.
In Broward County BankUnited made three loans to
African Americans in 2010 and zero in 2011.
BankUnited is not serving the needs of low- and
The bank had poor lending distribution not just to
low- and moderate-income borrowers but also to low-
and moderate-income census tracts. The most recent
data shows that BankUnited made 6.7% of its home loans
to LMI census tracts in Miami-Dade during 2010 and
then decreased this lending in 2011 to just 1.8%. In
contrast, all lenders, as a group, issued 12.2% of
their loans to LMI census tracts in 2010 and 11.0% in
In Broward the pattern continues with the bank making
10% of its home loans in LMI census tracks in 2010 and
then decreasing to 4.2% in 2011. In contrast, all
lenders, as a group, issued 10.7% of their loans to
LMI census tracts in both 2010 and 2011.
According to the latest data, the bank does an
adequate job of providing bank branches in low-income
neighborhoods in Broward County. However, data
indicates that the bank is not doing an adequate job
of branching in low- and moderate-income neighborhoods
in Miami-Dade County. In Miami-Dade County, the bank
has just 18.2% of its branches in low- and
moderate-income communities. In contrast, all lenders,
as a group, have 23.5% of their branches in LMI
neighborhoods. Furthermore, BankUnited receives just
6.2% of its deposits from LMI communities in the
county. In contrast, all lenders, as a group, receive
24.2% of their deposits from LMI neighborhoods during
2011. This may be an indication that the bank needs to
better advertise its deposit products and services to
LMI communities in Miami-Dade.
According to the most recent Call report data,
BankUnited had approximately $4.8 billion in loans and
$7.4 billion in deposits for a loan-to-deposit ratio
of 64 percent, which is low for a bank with
approximately $11.8 billion in assets. Also, it is a
full 10 percent lower than the Florida Section 109
loan-to-deposit ratio of 74 percent for all banks
headquartered in Florida (Section 109 is a federal
regulatory assessment of how a bank’s loan-to-deposit
ratio compares against the ratio of other banks on a
The OTS’ previous exam gave BankUnited a Low
Satisfactory rating on the lending test. The 2010 and
2011 data suggests that BankUnited merits a downgrade
in its lending rating from Low Satisfactory to Needs
to Improve because of low lending levels and a poor
distribution of loans by income of borrower. The
minimal lending levels to African Americans are a fair
lending concern that must be rigorously evaluated on
the fair lending review accompanying the CRA exam. In
addition, the paltry lending volumes suggest that
BankUnited’s overall rating should change from
Satisfactory to Needs-to-Improve since its branches
are collecting deposits but then not lending.
Collecting deposits and not lending on a level
commensurate with deposits is one of the classic forms
of redlining and neglect of the community’s credit
These applications to acquire Herald National Bank,
and for branches in affluent parts of New York should
be postponed until that exam is finished and public;
right now, they should be denied.
Thank you for providing us with an opportunity to
comment on this important matter.
Matthew Lee, Esq., Executive Director
Inner City Press / Fair Finance Watch
November 12, 2012
Fed Met M&T 10 Days Before
Hudson Deal, FOIA Shows, Appeal & Protest
By Matthew R. Lee, Exclusive
SOUTH BRONX, November 9 -- When
M&T on August 27 announced biggest bank merger deal of the
year, a $3.81 billion proposal to buy Hudson City Savings
Bank, it was not the first time the Federal Reserve had heard
Press, which has challenged M&T's application under the
Community Reinvestment Act, on November 9 got a belated
Freedom of Information Act response from the Federal Reserve
Board, less than two hours before the Fed said the extended
comment period would close.
released to Inner City Press show that on August 17, a full
ten days before the public announcement, Federal Reserve Bank
of New York official John Ricketti wrote to five others within
called me this afternoon to inform me that M&T is looking
to acquire M&T. [sic] He will be talking to his board
about the acquisition at next Tuesday's board meeting and
asked to come in Wednesday to talk to us (we're setting
something up for late Wednesday afternoon). I'll be up in
Buffalo for the board meeting to discuss the [REDACTED] and
expect to learn more from him Monday night (I have a
one-on-one meeting with him)."
After that, much is redacted. Click
here to view.
The Fed advised
M&T that its application to buy Hudson would probably be
protested -- accurately, given that Hudson City in 2011, for
conventional home purchase loans in the New York City
Metropolitan Statistical Area, to make 765 such loans to
whites and only FIVE to African Americans.
Of this, a Fed memo of August 24 said "this will
require review of any issues that are raised and [REDACTED].
To view, click on cover
email, and talking
points One and Two.
After the August
17 contact but before the proposal was announced, the Fed met
on August 22 from 4:30 to 5:30 with "Wilmers" and Rene Jones,
Michael Pinto and outside council Rodgin Cohen.
presentation was made, much of which including on Due
Diligence and Complexity has been withheld.
meeting, the New York Fed's Ivan Hurwitz sent a memo to the
Fed in Washington, most of which has been blacked out.
On August 24,
the Fed's John Ricketti wrote another memo, with talking
points, about his meeting with Rodgin Cohen and Rene Jones,
much of its redacted.
Then on August 27, Cohen
[Rodge] called the Fed's Tom Baxter, and Wilmer called
"Dudley," both summaries redacted.
After the deal was announced,
M&T had more meetings with the Fed on September 7. Only
after they submitted an application did Inner City Press
submitted a FOIA request on October 2, and an initial protest,
on October 7.
Now Inner City Press has timely
requested a further extension of the comment period, to review
the documents so belatedly released, and to appeal what is
the substantive part of "Confidential" Exhibit O, what M&T
will actually PAY to Merger Sub, and nearly all of the
anti-money laundering program, material changes and due
diligence findings. The Board Resolutions and Agreement and
Plan of Merger are all blacked out, which is ridiculous.
Since the announcement,
Super Storm Sandy hit, and SNL Financial reported the Hudson
City "said it was still too early to determine how many of its
mortgage loans were located in tidal flood zones."
allowed Hudson City in 2011, for conventional home purchase
loans in the New York City Metropolitan Statistical Area, to
make 765 such loans to whites and only FIVE to African
Americans (and only 44 to Latinos). Meanwhile, Hudson City
denied the applications of African Americans 3.21 times more
frequently then those of whites.
Picking up on the challenge,
the Buffalo News contacted M&T for its comment. M&T
spokesman C. Michael Zabel countered that "we support
But reporting by Inner City
Press find this questionable, throughout M&T's footprint
down to Virginia. M&T's next move was to reach out to
friendlier media and announce that its merger application is
proceeding - without mentioning the protest or why it was
Similarly, M&T hyped up
after the protests it celebration of Hispanic Heritage Month
at its Newburg, New York branch, and got it reported without
any mention of its lending record, much less the challenge.
But at least on M&T, the
word got out in New York and New Jersey, where Hudson is
based. Watch this site.
November 5, 2012
Six purported shareholders of Citizens
Republic Bancorp Inc. filed class-action lawsuits
against FirstMerit Corp. in September and October
alleging the proposed merger price and terms for the
Flint, Mich.-based company are unfair, according to
both companies' Form 10-Qs.
lawsuits, filed in Circuit Court of Genesee County in
Michigan, also allege Citizens' directors failed in
their fiduciary duties by approving the transaction.
They seek an injunction to or rescissory damages and
other equitable relief.
as reported by SNL Financial, the suits are: Hilary
Coyne, individually and on behalf of all others
similarly situated v. Citizens Republic Bancorp, Inc.;
Vladimir Gusinsky Living Trust, individually and on
behalf of all others similarly situated v. Citizens
Republic Bancorp, Inc.; Cecily Hoogerhyde,
individually and on behalf of all others similarly
situated v. Citizens Republic Bancorp, Inc.; Michael
Decker, individually and on behalf of all others
similarly situated v. Citizens Republic Bancorp, Inc.;
Robert Block, individually and on behalf of all others
similarly situated v. Citizens Republic Bancorp, Inc.;
and Blair Cole, individually and on behalf of all
others similarly situated v. Citizens Republic
We'll have more on this.
BankUnited in Florida has applied to open four
branches in New York: three in the most affluent parts
of Manhattan, and one in suburban Suffolk County. Not
only is this redlining, it also jumps the gun: due to
a non-compete clause and settlement, the branches
couldn't even be opened until February of 2013. Inner
City Press has commented - receipt confirmed - asking
for the applications to be suspended or withdrawn
pending among other things a review Florida NCRC
members have requested. We'll have more on this.
October 22, 2012
In the UK, according to SNL Financial,
"the Parliament's Treasury Select Committee on
Oct. 19 released a report stressing the need for
the new Prudential Regulation Authority to have
the power to approve large bank mergers. The
committee made the recommendation that the
government explicitly legislate for the new agency
to have that power in a report that concluded that
the FSA 'should and could have intervened' in the
disastrous acquisition by Royal Bank of Scotland
Group Plc of ABN AMRO Group NV in 2007. RBS needed
a £45 billion government bailout following the
acquisition. The Prudential Regulation Authority
is one of two successor agencies to the FSA due to
begin operations in 2013."
And what changes should be made in the
rewarded: the FDIC received 20 bids for failed
Bloomington, Minn.-based First Commercial Bank,
according to a bid summary last updated Oct. 9,
reported by SNL Financial. State regulators closed
First Commercial Bank on Sept 7. The FDIC-selected
winner, Louisville, Ky.-based Republic Bank &
Trust Co. ($3.17 billion), placed an all-deposit,
whole-bank bid with an asset discount of approximately
$79.4 million. And while, as per FDIC rules, the
details of the second-place bid — also known as the
cover bid — were omitted from the disclosure, the
other nonwinning bids offered asset discounts ranging
from $34.9 million to about $126.8 million.
Why would the FDIC, which purported to beat up
on Republic for predatory / tax refund lending through
Jackson Hewitt and Liberty Tax, now give it another
bank without any application subject to public
October 8, 2012
Rwanda, IMF Tells ICP It Studies M23-Related Delay in Aid
Until Next Week
By Matthew Russell Lee
UNITED NATIONS, October 4 -- For at
least three weeks Inner City Press has asked the IMF "On
Rwanda, does the cutting of aid based on alleged support of
M23 rebels in DRC have any impact on IMF analysis of or
programs in the country?"
Finally as the
last question at the IMF's October 4 media briefing spokesman
Gerry Rice took the question. He replied, "An IMF mission is
in Rwanda... Delays in aid disbursement is one of the issues
the mission is looking into. We expect the mission to complete
its work early next week and we will issue a press release at
At the UN, there was a flurry of
activity on the Democratic Republic of Congo and its neighbor,
Rwanda in September but as noted the topic is not even listed
on the agenda of the Security Council for October.
week's closed-door mini summit on the topic at the UN, Inner
City Press was told that the most vocal in pushing sanctions
was Belgium, for the allegations of support to the M23
mutineers made in the UN report coordinated by Steve
Hege, whose 2009 writings about the FDLR and Rwanda have yet
to be explained (they were taken off the Internet after
Inner City Press linked to them).
On Tuesday Inner
City Press asked income Security Council president Gert
Rosenthal of Guatemala why DRC is not on the agenda, is it
just on hold? Video
here, from Minute 22:48.
Inner City Press that on "Eastern DRC, the Security Council
has been waiting for some type of agreement among the Great
Lake governments, so far it has not come forth."
Inner City Press' question he said, "the way you put it, the
topic being on hold, is an accurate reflection of where we are
right now. The situation is not good, and that is the reason
we are reminding ourselves in the footnote that the topic may
come to us this month, though not specifically scheduled." Watch this site.
IMF's October 4, 2012 transcript:
is another question on Rwanda, "Does the cutting of aid based
on alleged support of rebels in DRC have any impact on IMF
analysis or of programs in the country?" I can say an IMF
mission is in Rwanda to conduct a fifth review under the
Policy Support Instrument and the discussions for the 2012
Article IV consultation. To answer Matthew directly, delays in
aid disbursements is one of the issues the mission is looking
into. We expect the mission to complete its work early next
week and we'll issue a press release at that time.
Tells ICP Welcomes Sudans Deals, Ready to Support Both - Debt
By Matthew Russell Lee
UNITED NATIONS, October 4 -- Just
before Sudan spoke last Saturday at the UN General Debate, the
IMF "encouraged the authorities to step up their dialogue with
creditors and donors to garner support for debt relief."
Sudan's arrears to the IMF itself are part of the problem.
minister Ali Karti in his September 29 speech called for debt
relief. At the IMF's next media briefing on October 4, Inner
City Press asked two questions on Sudan:
the UN General Debate, Sudan's Foreign Minister Ali Karti said
the country's debts should be forgiven. Any response? Do
Sudan's and South Sudan's agreements last week in Addis Ababa
have any impact on IMF analysis of or programs in either
country? Any IMF comment on the agreements?"
Gerry Rice took these as the penultimate question during the
embargoed briefing, replying that
Fund welcomes the agreement on oil related and other issues
between the two countries. We look forward to its
implementation and to the resolution of other bilateral
issues. The Fund stands ready to continue supporting both
countries going forward."
But what support does the IMF
give to Sudan? What about Ali Karti's call for debt relief?
the UN Security Council, one of the "unresolved bilateral
issues," Abyei, was to be discussed. Watch this site.
From the IMF's
October 4, 2012 transcript:
the U.N. general debate Sudan's foreign minister said the
country's debt should be forgiven in response. Do Sudan's and
South Sudan's agreements last week in Addis have any impact on
IMF analysis or programs in either country? Can you comment on
those agreements?" My comment would be that the Fund welcomes
the agreement on oil related and other issues between the two
countries and we look forward to its implementation and to the
resolution of other pending bilateral issues, and the Fund
stands ready to continue supporting both countries going
October 1, 2012
On LIBOR, and only after a Freedom of
Information Act appeal, we have received this:
From: Jose Alonso
To: jeremy c kress
Cc: stanley crisp; Mark Baker; David Goode
Date: 07/10/2012 06:08 PM
Subject: Fw: Mitsubishi UFJ Said to Suspend Two London
Traders on Libor Probe
Here is the update on the
Libor issue which you inquire about recently. The
response is from Bob Hand, MUFG General Counsel in
I told Bob that BOG staff
was interested in the status of the investigations as
part of our application review process.
At the end of the email he
expresses concerns as to the impact of this line of
inquiry on the SBBT application an offers to meet with
you and other interested parties. I will assume that
you would invoke ex-parte concerns on such a meeting.
Yes, such a meeting would have, and perhaps
did, violate the Fed's rule against ex-parte
communication. No summary of the meeting was provided,
at least along with Governor Jay Powell's September 25
FOIA appeal ruling...
September 24, 2012
Back in April, Inner City Press / Fair Finance Watch filed
comments with the FDIC opposing GE - MetLife bank. Now there's
this, from SNL Financial:
"GE Capital Retail Bank, a unit of
General Electric Co., will acquire approximately $7 billion in
deposits from MetLife Bank NA, rather than GE Capital Bank.
According to a Form 8-K filed Sept. 21, most key terms of the 2011
agreement remain unchanged. However, the amended transaction will
be subject to regulatory approval by the OCC, and approval by the
FDIC will no longer be needed. Upon completion of the sale,
MetLife Bank will terminate its deposit insurance and MetLife Inc.
will deregister as a bank holding company."
This is a scam. We'd hope to hear about it from Tom Hoenig of
the FDIC, for example.
$1.3 billion bid for Citizens Republic might put
FirstMerit into Michigan and Wisconsin, as well as
closing branches in Ohio - but even the rating
agencies are dubious about FirstMerit's abilities...
GE's proposed acquisition of the deposits of
MetLife Bank, which ICP protested months ago, remains
unapproved by the FDIC. Some are saying that, unlike
other applications, it requires action by the FDIC
board. We'll see.
The FERC has given Deutsche Bank Energy
Trading 30 days to show cause as to why it should not
be fined $1.5 million and required to disgorge
$123,198 (plus interest) of unjust profits for
allegedly manipulating California energy markets, SNL
Financial reported. The agency on Sept. 5 alleged that
employees of Deutsche Bank, including some at the
senior level, developed a scheme under which the
bank's traders asked the California ISO to schedule
exports of power over the 17-MW Silver Peak intertie
in order to eliminate import congestion. The bank
would then profit from the move because it possessed
congestion revenue rights for the intertie.
In a telling incipient deal, Société Générale
SA said Aug. 30 that Qatar National Bank expressed
interest in buying the 77.17% stake that the French
bank controls in National Société Générale Bank in
Egypt, SNL Financial noted. SocGen added that an
application was filed with the Central Bank of Egypt
for due diligence of the unit but added that the
"discussions are preliminary and there can be no
certainty as to whether an agreement will be reached."
The Egyptian unit is based in Cairo and had 160
branches across the country as of year-end 2011,
according to its full-year 2011 report. It booked a
full-year 2011 net profit of 1.49 billion Egyptian
pounds, up 11% year over year. Ah, Arab Spring..
August 27, 2012
As to Mitsubishi UJF, trying to buy Santa
Barbara Bank & Trust, the Fed is trying to
withhold whole paragraphs about LIBOR --
unacceptable. Watch this site.
August 20, 2012
In the wake of the NYSDFS
action against Standard Charter, Deutsche Bank is
being looked at for similar money laundering for
Iran and others. In denial, Deutsche Bank
spokeswoman Friederika Borgmann said the bank had
decided by 2007 to stop engaging in new business
with countries such as Iran, Syria, Sudan and
North Korea and also exit existing businesses as
far as legally possible. We'll see.
Meanwhile the New York State Department of Financial
Services quickly filed and settled charges against Standard
Chartered Bank for laundering money for Iran
to evade sanctions
against that country, the same NYSDFS has been remiss
in its more local duties.
A major New
York bank franchise, Emigrant Bank, is up for sale to Apple
Bank for Savings, but the NYSDFS appears asleep at the
switch. The NYSDFS is rubbing stamping mergers and branch
closings, and not responding to comments from the public.
On August 6, Inner City Press / Fair Finance Watch
submitted a timely challenge to the NYSDFS against a
pre-merger branch closing by Emigrant. While not responding,
then provided notice of a merger application filed August
8, saying the comment period expired August 6 - click here
The NYSDFS has not
explained this either. Can you say Kafka?
August 13, 2012
First, Brazil's Banco Itau was said to be
interested in buying in the United States, looking
at Royal Bank of Scotland's Citizens Bank
franchise, or Santander - Sovereign or even BNP's
Bank of the West. Then they denied it. But do they
protest too much?
Past (and future?) CRA rogue WesBanco is
buying into Pennsylvania...
Still sleazy: Community Bank System Inc. is
closing five branches, three of which are former HSBC
Bank USA NA branches divested by First Niagara. Among
the remaining two, one of the branches is from among
the three additional branches that Community Bank is
acquiring from First Niagara. Supposedly the
consolidation will be effective Sept. 10 and the
consolidations will not result in any layoffs.
Green Dot just gave back much of its goodwill
— and market value — in one 24-hour period. Green Dot
shares lost 61.15% on July 27, prompted by
management's decision to slash the firm's full-year
guidance in anticipation of rapidly increasing
Dot now expects just 5% growth in the average number
of active cards, down from the greater-than-20%
forecast provided in April. Cash transfer growth was
cut as well, to 15% from 20% in the first quarter. The
slowdown is likely to hit earnings hard, with the
company forecasting 2012 EPS at $1.29 to $1.32, down
from the original range of $1.65 to $1.70. That
guidance cut marked the second time this year that
Green Dot has softened its predictions.
a greater level of uncertainty going forward in our
business as our market and the prepaid industry in
general continues to evolve," Chairman, President and
CEO Steven Streit said on a July 26 conference call,
monitored by SNL Financial...
On behalf of Inner City Press / Fair
Finance Watch and its members and affiliates
(collectively, "ICP"), this is a FOIA request concerning
withheld submission related the applications of Mitsubishi
UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi
UFJ, Ltd and UnionBanCal Corporation to acquire Pacific
Capital Bancorp & Santa Barbara Bank & Trust,
which ICP timely protested.
Many of the applicants' submissions
are being withheld, including directly on issues raised in
ICP's timely protest. For example, and this is
specifically requesting, a July 31 submission recites an
FRB questions about Tax Refund Anticipation Loans (raised
by ICP), and says "Please see Confidential Exhibit 1."
ICP is request that and the other
Similarly, in a July 24 submission,
there is a question about Swiss regulators' inquiring into
interest rate manipulation (that is, LIBOR scandal) - and
it says "Please see Confidential Exhibit 2."
ICP is request that and the other withheld
July 30, 2012
Two of the vendors that
sold the credit card add-ons cited in Capital One's
settlement with the CFPB and OCC also do business with
of America: private equity owned Affinion Group
Holdings, and Intersections, for which Bank of America
is more than half of the company's income....
As IMF Briefs on Spain, Former Chief Rato Pushed
Bankia to Bailout, Safeguards?
By Matthew Russell Lee
UNITED NATIONS, July 27 -- When
the International Monetary Fund's mission chief for Spain
James Daniel held an embargoed (until now) press call Friday
morning, he was asked about the flame out of Bankia, which
was chaired by former IMF chief Rodrigo Rato.
followed up on the call, Rato's and now the IMF's role raise
questions about the need for safeguards given the revolving
door through which former IMF officials pass. Can former
IMF-ers benefit from bail outs or "programs" of the the IMF?
The story of Bankia and its IPO is an ugly and
extensive one. The global co-ordinators on the deal were
Deutsche Bank -- which, as Inner City Press has noted, has a
former official now on the Federal Reserve Board -- J.P.
Morgan, Bank of America Merrill Lynch, and UBS.
The retail underwriters on
the retail tranche were Bankinter, Sabadell and Barclays,
now of LIBOR fame.
garnered worldwide media coverage. But what of financial
scandals involving former IMF officials? Watch this site.
July 23, 2012
So just in the last week there are
announcements of a credit union merger proposal in
Washington State (Prevail and Harborstone), the
buy-up of United Community Bnak in Texas, and of
Inland in Ontario, California; there is
CRA-challenged WesBanco making a move into
Pittsburgh. And there is a proposed deal in New
York we will keeping a close, close eye on. Watch
July 16, 2012
HSBC is subject to a Senate hearing
this week, on funding support for terrorism... JPMorgan
Chase's losses mount, along with evidence of what Jaime
Dimon knew and when he knew it...
Even without major nationwide news
there are a lot of small regional deals, like
Montana, 7 branch deal
July 2: Maine
Illinois deal, Heartland and Farmer City
July 5: Kansas
deal, Southern Kansas
Nebraska, Valley Bank
July 6: Texas,
California, Opus Bank buying 10 branches in and around LA
Maryland, federal savings bank deal
July 10: Texas:
Comanche - Texas Savings
And that's just
in 10 days. Overseas, HSBC is selling in Monaco and buying
in Egypt, GE is selling, so is Santander in Latin
On Angola's Oil
Funds, IMF Tells Inner City Press It's Working on
By Matthew Russell Lee
July 12, updated -- After
a series of questions take by the Internation Monetary
Fund on Thursday about Greece and Ireland, Portugal
and Cyprus, Inner City Press' question about Angola
and transparency was asked by spokesman Gerry Rice:
"On Angola, what is
the IMF's response to requests that the IMF insist on an
audit of the oil revenue unaccounted for from 2007 to
an answer prepared in his binder, from which he read,
saying, "the IMF attaches great important to the
transparency of governments in management of public
He said the IMF and Angola have "devoted
efforts" in light of the "large discrepancies observed
in this accounts since 2011."
Rice claimed this has "produced important
results" such as "highlighting factors underlying the
discrepancies" and "promoting the introduction of
institutional measures" for "accountability" for
"Angola's oil revenue."
But where did the money go,
other than to real estate in and around Lisbon?
Who is being held accountable?
Rice continued that "the Angolan
authorities say the intend to complete work" soon,
that they "have adopted measure to address underlying
As to the IMF, Rice said that the "Board
its 2012 Article 4 consultations with Angola" and that
"there will be more info on that discussion, a Public
Information Notice" soon. We'll see.
Inner City Press submitted two other
questions, on Sri Lanka and
Hungary. On the latter, the IMF half answered, that
the authorities are requesting only a Stand By
Agreement, "not a PLN."
July 9, 2012
Germany's Bafin is probing Deutsche Bank for
LIBOR manipulation. DB's last quarterly report disclosed
that the bank had received subpoenas and requests from
regulators and government entities in the U.S. and Europe
in connection with setting currency rates. Watch for
July 2, 2012
Now the estimate for JPMorganChase's London whale dalliance is
$4 to $6 million...
Greek IMF Tragedy & Lagarde Guilt, Africa Ignored As Sudan
Matthew Russell Lee
UNITED NATIONS, June 28 -- The
International Monetary Fund and its director Christine Lagarde
often use Africa, or the idea of Africa, as a place that they
vaguely help or at least care about.
But at Thursday IMF briefing,
amid repeated questions about Greece, Cyprus, Spain and Hungary,
not a single sub Saharan Africa question was taken, much less
answered. It's not that they weren't asked. Inner City Press
submitted questions about the Democratic
Republic of the Congo and these, among others:
In Sudan, the IMF earlier this
month urges the government to institute "emergency measures."
Have the steps since announced, which have given rise to
protests that have been cracked down on, been consistent or
inconsistent with the IMF's advice?
the IMF have given rise to questions & protests in South Africa, the
Philippines and elsewhere, by those who say the money could be
better spent at home on the poor. What is the IMF's response?
again: What is the status of IMF programs in and reviews of Mali and Guinea Bissau,
given coups in each country?
But the IMF did not take the questions (in previous weeks, it
has answered Inner City Press' questions about Sudan by email
after the fact.)
Now, the IMF gives
austerity advice to Sudan, then when protests erupt, the IMF
would answer or even take the question.
A journalist ran in late,
citing an interview at the American Enterprise Institute, and
still got another answer on Greece. Perhaps it is Lagarde's
guilt for telling Greeks to pay taxes when she doesn't. But what
about those children in Niger? Watch this site.
June 25, 2012
While the CFPB may have
tried to downplay it, Capital One had by far the
most complaints against it, see https://data.consumerfinance.gov/dataset/Credit-Card-Complaints/25ei-6bcr
and search for Capital One. We'll have more on this.
June 18, 2012
UFJ's application to acquire Santa Barbara Bank &
Trust is now essentially amended to say at least five
branches would be closed, in Gilroy, Hollister Main,
Salinas-Harden Ranch, Watsonville and Lompoc. The policy
June 11, 2012
So the FDIC,
even after the subprime meltdown, rules that GE Capital
Financial Inc, buying the deposits of MetLife Bank, is NOT
responsible for the predatory lending of WMC, because it
"was a subsidiary of a different financial institution (GE
Capital Retail Bank)." This hairsplitting is shameful --
and dangerous. Watch this site.
June 4, 2012
AG bragged that its special situations group won the
auction for a $911 million loan portfolio being sold by
two units of Capmark Financial Group: Midvale, Utah-based
Capmark Bank and Capmark Finance LLC. Typically, DB did
not reveal the price it paid...
Peppered on Lagarde's Linking Greece to Niger, But Sudan
Matthew Russell Lee
UNITED NATIONS, May 31 -- The
International Monetary Fund's biweekly embargoed press briefing
on Thursday focused almost entirely on the protests to Managing
Director Christine Lagarde's comments that Greeks should pay
their taxes -- while she does not pay taxes -- and as one Greek
journalist focused in on, her comparison of Greece and Niger.
IMF spokesman Gerry Rice
responded to this last by paying the IMF has to serve all of its
members including the low income ones; he directed the press to
Lagarde's clarification if not apology on Facebook. But is it
The questions on Greece
kept coming, until Rice said, this will be our last question on
Greece. But it wasn't.
Inner City Press
submitted a number of questions, including "On Hungary, can you
respond to an analysis (by Citigroup) that "the IMF may still
require structural expenditure cuts and changes to the tax
Rice said, on Hungary,
that there are "no dates... to start negotiations," adding that
"we do continue" to be in touch with "the Hungarian authorities.
A lot of actions are needed," he said, "to ensure central bank
Then the questioning
turned back to Greece. Rice said there will be no new mission
until elections and a new government. One wonders how big the
protests would be, if Lagarde went there now?
Others of Inner City
Press' questions have yet to be answered, on Pakistan, the
Democratic Republic of Congo, Cote d'Ivoire and one on Sudan, on
which the UN Security Council was simultaneously meeting on
Cote d'Ivoire, can you confirm that next month a decision is
expected on "an
IMF-backed debt relief deal calling for relief of $5-billion
of the country's debt, reducing its current stock of debt by
is the status of Pakistan reaching out for a new facility? Is it
true the "IMF
wants Pakistan to raise tax revenue from the present 10% of
GDP to 15% of GDP by 2013"?
Sudan, because some are critical of the IMF's Edward Gemayel
recent recommendation of a "structural reform program," could
you explain what this means for the Sudanese?
Footnote: the press corps
covering the IMF backed each other up in pushing questions on
Greece and Lagarde's comments, in contrast for example to some in
the UN press corps these days.
ups were sharp, and journalists didn't allow themselves to
be used as a way to turn away from or even refuse
others' questions. It seemed unlikely there would be
pressure to take down stories, or for purges
or expulsion. Does money in the water make the reporting
more serious? Even within the same mega
May 29, 2012
Citigroup has sold 404 million common shares in Akbank TAS
through an equity offering, representing a 10.1% equity
interest in Akbank, for 5.24 Turkish liras per share.
Total proceeds from the transaction are expected to be
about $1.15 billion at the current exchange rate,
resulting in an after-tax loss of about $243 million in
the second quarter. The transaction is estimated to
generate approximately 23 basis points of Tier 1 common
capital under Basel III, according to a May 25 news
Facebook's botched IPO cost Citigroup's automated trading
desk about $20 million.
May 21, 2012
Chase's gambling loss morphed from $2 billion to more than
$3 billion, and some still say that "real reform" was put
Sudan IMF Has No View on Oil Transit Fee, Notes Country's in
Matthew Russell Lee
UNITED NATIONS, May 17 -- As
tensions have escalated between Sudan and South Sudan about oil
transfer fees and the size of Sudan's debt, Inner City Press has
the International Monetary Fund for its view of the oil
fee dispute and about possible debt relief for Sudan.
At the IMF's
Meetings in Washington last month Inner City Press put the
question to IMF regional expert Masood Ahmed. Finally on
Thursday afternoon, after Inner City Press re-submitted the
question to the IMF's embargoed briefing that morning, the
Date: Thu, May 17, 2012 at 1:55 PM
From: [Spokesperson at] imf.org
To: Matthew Russell Lee [at] innercitypress.com
is in response to your questions on Sudan and South Sudan:
What is the IMF doing on or about the Sudan - South Sudan oil
transfer fee dispute?
the request of the African Union, the IMF has provided estimates
of the fiscal and external impact of South Sudan’s separation on
both countries. The Fund has not taken any position on the
amount of financial assistance or oil transit fees that South
Sudan could pay.
Q - …
and about any debt relief for Sudan?
Fund is discussing with the authorities economic policies to
help stabilize the situation and implement reforms to sustain
more inclusive growth. These could underpin a new Staff
Monitored Program. Despite Sudan’s good cooperation on policies
and payment to the Fund under successive SMPs, Sudan remains in
arrears to the IMF and therefore ineligible to use Fund
These answers are appreciated;
among the questions that remain outstanding is
is the status of IMF programs in and reviews of Mali and Guinea
Bissau, given coups in each country? "
If the IMF's work on the Sudans
was at the request for the African Union, what about ECOWAS and
these two coup d'etats? Watch this site.
May 14, 2012
So JPMorgan Chase gambles and loses $2 billion,
and on Meet the Press Jaime Dimon says there was "almost
no excuse." So, what's the partial excuse? Dimon claims
JPMorgan Chase has supported 70% of Dodd Frank. But what
about the Volcker Rule? Then on the McLaughlinGroup,
Financial Times editor Gillian Tett says FT will
editorialize for "better regulation" after l'affaire
JPMorgan Chase. We'll see.
Myanmar, IMF Won't Assess Reversion to Repression, Kachin Not
Matthew Russell Lee
UNITED NATIONS, May 7 -- When
the International Monetary Fund's Meral Karasulu took questions
about the IMF's work in and assessment of Myanmar on Monday
night, one expected military rule and fighting in the ethnic
zones to be a topic.
But amid the IMF's rosy
view, pitching for example natural gas reserves, the world's
major wire services focused on exchange rates, natural gas and,
in the case of AFP, the Paris Club creditors getting paid back
Inner City Press asked
Meral Karasulu two questions: how likely does the IMF think that
a reversion to military rules, and did the IMF even consider the
continued conflict in Kachin state in its assessment?
Karasulu politely dodged the first question, saying that the IMF
has no "comparative advantage in political analysis," even that
it would be "inappropriate" to consider the risk of reversion.
But as reported
exclusively last week by Inner City Press, when UN Secretary
Ki-moon visited Myanmar he thanked and welcomed a company
specializing in surveillance technology, including to
Gaddafi's Libya, click here for that story.
the Myanmar's main economic activity is not in the ethnic areas.
Asked where Myanmar's
reserves actually are, Meral Karasulu said in three state owned
banks controlled by the Ministry of Finance.
When she was asked what
percentage of Myanmar's budget is devoted to the military she
said she did not know. (Perhaps relatedly, on Sri
Lanka where the IMF does have a lending program, it downplays
the growth of military spending even after the scorched earth
military compaign of 2009).
Of corruption in Myanmar, Meral
Karasulu said she has "no anecdotes," and that during country
visits the IMF can't see it. Meral Karasulu will return to
Myanmar in the second half of May. Watch this site.
May 7, 2012
Notes Heglig Impact, Dodges on Sudans Oil Transfer Fee, Answers
Matthew Russell Lee
UNITED NATIONS, May 3 -- During
Monetary Fund's Spring Meeting last month, Inner City
Press asked the the spokesperson for the IMF's Masood Ahmed
about the conflict between Sudan and South Sudan:
conference, in which my question was about Egypt, I asked
Masood Ahmed about Sudan, South Sudan and the IMF, on
which he's written, and specifically his / the IMF's view of the
oil transfer fee (and impact of stopping oil pumping and
destroying the Heglig field). I was told to email the question
so here it is: I cover the UN, and Sudan diplomats say they want
$34 a barrel transfer fee, South Sudan offers some 40 cents,
citing example of Chad to Cameroon, and Azerbaijan to Turkey.
What is the IMF's view of this oil transfer fee issue?
But even as, or
because, the conflict military and diplomatic around Heglig
continued to heat up, the IMF never answered.
And so to the
IMF's bi-weekly embargoed briefing on May 3 Inner City Press,
front of the UN Security Council where the day prior Sudan's
Ambassador spoke of an investigation and possible reparations
for Heglig, resubmitted the above question as well as a
question about Romania.
spokesman Gerry Rice on camera answered the Romania question,
saying that even after the fall of the government the IMF
mission remains in dialogue and will report back.
On the reformulated
Sudans question, the IMF replied:
response to your question on South Sudan during today’s press
briefing, you can attribute this to an IMF spokesperson:
border areas and a prolonged shutdown of oil production will
have serious implications on both countries' economies and
people's livelihoods. We look forward to a mutually beneficial
resolution of oil and other bilateral issues as soon as
While appreciated, this was the
question posed by Inner City Press:
is the IMF doing in Sudan and South Sudan given the economic and
oil transfer fee roots of the conflict between them? South Sudan
cites the IMF for the less than a dollar a barrel transfer fee
it proposes. I asked Ahmed Masood during the Spring meeting but
have not heard back. What IS the IMF's position?"
So Inner City Press has asked
again, and is now told "Sure. Will get back to you on this."
Watch this site.
ICP has commented to the FDIC, and NYS DFS:
On behalf of Inner City Press / Fair Finance
Watch and its members and affiliates (collectively,
"ICP"), this is a comment opposing and requesting public
hearings on the application by New York Community Bank to
acquire substantially all of the assets, and $2.3 billion
of deposits of Aurora Bank FSB.
On the FDIC's web site, the comment period on
this application runs through May 5, 2012. This comment is
Aurora is a subprime, some say predatory, lending
unit of the scandal wracked Lehman Brothers. For the
"Aurora had become one of
the largest players in that market, originating
$25-billion worth of loans in 2006. It was also the
biggest supplier of loans to Lehman for securitization.
Lehman had acquired a stake in Aurora in 1998 and had
taken control in 2003. By May, 2006, some people inside
Lehman were becoming worried about Aurora's lending
NYCB is a bank which has sought to fly under the
radar -- for example, a recent search of the FFIEC HMDA
data back for "New York Community Bank" reveals only one
HMDA reporter, 0000016022-3, reporting geography specific
data in only three MSAs.
In these MSA, NYCB is decidedly disparate in its
marketing and lending.
In the Phoenix MSA in 2010, the most recent year
for which data is publicly available, NYCB made 292
conventional home purchase loans to whites and NO such
loans to African Americans. Based on its disparate
marketing, NYCB received only four such applications from
African Americans, and denied three of them. To Latinos,
NYCB more only 14 such loans, compared to the 292 to
In the Fort Lauderdale MSA in 2010, NYCB made 38
conventional home purchase loans to whites, and NO such
loans to African Americans.
In the West Palm Beach MSA in 2010, NYCB made 83
refinance loans to whites and only ONE such loan to an
African American applicant, and only seven to Latinos.
The FDIC [and
NYSDFS] should require answers, extend the comment period
and hold public hearings.
In the course of spinning its first quarter
earnings numbers, Capital One's CEO let it slip that $75
million are being set aside to deal with fraudulently sold
products. "Oops." This has been raised to the OCC and
Federal Reserve; watch this site.
IMF, Canada's FinMin Flaherty Tells ICP Glad for Delay of
Volcker Rule, Geithner
Matthew Russell Lee
April 20 -- The Volcker Rule on proprietary trading by banks was
one of the responses to the subprime financial meltdown of 2008.
On Friday at the IMF,
Inner City Press asked Canadian Finance Minister Jim Flaherty
it has reported as the Group of 20's opposition to the rule, especially
for its treatment of non-US sovereign debt.
Flaherty told Inner City
Press, "it came up informally a couple of times... I can tell
you, Canada is please there's been delay in planned
implementation date, concerned about extraterritorial effect,
I've discussed with Secretary Geithner and we look forward to
Geithner, as we've noted
and even asked the US State Department to explain, did not show
up for the Finance Ministers meeting about Rio + 20 and
sustainable development held Friday at the World Bank. But has
Geithner given Flaherty some re-regulatory assurance?
Flaherty was also asked about a "disagreement" he had with
Germany's Finance Minister Wolfgang Schauble, concerning whether
European countries were doing enough about their crisis to avoid
Flaherty's requested veto and loss of European seats in the IMF.
Flaherty said he's known
Schauble for as long as he's been Germany minister, Flaherty has
served longer. Could that be the problem?
Inner City Press asked him
directly, beyond the alleged differential treatment of sovereign
debt, if the mixing of banking and proprietary trading played a
role in the meltdown.
"We're all entitled to
our views," Flaherty replied. "In the Canadian situation,
proprietary trading was not an issue for us. Some would argue it
was not causative. I'll leave to others to debate." Yeah - while he whispers to Tim
Geithner about it, then at the G20 in Mexico.
Later Friday afternoon
outside the IMF a protest marched by, to chants including Occupy
Wall Street. Few journalists looked up from "making the donuts,"
so to speak, packaging Christine Lagarde's canned quotes to
Charlie Rose as news. And so it has gone at the IMF. Watch this
In the course
of spinning its first quarter earnings numbers, Capital
One's CEO let it slip that $75 million are being set aside
to deal with fraudulently sold products. "Oops." This has
been raised to the OCC and Federal Reserve; watch this
effort by Capital One to impede lawful competition" has
been alleged, by two who should know: John Kanas and John
Bohlsen formerly of NY-based North Fork Bank. They had
served in executive roles with Capital One following the
December 2006 sale of North Fork Bancorp. Inc. before
departing by mutual agreement in August 2007. Their
respective separation agreements contained provisions
restricting them from engaging in the consumer or
commercial banking business in New York, New Jersey and
Connecticut until August 2012. Both executives
participated among a group of investors that formed
BankUnited and acquired the assets of a south Florida
institution of a similar name upon its failure in May
2009. Capital One described the government-assisted deal
as "the first step" of Kanas' and Bohlsen's plan to create
"a second North Fork" in the New York market.
like Capital One, underserved lower income and communities
of color. So, a plague on both their houses. The case is
pending before the U.S. District Court for the Eastern
District of Virginia. A hearing on the plaintiffs' summary
judgment motion has been set for April 27, but Capital One
has requested that the court simultaneously hear summary
judgment motions from both sides on May 11.
Tells Bangladesh How to Regulate Banks, Insiders Rush for
Matthew Russell Lee
UNITED NATIONS, April 11 --
While the International Monetary Fund often insists it does not
impose conditions on loans, for the $1 billion program it
announced Wednesday for Bangladesh, it required among other
things lower fuel subsidies, and centralizing bank regulation.
Inner City Press asked
David Cowen, IMF Mission Chief for Bangladesh, about this bank
regulation condition, and about the rush by Bank Bangladesh to
give licenses to nine new banks chartered by political insiders,
on the eve of the IMF decision.
Cowen described the required amendments to the Bank Companies
Act, for "fit criteria for bank directors," and said that the
IMF was aware of the recent license grants, and hadn't had the
chance to discuss them with Bangladesh authorities.
He said regular
procedures for licensing new banks had been followed -- indeed
-- and that the banks should be subject to the regulations
applicable to all banks in Bangladesh.
Here's a description of the six
most recent banks and their sponsors:
and Jatiya Party chief H.M. Ershad (Union Bank), ruling party
lawmakers Fazle Noor Taposh (Modhumati Bank) and Mohiuddin Khan
Al Amgir (Farmers Bank), S.M. Amjad Hussain (South Bangla
Agriculture and Commerce Bank) and Ashequr Rahman (Meghna Bank)
and Moniruzzaman Khan Khandaker (Midland Bank), the income tax
lawyer to Shaikh Hasina."
What was that again, about "fit
criteria for bank directors"?
Meanwhile HSBC is trying either to sell its 13 Bangladesh
branches, reportedly to Standard Chartered, or simply to close
them by some accounts.
On April 10 HSBC announced it is in talks to sell off its
operations in Pakistan and is moving in on a sale of its South
Korean businesses to the Korea Development Bank.
Beyond Bangladesh, other Asian markets where HSBC has fewer than
20 branches are Brunei Darussalam, Macao, New Zealand, the
Philippines and Sri Lanka. Watch this site.
Praises and Turns from Iceland, Cites Basel, Calls Hungary
Matthew Russell Lee
UNITED NATIONS, April 12 -- Has
Iceland turned the corner away from financial meltdown? The
International Monetary Fund seems to think so. On Thursday the
IMF released three reviews of the country and held an embargoed
conference call for the press hosted by Julie Kozack, tellingly
her last as IMF Mission Chief to Iceland. She will be moving on
to Lithuania and Poland.
The IMF has praised
Iceland's write-down of debts, while criticizing
Hungary's restructuring, complaining that "all losses from the
implied debt reduction would be borne by the banks alone."
As previously noted by Inner City Press, the IMF
likes bank mergers. Last April, IMF European Department
Director Antonio Borges told reporters on Friday that Belgium
was smart to have pushed Fortis to being acquired by BNP
Paribas. He urged more such mergers.
Inner City Press asked Borges if the IMF proposed any safeguards
at all, given that concerns exist that when a local bank is
acquired by one based far away, there will be less reinvestment
Borges, while calling this an “interesting question,” bragged
that the IMF organized a coordinated effort to get large banks
to treat communities, particularly in Emerging Europe, fairly,
and that this had worked
And so it seems, the IMF
likes bank mergers. In Iceland this is footnoted, that "data for
Landsbankinn and Islandsbanki reflect the impact of their
respective mergers with Sp Kef. and Byr in the second half of
Only yesterday, the
IMF minimized the rushed licensing of nine new banks by
political insiders in Bangladesh on the eve of its program
with that country, saying that at least they'll be subject to
Regarding bank regulation
in Iceland, the IMF says
strong, intrusive, and independent supervisory agency is
essential to help avoid the build-up of risks that can lead to
crisis... additional examiners with credit risk expertise may be
needed in the onsite inspection area and the credit risk bureau
may need more resources to become a powerful supervisory tool.
Staff underscored that preserving the FME’s independence, and
its capacity and willingness to act, is essential to ensure that
the needed strengthening of supervision continues, toward full
compliance with Basel Core Principles."
But what of bank regulation in
countries like the United States, UK, France and Germany? Watch
April 9, 2012
On Sri Lanka Deficit, No Reference to Defense, No Timeline for
Matthew Russell Lee
UNITED NATIONS, April 5 -- At
the International Monetary Fund's briefing on April 5, Inner
City Press asked about Egypt and Sri Lanka. The Egyptian
answer was short and picked up by wire services -- "the
timeline for concluding an agreement is not fixed and will
depend on how quickly progress is made by all sides on these
issues" -- but the Sri Lanka answer was provided later and so
is published here.
Inner City Press asked,
"What is the status of the IMF's program in Sri Lanka? Is the
IMF only looking at balance of payments? When would it
consider releasing the next and final tranche?"
Later, just after
embargo deadline, the following came in:
IMF Media Relations
Date: Thu, Apr 5, 2012 at 10:37 AM
Subject: Question Received
To: Matthew Russell Lee [at] InnerCityPress.com
Matthew, Thank you for your question. Please attribute the
following to Gerry Rice, Director of External Relations
April 2, the Executive Board approved the completion of the
Seventh Review of the Stand By Arrangement, which enables the
disbursement of SDR 275.6 million (approximately $400
million). The Board also approved the extension of the program
by 2 months to July 2012 to allow time for the completion of
the Eighth and final review.
main pillars of the program are to rebuild Sri Lanka’s
reserves, while transitioning to a more flexible monetary and
exchange rate policy framework, reducing the budget deficit to
sustainable levels, and strengthening the financial system.
This follows back and forth with the IMF regarding Sri Lanka's
increased defense spending.
The question of if the
IMF is only looking at balance of payments refers, for
example, to the recent UN Human Rights Council resolution on
Sri Lanka and accountability for crimes in the final stages of
its military conflict in May 2009 -- after which defense
spending continued nevertheless to climb, impacting the very
budget deficit the IMF refers to.
Meanwhile the military
SCAF government in Egypt is reportedly poised to take out an
IMF loan. Inner City Press asked, What is the IMF's reaction
to the reported deal in Egypt around an IMF program? Will the
program now go forward? Does the IMF think enough
It was to that that the
IMF responded, "the timeline for concluding an agreement is
not fixed and will depend on how quickly progress is made by
all sides on these issues." Watch this site.
* * *
The Fed has,
so far, allowed BB&T to amend its application to
acquire BankAtlantic, to tell ICP about its application
late, and not yet to extend the comment period. ICP has
This is a
third comment on the applications by BB&T to acquire
scandal-plagued BankAtlantic. BB&T has significantly
amended the proposal after an adverse court ruling --
the changed structure should trigger a new public
BB&T outside law firm Wachtell, Lipton send the
amendments to the Fed on March 19 by courier, they were
only sent to Inner City Press the follow (this) month.
So Inner City Pres is requesting an extension of the
It would be
ludicrous to argue that the changes to the proposal, the
result of a court order, are not substantial. As such,
it is unclear to ICP why no new public notice appears to
have been published.
described, BB&T would assume about $285 million of
BankAtlantic Bancorp TruPS obligations in exchange for a
95% preferred interest in a newly established limited
liability company, which will comprise about $423
million of loans and $17 million of other net assets.
BB&T has estimated $350 million of recoverable
preference value in the limited liability company. Once
BB&T recovers $285 million in preference amount from
the limited liability company, its interest in the
company will terminate. BB&T would also have an
incremental $35 million guarantee to assure BB&T's
recovering within seven years of the $285 million
recently obtained BB&T 2011 HMDA-LAR and will be
commenting on its, in a week's time. The comment period
must be extended.
April 2, 2012
In the first study of the just-released 2011
mortgage lending data, Inner City Press and
Bronx-based Fair Finance Watch have found that
banking behemoths Citigroup, JPMorgan Chase and
Wells Fargo continued with high cost loans and
disparities by race and ethnicity in denials and
is the eighth year in which the data distinguishes
which loans are higher cost, over a
federally-defined rate spread of 1.5 percent over
Treasury bill yields.
just released data show that Citigroup confined
African Americans to higher-cost loans above this
rate spread 3.38 times more frequently than whites
in 2011, worse that its 2.25 disparity in 2009, Fair
Finance Watch has found.
confined Latinos to higher-cost loans above the rate
spread 2.42 times more frequently than whites in
2011, worse that its 1.72 disparity in 2009, the
Southern bank BB&T, even absent its subprime
unit Lendmark, in 2011 confined African Americans to
higher-cost loans above the rate spread 2.59 times
more frequently than whites
Finance Watch has continued its enforcement project
in the South, most recently raising issues under the
Community Reinvestment Act on BB&T's proposal to
acquire BankAtlantic. In response, the Federal
Reserve Board extended the comment period. Much of
BB&T's application has been blacked out or
withheld in full, which Inner City Press is
challenging under the Freedom of Information Act.
City Press & FFW have also joined others
concerned with Deutsche Bank's decertification as a
financial services holding company to escape Dodd
Frank including its capital adequacy rules --
particularly given Deutsche Bank's role in the
subprime scandal, as lender, securitizer and now
law required that the 2011 data be provided by March
31, following March 1 joint requests by Fair Finance
Watch and Inner City Press. Several banks did not
provide their data by the deadline, most notably
Capital One and Bank of America, despite confirming
receipt of the request. Further studies will follow:
watch this site.
March 26, 2012
2007 bought 20% of Turkey's Akbank. Now it is cutting
that in half -- Akbank says, only to comply with Basel
III. We'll see.
Says Consults Broadly in Egypt, Focus on Democracy Doubted,
Matthew Russell Lee
UNITED NATIONS, March 22 --
After Egyptian Finance Minister Mumtaz al-Said bragged that
the International Monetary Fund does "not object to the
government's economic program," Inner City Press on Thursday again
asked IMF spokesperson David Hawley for the IMF's
"response to criticism that it is negotiating with an
unelected military government in a way that the parliament
David Hawley replied,
"In response to Matthew Lee's questions, I'd note that the
purpose of the mission that's just wrapped up in Cairo is to
consult broadly with stakeholders in Egypt to ensure that
should there be a program that it enjoys broad political and
social support, thank you very much."
While the IMF's
regional director Masoud Ahmed held a number of meetings in
Cairo, the concerns still exist.
Also on democracy,
Inner City Press submitted this question: "On Mali, please
describe the IMF's recent work there, the country's level of
debt, and what the IMF knows and thinks about the reported
coup or mutiny."
In front of the UN
Security Council, from where Inner City Press submitted its
four questions to the IMF, it also asked US Ambassador Susan
Rice about Mali: is it a mutiny or a coup? She said, "looks
like a coup." The Security Council is slated to meet about
Mali at 4:30 pm.
But the IMF did not
answer or even acknowledge the question, despite this sample statement
on its website:
mission from the International Monetary Fund (IMF) visited
Bamako from September 5 to 16, 2011 to conduct discussions on
the seventh review of the arrangement under the Extended
Credit Facility (ECF), which will expire at end-2011, and on
the preparation of a new three-year program eligible for IMF
support. The team met with Mariam Kaïdama Cissé, Prime
Minister; Lassine Bouaré, Minister of Economy and Finance;
Sambou Wagué, Minister of Budget; Oumar Ly, National Director,
Central Bank of West African States (BCEAO); and
representatives from the National Assembly, civil society,
unions, and the private sector.
IMF Mission Chief for Mali, issued the following statement:
program of the government of Mali supported by the IMF remains
We aim to have more on this. Inner City Press also submitted
questions on South Sudan and Sri Lanka which have yet to be
At Thursday's briefing,
Hawley said on Myanmar that "the Article IV was held beginning
of this year and is going to the Board. The authorities have
agreed to publication, I believe for the first time, of the
Article IV and that will take place in the weeks ago." That,
he said, will allow a discussion of the managed float of
currency. Watch this site.
In 2008 Deutsche
"reported it has established a subsidiary in Peru to
participate in the foreign exchange, government bonds
and derivatives markets of the mining country."
So, exploitative mining and... DB's
subprime troubles are even mentioned in France:
"Deutsche Bank a annoncé avoir réglé un
litige juridique remontant à la crise du crédit
hypothécaire à risque (subprime) aux Etats-Unis"
haven't really regle-ed
or fix it at all...
March 12, 20012
The FDIC has objected to Patriot Financial Partners LP and
Castle Creek Capital LLC acquiring a roughly 90% stake in Saint
Augustine, Fla.-based Prosperity Banking Co. unit Prosperity
Bank. The application was withdrawn Feb. 21. The Fort
Lauderdale, Fla.-based BankAtlantic/BB&T Corp. transaction,
recently blocked by a Delaware court, was modeled on
Prosperity's deal with Patriot and Castle...
Says Hungary's Fillegi Will Not Meet Management, of CB,
Matthew Russell Lee
UNITED NATIONS, March 8 --
While Hungarian minister Tamas Fellegi says in his upcoming
visit to the International Monetary Fund in Washington he will
"meet with management," when Inner City Press asked IMF
spokesman Gerry Rice on Thursday, Rice said "no meeting with
management is anticipated," only with the mission chief.
Inner City Press asked
where things stand, including on proposed amendments to
Hungary's Central Bank law. Rice said the IMF is looking for
"sustained commitment on major policy issues before proceeding
with discuss on a program... including the issue of the
Central Bank law."
While most questions
taken at the biweekly IMF briefing concerned Greece, Inner
City Press and several others also asked about Egypt. Asked
about the impact of the rift between Egypt and the US about
the non-governmental organization workers, Rice claimed "we
are international financial institution of 187 countries, not
effected by bilateral relations among two member countries."
Even if one is the US, with its quota and voting strength?
Footnotes: the IMF by deadline
left two of Inner City Press' question unanswered:
has cited the IMF as supporting its oil transfer fee offer to
Sudan of 69 cents a barrel. Has the IMF played a role in this
fee negotiation, and this price?
growth rate has recently been measured as barely one half of
what the IMF estimated. Was the IMF wrong? Or what happened?
And on an IMF conference call
this week when Inner City Press asked if the IMF's mission to
the Philippines considered charges that the Central Bank there
may have leaked the bank records of Chief Justice Renato
Corona, the answer was that it hadn't been considered... yet.
Watch this site.
March 5, 2012
Delaware Court of
Chancery Judge J. Travis Laster has questioned Alan
Levan's assertions that blocking the sale to BB&T
could lead to BankAtlantic Bancorp's failure. "The
apocalyptic picture painted by [BankAtlantic] Bancorp at
trial contrasts sharply with the history of the sale
transaction... it is far from clear that failure is
imminent or that [BankAtlantic] Bancorp lacks other
February 27, 2012
Spins Egypt's Need, Half
Answer on Unelected Military SCAF, Pledge
Matthew Russell Lee
February 23, updated
11:36 am -- Even as criticism of the International Monetary
Fund grows in Egypt and for not living up to its so-called
Arab Spring pledge of $35 billion, the IMF at its biweekly
briefings refuses to take or answer questions in this regard.
As it did on Feburary
9, Inner City Press as soon as Thursday's briefing began
"How much of the $35 billion 'Arab Spring' pledge has the
IMF disbursed, given the criticism from, among others,
UAE's Younis Haji al-Khouri?"
This time, Inner City Press added this specific:
"On Egypt, what is the IMF's response to public calls that the
new Egypt cannot be bound by IMF contracts with an unelected
military government, and that all or some of Egypt's $36
billion in debt should be forgiven?"
Christine Lagarde's spokesman Gerry Rice took a
full half hour of questions about Greece, then online
questions ranging from the Dominican Republic and Italy to
Argentina and a single question on Egypt. But it was not about
debt relief or loans to unelected military governments, but
rather a softball, what does the IMF suggest?
Rice began "we don't yet
have a program with Egypt so I won't get into details" -- then
said that "growth has stalled" and "foreign exchange reserves
The pitch, then, is that
Egypt needs the IMF, even if its the SCAF taking out more debt
on top of the $36 billion run up under Mubarak.
Update of 11:36 am -- an hour after
embargo deadline, these answer were provided and we publish
them in full:
Dear Mathew, Sorry we
could not take up your questions during the press briefing,
but I can offer you the following responses on the Arab Spring
On the Arab Spring: As we said in the context of the Deauville
initiative and as the Managing Director of the IMF repeated in
her interview with Asharq Al Awsat recently, the IMF can make
available $35 billion in loans for the MENA region’s oil-
importing countries upon request. Such loans would be in
support of the governments’ and the central banks’
macroeconomic policy programs and at their request and, like
elsewhere, are provided on favorable terms to help countries
transition to where they can once again secure financing from
the market. At the moment, we are in discussions with the
Egyptian authorities on a possible IMF-supported program to
help stabilize Egypt’s economy, restore confidence, lay the
foundations for job-creating growth, and ensure that
vulnerable households are protected during the transition. And
we stand ready to engage in similar discussions with any
country that requests it.
Egypt: As we said repeatedly, we clearly want to support a
program that addresses Egypt’s economic challenges, is
designed and fully owned by the Egyptian authorities, and
enjoys broad political support. The latter is essential to
ensure the success of any economic reform program.
We'll have more on
Because the IMF under Lagarde has become even less responsive
than under DSK -- who recently spent a night in jail during an
ongoing police investigation of a prostitution ring -- Inner
City Press killed off a recent UN lunch hour at an event by
the IMF's Special Representative to the UN Elliott Harris.
Inner City Press asked Harris, what about the criticism of the
IMF not spending Lagarde's Arab Spring pledge? What about the
charge that the IMF's austerity bailout in Greece is meant to
help countries (and banks) other than Greece?
Harris genially replied that Lagarde's pledge represented only
lending "capacity," and emphasized that Egypt hasn't accepted
an IMF program. He said he "regrets" Greece. Don't we all.
Watch this site.
Now this has gone in: a timely second comment
on the applications by BB&T to acquire
scandal-plagued BankAtlantic. On February 3 Inner City
Press / Fair Finance Watch (ICP) requested a copy of,
and commented on, the applications, noting scandal in
the public record and that notice of the proposal had
disappeared from the Federal Reserve's H2A of
applications subject to public comment.
A portion of the application, referring to
wrongfully withheld exhibits, was provided; then comment
period was extended to February 17, on information and
belief due to the lack of H2A notice to the public. It
is unclear if the brief extension, only for ICP, cures
this -- we say "no," and ask for a further extension,
including for the public at large, after satisfactory
notice is given.
The eight page application provided shows that
BB&T has sought to withhold basic antitrust
information that other applicants routinely make public.
It says, as simply one example, "See Confidential
Exhibit 3, Competitive Analysis, for a quantitative
analysis on the impact of the merger in the relevant
market." Also being withheld is information about what
BB&T would be buying, and not buying. ICP has
submitted a formal FOIA request through the Fed's web
site. This information must be released, and the comment
ICP has for this submission looked at
BB&T's lending records in 2010, the most recent year
for which data is available, first in the MSAs the
In the Port St. Lucie MSA, based on it
marketing, BB&T in 2010 for conventional home
purchase loans received 36 applications from whites,
making 23 loans with six denials. BB&T based on its
marketing received NO APPLICATIONS from African
Americans, and only one from a Latino, which BB&T
then reported as "withdrawn." This is troubling.
Similarly for refinance loans, BB&T in 2010
in this MSA received 49 applications from whites, making
29 loans with five denials. BB&T based on its
marketing received NO APPLICATIONS from Latinos, and
only one from an African-American, which BB&T then
reported as "incomplete." This too is troubling.
In the Miami MSA, based on it marketing,
BB&T in 2010 for conventional home purchase loans
received 96 applications from whites, making 47 loans
with 24 denials. BB&T based on its marketing
received only two applications from African Americans,
making one loan with one denial.
Similarly for refinance loans, BB&T in 2010
in this MSA received 142 applications from whites,
making 79 loans with 31 denials. BB&T based on its
marketing received only five applications from African
Americans, making two loans with two denials.
In the Ft Lauderdale MSA, based on it
marketing, BB&T in 2010 for conventional home
purchase loans received 120 applications from whites,
making 58 loans with 35 denials. BB&T based on its
marketing received only 13 applications from African
Americans, making five loans with three denials.
Similarly for refinance loans, BB&T in 2010
in this MSA received 189 applications from whites,
making 111 loans with 38 denials. BB&T based on its
marketing received only SIX applications from African
Americans, making three loans. This is troubling.
Also troubling is that the BB&T chairman
and CEO listed in the application, Kelly King, is on the
board of directors of the Richmond Fed, to which
BB&T is applying. This conflict of interest should
be addressed, including in whatever Order the Board
issues on this proposal.
BankAtlantic and this proposed transaction are
embroiled in scandal. For further example and for the
record in this second timely submission:
said it could hold a stock rights offering to its
existing shareholders as of Feb. 27 in case its deal
with Winston-Salem-based BB&T Corp. does not go
forward as planned. The Fort Lauderdale, Fla., bank
(NYSE: BBX) announced a deal in November to sell its
banking franchise, along with most of its assets and all
of its deposits and branches to BB&T (NYSE: BBT).
However, that deal is being challenged in a lawsuit by
the investors in BankAtlantic Bancorp’s corporate debt,
in the form of trust-preferred securities (TruPS). The
acquisition deal calls for BankAtlantic Bancorp to
retain about $623 million in assets, mostly noncurrent
or criticized loans and repossessed properties, and keep
about $320 million in TruPS debt outstanding. It would
repay its outstanding interest to the TruPS investors,
but they would either be repaid in full or have BB&T
assume the obligation for that debt. A judge in Delaware
is expected to rule on that matter by March 1."
The comment period should be extended at least
until after this March 1 ruling. There's also the SEC.
On the current record, the
merger applications should not be approved.
February 13, 2012
Following ICP's comments last
week on the proposed acquisition of Bank Atlantic, the
Federal Reserve on February 10 wrote to ICP stating
concerns your request, dated February 3, 2012, for an
extension of the public comment period on the
notification... to acquire all the voting securities of
BankAtlantic, Fort Lauderdale, Florida, a federal
savings association. The comment period for the proposal
closed on February 3, 2012.Based on all the facts of
record, the Secretary of the Board, acting pursuant to
authority delegated by the Board (12 CFR 265.5(a)(2)),
has determined to extend the period for receiving your
comments on issues related to this proposal..."
We'll have more on this.
filed last week on the proposal to acquire BankAtlantic:
BankAtlantic and this proposed transaction are
embroiled in scandal. For example and for the record in
this timely submission:
"The SEC on Jan. 18
charged Fort Lauderdale, Fla.-based BankAtlantic Bancorp
and its chairman and CEO, Alan Levan, with misleading
investors about escalating problems in one of its
significant loan portfolios in 2007. The agency, in a
civil lawsuit, charged that the company and Levan made
misleading statements in public filings and earnings
calls to conceal the deteriorating state of a large
portion of the company's commercial residential real
estate land acquisition and development portfolio."
"The SEC also charged
that the company and Levan committed accounting fraud by
scheming to minimize the company's losses on its books
by improperly recording loans they were trying to sell
from this portfolio in late 2007. According to the
complaint, two senior BankAtlantic loan officers
described the portfolio to each other in a 2007 email as
'ticking time bombs' and 'explosive piles of crap.'"
"Also, the holders of
some of BankAtlantic Bancorp's trust preferred
securities continue to challenge the transaction. The
company on Jan. 6 received a notice of default from
Wells Fargo Bank NA as trustee under the indentures and
declarations of trust relating to TruPS of BBC Capital
Trust IX and BBC Capital Trust XII."
In the Miami Metropolitan Statistical Area in
2010, the most recent year for which aggregate Home
Mortgage Disclosure Act data is available, for refinance
loans BankAtlantic made 17 loans to whites and NONE to
African Americans, denying seven of the eight
applications it received from African Americans.
In the Fort Lauderdale MSA in 2010, for
refinance loans BankAtlantic made 34 loans to whites and
only seven to Latinos and only two to African Americans,
denying five of the ten applications it received from
On the current record, the
merger applications should not be approved.
Financial Group President and CEO John Koelmel told SNL
Financial that the company still plans on closing an
additional 30 to 35 branches. We'll see about that...
Slowly, too slowly, some
pigeons come home to roost.
Electric, which engaged in predatory lending through
WMC, is now reportedly under investigation -- just as it
proposes to acquire $7.5 billion in deposits from Met
Royal Bank of
Scotland's former boss, Sir Fred "the Shred" Goodwin,
faces the loss of his knighthood, after he helped enable
predatory lending by securitizing and trading in the
loans through RBS Greenwich Capital Markets. PM Cameron
said, "There’s a forfeiture committee in terms of honors
that exists and it will now examine this issue. I think
it’s right that it does so."
more being done in the US? Some now say that the time of
AG Eric Holder and Lanny Breuer, head of the Justice
Department's criminal division, at Covington &
Burling that represented the Big Four and other
predators plays a role in it - watch this site.
January 16, 2012
As the biggest bank merger of 2012 so far was announced
Wednesday, Morgan Keegan for sale to Raymond James for $930
million, Morgan Keegan's recent settlement of subprime related
fraud charges was not lost on community activists. Would it be
raised to regulator? Why not?
and dimed, per even the WSJ: Next
month, Toronto Dominion / TD Bank unit will start charging
noncustomers a $5 fee to cash checks at any of its branches. PNC
now charges $25 to close some accounts.
Citizens Bank, a unit of Royal Bank of Scotland, now have
to pay $50 a month if they fall below minimum account
balances on some money-market accounts.
America charges some of its banking customers a $25 fee
if they dip below minimums on premium-checking accounts.
Bancorp already hits customers with a 99-cent fee to
make a mobile deposit.
December, Citigroup's Citibank unit raised fees on some
of its checking accounts. Monthly maintenance fees on
the lender's basic-checking accounts jumped to $10 from
$8. Also, banking customers have to maintain at least a
$1,500 balance, up from zero—or set up direct deposit
and pay at least one bill online each month—in order to
dodge the fees.
IMF Spins on Greece & Hedge Funds, No Answers on Ukraine,
Matthew Russell Lee
January 13 -- The International Monetary Fund under Christine
Lagarde has become even less transparent, answering fewer and
fewer press questions.
During the IMF briefing
on January 12, the first one in four weeks, Inner City Press
submitted four questions, including this: "On Greece, please
describe the IMF's engagement with hedge funds asking them to
accept a hair cut: are hedge funds reacting differently than
banks and what is the IMF doing?"
IMF spokesman Gerry
Rice did not posed the hedge fund or the other questions.
After the briefing, another IMF spokeswoman wrote to Inner
City Press: "We will get back to you on your questions
bilaterally Matthew. Gerry had already responded on Greece."
But Gerry Rice had not
responded, on Greece, about "private sector" hedge funds. On
the afternoon of January 13, the IMF put this out:
response to press queries on the talks between Greece and its
creditors on private sector involvement (PSI), we are issuing
the following line. This is attributable to an IMF
look forward to the resumption of talks between Greece and its
creditors. It is important that this lead to a PSI agreement
that, together with the efforts of the official sector,
ensures debt sustainability.'"
While bland, at least
it's a response. Here are the other three questions Inner City
Press submitted during the January 12 briefing, which more
than 24 hours later have not been answered "bilaterally" or at
Ukraine, what if the relation between that country's
negotiations with Russia on gas prices and the IMF resuming
talks, after Ukraine passed the bankruptcy legislation it said
the IMF wanted? What else would the IMF like to see?
On Sri Lanka, what is the IMF's
response to Central Bank Governor Ajit Nivad Cabraal statement
on January 3 that Sri Lanka will seek a fresh “follow up or
surveillance program” with the IMF as the $2.6 billion loan
obtained in 2009 is reportedly due to expire early this year?
What is the IMF's thinking on Sri Lanka's failure to fully
meet the budget deficit targets and its refusal to devalue the
Malawi, please describe the state of the IMF's relations with
Malawi, and reviving a program with Malawi, in light of recent
statements by President Bingu wa Mutharika against the IMF?
(he said on national radio that "Malawian government officials
should stop protecting the IMF at the cost of their own
citizens.. 'protect the IMF but protect the people' and that
of any officials who [a]re unwilling to do so had to resign
from their public posts, 'I will be glad to receive your
During the IMF's
briefing in mid December, Inner City Press has submitted
another question about Malawi, which also went ignored. The
IMF and Africa, under Christine Lagarde? We'll see. Watch this
Bad karma for
the ex-CitiFinancial: talks to sell the bank's OneMain
consumer-lending unit to private-equity buyers have
ended without a deal in place. Private-equity firms
Centerbridge Capital Partners LLC and Leucadia National
Corp., along with Berkshire, had been in exclusive talks
since the summer to purchase OneMain, which "makes
mortgage and other loans to high-risk borrowers." (WSJ)
predatory lending unit...
has focused on MetLife's reasons for moving to sell
deposits. But what about GE's motives for buying, and
how that process will go? We'll be there - watch this
Here is a
just filed FOIA appeal:
This is a timely FOIA
appeal to the Federal Reserve Board's partial denial of
my FOIA request and letter of October 23, 2011 related
to the proposed acquisition of US-based Bank of East
Asia by the China Investment Corporation, and Central
Huijin Investment Limited and Industrial and Commercial
Bank of China (ICBC), owned by the Chinese government.
The Fed's response, regular mailed on December
9 -- this appeal is timely -- decides to limit ICP's
FOIA request to only the portion related to the
Community Reinvestment Act, because Inner City Press
mentioned the CRA. And so the White & Case
submission of October 17, which ICP was supposed to get
under the Fed's rules against ex parte communication,
has the responses to items 4, 5 and 6 withheld as "not
This makes a mockery both of FOIA and of the
Fed's rules against ex parte communication. On October
23, Inner City Press submitted including to the Office
of the Secretary of the FRB a letter stating in part
"I filed a timely
challenge to the applications involving Industrial and
Commercial Bank of China (and its ultimate parent the
Chinese government -- since the PRC government is the
ultimate controlling shareholder, this letter timely
questions why the PRC government is not an applicant
here) to acquire 80% of Bank of East Asia. The FRB on
October 6 asked ICBC three questions, including
one CRA and consumer compliance, and told ICBC to send
us a copy, under the rules against ex parte
communications... We note that the signatory counsel for
the Industrial and Commercial Bank of Bank is the former
general counsel of the Federal Reserve Bank of New York,
and believe that in this context it is particularly
important that the information be provided and a public
hearing held. Please send all of the improperly
Because ICP gave the example of the withheld
CRA response, the Fed decided to ignore ICP's right to
the rest of the submission, despite the statement about
"all of the improperly withheld information" -- that is,
any part of the information ICP should have gotten under
the rules against ex parte communication, minus that
part explicitly exempt under FOIA.
The Fed is now trying to use
"non-responsive" as a way about FOIA, to withhold
without even citing a FOIA exemption. It is an outrage,
and on appeal ALL of the applicants' October 17
submission should be released.
Eyes Hungary, Has Adviser in South Sudan, Complaints on Lagarde
Matthew Russell Lee
UNITED NATIONS, December 15 --
While the International
Monetary Fund is often loath to speak about human rights
situations in countries, Thursday when Inner City Press asked
IMF spokesman David Hawley about Hungary's
Prime Minister Viktor Orban's move to assert control over the
nation's central bank, Hawley was ready with an answer.
"We are carefully examining recent legislative proposals with
respect to the central bank," the IMF's Hawley said. "Any
erosion of central bank independence would be of great concern."
From the IMF
question from Matthew Lee at Inner-City Press on Hungary. His
question is How would relations and a program with the IMF be
impacted by the prime minister's announced plan to assert
control over the central bank and demote its president? I can
answer that by saying that we are carefully examining the recent
legislative proposals with respect to the central bank and
erosion of central bank independence would be of great concern."
It's worth noting that
one proposal, to combine central bank functions with bank
regulation, is already the case at the US Federal Reserve, which
the IMF does not criticize.
Inner City Press also
asked, "now that the South Sudan National Legislative Assembly
on Dec. 13 voted to join the IMF, what are the next steps and
what can the IMF do for South Sudan?"
While that vote only took place
December 13, Hawley said that the work to make South Sudan a
full member of the IMF is "well advanced," even that the IMF has
a "resident adviser in the country." From the IMF
Lee of Inner-City Press notes that South Sudan intends to join
the IMF and what are the next steps and what can the IMF do for
South Sudan? Discussions or work on South Sudan becoming a full
member of the IMF are well advanced. South Sudan's main
challenges are maintaining economic stability, investing its oil
resources wisely in social and infrastructure development and to
build an environment and institutions to support sustained
economic development. In terms of what we're doing to support
these policy goals, we're stepping up on our technical policy
advice in areas where the Fund has expertise and we have a
resident adviser now in the country."
The Director of the IMF's Africa Department IMF's Antoinette
Monsio Sayeh was on the schedule December 14 at the International
Engagement Conference for South Sudan, on topics including
But at the December 15
IMF briefing, Hawley was asked when Managing
Director Lagarde will make herself available for questions
from those covering the IMF, with the complaint made that she
has hardly been available since she took over in June. Hawley
said this would be "taken on board." We'll see.
Bad karma: Bank
of New York Mellon moved to evict Occupy Pittsburgh from
"its" park. Will there be repercussions?
recent capital raise have been aimed at curtailing
uncertainty around the stock as it continues to work on
divesting some of the branches it is seeking approval to
acquire from its branch deal with HSBC. FBR Capital
Markets analyst Bob Ramsey told SNL Financial that, while
the company will look to maximize the value of any deals,
it will likely sell the branches in three transactions.
The bidders could include larger companies, such as
M&T Bank Corp. and KeyCorp, with upstate New York
operations, Ramsey said. Smaller companies could
potentially be the buyers, such as De Witt, N.Y.-based
Community Bank System Inc., but he wondered whether they
would have the capital to make the acquisitions. So do
December 5, 2011
On Yemen, IMF Welcomes GCC Immunity
Deal, Ready to Support
Matthew Russell Lee
UNITED NATIONS, December 1 -- On
Yemen, the International Monetary Fund kept meeting with Ali
Saleh officials even as his government killed protesters. On
December 1, Inner City Press asked the IMF, "with Ali Saleh's
signature of the deal, what is the IMF's thinking and plans for
the country? Whom in Yemen has the IMF spoken with and when?"
Later on December 1 the
IMF sent this response:
your question on Yemen, the IMF welcomes the signing of the
agreement, which we hope will bring the crisis to an end. The
agreement involves a formation of a new government that we look
forward to working with. We understand that the new government
will put in place an economic stabilization plan as per the GCC
agreement, and we stand ready to support such a plan with an
IMF-supported program if the new government wishes to reengage
with the IMF."
Back on March 31, Inner City Press asked then-IMF spokesperson
Caroline Atkinson (now with the Obama administration)
Yemen, please describe IMF's engagement with current gov't after
Ghazi Shbeikat's talks earlier this month, and any impact its
killing of protesters has had.”
Ms. Atkinson translated
this to “I
have a question online about Yemen: Please describe the IMF’s
engagement with the current government after talks earlier this
month and any impact the violence has had.”
The violence -- that is, the
killing of protesters -- has been so bad even Yemen's Permanent
Representative to the UN Abduallah Alsaidi, former head of the
Group of 77 and China, has quit. Here was Ms.
Atkinson's (first) answer:
course, in Yemen, Syria, and other cases we deplore any violence
and we hope for peaceful resolution of political issues–We have
a program actually outstanding with Yemen and there have been
contacts at a technical level with the central bank monitoring
Then on April 28, Inner City Press asked
the IMF's David Hawley to “describe the IMF's interface with
Syria and Yemen, and how the crackdowns there may impact that,
and how they are viewed by the IMF.”
Hawley said that the IMF's
program with Yemen are “on hold in the current situation,” and
then referred to comments by IMF Middle East and Central Asia
director Masood Ahmed -- who is the one who said, the previous
day in Dubai, that the IMF is “ready to work with the Yemeni
authorities... once the situation allows.”
Did that mean a
reduction in violence -- which could be brought about, at least
theoretically, by MORE repression rather than less -- or the
exit of Saleh? The IMF didn't say.
And now, after what's called the immunity deal, the IMF stands
ready. We'll continue on this - watch this site.
Footnote: The IMF had not
had a press briefing for four weeks, but still on the morning of
December 1 its web page did not list any press briefing. Too
late, despite monitoring the web page, Inner City Press found
out about a briefing, submitted the question about and a request
for "an explanation of the lack of IMF web page notice of this
There was at least a response
to the Yemen question, above. But nothing on the other. Watch
Royal Bank of
Scotland Group bragged on Dec 1 that the Reserve Bank of
India would allow the transfer of its retail and
commercial businesses in India to HSBC. "We continue to
work closely with HSBC and the regulators to complete the
transfer in a manner that is in the best interests of our
clients and employees," a Royal Bank of Scotland spokesman
said. The WSJ said The statement follows media reports
flagging potential roadblocks to the deal from India's
central bank. There OUGHT to be roadblocks...
Bancorp investor has filed a lawsuit to block the sale of
BankAtlantic to BB&T. The suit, filed the complaint in
Delaware's Chancery Court, claims the deal allows BB&T
to "unlawfully cherry-pick" assets and that the two sides
structured the deal with a "flagrant disregard" for
BankAtlantic investors. There are CRA problems too...
This is the new
Sumitomo Mitsui Financial Group, Inc. and
Sumitomo Mitsui Banking Corporation, both of Tokyo, Japan
Continue to increase their ownership interest to 9.9
percent of the voting shares of The Bank of East Asia,
Limited, Hong Kong S.A.R., Peoples Republic of China,
Sumitomo Mitsui Financial Group, Inc. and
Sumitomo Mitsui Banking Corporation, both of Tokyo, Japan
and thereby indirectly increase their interest in The Bank
of East Asia (U.S.A.), N.A., New York, New York 3 New York
not enough, First Niagara and the Department of Justice
have come to a deal on the divestiture of branches
acquired from HSBC. (First Niagara agreed July 31 to
acquire 195 branches. Under the deal, First Niagara will
divest 26 branches in Erie, Niagara and Orleans counties
in upstate New York. Most of the branches that will be
sold are in Erie County, in which Buffalo is located.
First Niagara will sell 18 branches there, seven in
Niagara County and one in Orleans.
First Niagara will not be divesting a majority of the
branches and deposits that it is acquiring in the HSBC
deal. In the three counties affected by the divestiture
order, First Niagara is acquiring 59 branches and $5.30
billion in deposits. The company will keep 55.9% of the
branches in those counties and 69.0% of deposits. We'll
see -- watch this site.
November 7, 2011
Admits Subprime Exposure & Purchase of Failed Banks,
Desjardins on Citi Deal
Matthew Russell Lee
UNITED NATIONS, October 31 --
When the UN scheduled a press conference Monday entitled
"Financial Crisis and Cooperative Banks," it was expected that
the two cooperative banks invited to speak would be akin to the
credit unions being praised in the Occupy
Wall Street movement, in opposition to big banks like JPMorgan
Chase and Bank of
But on the UN podium was
the chairman of Dutch multinational Rabobank, Mr. Piet Moerland.
Inner City Press asked him about protests to Rabobank in the
United States, complete with mariachi bands and complaints of
discriminating against small borrowers, and also about
Rabobank's statements that it was "exposed" to subprime lending
in the US. Video here,
from Minute 26:05.
Moerland replied that
Rabobank had to expand outside of The Netherlands because of its
small population, and that the US is its most important
non-Dutch market. He acknowledged the exposure to subprime
lending, calling it "indirect," but bragged that Rabobank grew
from 30 billion Euros in 2006 up to 40 billion Euros.
He said in the US it's
made purchases "at the request of the FDIC" - that is, of failed
banks. Apparently, Rabobank has profited from the global
financial crisis. Moerland said that in California, Rabobank is
"about half way there." We'll see.
such a multinational bank would be presented at the UN as the
poster child of the cooperative movement, a topic on which
former UK prime minister Gordon Brown speechified to the General
Assembly later on Monday, is not clear.
Smaller but similarly
mystifying was the presence of Canada's Desjardins Group. Its
CEO Monique Leroux said that before growing outside of Canada --
it already has a presence in Florida in the US -- or making
other expansions, it would speak with its people.
Inner City Press asked
about a recent Desjardins deal with Citigroup
and Staples, to buy a credit card portfolio. Did Desjardins
check with its depositors before that business transaction? Ms.
Leroux referred back to a 2009 meeting at which business lines
were agreed to. After that, it seems, it's just business.
October 31, 2011
Old MF Global Holdings, having tried
to suck up to JPMorgan and Barclays, is now rumored to be
an acquisition target for not only Goldman Sachs but also
State Street Corp. and Macquarie Group. Problematizing any
soft landing might be target for Occupy Wall Street...
Occupy Wall Street Reaches Banks in Midtown, Paper Planes
& UN Response
Matthew Russell Lee
October 28, updated with video -- Taking the
Occupy Wall Street protest into Midtown to deliver victimized
consumers' letters to Bank of
America, Morgan Stanley and others, a march moved west
on 42nd Street on Friday, surrounded by police. JPMorgan Chase protest
At Bank of America on Sixth Avenue, the letters were delivered
in the form of paper airplanes addressed to "missing" CEO
Brian Moynahan. Video
Then the march, complete
with two mock pirate ships, continued west to Times Square.
Here on a recent Saturday night, riot cops and police horses
kept protesters pinned down on either side of Broadway.
Friday in broad daylight, the march moved north to Morgan
Stanley where a song was sung. An invitation was extended to
Morgan Stanley's honchos to come have lunch down near Liberty
Square; jokes were made about Chase CEO Jaime Dimon. The east
again to Park Avenue, where JPMorgan
Chase sits on 48th Street (JPMC video here),
and Citigroup nearby on Lexington.
#OccupyWallStreet on 42 St Oct 28, heading to BofA (c)
Back down in the park,
generators used to heat the protesters have been seized, while
in Bryant Park corporate gift shops can use them.
the UN on October 27, Inner City Press asked for a comment on
the police having fractured the skull of Iraq veteran Scott
Olsen at Occupy Oakland. The spokesman for Secretary General
Ban Ki-moon, Martin Nesirky, said that the authorities were
investigating. President Obama, it's said, learns about Occupy
Wall Street only through the newspapers. That might have to
change. Watch this site.
October 24, 2011
Occupy Wall Street, People's Trial of Goldman Sachs Set for Nov
Matthew Russell Lee
WALL STREET, October 22 -- As it
got colder in Lower Manhattan on October 22 the Occupy
Wall Street meeting of the General Assembly considered a
proposal for a people's tribunal against Goldman Sachs, for
November 3. While other proposals were confronted by blocks, a
form of quasi veto, this one passed by consensus.
A block away JPMorgan
Chase stood surrounded by fencing and police. It has been the
subject of a number of marches from Zuccotti Park, but
Goldman Sachs until now as escaped direct action. Goldman does
not offer regular bank accounts or student loans, although it
trades in both, and in the predatory subprime mortgages which
triggered the global financial meltdown.
At Occupy Wall Street solidarity events in Philadelphia, banks
including the prospective
fifth Too Big To Fail institution Capital One were
denounced. But Goldman Sachs' will be the first people's
tribunal. How will it proceed?
Meanwhile the former CEO of Citibank
blathered that the Occupiers should forget about the past and
just look forward -- triggering responses that one should be
this logic empty out the prisons.
Bank of America
was described as moving risky derivative into its FDIC-insured
bank, putting the American people further at risk.
Goldman itself defunded its previous fundee, the Lower East Side
People's Federal Credit Union -- where Inner City Press has been
a customer -- because it dared invited OWS to one of its events.
But the indictment of Goldman will go well beyond being a
so-called Indian giver. Its roll in securizing predatory loans
make it a criminal, which until now has bought immunity. Watch
October 17, 2011
Wall Street Visits JPMorgan Chase with Police, Goldman &
Capital One Next?
Matthew Russell Lee
STREET, October 12 -- On a blustery Wednesday afternoon in Lower
Manhattan, a crowd gathered in front of JPMorgan Chase, blocked
off by police.
At first it first no
larger than past symbolic protests in front of Chase Manhattan
Plaza. Then a phalanx of marchers came from Zuccotti Park out on
Broadway, also contained by police. Occupy Wall Street had
arrived. Click here for
video by Inner City Press.
When JP Morgan
and Chase Manhattan merged, community groups challenged
them for "redlining" poor neighborhoods like the South Bronx,
and even sued. In the case by Inner City Press about the merger,
Morgan Chase tried as a Strategic Litigation Against Public
Participation (SLAPP) suit to get its extensive attorneys fees
paid. It failed, but received a massive bailout.
On October 12 it took
police with a bullhorn to get the protesters to continue, on to
Liberty Street and the Federal Reserve. The previous evening had
seen a protest
of Bank of America; around the corner is Capital
One, seeking to become the fifth largest bank in the US by
buying ING DIRECT.
Still escape direct protest is Goldman Sachs. "How do you get
your hands around them?" one protester asked Inner City Press.
Goldman underwrote many of the predatory mortgage bonds that led
to the crisis, then got more bailout funds than anyone. But it
gives campaign contributions to both parties, including through
its executives to President Obama when he travels to New York.
We will continue on this.
the JPMorgan march, a TV crew from Fox 5 News approached Inner
City Press. "Are you ready?" a man with a microphone said,
thrusting it out. Well, no, not for that. But the news will get
of big bank nepotism and sleaze: "Former Bank of America
Corp. executive Sallie Krawcheck will receive $6 million
after leaving the bank following a management reshuffle
last month." Somewhere Sandy Weill is laughing....
October 3, 2011 --
Police Arrest Occupy Wall Street Protesters, Focus on Banks,
Matthew Russell Lee
BROOKLYN BRIDGE, October 1 -- As
drizzle fell on the Brooklyn Bridge and the East River beneath
it, the New York Police Department took protesters off the
bridge, their hands restrained behind their backs, in busses
with signs that said "Out of Service" and "Promotional Bus."
The Occupy Wall Street protesters continue to gather steam, even
as most of the media has ignored them, or mocked them for not
having a single message.
Signs clasped to the
fence of Bloomberg's City Hall said, "No Bail Outs" and "Too Big
Too Fail means Too Big To Allow."
These references to the four American megabanks -- Citigroup,
America and Wells Fargo
-- about to be joined by a fifth in Capital
One seem focus enough.
Despite the size of the bailouts and the lack of criminal
prosecution for predatory lending, there has until now been
little direct fightback. Now there is, and the police are out in
"Obama's moved so far to
the right," a protester complained, staring as if hyponotized
into the swirling squad car lights.
the foot of the Brooklyn Bridge, Inner City Press was pushed
back by a phalanx of police. A protester yelled, Are you all
getting overtime? The answer was yes.
videos sampling interviews: click here
young woman said she had come to the bridge "straight from Slut
Walk," another event in Union Square. The talk in the crowd was
that those arrested a second time weren't getting bail.
The analogy to non-violent protests this year in Cairo and Tunis
and Benghazi and Homs is dismissed by some staid foreign
correspondents. But the energy is not dissimilar, and response
is moving at least directionally toward similarity too. Watch
Wall Street Target JPMorgan Paid Police Monitors, Paid Blair for
Matthew Russell Lee
UNITED NATIONS, October 2 -- As
Occupy Wall Street protesters were arrested Saturday by the
New York City Police Department, in the scrum at the
entrance to the Brooklyn Bridge there was talk of mega-bank J.P.
Morgan Chase having given money to the NYPD.
It's hardly hidden: the bank's
web site brags that
Chase recently donated an unprecedented $4.6 million to the New
York City Police Foundation. The gift was the largest in the
history of the foundation and will enable the New York City
Police Department to strengthen security in the Big Apple. The
money will pay for 1,000 new patrol car laptops, as well as
security monitoring software in the NYPD's main data center."
that the protests are largely directed that bailouts to and
abuse of the political system by JPMorgan,
Citigroup, Bank of America,
and prospectively Capital
One, it is
certainly relevant, and to many troubling, that the police take
money from the very target of the protest.
The police will use the money
for laptops and "security monitoring software" - would that
target the anonymizer app Vibe that's emerged, created by Hazem
"White Hat" Sayed?
Kelly, widely touted as a candidate to replace Michael Bloomberg
as Mayor, offered his "profound gratitude" to JPM Chase CEO
Jamie Dimon. Will this relationship and the mass arrests be
what of the use of MTA busses to arrest protesters, as
photographed by Inner City Press in its
story last night? On Sunday morning, Inner City Press
asked the Transit Workers Union Local 100 for its comment and
what it will do. Watch this site.
JP Morgan Chase stands accused
of improper involvement not only in New York City policing, but
in corrupting the Middle East peace process through UN envoy
Tony Blair, who is also a JP Morgan consultant.
For some time Inner City Press
asked the UN, and Blair
himself after a New York City meeting of the Middle East
Quartet, about his involvement in cell phone deals in the
Occupied Palestinian Territories, without answer.
On Friday, September 30 Inner
City Press asked Secretary General Ban Ki-moon's spokesman
City Press: I am sure you’ve seen these stories of late about
Tony Blair. Often you’ll say, speak to Tony Blair. It’s not that
easy to do, as you might imagine. So I wanted to ask the UN side
of it. These articles are saying that increasing questions have
arisen about the double service of Tony Blair for J.P.Morgan as
a consultant and as the Middle East peace envoy. And they point
to particular deals around cell phones... I don’t expect the UN
to say anything anti-Blair, but what is the UN’s role in
reviewing those conflicts of interest? Is there a kind of review
that’s done for other UN officials to view whether the outside
activities or other activities of Tony Blair conflict with what
he does for the UN system?
Martin Nesirky: Well, as we have said before, Tony Blair is the
Quartet envoy. He is the Representative of the Quartet. He is
not the UN envoy in the Quartet. That is not his role, okay? And
so, I think you’re knocking on the wrong door here.
City Press: who does the review of whether there is a conflict
of interest? Is it just up to Tony Blair himself or is there
some, does the Quartet have some secretariat or administrative
body to review these charges?
Well, I think you’d need to check with, first of all, I think
it’s right, you could certainly check with Tony Blair’s office
in the first instance. But, also of course, you could check with
the other participants in the Quartet, as well. But, just to be
clear, it’s not a UN role.
So JP Morgan Chase with
its money can corrupt the UN Middle East process -- then say
"it's not a UN role." And the bank can pay the New York police,
which mass arrests those protesting its bailout. What's next?
Watch this site.
So at UBS a
"rogue" trader burned over $2 billion, and not much of a
peep yet from the regulators including the Federal
Reserve. Meanwhile, Bank of America look move to sell its
correspondent banking business.
Niagara says that "in September" it will announce to whom
it would sell of HSBC branches, it's allowed to acquire
them. What a Rube Goldberg of a transaction. It will be
So Bank of
America denies it plans to close 600 branches. OK - how
many does it plan to close?
Société Générale de Banque au Liban, said Sept. 9 that it
gained final approval from the Central Bank of Lebanon to
acquire the assets and liabilities of Lebanese Canadian
Bank. The acquisition will raise the unit's total assets
to $11 billion, its deposits to $8.6 billion and its loans
to $3 billion. The bank will also take over Lebanese
Canadian Bank's 35 branches, which will come under the
unit's signage. Consequently, the unit will operate a
total of 101 branches....
Wells Fargo is
moving to settle in Memphis just the type of racially
discriminatory predatory lending and foreclosure charges
that it has previously bragged about beating in court, for
example in Baltimore. We'll be watching this -- and
another big bank, next week. Watch this site.
What does the
FDIC consider before selling off a bank? According to SNL
Financial, "Evansville, Ind.-based Old National Bancorp on
Aug. 26 revealed plans to close nine branches of failed
Integra Bank NA and consolidate them into other branches
of the failed bank as part of an ongoing assessment that
could eventually lead to more consolidations. Old National
acquired the Evansville-based bank July 29, after it was
shuttered by the OCC. Effective Sept. 30, Old National
will close nine of Integra Bank's 52 branches. Five of the
failed bank's Evansville branches will be closed, along
with one branch in Mt. Vernon, Ill. In Kentucky, Old
National will shutter one branch in Madisonville and
transfer the accounts to another Madisonville location.
The company will also close one branch each in Clay and
Poole in Kentucky, transferring the accounts to branches
in Providence, Ky., and Sebree, Ky., respectively." These
transaction are done without public comment. But what does
the FDIC consider?
In a marriage
of sleaze earlier this month, Spartanburg, S.C.-based
Advance America Cash Advance Centers Inc. said it agreed
to purchase for $45.6 million Atlanta-based CompuCredit
Holdings Corp.'s retail storefront consumer finance
business -- approximately 300 locations in nine states...
August 15, 2011
The proposal from HSBC to
transfer 195 branches to First Niagara is even worse that
it first looked, based only on First Niagara's weak CRA
program that led to its last acquisition, of NewAlliance
in Connecticut, being protested from nearly all of First
Niagara's communities. Now First Niagara says that of the
195, it would closed 33, and try to sell off 67. Can any
regulator accept such a disruptive and cynical "middleman"
transaction? It will be opposed...
Beyond the fair
lending violations at and consumer abuse by Capital One,
ING is being investigated for violating sanctions and
doing business in Sudan, Cuba and Iran. This is being
raised - watch this site.
First Niagara, opposed by community groups and local
elected officials on its recent deal in for New Alliance
in New Haven, now seeks to pay $1 billion to buy 195
Northeast branches from HSBC, mainly in Upstate New York,
held approximately $15.0 billion in deposits and $15.0
billion in gross assets as of May 31. First Niagara will
pick up 183 branches in Upstate New York, four branches in
northern Westchester County, N.Y., two branches in Putnam
County, N.Y., and six branches in Connecticut. HSBC said
it will be consolidating approximately 13 branches located
in Connecticut and New Jersey into nearby HSBC branches by
the first quarter of 2012, subject to regulatory approval.
We'll be there - watch this site.
July 25, 2011
“Banco do Brasil
projects to have a network of up to 20 branches and
400,000 new customers in the U.S. in five years, the
executive told the news agency. The prospective EuroBank
acquisition is subject to approval” - and yeah, not so
July 18, 2011
HSBC is putting
up for sale not only its credit cards -- Capital One and
Wells are the touted bidders -- but also branches, with
M&T, First Niagara and Key in competition. This would
clearly close a lot of branches: they should (have to)
compete on that. Watch this site.
July 11, 2011
Lagarde appeared on July 10 on the Amanpour show on ABC,
she said that her ethics test is what her mother would say
was okay. Amanpour then didn't ask her, what would maman
say about l'affaire Bernard Tapie? Bad journalism.
federal prosecutors based in Rio de Janeiro have initiated
a lawsuit against three major banks for alleged
irregularities in charging of client fees between 2008 and
2010, the prosecutors said in a statement last week. The
three banks are HSBC, Santander and Itau-Unibanco,
Brazil's largest bank by assets...
July 4, 2011
"We have a hard
time seeing a settlement with fines in the $20 billion to
$25 billion range, as originally discussed," the analysts
said. "We think that it will have much lower penalties
than originally proposed, if it happens at all." -- Bank
of America's $8.5 billion settlement with 22 mortgage
investors may sharply reduce or eliminate penalties
against the largest U.S. mortgage servicers under
investigation by the states' attorneys general, according
to Amherst Securities Group. The size of the settlement
with Bank of America, the largest servicer of U.S.
mortgages, and mandates to improve how the institution
treats loans in default will make it harder for the
attorneys general to find consensus, according to a client
note Thursday from Amherst.
Press: 1) it shouldn't buy BofA out of the other problems.
2) the AGs let their thunder be stolen...
June 27, 2011
acquirer for BNP Paribas' Bank of the West has now been
named: US Bancorp. We'll see. Consumers and analysis have
heaped scorn on Capital One's proposal to buy ING Direct.
Even from a purely financial point of view, it's said to
only make sense if Capital One intends on another
acquisition, for example of HSBC's credit card business,
the kind HSBC acquired along with the predatory Household
International. But there's a $270 million break-up fee in
the Capital One deal, and ING will not want to pay it.
Sudan & Afghan Banks
NATIONS, June 23 -- With the International
Monetary Fund refusing to answer or even
acknowledge questions about its consideration of
programs from Afghanistan through Belarus
to South Sudan, set for independence on July 9, it
seems the arrest and resignation of Dominique Strauss
Kahn, the two candidate race to replace him and a
recent hacking scandal have distracted the IMF.
IMF on Thursday morning held its first press briefing
in two weeks, the questions largely related to the
race between Christine Lagarde of France and Agustin
Carstens of Mexico to replace DSK. Two questions, one
online and the other in-person, concerned the IMF
getting hacked. Deputy spokesman David Hawley said
that “files were copied,” but deferred other answers.
City Press submitted as it has in the past four
questions by the IMF's online briefing center. In the
past at least some questions have been answered, about
Sudan and less frequently Sri Lanka.
his post-DSK era, these June 23 questions were
Sudan set to declare independence on July 9, what is the
status of the IMF's consideration of South Sudan,
including in light of Sudanese president Omar al Bashir's
threat to cut off the pipelines that takes South Sudan's
oil to market?
authorities have complained about negotiations with IMF.
On Afghanistan, can you state the status of and explain
IMF's requirement that shareholders not have any
management role in Afghan banks, given that this is
allowed in the US, for example?
In terms of
the IMF's research budget, some have questioned whether
the IMF at times censors the conclusions of research. Is
that true, and if so how does the IMF respond to the
will the new arrests of protesters in the last days have
any impact on the IMF's consideration of Belarus' request
for an IMF program?
the half hour between Hawley saying “there are no more
questions” -- which wasn't true -- and the expiration
of the embargo were any of the four questions
answered. Previously the IMF has been asked about gift
filings by its top officials, and hasn't answered. Oh,
June 20, 2011
It's looking as
of this writing on June 19 like PNC will be the applicant
to buy Royal Bank of Canada's 400 US branches, the old
Centura Bank. And the BNP Paribas will be under pressure,
due to its exposure to Greece, to sell off its US
Meanwhile we can
report: after the challenge to Comerica - Sterling, they
have been unable to meet their goal of closing in the
second quarter. Watch this site.
June 13, 2011
Belarus or Jamaica
NATIONS, June 9 -- Without a managing director,
without transparency and seemingly without regard to
human rights, the International
Monetary Fund is negotiating with Belarus about
a loan larger than the $3 billion the Russians lent,
conditioned on privatization to Russian firms.
the IMF's bi-weekly briefing on June 9, Inner City
Press submitted this question:
“On Belarus, what is the
IMF's thinking after Russia cut electrical supply this
week, after crackdown on online protests and long
sentences to political opponents, and what does the IMF
say that to require privatization would be serving Russian
buyers of Belarus assets?”
spokesperson Caroline Atkinson, facing in-person
questions about Dominique Strauss Kahn, took three
online questions -- about Pakistan, Argentina and
Latvia -- but not this Inner City Press question about
Belarus (nor another one, about Jamaica).
not acknowledging the timely submitted questions
during the briefing, afterward Inner City Press
received this email from the IMF about Belarus:
question on Belarus
From: [ ] @imf.org
Date: Thu, Jun 9, 2011 at 10:43 AM
To: Matthew.Lee [at] innercitypress.com
regard to your question today on Belarus. As you probably
know, a previously scheduled IMF mission is currently in
Minsk (the dates are June 1-13) to conduct post-program
monitoring. The standing policy has been that we don’t
comment on specific country matters while missions are in
the field and discussions are in progress. We will update
the press on the mission’s outcome when it concludes.
The purpose of
this mission is to discuss policies that would restore
economic stability and put the economy on the path of
strong and sustainable growth. The mission will use the
opportunity to exchange views with the authorities on
possible next steps in response to their request for the
Regards, [ ]
IMF Press Office
been reported that IMF Head of the mission Chris
Jarvis has met Deputy Prime Minister Sergey Rumas.
Inner City Press replied with a request to be informed
of any IMF press conference call about any
announcement with Belarus, but the IMF press person
who had replied was listed as out of the office.
Jamaica, the IMF asked for more specifics, to which
Inner City Press replied:
Finance Secretary Wesley Hughes met with the IMF, now
returns to Jamaica for talks with trade unions, in
connection with which Minister of State in the Ministry of
Finance and the Public Service, Senator Arthur Williams,
has spoken of the “Government’s inability to pay the $20
billion owed this year, and has proposed an extended
payment period, to protect the gains made in the economy
and to preserve its agreement with the IMF.”
So 1) does the
IMF dispute that the Jamaican gov't can't pay, must extend
the payment period “to preserve its agreement with the
what did the IMF tell Finance Secretary Hughes about this?
not taking this question during the briefing, then
asking two rounds of counter questions about it, the
IMF finally replied:
FW: Question Received (6/9/2011 10:10:02 AM)
From: [ ] @imf.org
Date: Thu, Jun 9, 2011 at 1:14 PM
To: matthew.lee [at] innercitypress.com
are not going to make any comment on ongoing negotiations
between the administration and the unions. I would refer
your questions to the Jamaican authorities.
government’s commitments related to the program are
outlined in the documents of the second and third reviews
of the stand-by arrangement, which you can consult online
in the Jamaica page [of the IMF].
after not acknowledging the timely submitted questions
during the briefing, and even asking questions about
the questions, the IMF declined to answer either of
them. Some transparency. The IMF did not even respond
questions about its policies on gifts. To be
* * *
competition for ING Direct has heated up, with GE battling
Capital One, while KKR tries for a minority stake. Capital
One, some feel, some be the odd one out. We'll have more
June 6, 2011
has been announced, with Bank United proposing to buy
Herald National Bank, with a strange non-compete clause in
which CEO John Kanas couldn't manage the bank he'd be
buying. This should not be approved.
Cincinnati-based First Financial Bank inked an agreement
to acquire all 16 of the retail banking branches of
Liberty Savings Bank located in Ohio. And on the seamier
side, Gaddafi's favor bank Goldman Sachs Group is close to
selling Litton Loan Servicing to Ocwen Financial, with an
announcement possible within days.
May 30, 2011
So HSBC and
Goldman Sachs are among banks that held funds for Muammar
Gaddafi’s government investment fund -- HSBC held $292.7
million across 10 accounts and Goldman Sachs had almost
$44 million in four accounts as of June 30, 2010,
according to a document on the Libyan Investment
May 23, 2011
Case, Theory of Replacing Ban & US Taking IMF,
China WB Revived
Russell Lee, News Analysis
NATIONS, May 18 -- The arrest
of International Monetary Fund managing director
Dominique Strauss Kahn, and his interim
replacement by his American deputy John Lipsky, have
a story exclusively reported by Inner City Press
two senior advisers to UN Secretary General Ban
Ki-moon told Inner City Press of worries
the US would take over the top spot at the IMF and
give the World Bank to China, which in turn would
not insist that the UN Secretary General term
beginning in 2012 go to an Asian.
that theory, if Europe lost the IMF -- as seems even
more possible now -- and China got a top Bretton Woods
institution spot, the Europeans could make a play for
the 2012 UN term.
Strauss Kahn's arrest, and now US Treasury Secretary
Geithner's call that a formal “interim” replacement be
named, quite possibly Lipsky, those close to Ban like South Korea's
Permanent Representative to the UN were bragging
that a second term for Ban was in the bag.
least until the IMF situation is resolved, Team Ban's
2009 nightmare scenario is suddenly closer to coming
Europeans candidates were already circling to succeed
Ban, albeit in 2016, among them Srgjan Kerim, Jan
Kubis and even Navi Pillay's deputy Ivan Simonovic.
Western Europeans may renew interest, if Europe loses
the IMF. Staffan de Mistura is said by his staff to be
interested. But surely there are others. Watch this
Per the WSJ,
California Attorney General Kamala D. Harris is expected
to announce Monday a new law-enforcement effort aimed at
mortgage-industry practices. The effort will cover a range
of activities, from loan origination to the packaging of
mortgages into securities, and will include both civil and
criminal prosecutions. Mr. Schneiderman has issued
subpoenas to units of Ambac Financial Group Inc., Assured
Guaranty Ltd., MBIA Inc. and Syncora Holdings Ltd.... Then
May 16, 2011:
NATIONS, May 15 -- With Dominique
Strauss-Kahn of the International
Monetary Fund having been detained and then this
for sexual assault allegedly committed in the
Sofitel near Times Square, attention has turned
to the IMF's failure to discipline him for what its
Executive Board called a “serious lapse of judgment”
case, IMF spokesman William Murray has been quoted
that the IMF “has not immediate comment” on the arrest
staff, too, have been defensive about Strauss-Kahn and
his compliance with rules. Inner City Press covers the
IMF as well as the wider United Nations, and on March
17 Inner City Press asked the IMF to respond to what
sources described as a pattern in which “DSK gets
friends and family hired by IMF affiliates.”
time, the IMF answer other of Inner City Press'
questions, while ignoring this one. Two weeks later,
Inner City Press asked:
Thursday, March 31, 2011 9:58:14 AM
To: IMF, Media Briefing Center
Again, Please state whether
Dominique Strauss Kahn has any relatives working in the
World Bank or other UN affiliated organizations, and if so
why this does not run afoul of anti nepotism rules and
principles? From: Matthew Russell Lee Media Outlet: Inner
time, the question drew a quick answer, albeit a
dismissive one, from Mr. Murray:
William [at] mf.org
Date: Thu, Mar 31, 2011 at 10:22 AM
Subject: FW: Question Received (3/31/2011 9:58:14 AM)
To: Matthew Russell Lee [at] InnerCityPress.com
He has no
relatives on the staff of the IMF. Given the premise of
your question, let me note that the Bank and UN are wholly
separate institutions from the IMF, with no fiscal or
managerial connections. At the IMF we certainly have
nepotism rules, and they have not been violated in any
But does the IMF have
rules, that they require not be violated?
that Strauss-Kahn “has an arrangement with Air France
that allows him to get on any flight and sit in first
class.” What kind of arrangement is that? Who paid for
it, and how much did they pay? Inner City Press has
asked three spokespeople of the IMF, including Mr.
Murray. Watch this site.
City Press has been asked how, if Strauss-Kahn as an
IMF official has a form of immunity, he could be
detained, questioned and arrested by the New York
Police Department. (The IMF has a history of citing
immunity, for example for Paul Ross in Pakistan,
Earlier this year, Inner City Press (un) covered
case of a French diplomat who was arrested for
attempted purchase of cocaine and resisting arrest,
but was later allowed to flee the country before
The practice is to allow one such flight - but the
person is not supposed to re-enter the United States
-- which, in the cocaine case, has in fact happened,
which neither the French government nor US State
Department have yet explained, click here.
Watch this site.
May 9, 2011
& Co. was subpoenaed by the U.S. Securities and
Exchange Commission over failed mortgages, it was reported
last week, as the SEC probes banks sued for allegedly
boosting their profits by failing to share refunds from
sellers of faulty debt.
May 2, 2011
Now Citibank is
accused of killing those who owe it money. In the past,
Inner City Press has covered JPMorgan Chase investing in a
Japanese finance company which told a borrower to sell his
kidney. But this is killing:
Citi on Hot Seat
Collection Brought In-House After Outside Agents Accused
in Man's Death
Indonesia—Citigroup Inc. said it has hired more than 1,400
people and brought its debt-collection duties in Indonesia
in-house, following accusations that outside debt
collectors used by the bank may have caused the death of a
police arrested three debt-collection agents used by
Citibank after a customer died in one of the bank's
branches. Police said Irzen Octa was found dead in a
Citibank branch in Jakarta after he complained about his
Police Chief Col. Gatot Edy Pramono said the suspects met
with Mr. Octa in a small room and interrogated him,
according to the Associated Press. He said an autopsy
found a ruptured blood vessel in his head and wounds on
debt-collection hires came after Indonesia's central bank
said recently that Citi had violated some collection
rules. Bank Indonesia Gov. Darmin Nasution said Wednesday
that the central bank is considering penalties against
Citi. This month, the central bank ordered the company to
stop recruiting new credit-card customers while it
investigated whether the bank's collection practices had
led to Mr. Octa's death.
episode isn't the first time questions were raised over
Citi's debt-collection tactics abroad. In India, a Citi
customer in Mumbai alleged in 1999 that outside debt
collectors put a knife to his throat and threatened to
kill him if he didn't pay his $27,000 credit-card debt.
The collectors were later arrested and charged with
extortion because undercover officers had witnessed the
episode. Citi said at the time that its debt collectors
were well-trained and not permitted to use threats.
another India customer accused the owner of the same
outside Citi collection agency of threatening to have one
of his kidneys removed and sold unless he paid an overdue
bill of $765. Citi, then part of Citicorp, denied the
customer's account at the time.
isolated cases and we have the appropriate controls in
place to operate in more than 100 countries," a Citi
spokeswoman in New York said Thursday.
police in India arrested a Citi employee at a branch near
New Delhi amid allegations the employee colluded with
others to siphon off an estimated $67.2 million from
Indonesian lawmakers called for penalties against
Citigroup after a hearing this month that examined
allegations that a Citi employee embezzled millions of
dollars from customers. Penalties could include being
blocked from taking new credit-card customers to losing
its license to operate in the world's fourth most populous
April 25, 2011
interest, rising interest rates: at this year's Citigroup
shareholders' meeting, only 400 people attended, fewer
than in previous years. About 25% of shareholders voted
for a proposal by the City of New York Comptroller's
office demanding that the board launch an independent
review of Citi's mortgage and foreclosure practices. But
the sleaze just continues...
April 18, 2011
Promotes Bank Mergers, Says Bigger is Better, Politics
& Portugal Dodged
DC, April 15 -- The International
Monetary Fund is unabashedly promoting the
takeover of small banks by large ones, claiming that
its own work in “Emerging Europe” since the financial
meltdown shows that communities are better served by
large banks, even if based far away or in other
European Department Director Antonio Borges told
reporters on Friday that Belgium was smart to have
pushed Fortis to being acquired by BNP Paribas. He
urged more such mergers.
City Press asked Borges if the IMF proposed any
safeguards at all, given that concerns exist that when
a local bank is acquired by one based far away, there
will be less reinvestment and accountability.
while calling this an “interesting question,” bragged
that the IMF organized a coordinated effort to get
large banks to treat communities, particularly in
Emerging Europe, fairly, and that this had worked. See
City Press began to ask about attempts to encourage or
require reinvestment, for example in the UK -- but
moderator Simonetta Nardin said there was no time for
follow up questions.
but refused to answer two questions about Portugal,
citing an IMF policy against officials working on
their own countries, and also claiming that the IMF
does not get involved in politics. What -- encouraging
bank mergers is not political? Watch this site.
Press: you seem to be saying that bank mergers—small banks
being bought by big ones sort of unqualifiedly may be a
good thing. In some countries people think that local
banks are more accountable, that if you move the assets to
a faraway headquarters that there's less responsive. What
do you say to that critique and is that something that the
IMF takes any account of?
you ask a very interesting question, because this is a
problem we were faced with over the last few years. In
many of the countries of emerging Europe, you find banks
that actually are owned by other banks elsewhere and there
were concerns that, as there might be problems in the
domestic countries of those banks that assets would be
pulled out from emerging Europe and they might suffer. And
the Fund, the IMF, invested quite a bit of effort to
organize a coordinated effort on the part of all these
banks to behave in the best possible interests of those
economies, and I must say this was quite successful,
because as a result, these countries are now recovering
very well and their banks are operating well. So, if
anything, the experience of emerging Europe demonstrates
that having large, solid banks operate in your country may
be an important source of stability if things are properly
* * *
A U.S. appeals
court ruled April 15 that Wells Fargo & Co. wrongly
claimed $115 million in tax deductions for the 2002 tax
year from transactions the court called "abusive tax
shelters." The so-called SILO deals involve banks that
bought railcars or other equipment from the public
agencies, claimed millions in depreciation tax benefits,
and then leased the equipment back to the agency. The U.S.
Court of Appeals for the Federal Circuit ruled that 26
SILO transactions involving Wells Fargo were "purely
circular transactions" that were "abusive tax shelters."
The appeals court said a trial judge in the case
"permissibly found that the claimed tax deductions are for
depreciation on property Wells Fargo never expected to own
or operate, interest on debt that existed only on a
balance sheet, and write-offs for the costs of
transactions that amounted to nothing more than tax
April 11, 2011
This, we like:
JPMorgan Chase was unsuccessful in blocking from its
annual shareholders' meeting a proposal to “prevent
holding investments in companies that, in management’s
judgment, substantially contribute to genocide or crimes
against humanity, the most egregious violations of human
rights,” targets J.P. Morgan Chase’s stock holdings in
Chinese oil company PetroChina. It's said that the
company’s work in Darfur supports ICC-charged genocide in
On Citigroup, a
senior Indonesian lawmaker called for penalties against
Citi amid allegations that a local employee embezzled
millions of dollars from customers, as well as questions
about its debt-collection practices. Speaking to reporters
in Jakarta on Thursday, Emir Moeis, chairman of the
parliamentary committee overseeing the financial sector in
Southeast Asia's most populous country, said the central
bank should impose "stern actions" on Citigroup, "ranging
from freezing its credit-card business to revoking its
entire license in the country depending on the degree of
violations it has committed." Bank Indonesia has already
ordered Citibank, the largest foreign bank by assets in
the country, not to accept new clients for its Citigold
wealth management unit after a staff member, Inong Malinda
Dee, was detained by police on March 23 on charges of
stealing at least $2 million from clients after obtaining
signed blank checks from clients. Citi detected the
problem in February, and the current investigation shows
the fraud dates back to December. Police also seized
expensive cars in Ms. Dee's possession.
April 4, 2011
Press / Fair Finance Watch last week put in to the Fed a
comment in the extended comment period on Bank of Montreal
/ Harris - M&I, and a new timely comment on Comerica
Using the 2010
HMDA data, Inner City Press has commented that Bank of
Montreal's Harris confined African Americans to higher
cost, rate spread loans 2.35 times more frequently than
whites. M&I Federal Savings Bank confined African
Americans to higher cost, rate spread loans 2.1 times more
frequently than whites. Bank of Montreal's Harris denied
the applications of African Americans 2.35 times, and
Latinos two times more frequently than those of whites.
The Fed extended the comment period on the merger once,
but now seeks to close it with the fair lending
information still outstanding.
Press has submitted another timely comment, that Comerica,
which is seeking to acquire Houston-based Sterling, in
2010 confined African Americans 6.26 times more frequently
than whites to higher cost, rate spread loans. At
Comerica, 11.3 percent of loans to African Americans were
over the rate spread, versus only 1.9 percent of loans to
March 28, 2011
So Bank of
America, J.P. Morgan Chase, Wells Fargo, Citigroup and
GMAC's Ally Financial have been “summoned” to Washington
for a March 30 meeting with state attorneys general and at
least three U.S. agencies. How will the public be
March 21, 2011
disaster at Fukushima Daiichi nuclear plant in Japan,
Deane Dray, a Citigroup analyst covering GE opined that
“while it is still early in the unfolding nuclear facility
crisis in Japan, we are getting many questions from
investors as to what GE’s liability might potentially be,”
Dray says that any potential GE liability in this incident
appears limited by something called “Channelling law.”
is the long-standing nuclear industry practice that
assigns the liability for damages from a nuclear failure
on plant operators, regardless of fault for an incident.
Channeling law is applicable in Japan, and protects
equipment suppliers and the designers of nuclear
facilities from liability. According to Japan’s Law on
Compensation for Nuclear Damage and Law on Contract for
Liability Insurance for Nuclear Damage, power plant
operators must provide 120 billion yen ($1.2 billion) of
coverage and the government provides coverage beyond this
So GE will get
off cheap, Citigroup predicts...
March 14, 2011
shopping its CitiFinancial unit, is willing to finance a
deal or retain a stake in the company. News services list
several potential bidder groups. One group reportedly
includes Warburg Pincus LLC and KKR & Co. LP, aligned
with Boadilla del Monte, Spain-based Banco Santander SA
and BlackRock Inc.. Another includes Blackstone Group LP,
Brysam Global Partners, Carlyle Group LLC, Thomas H. Lee
Partners LP and WL Ross & Co. LLC. Good luck...
March 7, 2011
Press / Fair Finance Watch has filed a timely Community
Reinvestment Act protest below with the Federal Reserve to
Hancock Holding Co. of Gulfport MS to acquire Whitney
Holding Corp. of New Orleans, LA.
As simply one
example, in the Hattiesburg, Mississippi Metropolitan
Statistical Area in 2009, the most recent year for which
Home Mortgage Disclosure Act data is available, Hancock
Bank denied each and every conventional home purchase
application from African Americans, while make 56 such
loans to whites (and none to Hispanics).
headquarters Gulfport MSA, Hancock Bank denied
conventional home purchase loan applications from African
Americans and Hispanics twice as often as those of whites.
To impose this
record on Whitney's service area, including New Orleans,
would have adverse impacts, which militate for public
hearings and the denial of Hancock's applications.
In the New
Orleans MSA in 2009, Hancock Bank of Louisiana made 55
conventional home purchase loans to whites, bot only three
to African Americans, and none to Hispanics.
In the Baton
Rouge MSA in 2009, Hancock Bank of Louisiana denied
conventional home purchase loan applications from African
Americans 2.35 times more frequently, and of Hispanics
2.91 times more frequently, that those of whites.
In the Mobile
MSA in 2009, Hancock Ban of Alabama made nine conventional
home purchase loans to whites, and none to African
Americans or Hispanics.
Tallahassee MSA in 2009, Hancock Bank of Florida denied
the conventional home purchase loan applications of
African American a whopping 8.6 times more frequently than
those of whites.
To impose this
record on Whitney's service area, including New Orleans,
would have adverse impacts, which militate for public
hearings and the denial of Hancock's applications.
In the New
Orleans MSA in 2009, Hancock Bank of Louisiana made 55
conventional home purchase loans to whites, bot only three
to African Americans, and none to Hispanics.
In the Baton
Rouge MSA in 2009, Hancock Bank of Louisiana denied
conventional home purchase loan applications from African
Americans 2.35 times more frequently, and of Hispanics
2.91 times more frequently, that those of whites.
militates for public hearings and the denial of Hancock's
alleges that the transaction would have anti-competitive
and anti-consumer effects, and timely requests a public
hearing on the branch closings and loss of service which
would result. Full disclosure of all branches that would
be closed for the next three years should be made before
the comment period closed, to allow input. ICP has
requested an extension of the comment period.
* * *
In other news:
not only did Gaddafi's Libyan Investment Authority have a
stake in HSBC -- now HSBC makes money from this, by not
having to pay out any divident on the frozen stake....
Chase's cover up of multi billion dollar fund transfers by
Madoff is an outrage, sure - but what were the regulators
What's in a
name? Citigroup renamed its discredited predatory lending
unit CitiFinancial as “OneMain Financial,” renaming NASCAR
teams in the process and now trying to sell it. But who
would buy it - Blackstone? Why?
Among the list
of banks that the sharks at Keefe Bruyette & Woods
pegged last week as takeover bait are KeyCorp, National
Penn Bancshares (in which Warburg Pincas has just upped
its stake), Synovus Financial Corp and Regions Financial
Corporation, pegged by some to hook up with CIT....
have filed 76 political contribution resolutions so far
this year, according to ISS. The measures mainly seek
semi-annual reports about direct and indirect corporate
spending for candidates and referendums. The first 2011
vote is set for April 21 at Citigroup Inc.'s annual
meeting. A similar proposal won 30.3% of votes cast last
As noted by
SNL, Bruce Berkowitz of Fairholme Capital Management LLC,
which is the largest shareholder of CIT and also one of
Region's largest stakeholders, hinted at a merger between
CIT Group Inc. and Regions Financial Corp. during an
interview with CNBC on Feb. 2, SNL has noted. Asked about
consolidation, he said Regions has a "great low cost
deposit base." He continued: "We also have CIT. We're the
largest owner. CIT is a great business. What a sweet spot
they're in … The only thing CIT needs is a low cost
deposit base. Gee, I'm going to have to think of some
candidates on that one."
Chairman, President and CEO Kelly King said the company's
intention to be "aggressive" in its Texas expansion does
not mean paying high prices to buy franchises. King,
speaking via telephone at a financial conference Feb. 2,
said that while Texas is an important region for BB&T,
"that does not mean we will run out and take over Texas
tomorrow." Who thought they would?
Susquehanna Bancshares Inc. agreeing to acquire Abington
Bancorp in Pennsylvania for $273 million, it strikes
ICP/Fair Finance Watch that Susquehanna makes a
disproportionately large percentage of African American
applicants NOT get loans, including by making them
“withdraw” their applications. Watch this site.
Last week J.P.
Morgan Chase & Co. admitted it had overcharged
more than 4,000 family members and foreclosed on 14,
problems it turned up after an internal review. Chase is
facing a civil lawsuit in South Carolina from a service
member who claims he was overcharged and is seeking
punitive damages. The Servicemembers Civil Relief Act caps
interest rates for loans to active-duty military members
at a 6% annual rate and shields them from foreclosure. The
law applies to "any debt incurred" by a service member,
including credit cards and car loans. The Delaware AG's
office has demanded action from Citigroup Inc., Bank of
America Corp., Wells Fargo & Co., PNC Financial
Services Group Inc., Ally Financial Inc. and Goldman Sachs
Group Inc.'s Litton Loans.
the "concentration limit" forbids big financial firms from
merging or buying another bank or large company if it
results in the firm having liabilities greater than 10% of
total U.S. liabilities. The limit "could also have the
beneficial effect of causing the largest financial
companies to either shed risk or raise capital to reduce
their liabilities so as to permit additional
acquisitions," the regulators said in the study. They
didn't indicate the need to break up the biggest banks, as
some officials would like to see. Federal Reserve Bank of
Kansas City President Thomas Hoenig, for example, has
spoken in favor of dismantling large banks. Regulators now
have nine months to impose concentration limits on the
banking industry. It will be up to the Federal Reserve to
calculate banks' liabilities and implement the rule.
Institutions that may be affected include J.P. Morgan
Chase, Citigroup and Bank of America...
India claimed last week it is working out "fair
compensation" for the customers affected by a scandal at
its banking branch in the northern Indian town of Gurgaon.
"We have been reconciling amounts involved with impacted
customers...this process [of working out compensation]
will happen over a period of time," the bank said in a
statement. Police in Gurgaon are investigating a case in
which an employee at the Citibank branch allegedly
colluded with others to siphon off an estimated $67.2
million from wealth-management customers. The alleged scam
included making false promises -- sort of like Citi's
predatory lenders, or at least servicer and forecloser --
Deutsche Bank -- is lurching toward the a sale to LGT
Group of BHF-Bank, which it acquired as part of its
purchase of Sal. Oppenheim jr. & Cie. SCA in March
2010. Handelsblatt reported Jan. 11 that the
Liechtenstein-based bank and Deutsche Bank expect to close
the deal within the next few weeks, having been in
exclusive talks since December 2010. The deal is still
subject to the approval of Germany's market regulator,
markets regulator and the central bank are combining
efforts in the investigation of a $70 million fraud,
involving an employee of Citigroup Inc.'s Indian wealth
management operations, even as the net is cast wider to
get to the bottom of the scam. "There are a whole lot of
investigations that are being conducted. We need to get a
sense of what went wrong first...Co-ordination is
happening very much now and the Reserve Bank of India and
SEBI are working together to find out what went wrong.”
The name is Citigroup....
Chase has been sued by the trustee attempting to recoup
money for the companies of convicted Ponzi schemer Tom
Petters. The money involved includes millions the bank
took from Petters' accounts after his downfall and profits
and fees it got from Petters' purchase of iconic camera
company Polaroid. In a filing in federal court in
Minnesota last week, Douglas A. Kelley, the
court-appointed receiver for Petters' companies, alleged
that J.P. Morgan knew, or should have known, that funds it
seized from Petters' J.P. Morgan accounts after his arrest
were fraudulently obtained. The suit also reiterated that
J.P. Morgan and its One Equity Partners also knew, or
should have known, the funds used by Petters to buy
Polaroid were also from his Ponzi scheme....
AG said last week it is in talks to sell its BHF Bank unit
to Liechtenstein's LGT Group. Deutsche Bank acquired BHF
Bank when it took over private German bank Sal Oppenheim
earlier this year with an aim of boosting its
private-banking and wealth-management business. Can you
say, money laundering and tax evasion?
revolving door -- Obama administration official Peter
Orszag is going to work for Citigroup, as Clinton's Bob
Rubin did. Any more predatory lending? Or was that
“democratization of credit”?
in the USA with Household Finance was profiled in a
lengthy Reuters piece last week. Missing from the analysis
was HSBC's era of buying near failing banks in Brazil and
elsewhere. This is what gave them the over-confidence
about Household. Now, they want to try more inroads in
China. We'll see.
IMF Fudges on Ireland &
Democracy, on Africa's Reduced Votes, Maldives Deferred
NATIONS, December 2 -- At the IMF's press briefing on
December 2, spokesperson Caroline Atkinson took
question after question about Ireland while deferring
answers on the Maldives and East African Community and
ignoring questions submitted about IMF chief Dominique
Strauss Kahn's statement that his successor should
come from outside the US or EU.
talks much about governance reform, but even under its
much hyped recent changes, Africa as a continent will
see its voting share drop from 5.9 per cent to 5.6 per
cent. Inner City Press asked Thursday about this, and
this was one question Ms. Atkinson took. She referred
to “dynamic and emerging” economies -- apparently not
in Africa -- but said that lower income countries
would also have their voices amplified.
City press had submitted this simple question: “In
light of Mr Strauss Kahn's statement that next IMF
chief should come from outside the US and EU, is he
going to formally propose that to the Board or any
other step?” The question was not taken or
acknowledged. We'll see.
Ireland, despite massive protests and statements
by the opposition that they are not bound by the
deal with the IMF, Ms. Atkinson said that the
IMF had “discussions with the major, uh, the
opposition parties” and was “satisfied” enough to
present the deal to the IMF Executive Board.
does this mean? Are successive governments bound by
IMF deals? Inner City Press had first submitted this
question: “on Ireland, what is the IMF's position on
approvals needed inside the country?” But the question
was neither taken nor even acknowledged.
Also on democracy, Ms. Atkinson was asked about
Ukraine's President vetoing an IMF suggested tax
increase due to protest. Ms. Atkinson said she hadn't
heard of it, but would provide information later if
she did. Inner City Press had asked it. So again,
out that Wikileaks founder Julian Assange has said that
he’s going to make a major U.S. bank the focus of a coming
Wikileaks dump. And now writer Andy Greenberg also
spotlights a previous interview in Computer World in which
Assange said he’s sitting on a stockpile of data from Bank
of America. Coincidence?
December 6, 2010: Forbes points out that Wikileaks founder
Julian Assange has said that he’s going to make a major
U.S. bank the focus of a coming Wikileaks dump. And now
writer Andy Greenberg also spotlights a previous interview
in Computer World in which Assange said he’s sitting on a
stockpile of data from Bank of America. Coincidence?
“Bank of America Corp. and J.P. Morgan Chase & Co.
have hit snags in efforts to restart nearly 230,000
foreclosures across the U.S., meaning some cases are
likely to remain in limbo until early next year. Several
complications are slowing the process, ranging from the
hiring of new law firms to handle foreclosure paperwork to
making sure that correct procedures are being followed as
new or revised files are submitted in the 23 states where
court approval is required for foreclosures. The delays
aren't a sign that documentation problems are worse than
previously acknowledged by the nation's two largest banks
by assets, according to the companies. And Bank of
America, based in Charlotte, N.C., and J.P. Morgan, of New
York, haven't backed down from their insistence that no
one was wrongly foreclosed on as a result of errors in
affidavits or other loan documents.” We'll see.
it is reviewing about 14,000 foreclosure cases for
potential errors, making it the latest bank to acknowledge
flaws in how it handled documents used to evict
homeowners. In testimony prepared for delivery at a House
subcommittee hearing Thursday, Harold Lewis, a managing
director of the bank's CitiMortgage unit, is expected to
say Citi is reviewing about 10,000 foreclosure documents
to ensure they are correct. Another 4,000 are being
reviewed because they may not have been signed with a
notary public present, as required by state law.”
Also brewing is
an application involving Spanish savings bank Caja Madrid,
and an ownership stake in City National Bank of Florida.
Regulators have slapped around the latter, while Caja
Madrid's record hardly gives confidence. A showdown may be
looming. The application has been requested from officials
at the Federal Reserve Bank of Atlanta. Watch this site.
Citigroup, Wells Fargo and Bank of America face lawsuits
over misstatements in their underwriting of residential
mortgage-backed securities, the banks belatedly disclosed
Friday in quarterly regulatory filings. BofA said in its
filing that it faces suits over more than $375 billion in
mortgage-backed securities.The Federal Home Loan Bank of
Chicago filed suit in state courts in Illinois and
California against a total of 17 institutions, including
units of H&R Block and Barclays last month. The
Federal Home Loan Bank of Indianapolis, using similar
language, sued 10 institutions, including Citi, J.P.
Morgan Chase and GMAC Mortgage Group, a unit of Ally
Financial Inc., in Indiana state court last month.
Cambridge Place Investment Management, a $3.1 billion
manager of asset-backed debt, is suing a dozen banks
including Citi, Morgan Stanley, Goldman Sachs and J.P.
Morgan in federal court...
“Citigroup Global Markets Ltd. has bought the
Israeli government's entire 11.69% stake in Israel
Discount Bank Ltd. (DSCT.TV) for 832 million shekels
($231 million) and will distribute those shares to
other institutional investors, Discount Bank said
Tuesday” of last week. Why isn't a Federal Reserve
Board review required for this?
City Press / Fair Finance Watch received an inquiry last
week about HSBC and Household, and responded:
had a bad reputation well before HSBC decided to buy them.
For example, when Household bought Beneficial Finance,
Inner City Press / Fair Finance Watch received numerous
complaints from consumers, and filed comments with
regulators against the combination. As such, HSBC was on
notice of these concerns.
regulators were considering HSBC's application to buy
Household, Inner City Press / Fair Finance Watch made its
views known not only to the regulators but also to board
members of HSBC. The deal was structured so as to avoid
Community Reinvestment Act review (Household's thrift was
extinguished, its “non bank bank” (a credit card bank) did
not trigger CRA review.
Press / Fair Finance Watch was called by whistleblowing
employees of Household who said they were ordered to
refinance all loans over a certain number of days
delinquent - “putting lipstick on the pig,” they called
it. Household's performance did not get better, more
probably worse, in that it was ultimately managed from
further away, and by management - including Mr. Flint -
which was arrogant, wouldn't admit there were any
Press / Fair Finance Watch had been aware of Household as
a predatory lender since well before HSBC's application.
HSBC battened down the hatches, tried to evade CRA review,
never made improvements...
Why not impose a moratorium
on foreclosures? The excuse given last week was that it
would freeze up the economy. Several participants in a
meeting with President Obama came back with the same sound
byte, that in Nevada over 50% of home sales are on
properties that have been foreclosed on.
Why was Nevada
the example? Could it have to do with Harry Reid? Vice
President Joe Biden is headed to Reno this week, to stump
Bank of America
Corp. is facing an Oct. 8 deadline to halt foreclosures in
North Carolina, according to a letter to the bank from
state Attorney General as reported by SNL. He noted in the
letter, dated Oct. 5, that while BofA has halted
foreclosure proceedings in 23 states across the country,
North Carolina was not among them. "As soon as possible
and by no later than the close of business on Oct. 8,
2010, please confirm that Bank of America has halted
foreclosure proceedings in North Carolina,"he said.
Additionally, he requests that the bank provide a
description of how it verifies and documents information
related to a foreclosure before an affidavit is submitted.
He also sent letters to several other banks and mortgage
lenders, among them Wells Fargo & Co., JPMorgan Chase
& Co., Citigroup Inc. unit CitiMortgage Inc., SunTrust
Banks Inc. unit SunTrust Mortgage Inc., PHH Corp. unit PHH
Mortgage Corp., IMB Management Holdings LP unit OneWest
Bank FSB, PNC Financial Services Group Inc., Lehman
Brothers Holdings Inc. unit Aurora Bank FSB, U.S. Bancorp
unit U.S. Bank NA, HSBC Holdings plc unit HSBC Mortgage
Services, MetLife Inc. unit MetLife Bank NA, BB&T
Corp. and Invesco Ltd. unit American Home Mortgage
Servicing Inc. In those letters, Cooper asked the
companies to provide information by Oct. 12 on how they
are re-examining their foreclosure process in North
Carolina and how foreclosure information is documented and
verified. Watch this site.
last week said the media ten to “make the good times too
hot and the bad times too cold.” This from a man who, like
his predecessor, ignored timely comments that Citigroup et
al were predatory lenders...
While much of
the financial press puts out laudatory softball pieces
about Doug Flint as new chief of HSBC -- a sample one is
below -- Inner City Press remembers him from conference
calls on HSBC's acquisition of Household International,
dissembling and setting up a deal that hurt not only
consumers but also HSBC's shareholders. Good job, Doug...
piece: “Douglas Flint (left) may be the “compromise
candidate” for the role of HSBC Holdings chairman
following a power struggle, but the straight-talking chief
financial officer of the U.K.’s largest bank is highly
regarded by analysts and has a strong track record in
regulation and corporate governance. The 55-year old
Scotsman looks set to take over from Stephen Green as HSBC
chairman once the appointment is rubber-stamped by the
board in Shanghai next week, beating Michael Geoghegan to
the post.... According to this Wall Street Journal
article, the industry considers Flint “rigorous, shrewd
Chase: “We are sorry for the difficulties that recently
affected Chase.com, and we apologize for not communicating
better with you during this issue.” Yeah, right...
Pakistan, IMF Won't Explain Lack of Debt Relief, Why
& When Loans, MDG Games
Matthew Russell Lee
NATIONS, September 9 -- Despite the flooding
Pakistan, the International
Monetary Fund is offering loans, which barely
make up for the debt payments Pakistan is making.
Inner City Press on September 9 asked IMF Spokesperson
Caroline Atkinson the following question:
“In Pakistan, given the
scope of the flooding and that 60% of the population lives
in poverty, why is the IMF not considering debt
forgiveness, and grants instead of loans? Does IMF dispute
that Pakistan's debt payments ($500 million) are larger
than the $450 million loan?”
Atkinson paraphrased the first part of the question,
and declined to read out the second part. She said
there was a question from this reporter, that “talks
about the scope of the flooding, which is indeed
terrible... We are assessing, there is a damage
assessment by the World Bank and ADB [Asia Development
Bank], results in late October.”
there is no dispute that Pakistan is deeply damaged.
Why use the damage assessment as an excuse? Ms.
Atkinson went on to say that Pakistan's financial
minister was at the IMF last week, discussing an ENDA
(emergency) loan that she said will be approved by the
board on a date not even set yet.
did not read out, or answer, this: “Does IMF dispute
that Pakistan's debt payments ($500 million) are
larger than the $450 million loan?”
Ms. Atkinson acknowledge another question Inner City
Press submitted, after in her introduction she
presented the IMF's commitment to what she called the
“Millennium Development Challenge Goals” -- seeming to
conflate the MDGs with the U.S. Millennium Challenge.
City Press submitted this question, in the same manner
as the paraphrased Pakistan question, that NGOs have
“criticized the IMF 'for
appearing to retreat to its “traditional position" and not
providing enough flexibility on unwinding deficits without
harming development spending.' Your response?”
no answer. Watch this site.
The IMF's Ms. Atkinson did read out and provide a
response to an Inner City Press question on Serbia.
Given the vote later today in the UN General Assembly
on Serbia's resolution about the International Court
of Justice, the IMF's answer will be reported at that
“BAE Systems Plc, a global company engaged in the
development, delivery and support of advanced defense,
security and aerospace systems announced Monday that it
has engaged Wells Fargo and JP Morgan to advise on
strategic options with regard to the Platform Solutions
business, including a possible sale.” Ah, arms
The war over
New York's Stuyvesant Town and Peter Cooper Village
apartment complex has heated up as lenders including Bank
of America and US Bancorp have moved to foreclose and for
a public auction for the 56-building complex on Oct. 4...
August 30, 2010
From the Inner
City Press department of No Honor Among Thieves: according
to a complaint filed July 23 in U.S. District Court for
the Southern District of Indiana, Regions Bank and Wells
Fargo equally backed a $95 million loan to Corporate Plaza
Partners LLC to build the 19-story, 376,000-square-foot
NASCAR office building in Charlotte. When Corporate Plaza
Partners' parent company filed for bankruptcy, Regions
said, Wells Fargo, the designated agent of the loan,
failed to aggressively go after the company for the
balance of the loan and protect itself and Regions from
taking "potentially huge losses."
expected that Wells Fargo could be trusted to administer
the CPP Loan even-handedly and in the best interests of
both lenders," Regions said in its complaint. "As alleged
herein, however, Wells Fargo repeatedly ignored loan
defaults, rebuffed demands by Regions to exercise
collection remedies, and allowed the collateral to
diminish drastically in value." According to court files
reviewed by SNL, a Wells Fargo officer said June 24 that
the lenders faced a $30 million to $40 million loss on the
suffered by Regions is a direct and proximate result of
Wells Fargo's breach of express provisions of the CPP Loan
agreement as well as the implied covenant of good faith
and fair dealing," Regions said in its complaint.
office building is essentially complete today, Regions
said, but its market value fell in 2010 as vacancy rates
across the Charlotte area increased. In June, Regions
said, Wells Fargo proposed to buy Regions' share in the
loan at about 42 cents on the dollar.
August 23, 2010
We note the
proposed $1.5 billion merger of First Niagara and New
Alliance, the Community Reinvestment Act implications of
which should be explored in coming weeks....
August 16, 2010
On AIG's sale of 80% of
American General to Fortress -- will AIG still have to
file American General's HMDA data? Or is that subject to
some sort of “control” test? We aim to find out.
August 9, 2010
“Colombia's financial institutions posted a combined net
profit of 3.08 trillion Colombian pesos ($1.70 billion)
during the first half of the year, up 14% from the same
period in 2009, the country's banking regulator said
Friday. The increase was due to higher revenues from
lending, the regulator said...Among foreign-owned banks,
the local unit of Spain's Banco Bilbao Vizcaya Argentaria
SA (BBVA, BBVA.MC) earned COP232 billion, up from COP204
billion. The local unit of Spain's Banco Santander SA
(STD, SAN.MC) reported its net profit rose 17% to COP53
billion from COP45 billion. The local unit of U.K. bank
HSBC PLC (HBC, HSBA.LN) posted a net loss of COP20
billion. The loss compares with a net loss of COP7.4
billion in the first half of 2009. The local unit of
Citigroup Inc. (C) reported a profit of COP73 billion, 43%
lower than in the same period a year ago.”
And what about
the FARC? What about Santos?
August 2, 2010
little, much too late: “On Thursday, Citi agreed to pay
$75 million to settle SEC civil charges that its officials
vastly understated Citi's exposure, saying it had declined
to just $13 billion in its second and third-quarter
earnings releases of 2007, withholding the full extent of
its risky assets. The SEC also charged two executives who
played key roles in the preparation of Citi's quarterly
earnings statements, former chief financial officer Gary
Crittenden and former investor-relations chief Arthur
Tildesley Jr., who agreed to pay $100,000 and $80,000
respectively to settle the charges.”
July 26, 2010
Cuts Off Funds for Central Africa, Goes on Vacation,
Ignores Guinea Bissau, Ukraine, Hungary and even Haiti
Matthew Russell Lee
NATIONS, July 24 -- The IMF, which positions itself as
concerned about lower income countries and people, cut
off funding to the central bank for six Central
African states, and then went on vacation.
cut off was justified, based on corruption. But when
will the problem be solved and the funding be
22, Inner City Press submitted a series of questions
to the IMF in connection with Spokesperson Caroline
Atkinson's online briefing, which we can no longer
Of the questions, only one was read out loud, about
the Central African bank. The other questions were
neither read nor answered. And there will be no next
briefing until late August, after the IMF Board's
vacation under August 20. (In fairness to the IMF, the
World Bank also followed with a cut-off.)
22, Ms. Atkinson read out:
“thanks to those of you who
participated online. And I’ll get back to any of you that
have further questions that we haven’t been able to take.
Actually, I just see—sorry, there’s another one [from
Inner City Press] that’s flashed up, asking about the
status of the Fund’s review of the Bank of Central African
States and 'when will the suspension and disbursements to
countries—well, to the BEAC, which then on lends to
countries be reconsidered?'
“And just note that we have
been closely engaged with the authorities at the BEAC and
with the CEMAC member country authorities to help them to
address the underlying issues that allowed it to take
place. And we hope very much that we can reach
satisfactory understandings that will provide assurance
that money disbursed through the BEAC will be properly
safeguarded and that, therefore, we can continue with the
disbursements. And, of course, we’ll let you know when
that happens. Okay, thank you very much.”
said, “the Executive Board will be on an informal
recess from Monday, August 2, until Friday, August 20.
We will also, by the way, be having our next press
briefing probably late in August.”
will happen with BEAC, the central bank for the six
states of the Economic Community of Central African
States (CEMAC) -- Gabon, Equatorial Guinea, Cameroon,
Chad, Congo Republic and Central African
Republic? CAR for example is in chaos, with
elections supposedly upcoming but rebels active in
Birao and elsewhere.
interim, in Cameroon the Finance Ministry was robbed.
The Minister of Finance, Essimi Menye said FCFA 700
million as reported by the media as having been stolen
would have required a pickup vehicle to transport. He
also said such a sum of money was not kept at the
Ministry rather at the Bank of Central African States,
City Press' other questions, which the IMF has yet to
acknowledge much less respond to:
Guinea-Bissau, does naming of coup leader to the top Army
post have an impact on IMF re-scheduling consideration of
HIPC & MDRI?
Hungary, why is the IMF opposed to Orban's proposed bank
Haiti, some have questioned why the IMF's new $60 million
is not a grant but a loan. Can you please explain?
will the Board on 7/28 be considering both a $3 billion
loan & breaches of information disclosure requirements
by Ukraine? What's the connection between the two?
Watch this site.
July 19, 2010
arbitration panel ordered J.P. Morgan Securities to pay a
customer more than $2 million, including sanctions... A
Financial Industry Regulatory Authority arbitration panel
in Richmond, Va., awarded $1.8 million, plus interest from
May 2008. The Finra panel also made an additional--and
rare--award of sanctions in the form of $218,000 in legal
fees, $25,000 in expert witness fees, and $9,000 in costs,
according to the award, dated July 8. It found that J.P.
Morgan and its lawyer, Stephanie Karn of Richmond, Va.,
allegedly weren't "wholly forthcoming.”
Why are we
"I'm very pleased we have produced solid operating results
for the second consecutive quarter," Chief Executive
Vikram Pandit said during a conference call with
investors. Growth will come from overseas, CFO John
Gerspach told reporters during a conference call. The
further away from the U.S., the better Citi's prospects
are for making new loans, he said. Consumer banking
revenue rose 9% in Latin America and gained 10% in Asia,
which generated a combined 90% of Citi's second-quarter
consumer banking income of $1.2 billion.
And on the
conference call, there was no answer to an analyst's
request to meet with Pandit or his bandits...
July 12, 2010
America was the world's largest private bank last year,
topping Switzerland's UBS, with $1.74 trillion in assets,
ahead of UBS' $1.59 trillion. Morgan Stanley, which jumped
four places from last year after buying Citigroup's Smith
Barney brokerage, held third place with $1.51 trillion in
assets. Wells-Fargo and Credit Suisse rounded out the top
five, while Switzerland's family-controlled Pictet &
Cie. cracked the top-10 for the first time, with $243.21
billion in assets...
July 5, 2010
Romanian Court Rules Against Pension Cuts, IMF Nods at
5% VAT Increase
Matthew Russell Lee
NATIONS, July 1 -- Romania's Constitutional Court has
struck down the pension cuts connected to the
International Monetary Fund's facility to that
country. On July 1 Inner City Press asked IMF
Spokesperson Caroline Atkinson for the IMF's reaction
to the decision, and if the government's move to boost
the Value Added Tax from 19% to 24% would be enough
for the IMF.
weeks earlier, Ms. Atkinson had responded to
Inner City Press' question about the Constitutional
Court in this way, as transcribed
the IMF itself:
“I have a question online,
which is a bunch of questions, but on Romania: 'The
government’s measures are being challenged in the
Constitutional Court. What does the IMF think of the suit?
What impact might it have on the IMF facility for
Romania?' And it’s absolutely right that the fiscal
adjustment measures, which are prior actions for our
program, have to be approved by the Constitutional Court,
and of course we respect that process. That’s an entirely
appropriate process. We don’t think that that will lead to
any -- I mean, that’s not something that we’re concerned
on July 1 Inner City Press asked, “the Constitutional
Court has now rejected the pension cuts connected to
the IMF facility. What is the IMF's reaction, since
two weeks ago it was said that the IMF did not expect
Atkinson said, “I'm not sure about that.” But she'd
said of the Court review, “That's not something that
we're concerned about,” a lack of concern that can be
equated with not expecting a negative court decision.
July 1, Ms. Atkinson said “the Romanian authorities have
identified other measures... What we look at is an
overall package, not specifying one measure or another.”
June 28, 2010
Game on: Inner
City Press / Fair Finance Watch has filed a timely
challenge with the Federal Reserve to the pending
applications of The Toronto-Dominion Bank to acquire The
South Financial Group and its Carolina First Bank.
TD's 2009 HMDA-LAR, which has not been reviewed or taken
into account in any regulatory review of TD. The data are
troubling, showing for example that in 2009 Toronto
Dominion denied fully 83% of mortgage loan applications
from African Americans, versus only 42% of applications
from whites. TD's denial rates for Latinos and Native
Americans, both 68%, were also troubling. Public hearings
should be held and the applications not approved.
TD in fact
makes rate spread or subprime loans, but not in a fair
manner. African Americans at TD are 1.93 times more likely
to be confined to higher cost loans than whites.
While the FRB,
despite the stated purpose of HMDA in helping to identify
discrimination, has shifted to a dismissive approach to
HMDA, it will be hearing different at its upcoming HMDA
hearings, testimony at which should be considered by the
FRB in connection with this application.
On a recent
investors' conference call, TD bragged about its
“FDIC-assisted transactions” -- which , significantly,
were not reviewed for CRA, and on which there was no
comment period. A public hearing is needed on this one.
FFW's request in this letter for a complete copy of the
applications includes also any and all information in the
possession of the FRS concerning TD's “FDIC assisted
shareholders of South Financial have filed suit against
the deal. See, e.g., Greenville (SC) News, June 22, 2010.
TD has told its shareholders it will somehow convert fast
food restaurants into bank branches. See, e.g., Globe
& Mail, June 17, 2010. Before serving up its disparate
lending, public hearings should be held. These issues must
be explored, under managerial and financial factors, in
connection with these applications. FFW has requested
June 21, 2010
Romania's Wage Cuts Challenged in Court, IMF Says Not
Concerned, Lead Nowhere
Matthew Russell Lee
NATIONS, June 17 -- A day after Romania's opposition
filed a challenge to the government's
cutbacks of public sector wages by 25%,
International Monetary Fund spokesperson Caroline
Atkinson said, we don't think it will lead to
anything, it's not something we're concerned about.
from Minute 30:04.
City Press had asked, "What does the IMF think of the
suit and what impact might it have on the IMF's
facility for Romania?" Ms. Atkinson said this was
"absolutely right, the fiscal adjustment measures
which are prior actions for our program, have to be
approved by the Constitutional Court."
makes it sound like review by the Court is routine --
or "entirely appropriate," as Ms. Atkinson put it. But
that the "government can start applying the austerity
measures ahead of any court judgment, but if declared
unconstitutional they would have to be revoked."
Reuters is correct that the pending challenge in the
Constitutional Court could result in the austerity --
or "fiscal adjustment" -- measures being revoked, why
does the IMF so blithely predict it will lead to
nothing, and say they are not concerned about it?
Atkinson began by saying, there is a question from
Inner City Press online, "a bunch of questions, but on
Romania." She then never read out or answered any of
the other questions, about Hungary, Poland, Zimbabwe
and Kyrgyzstan. There was, however, another question
about Kyrgyzstan, the IMF's answer to which we will
include in a forthcoming wider piece about the
bloodshed there. Stay tuned.
From the Taylor Bean
indictment -- ""[Farkas] and a TBW co-conspirator had in
fact diverted that $25 million from an Ocala Funding
bank account," the document said. "Further, [Farkas] and
other co-conspirators supplied the 10% down payment on
behalf of the two $50 million investors without the
investors' knowledge or consent." The 30-page indictment
included a forfeiture notice listing assets including a
1963 Rolls Royce, a 1958 Mercedes Benz Cabriolet 220 and
a 1961 Porsche." Rev rev.
June 14, 2010
Citigroup is looking to sell its $50 billion portfolio of
retailers' credit card loans, as with CitiFinancial it
says it cannot find a buyer. Is Citigroup trying to become
the unwilling but continuing predator? Among those not
willing to buy: HSBC and GE Money. Those perhaps looking:
Santander. Sears, Citi's "partner," is getting pissed.
June 7, 2010
So JP Morgan
Chase was hit with the UK FSA's largest fine ever, for
blending its own money with that of clients. Why are we
May 31, 2010
cemetery scam: The Financial Industry Regulatory Authority
has hit Citigroup Inc. (C) with $1.5 million of sanctions
for allegedly failing to supervise millions of dollars in
trust funds belonging to cemeteries in Michigan and
Tennessee. The agency accused the company of mishandling
funds as broker Mark Singer and two of his customers were
involved in a scheme to misappropriate more than $60
million in cemetery trust funds in 2004 through 2006.
Citi, which neither admitted nor denied the allegations
but consented to the entry of Finra's finding, will pay a
$750,000 fine and $750,000 in commissions repayment
May 24, 2010
Protests, IMF Says Wage Cuts Were Romania's Choice,
IMF for Vulnerable
NATIONS, May 20 -- With Romania wracked by the most
serious protests since its 1989 revolution, Inner City
Press on May 20 asked International Monetary Fund
spokesperson Caroline Atkinson if the IMF would
consider re-negotiating the 25% pay cut to public
sector employees portrayed by the government as a
condition for receiving a Greece-like bailout.
On May 6
when Inner City Press asked
Romania, Ms. Atkinson said there were negotiations
going on. On May 20, Ms. Atkinson's lengthy
answer denied IMF responsibility for the cuts, saying
they were choices of the government.
Ms. Atkinson of the IMF said:
me an opportunity to clarify that the IMF did not specify
or insist on any wage cuts with Romania... we did agree
with the Romanian government that some further fiscal
tightening would be needed in order to put their program
back on track .. the goal is to have sustainable public
finances that will allow for a recovery and there are of
course different combinations of expenditure cuts and tax
government chose to focus on the expenditure side in
particular on wage cuts. That was the government's
decision. Of course there are no easy options when there
are budget cuts. We have been clear that we want to
protect the most vulnerable and to have measures that
limit the impact on society and can get the most ownership
to the tens of thousands protesting in Romania's
streets. Watch this site.
Citi costs the public:
Citigroup received a $45 billion investment under
Treasury's Troubled Asset Relief Program. The bank
repaid $20 billion and converted, with Treasury's
approval, the remaining $25 billion to common stock
giving taxpayers 27% of the New York bank. Treasury
hired Morgan Stanley and gave it "discretionary
authority" to sell the Citi shares at market prices,
according to a prospectus filed in April. Selling the
shares at market prices is in contrast to a follow-on
offering of shares in which Treasury could have sold
substantial blocks at once. That process gives the
seller price certainty but often depresses the share
price because of a surge in supply. Selling at the
market, as Treasury has chosen to do, buffers the shares
from a sudden change in volume. However, the recent 21%
plunge in Citi's value will probably diminish returns
for Treasury and raises the possibility some of the
shares could be sold at a loss.
May 17, 2010
Chase & Co. and Deutsche Bank have both removed
themselves from the running for RBS Sempra's
energy-trading and retail-energy-supplier businesses,
largely because of expectations of a "Volcker Rule" that
would force banks to exit from proprietary-trading
May 10, 2010
said a one-notch downgrade of its long-term debt and
short-term commercial paper rating would likely mean the
bank has to replace $10.8 billion in commercial paper,
$2.5 billion in tender option bonds, and $1.1 billion in
margin requirements. However, the bank said it has $82.3
billion in liquidity resources it could use as a
contingency for such a downgrade, Citi said in its
first-quarter earnings filing with the Securities and
Exchange Commission. Congress is debating a financial
reform bill that might end the concept of
"too-big-to-fail," defining banks that would pose too big
a systemic risk to the financial industry and the economy
to be allowed to fail. If enacted, such legislation would
result in rating downgrades, bond-rating agencies warned
they might downgrade big banks.
May 3, 2010
Notable is the
lawsuit against Wells Fargo for failure to maintain ten
apartment buildings in the Bronx, New York that it is
foreclosing on, including 3018 Heath Avenue. The case
involves over 500 families, tenants of Millbank Real
Estate before it defaulted on its $35 million mortgage.
Then Wells Wargo and LNR Partners moved in.
Citigroup's cheapskatery, in the news: Citigroup Inc.'s
unsuccessful bid for the teetering banking operations of
Washington Mutual Inc. proposed that the U.S. government
absorb a majority of the thrift's loan losses and limited
Citigroup's financial exposure to $10 billion, according
to a document released by regulators. Terms of the offer
by the New York bank previously were kept secret by the
Federal Deposit Insurance Corp., which sold the failed
banking units to J.P. Morgan Chase & Co. for $1.88
billion in September 2008. The document was disclosed
following a Freedom of Information Act request...
JPM Chase executives Denis O'Leary, Stephen Rotella and
Harry DiSimone have formed Encore Financial Partners,
funds raised by Goldman Sachs, to "target" U.S. based
from foreign banks, including Citigroup Inc. and Deutsche
Bank AG, helped to feed "the buildup of risk" in Iceland's
banking system, which collapsed spectacularly in 2008, a
comprehensive report from a parliamentary commission
the report, Kjalar hf, an investment company controlled by
Ólafur Ólafsson, borrowed from Citigroup's Citibank unit
in 2007, using as collateral shares in Iceland's Kaupthing
Bank held by a Kjalar subsidiary, Egla Invest. Mr.
Ólafsson was a big Kaupthing shareholder.In January 2008,
with Kaupthing's share price falling, Citibank made a
margin call. So Kjalar turned to Kaupthing. Kaupthing
granted a €120 million loan. In March, after Iceland's
currency weakened, Kjalar borrowed more. The next month,
Glitnir also made a loan to Kjalar.
Björgólfsson, an Icelandic mogul, received a €153 million
($208 million) loan from Landsbanki, in which he and his
father had a 41% stake, to satisfy demands from Deutsche
Bank. The report said the German bank lent him €800
million in July 2007 to finance the takeover of
generic-drug company Actavis Group. Landsbanki's former
chief executive described the deal in an interview with
the commission: "Then it ends...with us lending Björgólfur
Thor our own money so he can honor certain things in
Actavis," an apparent reference to satisfying debt
covenants. Such transactions between a bank and its major
owners are out of step with banking rules elsewhere.
"Here, we call it insider dealing," says Cornelius Hurley,
director of the banking-law program at Boston University.
Prof. Hurley notes that U.S. regulations put "Draconian"
restrictions on the amount and terms of loans to
insiders.A Deutsche Bank spokeswoman declined to comment.
first study of the just-released 2009 mortgage lending
data, Inner City Press / Fair Finance Watch has found
that U.S. Bancorp confined African Americans to
higher-cost loans above the Federal defined subprime
rate spread 1.72 times more frequently than whites.
U.S. Bancorp confined Latinos to higher-cost loans
above the rate spread 1.71 times more frequently than
whites, the data show. 2009 is the sixth year in which
the data distinguishes which loans are higher cost,
over the federally-defined rate spread.
Regional bank BB&T in 2009
confined African Americans to higher-cost loans above the rate
spread 1.90 times more frequently than whites, and confined
Latinos to higher-cost loans above the rate spread 1.43 times more
frequently than whites.
Regions in 2009 confined African
Americans to higher-cost loans above the rate spread 1.68 times
more frequently than whites, and confined Latinos to higher-cost
loans above the rate spread 1.33 times more frequently than
lenders, including a large credit union, exhibited
disparities denial rate beween African and Latinos
compared to whites in 2009. Citigroup, for example, denied
applications by African Americans 1.45 times more
frequently than whites, while denying Latinos 1.35 times
more frequently than whites. JPMorgan Chase denied
applications by African Americans 1.54 times more
frequently than whites, while denying Latinos 1.41 times
more frequently than whites. The Pentagon Federal Credit
Union denied applications by African Americans 2.04 times
more frequently than whites, while denying Latinos 1.84
times more frequently than whites. Further
studies will follow.
Dimon remains both arrogant and evasive. "'For JP Morgan
Chase, it was not a question of access or need–to the
extent we needed it, the markets were always open to
us–but the program did save us money,' Dimon said. J.P.
Morgan stopped using the guarantees in April 2009 because
'it just added to the argument that all banks had been
bailed out and fueled the anger directed toward banks.'
Dimon d idn’t say how much the bank saved from the FDIC’s
lending program." Why not?
March 29, 2010
China and Boston: BofA's
"Brian Moynihan said China Construction Bank is a key
strategic partner for the U.S. lender. He made the
comments at a media briefing during his first official
visit to China since he took up the post at Bank of
America. Moynihan said the bank is 'comfortable where we
are,' in response to a question on whether the U.S.
lender will raise its stake in the Chinese bank."
Some say that Moynihan still
living in Boston, where activists visited him while he
was painting his house, means he'll try to move BofA
right out of Charlotte NC. We'll see.
More and more
complains are pouring in about Citigroup, Citifinancial
and Citi card services making repeated and abusive
telephone calls. One complainants says she took out a
personal loan from CitiFinancial, and since then has been
mis-charged late fees that they refuse to explain, only
call about. Citi does Radio Shack's private label calls,
and has a robo-caller calling its customers. This is the
Euro Tanking On Reports of Greece Turning to IMF, of
Half Answers, on Dodd Bill and Sri Lanka
NATIONS, March 18, updated -- As Angela Merkel speaks
darkly about ejecting from the Euro zone non compliant
countries like Greece, that country's renewed threat
of turning for help to the International Monetary Fund
has the market selling off the Euro.
the end of the IMF's fortnightly press briefing on
Thursday morning, spokesperson Caroline Atkinson,
beyond saying the IMF has not had a request for
financial assistance, declined to describe various
aspects of Greece's relations with the IMF. Her boss,
Kahn, previously bragged that the IMF would
"intervene" in Greece upon request.
Lagarde, belatedly added to the UN's climate finance
group after Secretary General Ban Ki-moon was
confronted with the fact he'd named men to all 19
positions on the panel, has said the EU can still be
Greece's interlocutor and helper, not the IMF.
president Sarkozy has a personal motive to oppose IMF
help to Greece: Strauss Kahn is polling ahead of him
for the next French election.
Press submitted to the IMF during its briefing, but
without answer yet, questions about financial reform
and the Fund's apparently stalled consideration of a
third tranche to Sri Lanka. It was mostly Greece on
Thursday, with few answers from the IMF.
later these two answers came in from the IMF:
Dodd’s bill, overall, we support the thrust toward
comprehensive reforms that would address the gaps in
financial regulation illustrated by the crisis. Strong and
prompt implementation would both help to secure financial
stability going forward.
Lanka, not much update. As you know, staff will visit
Colombo after the parliamentary elections and the
formation of the new cabinet, to discuss with the
government its plan for a 2010 budget.
Media Relations, IMF
The story goes
that Barclays is interesting in another North American
buy. Four institutions are mentioned as targets: Fifth
Third, Comerica, SunTrust or PNC. In Washington last week,
Inner City Press mentioned the last of these to a
Pittburgher, who said such a deal would be "terrible" for
the city. We'll see.
HSBC and JPMorgan Chase helped cause the collapse of
Lehman Brothers Holding Inc. by demanding more collateral
and changing guarantee agreements, the bankruptcy examiner
said last week. “The demands for collateral by Lehman’s
lenders had direct impact on Lehman’s liquidity pool,”
said Anton Valukas, the U.S. Trustee-appointed examiner,
in a 2,200-page report filed in Manhattan federal court.
“Lehman’s available liquidity is central to the question
of why Lehman failed.”
March 8, 2010
"No Agreement" With Sri Lanka, Meets in Hungary, Omits
Bulgaria, Angola and Chavez Questions
NATIONS, March 4, updated
-- The International Monetary Fund's lack of
transparency is matched by its claims to be
transparent. Take for example the IMF's arrangement
with Sri Lanka, where parliament has been suspended
and the state of emergency extended.
weeks ago, Inner City Press submitted three questions
to the IMF's briefing. Spokesman David Hawley
did not take any of the questions on camera.
Afterwards, and after complains, two of the three
questions were answered, but not the one on Sri Lanka:
"With an IMF team in Sri Lanka, what is the IMF's
thinking on the EU's suspension of the GSP Plus tariff
treatment, and/or the arrest of opposition politician
March 4, Inner City Press submitted five questions,
some repeatedly. Spokesperson Caroline Atkinson read
out her own summary of the question, about the third
of the IMF's loan, and then said that the IMF
"mission returned from Sri Lanka," we don't have an
agreement, we don't expect the third tranche to be
Ms. Atkinson said, I understand we have more online
questions, we'll wait for technology. See transcript
it appears that the delay is not technology related,
but rather consists of IMF staff screening and editing
the questions that are submitted. Of Inner City Press'
four other questions, only one was mentioned by Ms.
Aktinson. Inner City Press had submitted, "In Hungary,
why did the IMF meet with opposition party Fidesz?
What was discussed? Fidesz says the discussions
concerned the deficit, and if Fidesz comes to power in
the April elections -- is that true?"
Atkinson read only part of the question, then said
that such meetings are "common... an exchange of
views." But the
opposition party said it had an agreement with the
IMF. Shouldn't the IMF respond?
Press submitted for the IMF's response this quote
last week from Hugo Chavez: ""When Venezuela
used to get financing, the IMF would come here and
impose conditions and rules, and sometimes it would
even dismantle our laws. But now, with China and
Venezuela, we're on equal footing." But they woudn't
even acknowledge, much less respond to, the request
for a reaction.
the expiration of the IMF's embargo and the
publication of the above, an IMF spokesperson replied,
"I have nothing for you on this. However, I can
confirm that Venezuela and China are both members of
the IMF. "
of the submitted questions were either not passed on
to Ms. Atkinson, or were omitted by her and she said
there are no more questions:
the IMF any closer to assigning a resident
representative to Luanda? What progress has Angola
made to the transparency discussed by the IMF,
particularly in the oil sector?
Minister Simeon Djankov says he's asked the IMF to
inform him whether Greek owned banks are "draining
funds from their Bulgarian units" - can the IMF confirm
the request, if so will it respond in the 3 weeks given,
and separately what does it think of this "draining"
Bulgaria / Greece question, Inner City Press submitted
repeatedly. But it was not acknowledged.
after the briefing was over, an IMF spokesman wrote to
Inner City Press that "I’ve asked Olga to get back to
you on this. Not familiar with this request. We’re
checking." Olga would seen to be Olga Stankova, Senior
Press Officer. Numerous publicly available article
quote Bulgarian officials about their request to the
those few journalists present in person at the IMF's
briefing, many of the questions were about Greece:
would there be a meeting is DC? No.
There were questions about Iceland and Ukraine, an
expression of condolance for Chile, dodging on gold.
Mr. Strauss-Kahn will be in Kenya, with Bob Geldoff
and Raila Odinga., then on to Zambia. What about
Angola? Watch this site.
Later on Thursday, the following on Angola:
From: Thomson, Alistair at IMF
To: Inner City Press
Date: Thu, Mar 4, 2010 at 5:15 PM
Thanks for your question on Angola. We are in the process
of considering possible candidates for the post of
resident representative. On your second question, fiscal
transparency is a key part of the authorities' economic
program agreed with the Fund. A mission is currently in
the field to conduct the first review of the stand-by
will continue to follow all this. Watch this site.
From the IMF's
Ms. Atkinson: I have a question
online about the IMF's third tranche to Sri Lanka due in March. I
believe we have announced that the mission's return from Sri Lanka
that we don't have an agreement with them so we don't expect that
the third tranche will be released at least until we have an
agreement with them.I understand there are more online questions
so we have to wait for technology....
I wanted to go to a question that
I'd had online about Hungary. He was asking if there was
significance in the mission meeting with the opposition party when
they were there. I wanted to note that it's common practice that
we will meet with — and this has happened before — that we've met
with the opposition party, and of course there were no
negotiations with people who were not in the government, but an
informal exchange of views.
footnote: The banks that
helped conceal Greece's debt bomb included not only
Goldman Sachs but also, on an arms deal no less, Deutsche
Just asking: if
a bank funds settlements illegal under international law,
and comes before the Fed on an application subject to
public comment where this is raised, what happens? Watch
Citigroup moving to put Ernesto Zedillo on its board of
directors, questions are re-emerging about Zedillo's
actions on the 1997 massacre at Acteal in Chiapas...
February 22, 2010
IMF on Zim, Backtracks on Greece,
Rebuffs Questions About Sri Lanka, Terse on Pakistan and
NATIONS, February 18, updated -- The IMF board will vote
tomorrow on Zimbabwe's request to regain voting
rights, the IMF's David Hawley said at the
organization's biweekly media briefing on February
not taking any online questions, Hawley fielded
repeated questions about Greece, essentially backing
away from Dominique
previous blustered about the IMF being ready to
intervene. Pundits says the Europeans want to
keep the IMF out -- Germany because it wants to
retain the centrality of a European process it is
about to head, France's Sarkozy because he does not
want Strauss-Kahn to become any more prominent
before the 2012 elections.
Strauss-Kahn's IMF preaches to developing and
troubled countries, it cannot comply with its
commitment to conduct an online media briefing every
two weeks. On February 18, the IMF's David Hawley
presided over an ill-attended session in the
organization's new briefing room.
His colleague Caroline Atkinson had inaugurated the
room by saying it should make online participation
easier and more seamless. But on February 18,
despite online questions being submitted by Inner
City Press and surely others, Mr. Hawley did not
acknowledge or answer a single online question. Nor
in the twenty minutes between the briefing and the
expiration of the IMF's embargo did the IMF answer a
request for an explanation of the freeze-out.
were the three questions Inner City Press submitted:
does the IMF's recent announcement mean that the bank
supervision and power tariff goals have been met?
d'Ivoire, how does the IMF view the suspension of the
government and further delay of elections by Laurent
With an IMF
team in Sri Lanka, what is the IMF's thinking on
the EU's suspension of the GSP Plus tariff treatment,
and/or the arrest of opposition politician Sarath
On other matters, Hawley said he would not speculate
or comment about the motivations of Central Banks.
Fine -- but why can't the IMF, despite the spending
on its new briefing room, manage to acknowledge and
answer online questions about its operations? Watch
While the IMF took some online questions on February
4, after Ms. Atkinson said the IMF would provide an
answer about Yemen, none has been provided in the
after publication at embargo time of the report
above, the IMF indirectly justified its refusal to
even acknowledge the three online questions above:
Re: Three online questions ignored at 930 "online"
briefing, please explain and answer, thanks
From: Murray, William
Date: Thu, Feb 18, 2010
To: Inner City Press, "Atkinson, Caroline, Hawley, David
asked the press officers to review your questions and
get back to you where possible. Most of the questions
contained stuff that fell far afield of the IMF's role
or mandate. So where we can answer we will, but a big
chunk of your questions could be better answered by
institutions not focused on financial and macroeconomic
no. As linked to in the questions above, the IMF
a team in Sri Lanka, has opined
on power tariffs and bank supervision in Pakistan
-- in fact, Inner City Press got answers on those
questions on a previous IMF conference call -- and is
The IMF's attempt to portray itself as divorced from
politics, conditionality, and governance is
ham-handed and illegitimate. It is not for the IMF
to decide which questions to acknowledge or not. Or,
who in the IMF makes these decisions, and on what
basis? Watch this site.
-- after the IMF's embargo expired, and after the
above was published, responses came in to two of the
three above questions, which the IMF had tried to
argue somehow where not relevant:
The following statement can
be attributed to Adnan Mazarei, mission chief for Pakistan:
to strengthen the effectiveness of banking supervision in
Pakistan are proceeding as envisaged. The parliament is
discussing amendments to the banking law. The lower house has
approved the amendments and they are being discussed by the
upper house. Electricity reform is also proceeding, but
somewhat slower than planned earlier due to delays in
implementing certain tariff adjustments.
Olga Stankova, Sr. Press Officer
Matthew, Further to your
question on Côte d’Ivoire, I’m afraid it’s still too early
to say. You can attribute the following to me if it’s
“The IMF, through its resident
representative, continues to monitor the situation in Côte
d’Ivoire. It is too
early to assess any impact on the authorities’ IMF-supported
Best regards, Alistair Thomson, Press Officer - External
Apparently the question about Sri Lanka, where the
IMF current has a team on the ground, was deemed even less IMF
relevant that this. Watch this site.
* * * *
we not surprised, about JPM Chase? "A federal judge has
rebuked J.P. Morgan Chase & Co. for taking part in
an what he called an "end run, if not a down right sham"
in the way it arranged a $225 million loan deal for
Mexican telecom company Empresas Cablevisión SAB. In a
ruling unveiled late last month in U.S. District Court
in Manhattan, Judge Jed Rakoff said the New York bank
structured the deal so it would have allowed a major
competitor of Cablevisión to gain confidential
information about the company, which is Mexico's largest
cable-television operator. That competitor, Telmex
Internacional SAB, is owned by Mexican billionaire
Fifth Third Bank is not only
in foreclosing on families’ homes
– it is also seeking to
find a horse that it lent against, or actually 203 horses. From
“Fifth Third Bancorp claims Ahmed Zayat concealed a
mortality insurance claim for multiple Grade 1 winner Thorn
Song last summer in order to hide $2,750,000 in proceeds that
he should have paid to the bank. Zayat Stables owned Thorn
Song, who was pulled up in the Eddie Read Handicap (G1) on
July 25 at Del Mar after bolting to the outside rail in the
first turn… Fifth Third said it made multiple inquiries into
the whereabouts and well-being of the Unbridled’s Song horse…
Fifth Third said the concealed insurance payment is evidence
that a receiver should be appointed to oversee Zayat Stables'
203 horses, which are collateral for $34,265,970 in loans that
he owes the bank.”
So Fifth Third, still fueled with TARP bail out funds,
has been lending tens of millions of dollars secured by horses.
We first ran into Fifth Third when they bought Old Kent, coming
into the Detroit market. Click here
for a scan of a newspaper article
about the Community
Reinvestment Act challenge, complete with St. Patrick’s Day
karaoke and happy hour ads, courtesy of Google.
After the Federal Reserve approved the Fifth Third’s Old Kent
acquisition, in the Detroit MSA “at Fifth
, American Americans were over 10.3 times
more likely to be confined to higher cost loans than whites, and
Hispanics were over 6.3 times more likely to be confined to
higher cost loans than non-Hispanic whites.” And now,
horses. Fifth Third deserves more scrutiny….
A profile of the business
press, Congress and Geithner, during the Snowmaggedon lull --
following a recent Geithner appearance on Capitol Hill, business
reporters at a major Mayor-named publication spent countless
hours trying to identify the person behind Geithner, nodding
off. Who could they be?
Ultimately this press concluded it had been a Geithner staffer
with narcolepsy. One opined that maybe Geithner brought this
staffer on purpose, for sympathy. And still it won't save him.
Nor should it....
annual reports say J.P.
Morgan has $18.4 billion in exposure to Spain....
from New.Citi.com are admission like, "Yes CitiFinancial
trained its employees to hard sell unnecessary credit
insurance, even on items like fishing rods which weren't
collateral for loans. But what of it? We've produced a
new video! We're here for you!"
the first nine months of 2009, about 54% of donations
from Bank of America Corp.'s political action committee
and employees went to Republicans, according to
campaign-finance data compiled by the nonpartisan Center
for Responsive Politics. That was a switch from the 2008
campaign, when 56% of the company's donations went to
InnerCityPress.com's IMF's Strauss-Kahn Coy on
Opposing Sarkozy and Intervening in Greece, IMF and
Greek Denials, Yemen Deferrals
and echoes: Bank of
America repurchased nearly $4.5 billion of loans
during the first nine months of 2009, according to data
compiled by Barclays. That was triple the $1.5 billion
repurchased in all of 2008. Along with the Countrywide
acquisition, the sleaze is growing.
Morgan Chase, total buyback demands from the GSEs
surged to $5.3 billion in 2009 from $4 billion in 2008,
according to Barclays Along with the WaMu acquisition,
the sleaze is growing.
jacked up its stake in the controlling shareholder of
Banco de Chile, acquiring an additional 8.52% in LQ
Inversiones Financieras for $511 million. Banco de
Chile, the Andean nation's second largest bank, is
controlled by the local Luksic family, which also
controls U.K.-listed copper miner Antofagasta PLC
(ANTO.LN) and U.S.-listed beverage company Compania
Cervecerias Unidas SA (CCU), among other assets. In a
2007 deal Citigroup Inc. took a 10.44% stake in Banco de
Chile, through LQ, and the Chilean bank acquired
Citibank's local assets. Under the terms of the Banco de
Chile-Citigroup deal, the Chilean bank took over all of
Citibank's local clientele, while the U.S. bank retained
control of Banco de Chile's operations on U.S. soil.
are Citigroup's home
financial crisis commission claims to be zeroing in on
Citigroup, so far interviewed were Lloyd Blankfein, CEO
of Goldman, Brian Moynihan, CEO of Bank of America,
James Dimon, CEO of J.P. Morgan, and John Mack, chairman
of Morgan Stanley. Who will appear for Citi? And where
will it all end?
Obama's Bank Fees Under-Target Citigroup and AIG,
January 14 -- The night before President Barack Obama
was scheduled to unveil a scheme of fees on the three or
four dozen largest financial firms, the Administration
held a then embargoed conference call with the press.
questions centered around why the auto manufacturers
which took TARP funds would not also be fined. Others
wondered, if the fee regime yielded more than what the
government and taxpayers lost through TARP before it
expired in ten years, would the money still be collected
and how would it be used?
Administration representative, who the press was told
could only be called a "senior administration official,"
replied that once the basis of calculating the fee had
been decided on, car companies didn't fit it.
all questions were answered, the Administration signed
off, noting that Obama would be making his announcement
at 11:20 the next day. Among the questions not taken or
answered was this, from Inner City Press: why assess all
of the financial firms under the program at the same
rate, fifteen basis points?
received much more TARP and other payouts than other
covered banks. And as South Bronx based Fair Finance
Watch and others showed at the time, the government
tried to help Citigroup scoop up Wachovia, until another
less subpsized offer won the day. Why benefit Citigroup
again by treating it like other, less subprime heavy
banks? The same holds for AIG.
"senior Administration official" went out of his way to
portray the program as a matter of principle for not
only Obama but also "his" Treasury Secretary, Tim
the timing is meant to blunt renewed bipartisan
criticism of Geithner, this time only only for not
paying his taxes to the IRS -- which would be collecting
the fees from the financial firms -- but for having told
AIG not to disclose the preferential basis of the
bailouts it was receiving, while he was at the Federal
Reserve Bank of New York.
was hard to note that his seeming favorite, AIG, and the
bank most benefited by his Federal Reserve Bank of New
York, Citigroup, are benefited by the structure of this
proposed Financial Crisis Responsibility Fee program.
fact, some say it has an aspect of a Tim Geithner bail
that's... a question that should be asked, and answered.
Watch this site.
little, too late, Citigroup's ex-spook director John M.
Deutch last week intoned that "directors that served on
Citi's board during this financial crisis should rotate
off in an orderly fashion." Mr. Deutch was among the
deadwood directors targeted last year by Citigroup
shareholders who contended that the directors should be
removed. Also needing replacement are former AT&T
Corp. Chief Executive Michael Armstrong, Alcoa Inc.
Chairman Alain Belda, Dow Chemical Co. CEO Andrew
Liveris, Xerox Corp. Chairman Anne Mulcahy, Rockefeller
Foundation President Judith Rodin and Robert L. Ryan,
retired finance chief of Medtronic.
Fargo, already being sued by Baltimore for targeting
people of color with high cost loans, has now been hit
with a similar law suit in Memphis, Tennessee. "Ghetto
loans," they call them.
UN's Ban "Divides and Rules" G-77, Pachauri's Bank
NATIONS, December 21 -- While most observers and
even participants describe the Copenhagen global
warming talks as a disappointment, UN Secretary
General Ban Ki-moon on Monday told the Press that
they "sealed the deal" and were a success.
City Press asked Mr. Ban about the scandal erupting
around the undisclosed business interests of the
chairman of the UN's Intergovernmental Panel on
Climate Change Rajendra Pachauri, from the Tata
Group through Deutsche Bank to Credit Suisse, and
about the criticism by the chairman of the Group of
77 and its now 130 member states.
Ban entirely dodged the first question,
paradoxically using it as an opportunity to praise
business. On the second, he asserted that the
chairman of the Group of 77 was not, in fact,
speaking for the Group, since others' of its members
spoke more positively.
City Press asked Sudan's Ambassador to the UN about
Mr. Ban's comments. "Divide and rule," he answered,
calling the Copenhagen process "climate apartheid."
This phrase steps back from his counterpart in
Copenhagen who analogized it to the Holocaust.
of interest are extensive and emblematic of the UN's
lack of transparency and safeguards.
As detailed in the Telegraph
In 2008 he
was made an adviser on renewable and sustainable energy
to the Credit Suisse bank and the Rockefeller
Foundation. He joined the board of the Nordic Glitnir
Bank... This year Dr Pachauri joined the New York
investment fund Pegasus as a ‘strategic adviser’... He
is on the climate change advisory board of Deutsche
Bank... One subject the talkative Dr Pachauri remains
silent on, however, is how much money he is paid for all
these important posts, which must run into millions of
notwithstanding the non-responsive answer Monday
morning, does Mr. Ban believe that Pachauri should
make public financial disclosure of these interests?
Watch this site.
Silent on Climate Change Proposal to Use Its Gold
and SDR Interest
NATIONS, December 18 -- While world media reports
that the International Monetary Fund might play a
role in climate change adaptation funding, as
proposed by among others George Soros, IMF
spokesperson Caroline Atkinson told the Press on
Thursday that how SDRs (special drawing rights) are
used is "up to individual countries." Video here.
But the proposal involves the IMF using the gold it
holds, already ostensibly directed to less developed
countries, for the purpose of adaptation. So
shouldn't the IMF have a response?
"idle" in the IMF's coffers are $150 billion for
just 15 countries. But the IMF apparently doesn't
have the funding or staff or commitment to prepare a
transcript of its mere biweekly press briefing the
same day it is held.
are portions of the proposal.
countries' governments are laboring under the
misapprehension that funding has to come from their
national budgets but that is not the case. They have it
already. It is lying idle in their reserves accounts and
in the vaults of the International Monetary Fund (IMF),
available without adding to the national deficits of any
one country. All they need to do is to tap into it.
September 2009, the IMF distributed to its members $283
billion worth of SDRs, or Special Drawing Rights. SDRs
are an arcane financial instrument but essentially they
constitute additional foreign exchange. They can be used
only by converting them into one of four currencies, at
which point they begin to carry interest at the combined
treasury bill rate of those currencies. At present the
interest rate is less than one half of one percent. Of
the $283 billion, more than $150 billion went to the 15
largest developed economies. These SDRs will sit largely
untouched in the reserve accounts of these countries,
which don't really need any additional reserves... The
United Kingdom and France each recently lent $2 billion
worth of SDRs to a special fund at the IMF to support
concessionary lending to the poorest countries. At that
point the IMF assumed responsibility for the principal
and interest on the SDRs. The same could be done in this
The IMF owns
a lot of gold, more than a hundred million ounces, and
it is on the books at historical cost. At current market
prices it is worth more than $100 billion over its book
value. It has already been designated to be used for the
benefit of the least developed countries. The proposed
green fund would meet this requirement...it could make
the difference between success and failure in
the IMF have had something to say about the
proposals? Watch this site.
arbitration claim by the Abu Dhabi Investment Authority
against Citigroup, seeking to rescind an agreement to
invest a total of $7.5 billion in the U.S. lender or
damages of over $4 billion has been filed, alleging that
there were "fraudulent misrepresentations" in the
investment agreement. Sort of like CitiFinancial's
"fraudulent misrepresentations" to its lower income
Studies Congo Deals by India and China, Quid Pro Quo
by Canada at Paris Club on Mining, UN's Kivu Spin
NATIONS, December 11 -- The Congo battles for and is
embattled by its natural resources, the
International Monetary Fund made plain on Friday,
perhaps inadvertently. During a press conference
call explaining the IMF's
$550 million facility to the Democratic Republic
of the Congo, the IMF's Brian Ames put the
DRC's external debt at $13 billion.
City Press asked about new debts to China and
prospectively India, about conflict and mining in
the East, and Canada's use in the Paris Club of debt
relief to strong-arm for two of its mining firm.
who traveled to Kinshasa to negotiate about what he
called the "China deal," described how with IMF
pressure the deal decreased in size from $9 billion
to $6.2 billion, with "only" $3 billion guaranteed
by the Congolese government.
this guarantee, he emphasized, could only become due
in 25 years. Still, the IMF urged the restructuring
of the China deal. Inner City Press asked about a
newly reported loan proposal by India to the Congo,
for $263 million.
said that was just an announcement, when Congolese
officials were in India. To Inner City Press, a
connection with the Congo's loud demand that Indian
peacekeepers leave the UN Mission in the Congo,
MONUC, is inescapable. India is paid by the UN and
makes money on these peacekeepers. How does this sum
relate to whatever concessional rates India will
offer to the Congo?
City Press asked what the IMF thinks of Canada's
delay of a Paris Club vote on debt relief to the
Congo based on contracts canceled to Canadian mining
firms. Ames agreed that this had happened, saying it
was really about 1st Quantum. But what about
Toronto-based Lundin Mining, whose 24% stake in the
Tenke Fungurume mine and its $1.8 billion contract
are being "re-negotiated"?
Ames said that Canada had, after a week's delay in
November, agreed on a conference call to go forward
with debt relief, Inner City Press him if 1st
Quantum's contract was restored. No, he answered,
but the Congolese government, which already won a
round of litigation in its own courts, has agreed to
Congo's Kabila and China's Hu
Jintao, Indian UN peacekeepers and IMF and
Canadian pressure not shown
colleague, whom Ames instructed to "earn his
paycheck," added the 1st Quantum has other mines in
the Congo, that the dispute involves only one mine.
Yes, but that is the $553 million Kolwezi copper and
City Press asked if the IMF has concerns, similar to
those evidence on the China deal, about the
prospects of an Indian infrastructure loan. It is
just a proposal, Ames said, adding that it would be
for two hydro electric projects and one water
project. Actually, the third would be $50 million
towards the rehabilitation of the rail system in
Inner City Press asked about reports, including by
the UN's Group of Experts, of illegal mining in the
Kivus, Ames said that since this revenue stream has
yet to go to the government, its diversion does not
have an impact and is not considered. Actually, the
UN Group's report shows that units of the Congolese
army are involved in the illegal mining.
City Press asked the UN about reports its own Office
of Legal Affairs advised MONUC not to work with
units of the Congolese army involved in these and
other crimes. The response:
question on the DRC
From: unspokesperson-donotreply [at] un.org
To: Inner City Press
Sent: 12/10/2009 1:33:20 P.M. Eastern Standard Time
tasks carried out by MONUC are determined by the
Security Council. The mission has a mandate to provide
support to the Congolese Armed Forces (FARDC) in
disarming illegal armed groups while protecting the
civilian population. MONUC continues to give the highest
priority to protection of civilians.
furtherance of this mandate, MONUC and DPKO requested
advice from the Office of Legal Affairs regarding the
conditions governing their collaboration with the FARDC.
In full transparency, the Secretariat and the Mission
advised the Security Council of the risks involved and
potential consequences of cooperating with the FARDC.
The Security Council has repeatedly expressed their
unanimous support for MONUC and for the joint operations
with the FARDC against the FDLR, with full respect for
International Humanitarian, Human Rights and Refugee
extensive consultations between the Secretariat the
Mission and OLA, a policy was developed, setting out the
conditions under which the Mission would support FARDC.
This policy was transmitted to the DRC Government in
November. It specifies that all MONUC participation in
FARDC operations must be jointly planned and must
respect international humanitarian law, human rights and
refugee law. The policy also includes measures designed
to improve FARDC performance as well as to prevent and
sanctioning violations. This 'conditionality' provision
is why the Mission suspended support to a specific FARDC
unit believed to have been involved in the targeted
killing of civilians in the Lukweti area of North Kivu.
remember that the IMF is ostensibly part of the UN
system. We will continue to follow this -- watch
Footnote revealed by the
WSJ: "More than $2 billion allegedly held on behalf of
Iran in Citigroup Inc. accounts were secretly ordered
frozen last year by a federal court in Manhattan, in what
appears to be the biggest seizure of Iranian assets abroad
since the 1979 Islamic revolution. The legal order,
executed 18 months ago by the U.S. District Court for the
Southern District of New York, is under seal and hasn't
been made public." Call it Citi's secret sleaze...
Rebuffs Stanford Victims on Antigua Despite Iceland,
and Romania, Ukraine and UN
NATIONS, December 3 -- As the victims of the
Stanford scam petition the U.S. Congress to stop the
flow of any funds from the International Monetary
Fund to Stanford's home base of Antigua and Barbuda,
the IMF says such considerations play no role in its
December 3, Inner City Press asked the IMF since,
"there is a proposal in the U.S. Senate seeking to
block IMF funds to Antigua until the victims of the
Stanford scandal are compensated. Given the IMF's
recent actions on Iceland, does the IMF acknowledge
any link in Antigua between IMF funds and the
compensation of banks' victims?"
Jennifer Beckman responded that "it isn’t part of the
IMF’s mandate to help private parties in their
claims against our member governments."
Iceland, the IMF held back its loan or stand by
arrangement until the victims, in the UK and the
Netherlands, of Icesave were made whole. The IMF is
inconsistent, and refuses to forthrightly explain
two weeks, the IMF is supposed to hold a press
briefing including online participation by
accredited media like Inner City Press. There are
been technical snafus, but those on December 3
reached a new low.
City Press, with three or four questions to ask,
logged in to the password protected IMF Media
Briefing Center before the 9:30 a.m. start of the
briefing. But the screen remained dark. This was no
out of the normal, as Spokesperson Caroline Atkinson
has several times started late.
9:58 a.m.., thinking that the briefing may have been
delayed or canceled, Inner City Press called the
IMF. The answer was that the briefing would be
"rebroadcast" later in the day. But what about
online participation by accredited media?
have been technical issues, Inner City Press was
told, and was advised to submit its questions in
writing, they would be answered. At 10:04 a.m.,
Inner City Press submitted its questions, to Ms.
Atkinson and the general inbox, with a cover note
reason, the Webcast of this morning's IMF briefing
didn't work. I waited, thinking the briefing was delayed
as sometimes happens. Just now I called the IMF and was
told there was a "technical issue," that the briefing
would be re-broadcast. When I said I had questions to
ask, I was told to send them here and they will be
answered. Here they are, I am writing on these topics
There is a
proposal in the U.S. Senate seeking to block IMF funds
to Antigua until the victims of the Stanford scandal are
compensated. Given the IMF's recent actions on Iceland,
does the IMF acknowledge any link in Antigua between IMF
funds and the compensation of banks' victims?
Romania, the party of the presidential frontrunner has
come out against what it calls IMF imposed layoffs in
the public sector. Will the IMF confirm it is urging
such layoffs, if so how many, and what ramifications if
they are not implemented?
2 UN experts told the Press the IMF's Flexible Credit
Line discriminates against poorer countries, & that
rather than moving beyond conditionality, IMF simply
imposes conditions later.
What is the IMF's
response? And to allegation that health crisis in
Ukraine is due to IMF imposed cuts? On deadline.
Even twelve hours
after these four questions were submitted, the IMF
had answered only one of them.
Subj: On Antigua
To: Innnr City Press
Sent: 12/3/2009 11:11:00 A.M. Eastern Standard Time
Although we are concerned
about the Stanford Victims Coalition, it isn’t part of
the IMF’s mandate to help private parties in their
claims against our member governments.
What about the other
answers? Watch this site.
Kuwait Investment Authority's exit from Citigroup comes
as another Gulf sovereign wealth fund, the Abu Dhabi
Investment Authority, may have to overpay on about $7.5
billion worth of the Citi's shares it's committed to buy
at $31.83 a piece in a deal struck two years ago. The
UAE-based investment fund, also known as ADIA, committed
in November 2007 to pump billions into Citi in return
for an 11% dividend up to March next year when it has to
start buying the bank's common stock.
Murky on Angola's Oil, Bond and China Deals, Doles
Out $1.4 Billion
NATIONS, November 25 -- Days after announcing a $1.4
billion arrangement with Angola, the International
Monetary Fund held a press conference call to offer
explanations. At the end, things were murkier than
before. Inner City Press asked if the IMF had been
able to fully assess the income and distribution of
revenue from the state owned oil company Sonangol.
IMF's Lamine Leigh, who led the Fund's missions to
Angola in August and September, replied that "in the
context of our negotiations, Sonangol participated
fairly well." Inner City Press asked, since Sonangol
has accounts in off shore financial centers and tax
havens, if the IMF had gotten to the bottom of these
a long pause, Lamine Leigh proffered another answer,
that the government has "committed to steps in the
more general area of resource revenue transparency."
But what about the Sonangol accounts?
City Press asked about the statement
by IMF Deputy Managing Director and Acting Chair
Takatoshi Kato that in Angola "measures will be
taken to strengthen further the regulatory and
supervisory framework." The IMF's Senior Advisor on
Africa Sean Nolan replied that the IMF analyzed the
effect of the exchange rate on borrowers and "on the
fact, Angola's government has gotten billions in
pre-export oil loans from, for example, BNP Paribas,
Standard Chartered and Deutsche Bank. The latter has
made similar loans in Turkmenistan, assailed by
transparency and human rights advocates. How much of
the IMF's new arrangement benefits these banks?
fact, the questioner after Inner City Press, cutting
off follow up, was from Standard Bank. Other than
Inner City Press, the only other media questioner
was from Reuters.
the call ended, Inner City Press was able to ask
about Angola's reported $4 billion bond sale planned
for December. Sean Nolan said that the IMF's
"understanding" with Angola does involve a
"fundraising effort," but that the timing was not
agreed to, the IMF does not "micromanage" to that
extent. Nolan added that there is an agreement on an
four billion dollars?" Inner City Press asked.
replied that the precise limit will be "clear in the
documents," which have yet to be released. Why play
hide the ball?
praised the country for "appointing reputable
financial and legal advisers for the transaction" --
JPMorgan Chase will be the manager.
continued that the actual size of the bond sale will
depend on how much "concessionary lending" Angola
gets from "countries with a strong record of
financial support to Angola."
City Press asked if the size of China's loans to
Angola -- China gets 16% of its foreign oil from
Angola -- were known by the IMF or considered.
hasn't figured in our discussions," the IMF's Nolan
responded. Why not? Watch this site.
among thieves: Deutsche Bank AG and a unit of BNP
Paribas SA separately sued Bank of America Corp. on
Wednesday, alleging that the bank has failed to repay
about $1.7 billion in secured notes issued by a
special-purpose entity. The breach-of-contract lawsuits,
filed in U.S. District Court in Manhattan, allege that
Bank of America has failed to redeem $480.7 million in
secured notes held by BNP Paribas and $1.2 billion held
by Deutsche Bank. The notes were issued by Ocala Funding
LLC, a special-purpose entity that provided short-term
liquidity funding to Taylor, Bean & Whitaker
Reports of War Crimes, IMF Gives More Funds to Sri
Lankan Government and Spins on Human Rights
NATIONS, November 18 -- The International Monetary
Fund's seemingly dismissive attitude toward human
rights, including labor rights and protections
against ethnic cleansing and even torture, has been
on display this month. Managing Director Dominique
Strauss Kahn defended the IMF's disbursement of
funds to the government of Sri Lanka, without any
conditions or safeguards, after detailed reports of
presumptive war crimes.
Inner City Press asked IMF spokesperson Caroline
Atkinson if, in light of Mr. Strauss Kahn's logic,
the IMF ever considers human rights in disbursing
funds or not, she laughed and called the question's
"premise... a bit misleading." Video here
from Minute 9:07.
Press: Does the Managing Director’s November the 5th
statement ‘regardless of one’s opinion of the human
rights situation’ mean that the IMF never considers
ATKINSON: That’s another question where the premise is a
bit misleading. The point that the Managing Director was
making in his response to a letter from Human Rights
Watch was—and as you know, the text of that letter talks
quite directly about the Managing Director’s own
feelings about the importance of human rights. And the
point of that quote was that he was saying whatever you
think about what rights and wrongs of what’s happening
in Sri Lanka now, what is true is that an economic
collapse would make lives worse for everybody. And, of
course, usually the most vulnerable are most hurt by any
economic collapse. So it was in that context he was
explaining the reasoning behind the Fund’s economic
support for Sri Lanka. Thank you all very much and have
a good Thanksgiving.
fact, even the Europe Commission in considering
extending or suspending its GSP Plus favorable tariff
treatment to Sri Lanka, has taken into account
consideration of human rights and war crimes. By
contrast, the IMF has argued against any duty to
consider human rights. Even Strauss Kahn's letter
refers only to "humanitarian" issues, and uses this as
an argument in favor of releasing more funds.
Inner City Press has asked IMF spokespeople what
safeguards if any would be attached to the loan.
(Despite Inner City Press' demonstrated interest since
then, the IMF did not tell it about its conference
calls on disbursements to Sri Lanka, neither in July
nor this month).
July 16, the IMF's Caroline Atkinson said that the
views of the international community will be taken
into account. Four
days later her
boss Mr. Strauss Kahn issued a press release
with no mention of safeguards. Now a letter, and a
laugh. We will continue to follow this issue.
November 23, 2009 -
which used to have five retail banking locations in
London, has written to account holders alerting them to
the closure of its Monument branch on November 27. It’s
the one just east of the monument to the Great Fire of
London, the tallest isolated stone tower in the world.
Users are being directed to the St. Paul’s branch, which
is about a mile west. That’s a 15-minute walkaway.
Accounting for the closure, a spokeswoman said: “The St
Paul’s branch has better facilities and is located on a
bigger site.” They've done this in the USA too...
cards - HSBC announced last week it had agreed to sell
its London headquarters building to the National Pension
Service of Korea for $1.3 billion. The move to sell its
8 Canada Square property in Canary Wharf, London's
financial area, comes a month after the bank announced
the sale of its New York headquarters building to
Israeli investment holding company IDB Group for $330
Dimon's father Theodore or Ted being given a job at
JPMorgan Chase, can we call that nepotism?
Report Buries Its Icesave Conditionality, Enforcer's
NATIONS, November 3 -- While the IMF has
acknowledged that its second round of disbursements
to crisis-hit Iceland was delayed for months by the
country's failure to placate those in the
Netherlands and UK who did business with IceSave,
the IMF's just released report on Iceland buries the
issue on page 30 of the 98 page report. The IMF
terms and conditions of Nordic loans, amounting to $2.5
billion, have been finalized. Their disbursement has
been linked to resolution of the Icesave dispute with
the U.K. and Netherlands over deposit insurance
liabilities. After protracted discussions, the three
governments have reached an agreement on this"
that agreement was reached, on October 18, the IMF
then went forward with a letter of intent and
memorandum of understanding for the second tranche
of financing. But, as with the IMF's moves in Latvia
for Swedish banks, some see the Fund operating as an
enforcement or collections agent for creditors who
even less would like to show their hand.
the IMF does not like to admit or reveal its degree
of control over the countries it lends to, the de
facto conditions for loans, such as paying off on
IceSave, are often not explicit in what purport to
be full agreements containing all express and
fact, the IMF has claimed that it "no longer"
engages in conditionality. But the Iceland report
has an entire chart about conditionalities. It's
just that the most important one was left unsaid. Is
this diplomacy or duplicity?
Iceland report continues, about other loan requests
including from Russia:
from the Faroe Islands ($50 million) has already
disbursed, and a loan from Poland has been agreed ($200
million), and will disburse alongside the next 3 program
reviews. A $500 million loan originally committed by
Russia is no longer expected, but the $250 million in
over-financing in the original program, an expected
macro-stabilization loan from the EU ($150 million), and
use of an existing repo facility with the BIS ($700
million, of which $214 million is outstanding) will more
than offset this."
Offset may be
the right word. Last year, in the midst of Iceland's
abortive run for a seat on the UN Security Council,
the country announced it had to seek a $4 billion
loan from Russia. It was after that that the IMF
loan commitment was made -- an "offset," some saw it
-- and after talks in Istanbul, on October 15 the
already whittled down loan request to Russia was
Then the deal with the UK and Netherlands, and the
IMF's releasing. While the IMF calls these types of
moves only technical, others call them power
politics. Watch this site.
TARP-er hypes the stock of another, per WSJ: The recent
selloff in BofA shares creates a good chance to buy into
the bank, say Citigroup analysts. Bank of America shares
are down some 17% from their most recent closing peak of
$18.59 hit on Oct. 14. "Given the ongoing CEO search,
fear of a capital raise only adds to the uncertainty
hitting the stock, which creates a very attractive entry
a Lewis Ranieri-led firm has cut deals with -redatory
Taylor Bean & Whitaker for Debtor in Possession
financing and the bulk purchase of $331M REO
Morgan Chase & Co. made nearly $50,000 in political
donations through its PAC in September, counted by WSJ.
The company donated $2,000 to Alabama Sen. Richard
Shelby, the senior Republican on the Senate Banking
Committee. The company also donated $1,000 to
Pennsylvania Rep. Paul Kanjorski, the No. 2 Democrat on
the House financial-services panel...
canceled a planned $4.5 million renovation of its main
office in Brazil that included an area for entertaining
clients and a landscaped terrace called a "suspended
garden." Can you say, Babylon?
it to compete," a senior executive told the WSJ about
about the project last week, describing it as an
important way to impress banking clients and use
Citigroup's real estate more efficiently. But on Tuesday
afternoon, a person familiar with the situation said the
renovation had been reviewed by senior executives, who
decided to shelve the project. The reversal underscores
the sensitivity inside Citigroup about its spending
habits, since the bank has gotten $45 billion from the
U.S. government, a 34%-owner of the company's common
reportedly "hopes to list its shares in Shanghai next
year, becoming one of the first overseas companies to do
so, its chief executive said. "I don't see it being a
2009 event, hopefully in 2010. It has a very symbolic
element for HSBC. We were established in 1865 in Hong
Kong and Shanghai... we would welcome participating in
the Chinese market," Michael Geoghegan told Reuters in
an interview on Monday. Asked how much he expected the
listing to raise, he said: "We haven't got to that stage
yet. We are looking at the fundamentals." People
familiar with the matter have told Reuters that HSBS
could raise $3-$7 billion as part of a Shanghai listing.
The bank, which operates in 86 countries, has
investments worth about $22 billion in China, including
a 19 percent stake in Bank of Communications and a 16.8
percent stake in Ping An Insurance. HSBC announced last
month Geoghegan would move to Hong Kong from February,
as the bank focused more on Asia."
for the predatory lending...
UK, there is talk of breaking up the large banks like
Royal Bank of Scotland. In the U.S., shouldn't Citi,
Chase, B of A and Wells be broken up?
belated ouster of Ken Lewis from Bank of America, who
will now leave at latest by the end of the year,
triggers a successor search by three ex-Fleeters,
Charles Gifford, Thomas May and Thomas Ryan -- and
former Federal Deposit Insurance Corp. Chairman Donald
Powell and DuPont Co. Chairman Charles Holliday. A
September 28, 2009 --
Disappears Questions on Post-Coup Honduras, Sri
Lanka Withholding and Jamaica
NATIONS, September 24, updated -- Despite the
International Monetary Fund's rhetoric about
transparency and openness, at its press briefing on
Thursday it declined to answer or even acknowledge
timely submitted questions about how
it will decide whether to allow Honduras' de facto
Micheletti regime to use the funds the IMF has
allocated, after the coup, about conditions
imposed on Jamaica and staff
reports withheld about Sri Lanka.
is happened before with the IMF, when the
spokesperson has stood smiling on camera in the
Fund's auditorium in Washington claiming that,
"There are no more questions."
On Thursday, it was Caroline Atkinson delivering
this line, after waiting to take two separate rounds
of questions from another media organization. (Ms.
Atkinson made a reference to the IMF's
question-accepting technology -- could it be
filtering?) From among the questions submitted to
the IMF online, the IMF picks and chooses which ones
to read out loud and acknowledge. There is no
transparency in how this censorship is conducted,
even that it is taking place at all.
City Press has respected the IMF's 10:30 a.m.
Honduras, when and by whom will the decision be made on
"whether the Fund deal with the [Micheletti] regime" be
made? 2) Is the IMF considering granting Jamaica budget
support, as the Prime Minister has said? 3) And why
has the IMF staff report on the loan to Sri Lanka not
when answers are provided by the IMF, they will be
reported on this site.
than four hours after declining to answer or even
acknowledge the question on Honduras that Inner City
Press timely submitted during the fortnightly
briefing, the IMF sent this out:
Statement on Honduras: "In recent weeks, the Fund
consulted its membership through its Executive
Directors. Based on this consultation, IMF Management
has determined that it will recognize the government of
President Zelaya as the government of Honduras."
whose Household International unit told borrowers how to
doctor their applications for subprime loans, has now
sued New York businessman and prominent Democrat
fund-raiser Hassan Nemazee, alleging he fraudulently
obtained a $100 million loan from the bank and used the
bulk of the money to repay a separate loan he falsely
obtained from Citigroup. The funds were used to repay a
loan from Citigroup's Citibank unit, according to the
lawsuit. The HSBC loan remains outstanding, according to
the complaint. Prosecutors have said he used fake
documents to borrow money to repay the loan from
Citibank on Aug. 24. The government has said Nemazee
obtained a line of credit to repay Citibank by using the
same type of fake documents - fake account statements
and forged signatures - that he used to fraudulently
obtain the Citibank loan.
Still Murky on Honduras and SDR Use, Critique on
Georgia, Serbia, Hungary and Latvia
NATIONS, September 10 -- The International Monetary
Fund through spokesman David Hawley repeated on
Thursday that despite its recent allocation to
Honduras of $168 million in Special Drawing Rights,
"the regime in de facto control is not able to use
[the allocation] until a decision is made if the
Fund will deal with" the regime as the government of
But Hawley also said that he has "no details on how
individual countries have used the allocation," and
when asked if countries have to disclose if they
convert SDRs into hard currency, he said, I'll have
to get back to you. So still the IMF's approach to
Honduras, as well as other countries with coups and
de facto regimes, remains unclear.
the IMF's regular press briefing on September 10,
Inner City Press submitted three questions,
including "Please clarify the conditions under which
a government of Honduras could access the SDRs voted
to the country on August 28? Could the Micheletti
government never do so? Or after a new election"
without UN observers?
Mr. Hawley read the first part of the question out
loud, and then flipped through a binder to repeat a
line the IMF e-mailed to the Press on Sunday. Left
unanswered is who will make the decision about the
Honduran government and its right to the allocated
SDRs, when the decision will be made, and in light
of Hawley's other answers, how any decision,
including the current supposed prohibition, would be
President the UN General Assembly, which passed a
resolution on Honduras after the coup, says that no
country or body like the IMF can recognize the
Micheletti government, or send observers to an
election it organizes. Does the IMF mean that its
executive board could decide, tomorrow, to recognize
Micheletti? Or that to recognize a government
elected in a Micheleti organized election?
week, UNCTAD released a report criticizing the IMF at
length. Inner City Press submitted this question:
IMF says that "conditionality" is a thing of the past,
this week's UNCTAD report criticizes the IMF for
imposing "restrictive financial policies" on Latvia,
Serbia, Georgia and Hungary. What is the IMF's
for some reason declined to even read this question
out, during the briefing he said he and the IMF have
no response to the UNCTAD report. This is more than
a little strange. During the briefing, as simply one
example, Hawley described how in connection with an
IMF package for Ukraine, gas prices to consumers had
to be raised. Labor unions are fighting it, he said,
but the authorities are litigating to get the gas
price rises in place and the IMF is monitoring it.
On September 8, Inner City Press posed questions
about the IMF to Heiner Flassbeck from the UN
Conference on Trade and Development, video here.
Flassbeck laughed when told of the IMF's denials of
conditionality. For this and other reasons, it would
seem the IMF would have a response. Watch this site.
Mr. Hawley declines live questions for which no
written answer is ready, and edits out or censors
questions submitted electronically if he does not
want to answer them. We'll see.
* * *
(?) footnote: Another
country in which Citi is going to keep doing subprime
and predatory lending is India. “We have a comprehensive
revival plan for CitiFinancial, in terms of moving the
asset base to more stable sectors,” Citibank’s chief
financial officer (CFO), Abhijit Sen, told reporters.
"The Citi group is unlikely to sell
CitiFinancial"....CitiFinancial India offers personal
loans, home loans, home finance and loans against
September 7, 2009
London, the G-20 nations last week preliminarily "agreed
to impose sanctions on tax havens from March 2010.
Jurisdictions that don't meet international standards
for sharing tax information may be deprived of funds
from the international financial institutions—such as
the International Monetary Fund and the World Bank—and
they may also be deprived of aid from G-20 governments."
B of A is really suffering, or
pretending to -- in its lawsuit against the FDIC about the
Colonial Bank failure (and re-sale without any CRA comment
period to BB&T), B of A has now accused the FDIC of acting
"beyond the scope of its statutory powers" as receiver for "by
making disbursements without complying with its statutory and
Failure to supervise? The Financial
Industry Regulatory Authority barred Citigroup employee Tamara
Lanz Moon from the securities industry for allegedly taking
more than $850,000 from at least 22 especially vulnerable
customers, including $55,000 belonging to an American diplomat
IMF Loans, Service Cuts in Jamaica, Serbia, Congo
Changes China Deal
NATIONS, August 27 -- While the IMF
states publicly that it no longer engages in
conditionality, it is reportedly requesting as
a condition for loans significant budget cuts in
Jamaica, as well as Serbia,
St. Lucia and the Maldives. At the IMF's
forthnightly briefing on August 27, Inner City Press
asked IMF Spokesperson Caroline Atkinson about
"what's seen as the IMF dictating cuts in government
spending as a condition for a loan... Please confirm
what changes are being requested by the IMF." Video
from Minute 9:18, IMF's
Atkinson replied that there are "discussion between
the IMF and Jamaican authorities" and argued that
the "authorities are designing the macro economic
program... they are in the lead on." She said "I
don't want to go into a discussion of particular
issues." Then she ignored Inner City Press' request,
in the same question, for answers on the Maldives,
and on Serbia
at the provincial level.
or "macro economic programs" done which negotiating
with the IMF look suspiciously similar, and undercut
the argument that each government is really in charge.
The governments also try to avoid questions of how
they have given in to the IMF. Last week Jamaican
Prime Minister Bruce Golding, speaking at the opening
of a new financial center for the Scotiabank Group in
the Jamaican capital, refused to say "whether the cuts
were required by the International Monetary Fund as a
condition for borrowing $1.2 billion to stabilize its
budget under the multilateral lender's special drawing
rights." Is this the new IMF?
a question submitted during the IMF briefing but
ignored (or censored), the IMF played a
wheeler-dealer role in the Democratic Republic of
the Congo and its mining sector. Inner City Press
asked, in writing, "did the IMF's suggested changes
in the country's mining deal with China result in
any offsetting changes in China's commitment to
Congolese infrastructure development? Is the IMF
involved in or did it consider the DRC's proposed
IMF's request, the
DRC cut its guarantee of income from the mines to
China, in connection with which China cut its
investment commitment from six to three billion
dollars. As one analysis interviewed by Inner
City Press put it, DRC will now borrow money from the
IMF instead of taking it from China. The analysis
describe the IMF as doing European powers' work for
them, trying to ween a country away from China. The dam
named above will reportedly supply power to southern
Europe, from a region where than 30% of the
population has electricity. This is the new IMF?
Watch this site.
27, 2009 transcript:
I have a
question online about Jamaica. It's asking, "In Jamaica
there are protests about what's seen as the IMF
dictating cuts in government spending as a condition for
a loan. Please confirm what changes are being
As you know, there are discussions
that have been underway with the IMF and the Jamaican
authorities. The authorities themselves are designing their
macroeconomic program and that is something that they are very
much in the lead on. I don't want to go into discussions about
particular issues and I think that we've been having good
discussions with the authorities. We are impressed by the fact
that they are taking measures and considering measures and have
committed as it is very important as we've been stressing
recently to a program that will be very much their program.
of a confidential agreement reveal that U.S.
regulators directly pushed Citigroup Inc. to replace
then-CFO Edward “Ned” Kelly, which is in sharp
contrast to CEO Vikram Pandit’s earlier statement,
per SNL. According to the document, the New
York-based bank had agreed to review whether Kelly
could be “more effectively utilised” by giving him
other responsibilities and if so, to replace him.
Citing people close to the matter, SNL reported that
Kelly resigned from his post on learning about the
agreement, which allowed the bailed-out bank to make
Kelly the vice chairman and promote then- Controller
and Chief Accounting Officer John Gerspach to CFO.
never stops. Now they brag that they "already put to use
about a third of the $45 billion it has received from
the U.S. Treasury Department's Troubled Asset Relief
Program. It said it also has approved another $35.7
billion for future loans and investments, bringing the
total to $50.8 billion, above its TARP level. "Our
efforts have enabled businesses to keep their doors
open, spurred job creation in communities and provided
families with access to additional funds at times when
they've needed it the most," Pandit said in a statement
accompanying the report. News stories were quick to note
the more than $50 billion that Citi says it either has
or will put to work does not account for leverage."
we've reported, some of these loans are just predatory
lending. Meanwhile, Citi is trying to exclude trader
Andrew Hall from a review by the government’s pay czar,
Kenneth Feinberg, per SNL. Hall, the head of the Phibro
commodity trading unit, is in line for $100 million in
TARP funds for 2009...
Pittsburgh, the FDIC handed over Dwelling House S&L
Association to PNC Bank with no mention of CRA.
Next month the finance ministers of the largest
economies convene for a meeting of the so-called Group
of 20. In a city crippled by foreclosures on predatory
loans, and now the site of the U.S.'s waiver of one of
its few laws meant to crack down on the mis-service of
lower-income borrowers, there will be talk of improving
the regulation and supervision of banks. But it will be
empty talk, and there will be protests. Watch this site.
America has been asked for emails and documents dealing
with losses and loss projections at Merrill Lynch;
records covering negotiations with the federal
government on bailout funds received by the bank; and
the details of any legal advice received by the bank on
disclosure of the losses or government aid. - by August
Lanka's Ethnic Cleansing Bonds Touted by StanChart
IMF Silence on Vote Is "Policy"
NATIONS, August 2 -- Less than a week after five
countries on the International Monetary Fund's
executive board cast rare votes of abstention and
did not support the IMF's $2.6 billion loan to Sri
Lanka, due to the continued detention of 280,000
people in internment camps in the north, Inner City
Press on July
the IMF to finally confirm the five
abstentions or to explain why it refuses to disclose
the votes of its executive board.
spokesperson Caroline Atkinson replied
that "it's just a matter of our policy not to... it
may even be a matter of our legal requirements...
It's a matter for executive board member to disclose
their voting if they wish to. It's not a matter for
IMF staff or management, that's always our
practice." But why?
on July 30, Inner City Press asked the UK's outgoing
Ambassador to the UN John Sawers about the IMF loan,
on which the UK abstained. Sawers too dodged the
question, saying "You'll have to ask my colleagues
in Washington about the situation at the IMF board.
The loan has been approved, as you say." Video here,
from Minute 5:34. After
that, Sawers mentioned the displacement -- that is,
detentions -- and of the "legitimate concerns of
minorities, particularly Tamils."
UK-based banks HSBC
and Standard Chartered both gushed about the IMF
loan, without any reference to ongoing
internments. The IMF loan "is a significant
positive for Sri Lanka’s external liquidity
position and should further boost sentiment toward
the country," Standard Chartered’s Mumbai-based
analyst Priyanka Chakravarty wrote
in a research report. "It is noteworthy that the
final IMF loan amount is appreciably higher than
Nicolaou, chief executive officer of HSBC Sri Lanka, pitched
that "the IMF endorsement provides confidence to overseas
investors... Sri Lanka has an excellent story to tell."
Fellow UK bank Barclays, along with HSBC and JPMorgan Chase,
was involved in the Rajapakse administration's October 2007
bond sale in the run-up to the final assault on North Sri
it wants to raise $500 million more from overseas.
Some say that these bloodbath bonds are now ethnic
cleansing instruments. Watch this site.
IMF Vote, Sri Lanka Releases Letter, Drops IDP Release
from 80 to 60%
NATIONS, July 25 -- Only after procuring approval
of a $2.6 billion loan from the International
Monetary Fund Executive Board did the Sri Lankan
government, under pressure, put
online a copy of its July 15 Letter of Intent to
Contrary to claims that the purposes and IMF debate
around the loan had nothing to do with the detention
camps and relocations in Northern Sri Lanka, the
Letter of Intent describes
use of funds for the camps, and states that "the
government aims to resettle 70-80 percent of IDPs by
the end of the year."
UN Secretary General Ban Ki-moon belatedly visited Sri
Lanka and the Manik Farm internment camp in late May,
the government said it would release 80 percent of
those being detained by the end of the year. The July
16 letter to the IMF -- withheld until after the July
24 vote on the loan -- dropped the percentage to
fact, before the IMF board voted but also before it
was publicly acknowledged that the release of detained
Tamils was part of Sri Lanka's letter of intent to the
Lanka's foreign minister had already further dropped
the percentage, to sixty.
Some now say that the IMF board on July 24 voted on
old and inaccurate information -- which was allowed
only because the IMF and Sri Lanka withheld the July
16 letter until after the $2.6 billion had been voted
the UN's July 24 noon briefing, before the IMF
executive board vote, Inner City Press asked UN
Associate Spokesman Farhan Haq:
Press: Since it was said that the Secretary-General was
closely monitoring the compliance with the joint statement
and all of this, it’s just come out that the Foreign
Minister of the country has now said that the commitment
made, including while the Secretary-General was there,
to allow 80 per cent of those in the detention camps to
return home by the end of the year no longer holds, that
it’s going to be a lower number. Has the UN taken
note of that and what’s the response to that?
Spokesperson Haq: We have always expected the Government
to abide by the commitments that have been reached on this
particular matter. Beyond anything further, I’d check
whether OCHA has new reaction to the latest comments. I
don’t know whether we necessarily would react to the very
latest comments that you just cited, though.
by the Sri Lankan government can, some say,
legitimately be called political prisoners. The
government committed to the UN to release 80% of them
by the end of the year. The government committed to
the IMF, in a letter withheld until after approval of
a $2.6 billion loan, to release 70 to 80% by the end
of the year. [A reader points out that per Mahinda
Rajapakse, it is not a commitment or promise, only a "target"
-- click here.]
Then prior to the IMF vote, but before the letter to
the IMF was released, the government gave itself space
to continue to detain some additional 30,000 to 60,000
people past the previously committed deadline. The UN
has nothing to say, and the IMF is giving $2.6 billion
to the government.
Some call it an IMF reward for the extended detention
of political prisoners -- apparently the IMF would
look favorably on the internment -- and opacity or
delayed release -- practices of Myanmar and North
Korea. Watch this site.
footnote: the belatedly released Sri Lankan Letter of
Intent to the IMF about the loan puts in a different
light the IMF
of Communications' public May 21 response to
Inner City Press' questions about IDPs and relocation,
"perhaps it's just helpful to clarify that
when the IMF lends, it is not for specific projects.
We lend to support a country's finances. We make a
loan to the Central Bank to support reserves."
Then why was the following in
Sri Lanka's Letter of Intent to the IMF,
withheld under after the IMF vote?
(IDPs). The government aims to resettle 70-80 percent of
IDPs by the end of the year...In 2009 the government
intends to make room within the programmed deficit targets
for spending on humanitarian assistance and the
resettlement of IDPs using savings in existing budget
provisions, redeployment of certain categories of military
personnel for demining and for the provision of basic
infrastructure, and any external grants from our
development partners. About two percent of the projected
government spending will be used for the provision of
humanitarian assistance and the resettlement of displaced
persons. A needs assessment is expected to be completed by
end July 2009 to determine additional funds needed for the
broader reconstruction strategy.
teeters on the edge of bankruptcy, Inner City Press has
been reminded of its filing to the Federal Reserve
opposing CIT's application to become a bank holding
company, only to get bailout funds. Should we say, we told
the financial meltdown exposed the Federal Reserve's
inattention to predatory lending and credit default swaps,
one would expect the Fed to hold off further loosening the
rules on CDS. But you'd be wrong. Last week the Fed granted
an exemption to CDS dealer ICE Trust, owned by
crisis loser Citigroup and predatory Goldman Sachs, among
others, giving them an easier 20 percent capital treatment
rather than the 100 percent applicable to uninsured banks
like ICE Trust.
the story the other way, claiming that "the
Federal Reserve determined that ICE Trust is as risky as
any insured bank, according to a letter posted July 14 on
the regulator’s Web site. The Fed is requiring that bank
members of ICE Trust, such as Goldman Sachs and New
York-based Citigroup Inc., set aside the same amount of
capital as parties trading as federally-backed lenders."
is a story yet again of the Fed making it easy for the
dealer community-- the dealers sought 0% so at least the
Fed is imposing 20%. Those who don't learn from the past
are condemned to repeat it...
CIT Group fell by a quarter on July 10 on a report the
FDIC is unwilling for now to guarantee the commercial
lender's debt due to concerns over its credit quality. The
stock fell 45 cents to $1.41. CIT hasn't been given the
go-ahead yet to participate in the FDIC's Temporary
Liquidity Guarantee Program. This is despite the regulator
having bypassed public notice and comment to allow CIT to
become a bank holding company to apply for bailout funds
and guarantees. CIT's subprime activities were criticized
some time ago by Inner City Press / Fair Finance Watch,
and more recently by the FDIC, which gave a rare Need to
Improve CRA rating to a CIT bank. Hate to say, we told you
so -- but we told you so....
On July 2
the Belgian Chamber of Representatives enacted a law
prohibiting investment in weapons which use depleted
uranium weapons. "The law forbids banks and investment
funds operating on the Belgian market from offering
credit to producers of armor and munitions that contain
depleted uranium. The purchase of shares and bonds
issued by these companies is also prohibited. This law
implicates that financial institutions in Belgium must
bring their investments in large weapon producers such
as Alliant Techsystems (US), BAE Systems (UK) and
General Dynamics (US) to an end." We'll see.
financial regulator ordered Citigroup Inc.'s Citibank
Japan Ltd. to suspend all promotional sales activities in
its retail-banking division for one month as punishment
for lax compliance in preventing money laundering.....
HSBC Gushes About Sri Lanka, IMF "Loan for Ethnic
Cleansing" Still Delayed
Byline: Matthew Russell Lee of
Inner City Press at the UN: News Analysis
NATIONS, June 19 -- While human rights groups call
for investigations of the killing of tens of
thousands of civilians by the Sri Lankan
government as well as Tamil Tigers, and for
the government to release the hundreds of thousands
of Tamils including
UN staff whom it has in detention, HSBC Bank,
like some notorious hedge fund investors, sees only
the chance to profit while there's blood in the
rebound will be spectacular," said HSBC Private
Bank's chief investment strategist for Asia Arjuna
Mahendran, hyping the possibility of Sri Lanka
becoming the "Hong Kong of India."
report by Prakriti
being used to urge countries to drop restrictions on and
travel advisories about Sri Lanka: "a report released
by HSBC Global Research on 25 May 2009 had forecast...
business process outsourcing (BPO), and manufacturing were key
sectors ripe for Foreign Direct Investment."
But while continuance of the EU's GPS Plus favorable
tariff treatment of Sri Lankan textiles, proffered after the
tsunami, requires a human rights review, the Rajapakse
administration has blocked investigators' access.
focus seems to be on Sri Lanka's ports, which are to
be trebled in size. Getting many of the contracts,
some have noted, are South Korean firms.
But even the International
Monetary Fund, which a month ago on May 21 said that
the Rajapakse administration's application for a
$1.9 billion loan would be approved "within weeks"(click
for the Inner City Press story) now
says the proposal is not yet certain, is not agreed
The government's use of funds for what many call
ethnic cleansing is increasingly questionable. This
does not dissuade HSBC, or reportedly
Citigroup and Deutsche Bank, under fire for
standardless banking for strongmen in Gabon and
has a global record of ignoring human rights.
It was implicated in money laundering with Riggs
Banks, for Agusto Pinochet of Chile and other
dictators. It has raised funds for controversial
Canadian oil company Talisman, and has been sued for
lending discrimination. Many now question its blithe
gushing at this time about Sri Lanka. Watch this site.
supposedly recused at the Federal Reserve Bank of New
York, Tim Geithner was weighing in on Bank of America, in
support of the shotgun marriage with Merrill Lynch, it
emerged in Congress last week. He denies it. But didn't he
initially denied not paying his taxes?
From the WSJ:
"Mr. Geithner, then head of the Federal Reserve Bank of
New York, had recused himself from individual bank
matters in November after being tapped as Treasury
Secretary. Treasury officials say Mr. Paulson kept Mr.
Geithner apprised of what was happening with the merger.
A separate note from
Mr. Lewis recounts a conversation with Mr. Bernanke and suggests
that Mr. Geithner approved of the agreement to infuse the bank
with more money and guarantee its assets. A similar structure had
been used to help Citigroup Inc. A Treasury spokesman said Mr.
Geithner was informed about what was happening but didn't weigh in
June 8, 2009
America will be saved by... ex-regulators? Now on the
board of directors are former Federal Reserve Governor
Susan Bies and former Federal Deposit Insurance Corp.
Chairman Donald Powell. That is to say, regulators who
failed to stop predatory lending and the meltdown now
benefit from it....
regulators' idea of change at Citigroup would be to hand
the reigns from Pandit to former U.S. Bancorp CEO Jerry
Grundhofer, who bought a 25% stake in now-failed predatory
lender New Century? Plus ca change, plus c'est la meme
June 1, 2009
The race for
governor in Florida pits bad banker against worse pro-bank
blowhard. Bill McCollum, who while in Congress promoted
every form of deregulation and promoted predatory lending,
now faces off against Alex Sink, the former CFO of
NationsBank now Bank of America, who oversaw the former's
purchase of Barnett Banks which set negative fair lending
precedents. How to choose between them? We don't envy
Floridians on this one...
In the UK,
according to a new study by the New Local Government
Network, "There is evidence that the pernicious trend of
illegal unsecured lending at extremely high rates of
interest, or 'loan sharking,' is making a comeback At
least 165,000 people already use loan sharks in the UK and
we can expect the number to rise sharply." An additional
35,000 people, or an even higher number, are likely to use
loan sharks during the recession, the
May 25, 2009
High rate, subprime accounts make up one-third of
Citigroup's and Bank of America's credit card
May 18, 2009
Airports operator BAA Ltd last week said
Citigroup Inc.'s consortium had been eliminated from the
auction for Gatwick Airport, leaving just two bidders still in
the running. BAA said the Citigroup proposal "was
uncompetitive on price and there were no assurances on
deliverability." Many are saying that of the current
May 11, 2009
sells its Japanese domestic securities business for 774.5
billion yen ($7.9 billion) in cash. "We will continue to look
for additional opportunities to maximize the value of
businesses and assets as we rationalize and restructure Citi,"
Citi Chief Executive Vikram Pandit said. Citi had bought Nikko
Cordial for $7.7 billion as the largest foreign bidder in
Japan in April 2007. However, it is now being forced to sell
its non-core assets after being hit by credit-related losses
in wake of the global financial meltdown. Citi is also selling
its Nikko Asset Management business in a separate deal. The
sell off continues...
May 4, 2009
CitiFinancial continues to sponsor a Ford car -- NASCAR TARP.
So at Bank of
America's shareholders' meeting last week in Charlotte, Ken
Lewis was ousted as chairman. This same a week after he and
his CFO Joe Price fingered the bank's “Community Reinvestment
Act porfolio” as having much higher delinquency rates than
other loans. Cynically, Lewis arranged for some community
groups to lobby for him to remain as chairman. He's still the
CEO -- shareholders couldn't vote on that. Yet.
April 27, 2009
the WSJ, “a long procession of grumpy investors took to the
microphone to vent about the crippling losses that have
decimated Citigroup's share price. Some shareholders lashed
out at the New York bank's directors for failing to adequately
shield the company from the credit crisis and recession.
Still, by the time the meeting adjourned roughly six hours
later in the ballroom of a Manhattan hotel, Citigroup's slate
of directors had been handily elected, with each director
receiving at least 70% of the votes cast. Also, Chief
Executive Vikram Pandit managed to dodge much criticism of his
16-month tenure. There was no sign of representatives of
Citigroup's soon-to-be-largest shareholder, the U.S.
government, which is poised to own as much as 36% of the
company.” How about the taxpayers? Or the predatory lending
victims Citi previously tried to belatedly buy off?
From the mail bag, on Wells Fargo and US Bank
Subj: My Plight with Wells Fargo Auto Financial
From: [Name withheld in this format]
To: Inner City Press
Sent: 4/17/2009 6:59:57 P.M. Eastern Daylight Time
Hello Matthew, I've been referred to you by a family
member to contact you about some trouble I've been having with
Wells Fargo Auto Financial. I'd like to share my story with
you, in hopes that you will promote awareness regarding
Predatory and Discriminatory Lending Practices.
I myself, am a young, black female; have always been
a part-time worker, and full-time student (until recently as
of 4/06/09); and a single mother. At the time I contracted
with WF, these same characteristics applied.
December 2007, I was deceived into a contract for an
auto loan that did not state the terms that was initially
discussed. Based on my good credit history, I was told that
Wells Fargo would pay off all of my credit card debt, and buy
out my car loan from Bank of America and I would end up paying
a low monthly payment each month. Right before it is time to
sign the contract, Wells fargo change the terms, and decided
it was best to give me a check in the amount of $2000 to pay
off my own debt, and buy out my car loan ($18K). This was a
little fishy to my then, but I felt pressured to go ahead with
the deal because (1) I spent almost 3 hours in this office,
and I had to leave quickly; (2) I needed the money to pay off
some debt and bills; (3) Wells Fargo offered an additional
line of credit (as an incentive) for $1000, and (4) I didn't
have to start paying for another month and a half.
The terms were $505.77 per month, which was far less
than what I was paying for the bills separately. He told me
where to sign, and I left. Things were fine for the first
couple of months.
May 2008, I had a life changing event occur. My
daughter had chronic bronchitis due to Chicago's weather and I
had to move to Arkansas for a better climate environment. Upon
my move I had certain job leads that fell through and was out
of work for at least 4 months. During the entire time, Well
Fargo called everyday, at least 3 or 4 times a day. My credit
score dropped tremendously, and no one was willing to help.
Once I did find a job, I paid all I could to Wells Fargo to
get things back on track, but all the money was going torward
the interest and not the principle of the load, which kept me
at a standstill with paying it down.
I now landed a job where I currently make $30K. As I
discussed to Wells Fargo, I've worked in the $505.77 in my
monthly budget; but I know that I don't have the money to pay
a past due balance, late charges, the current monthly payment,
and rolocation expenses in preparation for this new job. I've
kept them up to date with all of the changes, and yet they
continue to threaten me with repossession, despite the fact
that I paid out over $1500 within the last month and a half.
I've called numerous times to see if my loan can be
restructured, and been given countless run arounds. Finally,
Wells Fargo Bank explained that neither them nor Wells Fargo
Auto Financial work with customers (new or existing) that live
Bottom line, there was absolutely nothing they could
do to help me. All the while, I owe $505.77 for March payment,
$272.99 in late charges, $505.77 for April, and the $505.77 in
May. My credit score is shot, so no other bank will loan me
anything, and no car dealership is willing to take a trade in
for a car only worth $8000 but a loan attached to it for
I've contact the CEO, John G. Stumpf, who had someone
else send me a letter back explaining that since I signed the
contracted there was nothing they could do. I'm seeking
justice in that, Well Fargo needs to be stopped. They thought
it was best for my financial situation to require a full-time
student, part-time worker, single parent, young black lady to
pay them $33,380.82 on a car worth $8000. Tack on a 19.24%
interest rate to a loan, which would have me pay them
This is ridiculous, and something must be done. I
trusted Wells Fargo in that they were charged to help me. They
initially told me that there was something they can do to
help, and made me believe that this is what was best for my
situation. Now that I am a customer of theirs, there is
nothing they can do to assist me. I am enraged!
Us too. And
on US Bank --
Subj: Attn: Matthew Lee, Executive Director or
From: [Name withheld in this format]
To: Inner City Press
Sent: 4/17/2009 10:37:28 P.M. Eastern Daylight Time
I'm in a fix with US Bank as they have attempted to
keep me in perpetual debt to them by using late fees, or
overdraft fees. Lately I've moved my account to a credit
union, and closed my account with US Bank. I paid in full the
negative amount in doing so, and now they claim I own them
$795.50 in a negative balance. Again, "overdraft fees".It has
been hard to shake these people off. They almost had me lose
my apartment, my electricity was off for a week, my phone was
off for 4 months. During that time, I had an auto deposit I
could not stop because of a perpetual negative balance they
claimed even when the deposit was well over the negative. Is
there any law I can use to stop these idiots? I doubt I'm the
only one having this problem with there predatory practices.
And can't the state pull their charter?
April 20, 2009
run-up to its annual shareholders' meeting, this time in the
Hilton and not Carnegie Hall, Citigroup has been criticized for
offering $5,000 loans and not disclosing in the advertising the
interest rate -- 30%. But CitiFinancial has been doing that for a
America, raising its credit card interest rates and saying
that "To continue to offer competitive products and services
and responsibly lend in this current environment, we must
adjust our pricing."
April 13, 2009
done? "Citigroup said longtime executive Steve Freiberg plans to
retire after nearly three decades with the company. 'Steve has
been an extraordinary leader and has made significant
contributions to building the great global franchise that Citi is
today,' Chief Executive Vikram Pandit said in a statement." What
exactly was so well done about the job?
the closings, "before it collapsed last September, Washington
Mutual Inc. spent roughly $1 billion on a branch-building binge
that replaced bank-teller windows with free-standing counters and
cash-dispensing machines. New owner J.P. Morgan Chase & Co. is
now dismantling it all, right down to the signs that promise "free
checking, free smiles," and basically dragging the former WaMu
branches back to the past. Traditional branches 'are superior in
every way,' said Charles Scharf, who runs the Chase unit of J.P.
Morgan. 'They might be boring, but they're practical.'" What ever
happened to Chemical Bank's promise of five dollars if you're not
served in five minutes?
Survivors Wells, BofA and JPM Chase Were More Disparate By
Race in 2008 than Wachovia or Countrywide, Trends Will Worsen
Under Current Regulators
NEW YORK, April 2 -- In the
first study of the just-released 2008 mortgage lending data,
Inner City Press / Fair Finance Watch has found that the
seeming survivors of the banking meltdown, Wells Fargo, Bank
of America and JPMorgan Chase, had worse disparities by race
and ethnicity in denials and higher-cost lending than the
banks they acquired, Wachovia and Countrywide. Mortgage
lending in the U.S. will become more and not less disparate
because of the emergency mergers and bailouts engineered by
the regulators, the study predicts.
Fair Finance Watch notes that JPMorgan Chase's massive
closing of branches of Washington Mutual will also make credit
harder to come by, especially in poor neighborhoods. 2008 is the fifth year in which the
data distinguishes which loans are higher cost, over the
federally-defined rate spread of 3 percent over the yield on
Treasury securities of comparable duration on first lien
loans, 5 percent on subordinate liens.
Wells Fargo Bank in 2008 confined African Americans to
higher-cost loans above this rate spread 2.18 times more
frequently than whites, according to Fair Finance Watch.
Wachovia Mortgage FSB, the largest lender of Wachovia which
Wells Fargo acquired, had a lower disparity, at 1.46.
Bank of America NA in 2008 confined Latinos to
higher-cost loans above the rate spread 1.51 times more
frequently than whites, the data show. Countrywide Bank, which
B of A acquired, had a lower disparity, at 1.22.
JPMorgan Chase was even more disparate to Latinos,
confined them to higher-cost loans 2.10 times more frequently
than whites, almost as pronounced as its disparity between
African-Americans and whites, 2.26. Citigroup, perhaps due to
its shrinking, some say dying, business had disparities of
1.90 for African Americans and 1.23 for Latinos. For US
Bancorp, the disparity for African Americans was 1.55 and for
"The banks the regulators favored in 2008, allowing
emergency takeovers like JPMorgan Chase's of Washington
Mutual, Bank of America's of Countrywide and Merrill Lynch,
and Wells Fargo's of Wachovia, were the most racial disparate
lenders," states the Fair Finance Watch report. "The
regulators did not put any conditions on the mergers or Troubled Assets
Relief Program bailouts, for example
allowing Chase to close dozens of Washington Mutual branches.
As things are going, it will be worse and more disparate in
2009. The new administration has yet to make any substantive
change to this."
Several lenders had worse denial rate disparities in
2008 between Latinos and whites then between African American
and whites, a change from previous years. Bank of America NA,
for example, denied applications by African Americans 1.44
times more frequently than whites, while denying Latinos fully
1.57 times more frequently than whites. Atlanta-based SunTrust
in 2008 denied applications by African Americans 1.37 times
more frequently than whites, while denying Latinos fully 1.78
times more frequently than whites.
The law required
that the 2008 data be provided by April 1, following March 1
requests by Fair Finance Watch. Some lenders did not provide
their data by the deadline. Regions Financial provided its data
at the deadline but only in paper format, on over 2000 pages, so
that it could not yet be computer-analyzed. Further studies will
Promotes Megabanks' Monopoly, in DC as at Fed, 17 Cut to 7 on
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, March 28 -- Seven
megabanks' renewed grab for monopoly power in the over the
counter derivatives market shows how little Wall Street's real
power has changed in the transition from the Bush to Obama
The banks, including
Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley,
Barclays, Credit Suisse and Deutsche Bank, are paying over $1
million to p.r. firm Prism Public Affairs to "educate" the
voters weary of bonus and bailouts that those who caused the
crisis should benefit from it.
members hungry for campaign contribution have submitted to
closed door briefings by Ed Rosen of the law firm Cleary
Gottlieb, who drafted the legislative language for monopoly.
The connector in
this story is Timothy Geithner, under Bush the president of
the Federal Reserve Bank of New York and now Obama's Treasury
Secretary. Geithner in June 2008 convened closed door meetings
with 17 banks, essentially allowing them to propose and draft
their own rules for the derivatives market.
This led to advocacy
by the Fair Finance Watch that Geithner's meetings were in
fact rule making that excluded the public in violation of
the Administrative Procedure Act, and by Inner City
Press, as media, to get the meetings opened to journalists and
9, 2008 met with a group of the largest banks to discuss,
according to the Geithner himself
"Regulatory policy. These
are the incentives and constraints designed to affect the
level and concentration of risk-taking across the financial
system. You can think of these as a financial analog to
imposing speed limits and requiring air bags and antilock
brakes in cars, or establishing building codes in earthquake
zones. Regulatory structure. This is about who is
responsible for setting and enforcing those rules. Crisis
management. This is about when and how we intervene and
about the expectations we create for official intervention
Press accounts made clear that the financial instruments and
regulatory issues discussed behind closed doors are related to
issues of public interest, which in fact are
disproportionately impacting low- and moderate- income people
and communities of color -- subprime and predatory mortgages.
institutions invited, in mid 2008, were:
Bank of America, N.A. -
Barclays Capital - BNP Paribas - Citigroup - Credit Suisse -
Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs &
Co. - HSBC Group - JPMorgan Chase - Lehman Brothers -
Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of
Scotland Group - Societe Generale - UBS AG - Wachovia Bank,
Buy-Side Firms: AllianceBernstein - BlueMountain Capital
Management LLC - Citadel Investment Group, L.L.C.
in U.S. Troubled Assets Relief Program bailout funds through
Now the idea is to
formalize the monopoly through legislation, not rule making.
Industry friendly Congress people like Connecticut's Chris Dodd
are supporting the monopoly for the privileged. The fig leaf
policy argument is that derivatives should runs through
regulated banks. The push is made now, before it is formalized
that non-banks, too, are regulated. It
is a pure power grab, with Timothy Geithner as the connector.
And who is fighting this monopoly of the morally if not
financially bankrupt? To be continued.
Pandit put out this spin last week, "The work we have all done
to try to stabilize the financial system and to get this economy
moving again would be significantly set back if we lose our
talented people because Congress imposes a special tax on
financial services employees," Mr. Pandit wrote in a memo
distributed to Citi's 300,000 employees.
Bank of America's
Ken Lewis claims that B of A is "part of the solution for the
financial crisis" through its subsidized acquisitions of
Countrywide Financial and Merrill Lynch. Most say, part of the
"Inevitable" Fraud as Obama Jokes with JPM Chase, Meets Citi
Matthew Russell Lee of Inner City Press
12 -- As President Barack Obama promises to find and "call
out" misuses of the stimulus package, and to review the over
7,000 earmarks in the budget bill he signed this week, the
chairman of his Recovery Act's Transparency and Accountability
Board, Earl Devaney, told the Press of a "naive impression
that given the amount of transparency and accountability
called for by this Act, no or little fraud will occur... some
level of waste and fraud is unfortunately inevitable."
Accordingly, the same is true not only at the United
Nations -- despite Obama not mentioning the need for UN reform
in his comments Tuesday after meeting Secretary General Ban
Ki-moon -- but also with the bank bailout funds of the
Troubled Assets Relief Program. Nevertheless, Obama joked with
Chase's Jaime Dimon at the Business Roundtable's gabfest
Thursday in Washington. As a smaller banker asked the final
question of Obama -- no questions were taken after his meeting
with the UN's Ban -- Obama said that banking has of late
become complex, and that he could ask "Jaime" about it.
Also on the White House's list of Roundtable attendees
was Citigroup's longtime board member and now chairman Richard
veered into predatory lending, JPM Chase
at a minimum securitized it, while lending to payday
lenders and pawnshops. What
then is so funny?
as Senator from Illinois Roland Burris is said to have a brother
who is going through foreclosure. A well-known Representative
from the state of Illinois, sponsoring a pro-industry
payday lending bill, has taken
over $10,000 from the lender QC Holdings. If this is how
politics will be in the current Washington, predatory lending
can be expected to continue.
Lanka, IMF Says Its Pending Loan Would "Support Government
Policy Goals," To Wait and See
Matthew Russell Lee of Inner City Press: News
12 -- As conflict rages in Northern Sri Lanka, with not only
the Tamil Tigers but also the government forces killing
civilians at a pace that has triggered two calls for a
cessation of fighting by UN Secretary-General Ban Ki-moon, the
International Monetary Fund is in the final stages of
negotiating a $1.9 billion loan to Sri Lanka. Asked Thursday
what restrictions the IMF might place on the loan IMF
spokesman David Hawley said the loan funds would be used for
"the government's policy goals."
Inner City Press asked a follow-up on possible
conditions or safeguards, specifically with regard to the
military action in Northern Sri Lanka. Mr. Hawley referred to
the note he had just read out, saying that the loan is still
under negotiation and to wait and see what conditions there
The IMF briefing, held in basement auditorium of the
Fund's headquarters a few blocks from the White House where
Ban Ki-moon met with U.S. President Barack Obama on March 12,
was sparsely attended and lasted less than 20 minutes. After passing through security and
waiting for an escort, Inner City Press arrived just as Mr.
Hawley was about to close the briefing. He took Sri Lanka as
the last question. Some said it must be a busy news day, that
few questions were submitted online to the briefing. (Inner
City Press has in the past sought to submit questions from the
UN in New York via the IMF's web site and has watched online
as it was said, "There are no more questions.") The IMF's own
lack of funds would seem to trigger at least a half hour of
questions and answers.
During the visit of Ban and his entourage to
Washington, the word Sri Lanka did not arise even once, chief
UN Peacekeeper Alain
Le Roy told Inner City Press on Wednesday in the Rayburn
House Office Building. This despite Ban Ki-moon have
twice called for a cessation of fighting, and his
Spokesperson's Office's claim that he has made the
humanitarian crisis in Sri Lanka a priority.
The IMF Spokesman said to wait and see
about conditions on the Fund's loan to Sri Lanka. Sources say
while these conditions may involve not using the Fund's funds to
support the Sri Lankan rupee, what others
the UN system are calling a humanitarian catastrophe,
including government-created and -funded detention camps
for those fleeing the conflict zone, is not even on the IMF's
radar. We'll see -- watch this site.
March 9, 2009
stock went below one dollar a share last week -- along with HSBC
closing 800 HFC and Beneficial storefronts, a fitting end to an
The Journal sings HSBC's praises, that
"gains from growth in Asia have helped HSBC offset deep losses
from HSBC Finance Corp., the bank's largely subprime U.S. lender."
According to the strategy, some of that Asia lending was subprime,
the beholder: the Teamsters last week came out against KeyCorp for
lending to a company they planned to go on strike against, and
cited Key's (mis) use of TARP funds and abuse of consumers,
including a consumer advocate's quote. But one report drew,
at least initially, entirely negative response, including a
comment that the underlying strike had been called off.
Still the TARP was mis-used...
The use of the subprime-triggered
meltdown to justify anticompetitive mergers toward monopoly is a
global phenomenon. Brazil's Central
Bank last week approved the merger of the country's second- and
third-largest banks, Banco Itau and Unibanco. "This is an
initiative which contributes to the stability of the national
financial system in the current environment of the international
financial market," the Central Bank said in a statement. The authority claimed the merger
wouldn't hinder competition in the financial system, although it
would increase the market power of the new conglomerate "in some
relevant markets for financial products." Ya don't say...
Citigroup's Pandit last week said, "The future of Citi is
in emerging markets, is in Latin America, and is in Mexico with
Banamex." While the last is dubious, one thing seems true: the
future of Citigroup, if it has one, is not in
the United States, although it might be WITH the United States
February 16, 2009
to defend its plastering of its discredited name on the Mets new
stadium in Queens, rounded up the support of Dem Reps
Eliot Engel, Joseph Crowley, Yvette Clarke, Gregory Meeks, Anthony
Weiner and Steve Israel. Would they write in favor of Citigroup's
jet? During the Congressional hearings last week, Nydia Velazquez
called Pandit “a convincing person." Convincing to whom?
So BofA's Ken
Lewis has claimed he had no authority over Merrill Lynch's final
bonuses. We'll see...
Before Congress last
Dimon complained, “we have a Byzantine alphabet soup of
regulators,” and that banks and lenders have to deal with the OTC,
the CFTC, the SEC and so on. He pontificated that it should be a
U.S. system and globally regulated, and that no one should try to
create a new regulator. He suggested the Federal Reserve -- and
why not, since the Fed delivered Bear Stearns to him and Chase,
which then got WaMu as well... The Fed's been good to Morgan
February 9, 2009
As Royal Bank of
Scotland, bailed-out by UK taxpayers, tries to pay bonuses
to its second layer of executives, the UK's Gordon Brown says
the Government would only support any bonus payments to RBS
staff through UKFI if they were consistent with the taxpayers’
interest. Business Secretary Lord Mandelson added that RBS
risked alienating the public by offering “exorbitant” bonuses to
its traders and senior bankers.
But note that in New
Chase has just awarded bonuses, on the theory that
particular units didn't lose money. Your tax dollars at work...
Outfitters sued Citigroup
and accused it of fraudulently inducing it to buy $258 million
worth of auction rate securities that it now can sell only at a
significant loss, if at all. Citigroup represented the securities
as safe and liquid and therefore compatible with the
Pittsburgh-based clothing retailer's conservative investment
policies, according to the suit. Instead, American Eagle claimed,
Citigroup knew there was not enough demand for the securities to
keep them liquid. A Citigroup spokeswoman declined to comment.
February 2, 2009
Too little too late,
accountability awaits: Sanford "Sandy" Weill says he will end a
10-year consulting contract with Citigroup
that gave him millions of dollars in perks, including an office,
car and driver and the use of company jets. Weill, who retired
as chairman and started the consulting job three years ago, now
wants to opt out. But what about returning ill-gotten gains?
Beyond the branch
closing listed last week, JPMorgan
Chase plans to axe another 13 in San Antonio -- the
countdown will continue.
Chase Shutters WaMu Branches, Regulators Missing, Commitments
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, January
23 -- JPMorgan Chase is moving to closed down dozens of the
Washington Mutual bank branches the government allowed it to
acquire last year with no public notice or comment period. In
Dallas, Chase has targeted 23 WaMu branches for closure, and
another six in Fort Worth. In the Chicago area, Chase says it
will shutter 57 WaMu locations. More branch closings will
follow across the nation.
Community and consumers groups are belated protesting
the acquisition, which was a one of a slew
of so-called emergency transactions on which no Community
Reinvestment Act comments were considered, including the
accession of Goldman Sachs and Morgan Stanley to bank
holding company status, and Bank
of America's now discredited acquisition of Merrill
JPMorgan Chase benefited from regulator-protected acquisitions
not only of WaMu but, before that, of Bear Stearns. As
first reported by Inner City Press, Bronx-based Fair Finance
Watch submitted to the Federal Reserve Board comments on
these transactions, but was told that emergency did not allow
consideration of the issues raised, including prospective
JPMorgan Chase has now told groups who have asked if it
will continue Washington Mutual's CRA programs and commitments
that since there is no more Washington Mutual, there is no
comes in the wake of JPMorgan Chase's Jaime Dimon reversing
himself from a stated commitment to mortgages through brokers
to abruptly shutting down Chase's wholesale mortgage unit.
While groups are told this will give Chase more control over
the terms of loans, brokers point out that Chase ultimately
had control in the wholesale business, too.
Commitments are made to be broken, apparently,
particularly those by companies the federal regulators bailed
out or merged out of existence. What, the question grows, is Timothy
Geithner's position on this Main Street issue?
Update: later on January 23,
community groups were told that JPMorgan Chase plans to close
over 40 WaMu branches in New York State...
Geithner Evaded Taxes at IMF, Used Statute of Limitations
Later, Mishanded Citigroup
Matthew Russell Lee of Inner City Press at the UN: News Analysis
UNITED NATIONS, January 14
-- While working for the UN-affiliated International Monetary
Fund earlier this decade, Treasury Secretary-nominee Timothy
Geithner did not pay required taxes to the Treasury
Department's Internal Revenue Service. This would seem to be
problematize, to be diplomatic, Geithner's ability to gain
confirmation by the U.S. Senate to oversee the IRS.
This would seem to be
problematize, to be diplomatic, Geithner's ability to gain
confirmation by the U.S. Senate to oversee the IRS. But
Democratic Senators and Barack Obama himself are calling
Geithner's an "innocent mistake" which should not impinge on
confirmation. Some ask how a financial whiz, head of the
Federal Reserve Bank of New York, would claim ignorance of
basic tax law as a defense.
initially hid behind the statute of limitations to refuse to
pay $25,000 in taxes for 2001 and 2002: "A three-year statute
of limitations had precluded the [IRS] from auditing the 2001
and 2002 tax returns." But his supporters argue that
Geithner's expertise is needed to confront the global
who can now save the day?
on Citigroup, sources say that the Feds are pushing Richard
Parsons to take over as the embattled company's chairman. He
ran Dime Savings Bank, part of the now-collapsed Washington
Mutual franchise. At Citigroup's annual meetings, at Inner
City Press asked questions about predatory lending from the
floor of Carnegie Hall, Parsons never spoke up.
What did he think of the questions, of Citigroup's
venture into predatory lending with Commercial Credit,
Associates First Capital and CitiFinancial? The questions
should be answered.
requirement of public notice and comment while granting bank
holding company status to Morgan Stanley, CIT, Goldman Sachs
A cavalier approach to the law, by both
Bernanke and Geithner -- is this what would help to solve the
financial crisis? Let
fall apart, let it fail without further bailout. For sale: "CitiFinancial,
which does real estate lending, personal and auto loans, had 3,799
locations, compared to Citi's 4,057 Citibank branches, as of the
third-quarter. Though CitiFinancial does not offer the same range of
products as the Citibank branches, it does cross-sell Citi credit
cards through most of its locations. " Terminate it - it is rotten.
Chase has closed its wholesale mortgage business, after
virtually promising not to. They claim
this way they can better control the terms of loans. But the
ones they made through brokers, they made decisions on. Back on
Nov. 6, 2007, David Lowman, CEO of JPMorgan Chase's home
lending division, and Patrick Sheehy, business-to-business channel
executive at Chase Home Lending, told mortgage brokers of “an
unwavering commitment to our wholesale … lending” business. Jamie Dimon made this type of about-face and close-down
before. It's just what he does.
is making layoffs, BofA is getting sued. And yet BofA is getting
more and more billions of TARP, including the share that would
have been Merrill's. For shame. Bank
of America Corp. filed a letter with Charlotte, N.C., Mayor Pat
McCrory verifying that it is laying off about 139 employees in the
city’s Ballantyne neighborhood. The layoffs are expected to be
completed by March 10. The bank is also laying off about 85
workers at a Preferred Services site in Dallas. Meanwhile, a group
of Washington state homeowners filed a lawsuit against Bank of
America Corp. unit Countrywide Financial Corp., alleging that the
company illegally manipulated the appraisal process in a plan to
increase profits at the expense of homeowners and independent
appraisers. The lawsuit, filed in the U.S. District Court in
Seattle under the Racketeering Influenced and Corrupt Practices
Act, claims that the company forced homeowners to use its unit,
LandSafe, for appraisals, while subcontracting the work to
independent appraisers and charging homeowners as much as 200% of
the actual cost of the appraisal.
significant exposure to toxic assets, including U.S. subprime
mortgages that aren't marked to market, either because they are
held directly on its loan book or because the U.K. regulator
absurdly allows unrealized losses on certain assets to be
written back for capital purposes. It is estimated that HSBC's
true leverage is closer to 50 times and Tier 1 is 4.6%, making
it one of the most highly leveraged banks in the world. How's
that Household now?
Here are properties in The Bronx,
New York on which Wells Fargo
BRONX 2862 Multi-family $374,900 N
BRONX 1809 Multi-family $599,000 N
BRONX 2700 Duplex TBD N
AVE BRONX 2403 Multi-family $325,000 N
UNIT 1 & 2 BRONX 1848 Duplex $339,900 N
AVE BRONX 2000 Multi-family TBD N
coming home to roost for HSBC -- "European shareholder
group Deminor said Friday it may take legal action against ...
HSBC Holdings PLC on behalf of investors who bought products from
disgraced asset manager Bernard Madoff."
Fargo that they had cleaned up their predatory lending act
has been blown out of the water by the example cited by even the
Wall Street Journal, of a $103,000 mortgage on a shack in
Arizona, purchased by Wells and then HSBC --
than two years ago, Integrity Funding LLC, a local lender, gave
a $103,000 mortgage to the owner, Marvene Halterman, an
unemployed woman with a long list of creditors and, by her own
account, a long history of drug and alcohol abuse. By the time
the house went into foreclosure in August, Integrity had sold
that loan to Wells Fargo & Co., which had sold it to a U.S.
unit of HSBC Holdings PLC"
hear the spinmeisters at Wells and HSBC try to explain this one
HBOS is said to be cutting off Oz Minerals, not extending loans,
the extractive party is over...
Capitol One goes forward to scoop up Chevy Chase in DC... What
in your wallet -- a bank with a history of racially-based
Morgan Stanley, which the Federal Reserve let become a bank
holding company with no public comment, now applies on an
expedited basis for its Greenwich, Connecticut-based subsidiary
Frontpoint to own a stake in a start-up bank that says it will
serve Manhattan, Brooklyn and parts of Long Island: Heritage
Bank. Then, there is a China-related application by Morgan
Stanley, on which the comment period is still open. Expect more
HSBC client companies' violations include... client
companies embroiled in conflicts over lands and forests with the
in Sarawak regarding the establishment of oil palm plantations
on community lands
.. long standing conflicts
between client companies and communities in North Sumatra which
have led to the imprisonment of villagers and restrictions being
placed on people’s movements, which have in turn
prevented children from getting to school and villagers from
going to market or their farmland
.. the takeover of community
lands in West Kalimantan undermining community food security
.. repeated allegations that
client companies in several parts of Indonesia are clearing
forests and areas of high conservation value.
Nearly all of the 17 business
groups which are HSBC’s clients have announced plans to expand
their palm oil operations. Unless their practices change, these
operations will inevitably destroy more forest,
wildlife and peoples’ homes. Yep, that's HSBC..
In October, Fred H. Langhammer,
chairman of global affairs of Estee Lauder quit the board of
AIG, as it got a $150 billion government bailout. His
resignation letter cited the time demands of the AIG board seat.
Between Nov. 10 and Nov. 19, the directors conferred three
times. Where -- in Biarritz? San Tropez?
PNC's proxy statement to acquire
National City raises the question, why would NCC's regulators
rule that TARP funds were unavailable to it, but then turn
around and give them to PCC? Some are alleging that the
Comptroller's connections to PNC played a role here. Crony
WSJ of November 18 reported that in February 2007 "to modify
loans, HSBC tried a strategy called 're-aging.' If
a borrower fell behind on payments by two months or more, HSBC
effectively allowed some to catch up by declaring the loan
current and adding the delinquent amount to the balance owed." But re-aging began far earlier -- in
fact, it was done at Household during the run-up to its sale to
HSBC, to make the already dubious predatory business model look
better. "Lipstick on the pig," whistleblowers called it them to
Inner City Press, who reported it at the time. Plus ca change...
November 17, 2008
NCRC's Responsible Lending conference in London on November 14:
How will the UK run RBS, which
owns subprime lenders in the US, and securitizes subprime loans
through its subsidiary Greenwich Capital Markets?
What oversight will be given to Deutsche Bank
Paribas and their involvement in subprime lending?
Raised at the meeting in September
with the Federal Reserve's Bernanke was his decision to allow
Morgan Stanley and Goldman Sachs to become Bank Holding
Companies with no public comment. Both of these investment banks
helped cause the current crisis, in their role as securitizers
of subprime loans by now-bankrupt firms like Ameriquest and New
Century. Bernanke said CRA could be considered later. But under
the law, the only time to consider it is before granting these
reason for the crisis was the lack of sufficient oversight of
financial institutions and their practices, which the Fed is now
making more widespread by overriding the oversight laws.
of the law has just be done for American Express, will be done
for CIT, while General
Electric complains loudly that it will not become a bank
holding company, protesting too much, some opine.
how many WaMu
branches is JPMorgan
Chase planning to close? The bank refuses to say, but we
aim to find out...
one of the first banks to have to announced big subprime
write-offs, is trying to pull back in some segments of the U.S.
consumer finance market. Through their purchase of Household
International (and affiliates of its like the secured / subprime
card lender Orchard Bank), HSBC became huge in subprime, and
then had to pay the price. (They are exporting the business
model elsewhere, but cutting back in US at least for now, as
evidence by card solicitations down.
And see this
November 7 debate: http://bloggingheads.tv/diavlogs/15731#
job, Pandit: in the last year, Citigroup
shares have lost 65% of their value, and $68 billion in
mortgage-related losses later, the company has so many troubled
assets that its days as a leader in U.S. finance appear to be
over. “Citi no longer matters,” says Bill Smith, head of Smith
Asset Management, a shareholder in and longtime critic of the
bank. “It's a black hole.” Even after massive write-downs, the
bank still has $138 billion of “problem assets." Crain's says
that with $25 billion in federal bailout money safely in
its coffers, the company will also get another chance to snap up
an even weaker rival or two on the cheap.
But see Inner City Press'
interview with Joseph Stiglitz, in this week's CRA Report, www.innercitypress.org/crreport.html
withheld in this format]
Inner City Press
12:53:33 P.M. Eastern Standard Time
an issue of the Portland Oregonian in late 2001, there was a
small 4-5 paragraph article buried in the last pages of the
front part of the paper. It spoke of a high level security
employee of US Bank that was gathering evidence to present to
the FBI regarding US Bank account and Branch managers. Apparently, they were selling names of
consumers who had accounts to certain Cincinnati, Ohio Consumer
Finance Division’s loan officers. Aggressive sales tactics were
employed to recruit potential loan applications in which somehow
dummy accounts were established not to the benefit of the person
applying for a loan, rather those who were behind the scheme.
US Bank security person who uncovered this scheme never did
submit her documentation to the FBI, because she apparently
decided to suddenly retire, and conveniently was unavailable for
comment on the story. It never went nowhere. I consider myself
as one of the victims of the scheme here 6 years later still
have not found any closure nor justice.
is unfortunate because I had not learned of this article until 3
maybe even 4 years after it had appeared in the Oregonian. Had I
known, perhaps the outcome that personally tore this family to
shreds may have been avoided. There was an accounts manager at
my local Scappoose, Oregon branch that pursued me to refinance
to the point of being totally annoying, so much so that I would
not even go into the branch, opting to either going to a
different branch or banking through the ATM. The most extreme
was one morning while at the ATM, this individual saw me and
came outside to ATM to once again “sign us up”.
Perhaps not except for the fact that it was during a torrential
owner of the company my wife was consulting for had some issues
with a competitor over patent rights or something along those
lines, and decided to retire and dissolve the company. My wife,
being tired of traveling and being away from home decided to go
back to a firm on a salary basis, the consequence being a
drastic reduction in income. That is not to mention the
coinciding terrorist attacks of 9/11 and consequences that
rippled through the economy that affected my business.
lost sight of all the problems we had at the local level branch
level. Tellers posting to incorrect accounts resulting in
bounced checks and overdrafts, I mean it was constant. If we are
guilty of anything it is moving forward with US Bank on a refi,
given all the problems we were already having.
was after one of these “mispostings” that I had gone to see the
same accounts manager that doggedly pursued us, to correct the
tellers mistakes and set our personal accounts correct. We
walked through it, he saw the mistakes made and promised that it
would be taken care of and to stop in tomorrow if it was not
done yet. The following day nothing was corrected and so I
stopped in and to amazement this accounts manager was gone for
good. I was told that he transferred to a location closer to his
home, which I found very odd because he was from a rural area,
more so than Scappoose, and this was a considerable step up for
him. Just like that, overnight, he was gone. This “disappearing”
act, I would come to learn over the years to come is a tactic
used to keep consumers at bay. After discovering the article in
the Oregonian, I went back through my records and checked for
timeframe. Turns out that the day that the article was published
was the same day I had met the accounts manager regarding the
mispostings. Coincidence? It is one of those questions that
never has been answered.
were given assurances, verbally, time and again, that we were
all approved for this refi and that was holding it up was the
appraisal and if it would come in high enough. Once that was
done, we would essentially be done in a couple of days. That was
nothing more than deceit, lies and simply keeping us on the line
of their hook. The appraisal was done and we were well above
where it needed to be and we assured it would be wrapped up by
Christmas of 2001. Christmas came and went with nothing done.
were getting very concerned as estimated business taxes on my
wife's consulting and my business we rapidly coming due. We were
going fall 7800 dollars shy and part of the disbursements from
the refi were going to cover that. It became apparent that this
was going to drag through past the 15th of January and we were
furious that all their promises had been unfulfilled, yet we had
come this far and to start all over someplace else was just
unthinkable at this point. Our loan officer suggested that we
find someone to lend us the 7800 and that she would personally
secure a note with that person to the disbursements funds, in
essence guaranteeing payment back to this person.
asked my mother in Cleveland Ohio and she agreed to lend the
money, everything else was handled by the loan officer. She
contacted my mother and explained that she would have some sort
of document that would secure her name to the disbursement
funds. As we are in Oregon, the funds needed to transfer via
Western Union. This loan officer went as far as walking my
mother step by step on how to do so. The note that guaranteed
repayment that was promised never did arrive, nor for that
matter did the refi.
at me when I tell that part of the story as if I am an idiot, a
liar or a bad storyteller, and who is to blame them. After all
it's totally outlandish. Preposterous, absolutely so, but
totally true. Is it in writing? Of course not, US Bank puts none
of their promises in writing, only what they can screw you with,
not what would screw them.
phone records and transference of fund records, and my mother
don’t lie. We later came to find out that this scheme was
concocted by the loan officers supervisor. I call that fraud.
caused concern as to whether we should be loaned money to. Never
was this even a concern to them prior. We later came to find out
that it was a concern long ago and that they had farmed us out
to other lenders and they found one in a place call Greenpoint,
but never shared that information with us, as a matter of fact
it was deliberately held from us. All the while we were being
told everything was hunky dory.
stipulation for approval is again something that people look at
me as if I am idiot.
am in Architecture and I designed and built our home. It sits on
a slight downslope because of that there is a basement area that
is known as a daylight basement. I designed it as such so that
in the future it could be modified into living space. However,
that would be under a separate building permit and was for all
intensive purposes is deemed as nothing but a crawl area. US
Bank and Greenpoint decided in their infinite wisdom that in
order to get the refi we would now have to make the daylight
other words, we would have had to
obtain a building permit, bring in rock and pour a slab over,
and additionally insulate and drywall the walls at a cost of
15,000 – 20,000 dollars. That did it that was the final straw,
to which we walked away very, very angry. We felt like we were
raped. On top of that our loan officer told us not to pay the
mortgage payment to Washington Mutual, that she had it worked
out with them with all these prior delays and that it was all
taken care of. Naïve our part? Absolutely it was, but this is
their business, a consumer should be able to put trust in that.
For that we were very very stupid.
the early part of 2002 the lending practices were still rather
strict and we found ourselves not being able to get a refi
anywhere. No one would touch us because of a past 30 day on our
mortgage that showed up on our credit report. It did not matter
what the reason was.
intention to adjust our finances to our personal and economic
changing times was destroyed. The stocks we held and the savings
we had all withered away to keep pace with what had become
financial chaos. I was determined to fight back because I
believed in justice and truly believed that we mattered. I came
to find out that we do not matter. I filed a complaint with the
OCC, and they contacted me back asking me to send them all the
info I had so they could review it and proceed further. They
even told me to fax it as opposed to mailing my docs, as it
would find its way quicker into their hands. I did that, on a
Sunday evening. I faxed about 150 pages if not more, and the
following day I called to ensure that it was received.
was stunned when the woman on the side of the line admonished me
for having the nerve and stupidity to fax that many documents. I
asked them if they were going to review and she said that they
do not have time to pour through that many pages and that they
wrapped it all up with a cover letter and sent it to US Bank. As
I understand it in a civil matter I am not obligated to provide
the defendant with discovery. Any chance of that happening went
right out the door when the agency designed to protect me as a
just the opposite.
you have ever missed a car payment then you know that the calls
come daily if not 2 or 3 times, and that’s what my life became.
A balancing act, paying the mortgage one month and skipping
other ones and then the following month doing the opposite, all
the while the credit report overall number divebombing. Being a
one person office those calls came to that phone line. Every
single I made it a point that I was going to find justice, and I
called the 800 number of US Bank, never speaking to the same
person twice, and being bounced all over the country to get
nowhere. While at the same time I was also receiving phone calls
from their collections department looking for the payment on a
second that we had with them. I exaggerate not when I say that
in a 1-1/2 year period I spoke with over one thousand different
US Bank personnel, and the small handful that took an interest
in my pleadings for help would disappear……be
transferred. To this day, I am still appalled by that.
day that the refi fell apart, and after we were done screaming
at the loan officer she had faxed me a copy of a field review
that was commissioned by US Bank, which is common practice, but
nonetheless a document that is to be used in house and not privy
to us, the loan applicant. Their was so much emotion that day
that it did not occur to me until long after a statement that
she had made to me, and that was that “you did not get this from
me”. In an effort to shorten an already very lengthy letter,
what it came down to was that the person who did the field
review was not licensed to appraise our particular zone or type
of estate property, as we sit on 5 acres.
took about a week of spouting off about the appraisal when all
of a sudden, after months of getting nowhere, I suddenly find
myself taking a call from The President of Consumer Finance.
Which is just another long story ending in corporate America
screwing the common man and getting away with it.
to buy Nat City on the cheap is a deal with many echoes. There
was National City's purchase in Pittsburgh of Integra, with the
favor now being returned. There's PNC's purchase of Riggs after
its money laundering for Chile's Pinochet and Equatorial Guinea
came to light. National City's sins have been closer to home and
if the past is any guide, PNC wouldn't clean them up either.
stock fell 13.5 per cent last week to a five-year low. "We
question how long the [HSBC] shares can tread water in the face
of falling earnings and increased pressure on capital, and we
think the dividend is exposed," Morgan Stanley said. Takes one
to know one...
It's telling, in terms of how
sloppy the corporate giveaways have been, that neither the Fed
nor Treasury thought through how buying warrants in the big
banks would put them in the position of reducing book value or
recording a loss. They plan to pumps a combined $125
billion in Bank
of America Corp. (BAC) - including Merrill Lynch & Co.
Inc. (MER) - as well as JPMorgan
Chase & Co. (JPM) and Citigroup Inc.
Fargo Corp. (WFC), Goldman Sachs & Co. (GS), Morgan
Stanley (MS), Bank of New York Mellon Corp. (BK) and State Street
As FDIC Offers Bail-Out, Its
Conference Calls Are Full Then Off the Record
Byline: Matthew R. Lee
of Inner City Press on Wall Street: News Analysis
SOUTH BRONX, October 14
-- If the way the FDIC dealt with the Press on Tuesday is any
indication of how they will offer guarantees as part of the bank
bail-out process, the corner may not yet be turned. The FDIC
emailed the press corps at 9:57 Tuesday morning, announcing a
briefing at 10:45 a.m. to "provide
details of the FDIC’s plan, what it includes, how it will be
funded and who will be eligible to participate." A phone number
was provided, but when called the message was that the
conference call was full.
the same notice of 10:45 press conference was sent out, this
time with a new phone number and pass code. But even if one
called immediately, the call was ending, with some anonymous
participant griping that only JPMorgan Chase, Wells Fargo,
Citigroup and Bank of America will benefit.
was followed at 1:48 on Tuesday afternoon with a notice of a new
conference call, at 3:15. Once on, an FDIC official said it
would all be not for attribution. Inner
City Press asked two questions. First, why are some savings and
loan holding companies being excluded from the guarantee
program? Because some were grandfathered in and engage in
commercial activity was the answer. No list of excluded S&L
holding companies was provided.
then asked if the FDIC believes that the proposal to acquire
Wachovia by Wells Fargo is an emergency transaction, or that
requirements of public notice and comment should be adhered to.
The official said the FDIC is "not prepared to comment on
particular institutions." Inner City Press asked, Why will you
be? But the phone line had been cut off. The masters of the
universe moved on, corporate welfare in their wake.
And see this Oct 17 (UN) debate, including Musing
of One-Term Limit for Ban by Obama, at http://bloggingheads.tv/diavlogs/15262#
The WSJ transcribes for
Citigroup that "Citi will mainly seek to expand overseas,
particular in Asia and Eastern Europe, which has long been a
major focus of Citi's growth strategy. Retail banking and
consumer lending returns there by far outweigh the returns in
the U.S., Citi has long argued. Citi has 'exactly the same
strategy as before,' the source said." And that strategy
includes predatory lending -- now in Asia and Eastern Europe...
Tales for a time of lawless
regulators giving rubber stamp bank merger approvals without any
public notice or comment, Chase and now Wachovia --
On October 10, the Federal
Reserve Board sent Inner City Press a partial response to a
Freedom of Information Act request made back in March, about the
Fed voting without public notice or comment to bail out JPMorgan
Chase's acquisition of Bear Stearns without even following the
law requiring the involvement of Fed governors. Six months after
the fact, the Fed releases an April letter to Congress saying
the Governor Mishkin, who has since left the Board, was in the
air on a flight from Finland to the U.S. and therefore couldn't
be involved. Click here to view. And now he's gone...
responsive records which Inner City Press is pursuing.
begin "immediate consideration" of Wells Fargo's application. But no FDIC involvement = no
RBS is pleading for a bailout
from the UK... When Inner City Press / Fair Finance Watch
commented, at length and over years, about RBS' involvement in
and exposure to predatory subprime lending, RBS always said it
6, 2008 -- So why not
let Germany's Hypo
Real Estate fail? For an angry debate to this effect by Inner
City Press on the bailout, click here
In Wachovia War, Wells Fargo Would
Require Public Notice and Comment, No Emergency
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, October 3, 5 -- With Wells Fargo's
announcement that is it outbidding Citigroup for Wachovia, and
would consummate its proposal, without FDIC assistance, by the
end of the year the question arises: how could the regulators
bypass public notice and comment on a transaction that has no
FDIC involvement? Since
this still hasn't been answered as of October 5, Citigroup's
announcement that it's gotten a judge to restrain the deal
is much more sizzle than steak.
When Inner City Press /
Fair Finance Watch complained to the Office of Thrift
Supervision about the subprime practices of Washington
Mutual's affiliate Long Beach Mortgage, the OTS responded that
is was only concerned with WaMu's savings bank, not its
finance company. WaMu never got CRA credit for Long Beach's
loans, but now WaMu has failed and been bought at fire sale
prices by bottom-feeder JPMorgan Chase...
-- First on the fringes and now on Fox News, the
Community Reinvestment Act is being blamed by some for today's
financial crisis. The argument is that by encouraging
FDIC-insured banks to lend in lower income neighborhoods, the
government -- read, Democrats, from Jimmy Carter to Bill
Clinton -- created the explosion in high interest rate
major factual problem, though: with a single exception, no
bank sought CRA credit for its subprime loans. And the
investment banks which were purchasing, bundling and
securitizing the loans were not covered by CRA. Bear
Stearns was not covered by CRA, but was bailed
by the Federal Reserve Board for $30 billion dollars. AIG,
an insurance company, was not covered by CRA, but its subprime
activities have led
to a $75 billion loan from the Federal Reserve, whose
Bernanke nevertheless claimed to Inner City Press
that the Fed does not control AIG, despite owning
warrants for 79% of its stock, click here
for that story.
fact, community advocates had been telling the Federal Reserve
about the dangers of subprime lending since the 1990s. For example, Bronx-based Fair
Finance Watch commented to the Federal Reserve about the
practices of now-defunct non-bank subprime lender New Century,
when U.S. Bancorp bought warrants for 24% of New Century's
stock. The Fed, rather than take any action on New Century,
merely waited until U.S. Bancorp sold off some of the
warrants, and then said the issue was moot...
September 22, 2008
the rumors of Wachovia looking to buy Morgan Stanley, just as
its bigger sibling Bank of America bought Merrill Lynch (click here
for Inner City Press' 10% deposit cap analysis),
consider that both deals involve Utah-based industrial loans
companies, which are covered by the Community Reinvestment Act,
but whose acquisition, it is argued, is not subject to CRA
scrutiny and public comment. This is something that should be
fixed, clearly, in the pending bail-out legislation...
How did Citigroup slip the bit?
Now they're listed as a possible bidder for WaMu... HSBC
finally ended its pact for Korea Exchange Bank, denied rumors of
interest in Morgan Stanley and Halifax...
who shepherded Independence Savings Bank in Brooklyn toward its
ill-fated sale to Sovereign, has now brought another
Independentista over to the fast-collapsing WaMu, Frank Baier...
said last week that it expects a $450 million quarter-to-date
pretax impact on revenue from trading losses and write-downs of
Fannie Mae and Freddie Mac securities...
asked on September 12 if it was making an offer for Lehman
through a spokesperson said, " "We have made it clear
that our strategy relies on focusing on emerging markets and
businesses with a genuine global connectivity."
Yeah, like Household
International and predatory lending...
September 8, 2008
GE said it
received a Wells notice that staffers at the Securities and
Exchange Commission are considering recommending the SEC file
civil charges in a long-running probe of GE's
accounting. GE said Friday that the SEC staff is
considering civil charges on its accounting for four items over
various periods: derivatives; sales of spare parts, particularly
in its aviation unit; the timing of revenue recognition on the
sales of locomotives; and revenue recognition on several other
What about subprime?
Merrill under John Thain has
reached down into Citigroup's
mortgage operation for James De Mare to run its mortgage trading
operations. As reported, De Mare has been with Citigroup for 11
years. He most recently was the firm's global head of mortgage
trading, overseeing the trading of all securitized products in
the firm's fixed-income currencies and commodities group. Great
AG was poised Sunday to announce the purchase of Dresdner Bank
AG in a $13.2 billion deal -- to compete with predatory lending
enabler Deutsche Bank...
brags it has increased its stake in Vietnam Technological and
Commercial Joint Stock Bank from 14.4% to 20% for $77.1 million.
The transaction follows the granting
of special approval from the State Bank of Vietnam and
Vietnamese Prime Minister Nguyen Tan Dung in July to increase
HSBC's investment in Techcombank beyond the foreign ownership
cap of 15%, HSBC said...
August 25, 2008
Per DJ, "Russian police have raided the offices of four
law firms representing Hermitage Capital Management Ltd., once
the country's biggest portfolio investor, the fund's chief
executive, Bill Browder, said Friday. The
raids come after Hermitage, together with HSBC Holdings,
turned to Russian courts to recover ownership of three Hermitage
investment vehicles that they say were stolen last year with the
help of the Interior Ministry."
So HSBC, in most parts of the world a rogue and
spreader of predatory lending, is draped in the banner of
corporate reform in Russia...
Genpact Ltd., a business process outsourcing
provider with its Latin American headquarters in Juarez, has
acquired a delivery center in Guatemala City, the company
announced this week. Genpact will
provide services to GE Money from
the facility, which it acquired from GE Money, a division of
General Electric. Financial details were not disclosed. The
Guatemala facility extends Genpact 's Latin American presence
beyond Mexico, the company said in a news release. The delivery
center will initially employ more than 700 people, and can grow
to 2,000 workers, it said.
This week we note the sale of ABN Amro's
private equity business this week to a Goldman Sachs (CS)-led
consortium for 600 million Euros, just part of the $95
billion carve-up of the Dutch bank by new owners Banco Santander,
Royal Bank of Scotland Group and Dutch-Belgian financial services
company Fortis NV. The fall-out continues.
HSBC Auto Finance will lay off
about 400 workers in San Diego in the next three months as the
giant London-based bank stops making auto loans in the United
States. After exiting auto lending, HSBC's
consumer finance unit intends to focus on its credit card and
home mortgage businesses, said bank spokeswoman Cindy Savio in
Chicago. And still much of it is predatory -- now to employees
August 11, 2008
WSJ, "the SEC didn’t want to impose an
upfront fine against Citi, say people familiar with the matter,
while the states pushed for -- and eventually got — a $100
million fine. Also, as part of the deal, the SEC wants Citi to
use its 'best efforts' to help help institutional investors sell
roughly $12 billion of auction-rate securities it sold to
retirement plans and institutional investors by the end of 2009,
or else face possible sanctions from the commission. (In other
words, this is the SEC’s version of a deferred-prosecution
agreement.)" Another sleazy deal by Citigroup...
Money is to make 85 staff redundant and stop offering
personal and commercial loans, in a major restructuring of its
operations in Ireland. The lender, which is part of America's
largest company General Electric, is to continue offering
sub-prime loans, loan protection insurance, and car finance
through motor dealers." The subprime continues...
Also per WSJ, "HSBC North
America's risk-weighted assets rose 11% to $374 billion in the
first half, under the new Basel II banking rules, with most of
the rise at HSBC Finance. That is the old subprime-dominated
Household International, HSBC's U.S. unit into which it has
pumped $2.2 billion in equity this year and which continues to
need intensive treatment." Great purchase, that...
is getting out of mortgages in Canada, while expanding
elsewhere. Apparently Canada is too regulated for GE...
playing hard ball in Seoul. DJNS: " HSBC
Holdings PLC (HBC) said Thursday that it hadn't received
regulatory approval to buy a controlling stake in Korea Exchange
Bank (004940.SE) by a July 31 deadline. The
bank, recently ranked by Forbes as the world's largest company,
has an exclusive agreement to buy the stake from U.S-based Lone
Star Funds. HSBC and Lone Star have
imposed a deadline on the deal, valued at around $6 billion, of
July 31 to coincide with the required regulatory approval. 'The required regulatory approval was
not obtained by 31 July so, under the terms of the acquisition
agreement, either HSBC or Lone Star may terminate the
agreement,' HSBC said in a statement... Earlier Thursday, an
official at South Korea's Financial Services Commission said
that HSBC hadn't submitted an amended application. "
28, 2008 -- a week of shenanigans by Citigroup
(in London), HSBC
(in South Korea) and GE (in Abu
Dhabi). And this --
a hurried correction, AFP on July 25 reported that
Friday, the Treasury's Office of the Comptroller of the Currency
took over First Heritage Bank of Newport Beach, California, and
First National Bank of Nevada, based in Reno, Nevada, declaring
both undercapitalized and facing losses that would wipe out
28 offices of the two banks will reopen on Monday as branches of
Mutual of Omaha Bank," the Federal Deposit Insurance Corporation
said in a statement.
depositors, including those with deposits in excess of the
FDIC's insurance limits, will automatically become depositors of
Mutual of Omaha Bank for the full amount of their deposits."
addition to taking over the deposits, Mutual of Omaha Bank will
pay 200 million dollars for assets of the two closed banks,
which are now in receivership under FDIC control.
closures took to 10 the number of banks closed in the country in
the past 18 months, as the collapse of real estate prices, the
spread of mortgage defaults and the crumbling of the markets for
billions of dollars worth of securities tied to mortgages.
July, the FDIC seized control of the large IndyMac Bank, which
was weakened by heavy exposure to risky subprime mortgages and
collapsed after a run by depositors.
Then they added the N.A....
July 21, 2008
why did Richard Holbrooke resign last week from AIG's board?
AIG while announcing the resignation, "effective immediately," did
not list a reason...
From the earnings: "
about 8.5% of its subprime mortgage borrowers, which make up about
16% of the bank's total mortgage portfolio, have fallen at least
90 days behind on their loan payments, and therefore are
considered at high risk of defaulting."
Slinking out of Slovakia, "in Slovakia Citibank
of the US made several redundancies after its consumer finance
division CitiFinancial was liquidated. At the
beginning of 2008 the bank said that it plans to cut 55 jobs in
Slovakia out of almost 230 jobs. In the near future Citibank
Slovakia will operate as a branch of Ireland-based Citibank
sell-off of Lake to Shinsei in Japan, where will the $5.4
billion be redeployed -- in predatory lending elsewhere? "In an
extremely challenging environment, we have completed an
agreement that fully meets our core strategic objectives: giving
our Japanese business the opportunity to work with a partner
committed to investing in Japan, and allowing GE Money and GE to redeploy its capital to
areas which will generate strong sustainable long-term growth
and returns for our shareowners,'' said GE Money's CEO Bill
Bank's CEO said Friday that the government should decide soon
whether to approve HSBC to
purchase of a controlling stake in the bank from U.S.-based Lone
Star Fund. "It is very difficult
for the bank not to have clarity on when the deal can be
closed," Richard Wacker whined at a press conference. If Lone Star has to find a new buyer for
KEB as a result of the delayed decision, then the outcome may
not be what the Korean government wanted, he said. Is
that a threat?
Pandit's pitch about a great
turn-around just around the corner is falling on deaf ears.
Meanwhile, Threat Level quotes the FBI that Citi's
servers were hacked, leading to mass withdrawals from ATMs, the
reissuance of cards and, to be sure, some truly sleepless nights
from the Citi that never sleeps (except when it comes to
consumer privacy)... Ex-Chaser Don
Layton, now at E-Trade, has scooped up an old crony, Joe
to CR: CapitalOne Healthcare Finance says, "Expert
cosmetic surgery and procedures like liposuction, hair
restoration, tummy tucks, and more are now within reach." GE
Money CareCredit provides this testimonial from
Laser Elite, a hair and skin clinic in McLean, Va.: "Having
CareCredit has definitely had a positive impact on our business.
It helps us attract more patients and has increased our sales by
25 percent." GE's website for its CareCredit card lists
endorsements from 31 state medical and veterinary associations and
11 national groups, including the American Dental Association,
American College of Eye Surgeons, American Society of Plastic
Surgeons, American Society of Bariatric Physicians, and American
Animal Hospital Association. Like we've said before, pet loans.
But how does GE collect?
looks to sell its German operations, probably to Deutsche Bank,
its unions have laid down conditions that "management also
emphasizes the need of employees in the talks with the bidders,"
that working conditions shouldn't deteriorate and the current
locations be kept. Citibank's German retail operations, Citibank
Privatkunden AG & Co. KGaA, employs around 6,500 people in
Germany, at Duesseldorf headquarters and a call center in
Duisburg. Can you say fire sale? As
noted, Citi's stock is at a 10 year low; it has cut its dividend
and been forced to raise, so far, $42 billion...
finagled approval from China's banking regulator to buy nearly
20% of Suzhou Trust Co., sources say, a follow-up to RBS' stake
in Bank of China Ltd. in 2005. Desperate swashbucklers...
other desperation news, GE is trying
to sell off its credit cards, but nobody is interested...
June 23, 2008
Citigroup has said it's
buying a brokerage firm Intra S.A.
Corretora de Cambio e Valores in Brazil which has about $745
million in client assets --but would not disclose how much it is
paying for the firm. Ah, transparency.... On the spin
front, Leah Johnson jumped ship earlier this month after about
eight years of spinning, replaced by Kate James, who was Standard
Chartered Bank's head of public affairs and strategy for the
Americas. James will report to Lisa Caputo, Citigroup's
chief marketing officer, whom the company has now put in charge of
both marketing and communications operations.
Chase's securities arm sued a former private banker on
Monday, alleging he stole confidential and proprietary
information about the bank and its clients. The
lawsuit, filed in U.S. District Court in Manhattan, is seeking
an injunction against Hernan E. Arbizu, a former senior private
banker for the Argentina and Chile region at J.P. Morgan
Securities' private banking department in Manhattan. Live by the
we're glad to see that CompuCredit, and First Bank of
Delaware, are getting sued by the government for $200 million.
Inner City Press / Fair Finance Watch filed comments opposing
CompuCredit as a predatory lender.
week, Inner City Press / Fair Finance Watch filed comments against the applications by Spain's
Caja Madrid, funder of biofuel projects and 23% owner of Iberia
airlines, to acquire City National Bank of Florida, and against
the Federal Reserve's secret process with banks, in essence a
rule-making excluding the public even those the topic, credit
derivatives, has come up because of the subprime lending crisis.
The financial institutions invited -- and now challenged -- are
Bank of America,
N.A., Barclays Capital - BNP Paribas - Citigroup - Credit Suisse -
Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. -
HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch
& Co. - Morgan Stanley - The Royal Bank of Scotland Group -
Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital
Management LLC - Citadel Investment Group, L.L.C.
Procedures Act (5 U.S.C. Section 553) and related laws require
that when the government engages in rule-making, it must provide
notice to the public, and allow and weigh public comments.
Here, the FRBNY has tried to rule-make without any involvement
by the public, even the public most impacted by the subprime
lending that underlies this FRBNY process. Rather, for example,
the FRBNY on June 9 met with a group of the largest banks to
discuss, according to the FRBNY's president,
policy. These are the incentives and constraints designed to
affect the level and concentration of risk-taking across the
financial system. You can think of these as a financial analog
to imposing speed limits and requiring air bags and antilock
brakes in cars, or establishing building codes in earthquake
"Regulatory structure. This is about who is responsible for
setting and enforcing those rules.
"Crisis management. This is about when and how we intervene and
about the expectations we create for official intervention in
But when rules are being
set, to use Mr. Geithner's own analogies, for air bags, brakes,
speed limits or building codes, the agencies at issue are not
allowed to and do not only take input from the industry.
accounts make clear that the financial instruments and
regulatory issues discussed behind closed doors are related to
issues of public interest, which in fact are disproportionately
impacting low- and moderate- income people and communities of
color -- subprime and predatory mortgages. AFP of June 9
are designed to transfer the credit exposure of fixed income
products between parties and often have been linked to US
subprime, or high-risk, mortgages... Trading in derivatives,
financial securities whose value is derived from other financial
securities, was a major factor in the subprime, or high-risk,
mortgage crisis that rocked markets last August and has spread
through the global markets... Geithner defended the Fed's
decision to finance the Bear Stearns - JP Morgan Chase merger in
March, saying it was done only with great reluctance and only
because there seemed to be no other choice as Bear Stearns
reeled from soured mortgage-related investments. 'It was the
only feasible option available to avert default,' he said, and
'we did not believe we had the ability to contain the damage
that would have been caused by default.' The Fed acted only to
'facilitate an orderly transition,' not 'to preserve the
company,' Geithner said."
Here, it appears
that the FRBNY is trying to take the closed-door, no public
notice Bear Stearns - JPM Chase process several troubling steps
further, providing access to 17 mega-banks but still not the
This closed-door, industry
top-heavy process is unacceptable and, Inner City Press has now
timely contended, is contrary to law, under 5 USC 553 and
otherwise. Watch this site.
Polish financial regulatory body
KNF has rubber-stamped GE Money's takeover of Bank BPH. 'KNF has
approved for GE to use their rights from over 66 percent of
votes but not more than 75 percent of votes in BPH,' said Lukasz
Dajnowicz. BPH was Poland's third largest bank until the bulk of
its assets were absorbed by peer Bank Pekao as part of a merger
of UniCredit's local units. Italy's UniCredit last November
agreed to spin off and sell 200 branches of BPH to GE Money to
gain Polish authorities' approval for a merger of its local
head of global communications Robert Rendine says that GE Money,
which provided about $25 billion of the parent's company's
$172.7 billion in sales last year, is an active player in the
global financial services sector. While the economy in the United States
has struggled, GE has turned to developing markets like Poland,
Turkey and India, Rendine says. GE Money has invested nearly a
half-a-billion dollars in some of these emerging markets, "and
they have become a great growth vehicle for us," he adds.
- a great vehicle for spreading predatory lending...
June 2, 2008
GE, advised by
Chase, beat out Natixis and others to buy Interbanca from
Santander -- what GE is doing is trading other businesses with
Santander, giving it GE Money's businesses in Germany, Finland,
and Austria, and its card and auto businesses in the UK.
HSBC is a
finalist to become advisor to the privatization of Nigeria
predatory lending, insurance sales and debt collection practice
have hit a new low in Australia. Beyond called debtors up to 100
times a month, GE violated previous commitments. According
ASIC. ASIC found that parts of the insurance advice and sales
business were often poorly managed and not meeting the legal
obligation requiring there be a 'reasonable basis' for personal
advice given to customers. Specifically, ASIC was concerned that
staff were selling insurance to customers whose needs had not been
identified or understood. Given that the Hallmark companies did
not comply with a number of key undertakings given to ASIC in
2006, the regulator has decided the best way to protect consumers
is to impose conditions on the AFSLs of GE Money's Hallmark
stringent conditions now included in the AFSLs of the GE Money's
Hallmark companies replace the 2006 EU. These additional license
conditions require the Hallmark companies;- to engage an
independent expert, over a period of up to 15 months, to review
and assess the advice, sales, training, management and corporate
governance processes in its branch network and make
recommendations to correct any deficiencies to ensure these
processes are at an industry best practice level;- to engage the
same expert to assess the steps already taken by the Hallmark
companies to compensate their customers and make recommendations
as to any additional compensation steps that may be necessary;- if
the expert makes recommendations, to provide ASIC with an Action
Plan to implement those recommendations; and- to provide ASIC with
full details of the compensation already paid to customers by
means of a director's statutory declaration, by 18 July 2008.
the Hallmark companies are now required to limit the insurance
advice their staff provide to 'general advice' only and not
the imposition of additional license conditions on the Hallmark
companies, GE Money has entered into an EU to address ASIC's
concerns about the debt collection practices of its consumer
credit business. This is in response to consumer complaints about
harassment from the debt collection practices of that business.
Those practices included excessive or inappropriate contact with
customers, contact at unreasonable hours and an inflexible
approach to repayment arrangements.
As part of
this EU, the GE Money consumer credit business is required:- to
engage an independent expert, over a period of two years, to
review and assess its debt collection processes to ensure that it
complies with the ASIC/ACCC Debt Collection Guidelines and make
recommendations to correct any deficiencies;- if the expert makes
recommendations for improvements, to provide ASIC with an Action
Plan to implement those recommendations;- to pay compensation to
affected customers in accordance with guidelines prepared by the
Banking and Financial Services Ombudsman; and- to arrange and pay
for an industry workshop to promote best practice in the debt
the attempt to crack-down just keeps a story alive. It is not
clear if that's the case regarding the barring from Russia of
Moldovan journalist Natalya Morar for her reporting on the
covering up of murder links to money
laundering through Russian bank Diskont and Austrian bank
Raiffeisen (see, "Strange Games", The New Times,
August 20, 2007). Morar has been fighting the expulsion in
court, without success. We aim to continue to follow this story.
We bring good things to life? The
several thousand people working at General Electric's
Appliance Park in Kentucky were blind-sided by the
company's plans to sell or spin off its appliance
business. Larry Hayes, secretary of Kentucky Gov. Steve
Beshear's executive cabinet said, "It's the hand we've been
dealt, and now we need to play that hand as best we can."
"We don't have any idea
who's coming in, what kind of salaries, how much of our benefits
we're going to lose," said Ann Davidson, a production worker
with 35 years at GE plants.
HSBC has it
will acquire a 73.21% stake in Indian brokerage firm IL&FS
Investsmart Ltd. for $241.6 million, half of it from an entity
known as E*Trade Mauritius Ltd. --
GE Money and
others in Sweden -- " The first foreign bank in Sweden
was established in 1986, with the first branch opening four years
later. Most of the 29 foreign banks (at end-2006) focus their
activities on the corporate banking and securities markets. The
largest foreign bank (aside from the Nordea Group) is Danske Bank,
now established as the country's fifth-largest bank. A fairly
recent foreign entrant is Kaupthing (Iceland), which took over JP
Nordiska in 2002. The most active non-Nordic banks are GE Money Bank (US), Dexia Credit
(France/Belgium) and ABN Amro" -- which bet on world food prices
The U.S. "Country Reports on
Terrorism," has been closely watched in recent years after the
U.S. offered to take the North off the list. North Korea was put
on the list, joining Cuba, Iran, Sudan and Syria, in January
1988 after its agents bombed a South Korean airliner in November
the preceding year. All 115 people aboard the plane were killed.
The report said North Korea is not known to have sponsored any
terrorist acts since then. Getting off the list is one of
Pyongyang's most coveted benefits, since it would lift
wide-ranging prohibitions that effectively restrict economic
assistance and diplomatic interchanges. After striking a
September 2005 deal under which Pyongyang agreed to eventually
abandon its nuclear programs, the U.S. toned down the segment on
North Korea by striking out detailed accounts of the country's
past abductions of Japanese citizens. This year, the report gave
more emphasis to the U.S. commitment to delist Pyongyang once
conditions are met. 'As part of the six-party talks process, the
United States reaffirmed its intent to fulfill its commitments
regarding the removal of the designation of DPRK (North Korea)
as a state sponsor of terrorism in parallel with the DPRK's
actions on denuclearization and in accordance with criteria set
forth in U.S. law,' said the report. We'll see.
begrudgingly agreed last week to extend the deadline for the
completion of its proposed acquisition of a majority stake in
Korea Exchange Bank from Lone Star Fund by two months to July
31. The proposed deal has been
hindered by an ongoing tax-related trial over the U.S. private
equity fund's acquisition of the stake in KEB in 2003. The statement said HSBC or Lone Star may
terminate the agreement if the deal isn't completed on or before
July 31. "The proposed transaction
is entirely in line with our stated strategy to focus on
high-growth economies and I continue to be of the view that it
is in the best interest of all KEB stakeholders and of HSBC,"
HSBC Group Chairman Stephen Green said. HSBC's statement made no
reference to the ongoing trial -- or the sleaze...
lending is booming in the Czech Republic -- while GE Money
Multiservis has not yet disclosed its economic results, Cetelem
CR granted loans worth Kc2.8bn to clients in Q1 2008, 18 percent
more than a year ago. Cetelem CR operates in the Czech Republic
since 1996, and is one of the 20 subsidiaries of French bank
Cetelem S.A. Cetelem is a unit of BNP Paribas...
The calm before the storm?
South Korea's Financial Services
Commission Chairman Jun Kwang-Woo Wednesday said he hopes to
soon find a way to resolve the issue of Lone Star Funds' stalled
sale of Korea Exchange Bank. South
Korea's sixth largest bank by assets is majority-owned by
Dallas-based Lone Star, which agreed last September to sell its
shares to HSBC for $6.3 billion. Lone Star's exclusivity in the
agreement with HSBC will end on April 30... "It will be between
Lone Star and HSBC, not the government, to decide whether to
extend the contract," said Jun. That's just how HSBC likes
and pays for it - government and the public out of the way...
been told to try to sell off GE Money. But
it's too late, some say...
"This week you'll see several
organization announcements from our management committee about
their direct reports, and we expect the rest by the end of the
month," Steve Black and Bill Winters, co-heads of J.P. Morgan's
investment-banking business, told employees in a memo sent
Monday. "People selection is the most important and most
difficult task in any merger, and we want to make sure we spend
the time to get it as right as we can." They promised to inform
Morgan Chase and Bear employees whether they would have a
job no later than the merger's expected close on June 1. We'll
recently sold - and in some markets closed - retail bank branches
"but also said it would expand CitiFinancial, its consumer
lending group," the American Banker of April 18 reported, without
noting that CitiFinancial is subprime...
bragged last week that it is launching a new private bank in
Ireland. "Ranked the third largest private bank in the world by
Euromoney, HSBC Private Bank offers wealth management, banking
and trust services in over 93 locations around the world" --
including some breakaway republics, with the presumptive offer
of creative money washing...