Inner City Press Bank Beat Archive 2005-2012

  Click here to see ICP's current Bank Beat

          Welcome to Inner City Press’ Bank Beat.  We aim to scrutinize the industry, from high to low. Our other Reporters cover Community Reinvestment, the Federal Reserve, and other beats.   ICP has published a (double) book about the Bank Beat-relevant topic of predatory lending - click here for sample chapters, an interactive map, and ordering 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 Lit: Roman a Klepto [Review of 'Predatory Bender']," by Matt Pacenza, City Limits, Sept.-Oct. 2004. The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site

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.

December 24, 2012

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.

Bottom feeders...

December 17, 2012

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 assets."

But Synovus is a rogue - who would buy it? Watch this site.

December 10, 2012

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 site.

December 3, 2012

IMF Won't Answer on Rwanda, Sudan or Hungary, Does on Bosnia and Sri Lanka

By Matthew Russell Lee

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 challenged tried 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 spending."

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...

November 26, 2012

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.

November 19, 2012

Inner City Press / Fair Finance Watch filed timely comments on FirstMerit's application to acquire Citizens Republic:

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 than whites.

Citizens Republic's Citizens Bank in Akron in 2011 made three such loans to whites, none to African Americans.

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 Americans.

FirstMerit in the Toledo MSA in 2001 made 17 such loans to whites, none to African Americans.

For 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 term.

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:

Flint, 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.

The approximate 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.

The other 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

SO.Licensing@occ.treas.gov

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 and Queens.

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 the record:

"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 be.

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 Melville.

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 months."http://www.bizjournals.com/southflorida/blog/2012/10/bankunited-files-plans-for-four-new.html

So the plan is to open branches in affluent parts of New York, and to close them in Florida. The OCC should deny this....

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 moderate-income.

BankUnited’s lending to African Americans is a fair lending concern.

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 moderate-income neighborhoods.

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 2011.

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 state level).

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 needs.

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.

Sincerely,


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 about.

  Inner City 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.

  The documents 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 the Fed:

"Wilmers 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.

  A slide presentation was made, much of which including on Due Diligence and Complexity has been withheld.

  After the 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 being withheld.

Withheld 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."

  Regulators had 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 community-based organizations."

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 reaching out.

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.

The 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.

By name, 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 Bancorp, Inc.
 
  We'll have more on this.

October 29, 2012

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 USA?

October 15, 2012

Predatory 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 comment?

October 8, 2012

On 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 that time."

  After last week's closed-door mini summit on the topic at the UN, Inner City Press was told that the most vocal in pushing sanctions against Rwanda 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.

  Rosenthal told 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."

  Referring to 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.

From the IMF's October 4, 2012 transcript:

There 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.

IMF Tells ICP Welcomes Sudans Deals, Ready to Support Both - Debt Relief?

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.

  Sudanese foreign 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:

"In 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?"

  IMF spokesman Gerry Rice took these as the penultimate question during the embargoed briefing, replying that

"The 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?

Thursday in 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:

"In 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 forward.

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

Jeremy

Here is the update on the Libor issue which you inquire about recently. The response is from Bob Hand, MUFG General Counsel in NYC.

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.

September 17, 2012

FirstMerit's $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.

September 10, 2012

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.

September 3, 2012

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, the NYSDFS then provided notice of a merger application filed August 8, saying the comment period expired August 6 - click here to view.

 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...

August 6, 2012

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 competition.

Green 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.

"We see 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 withheld exhibits.

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 exhibits.

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 Wells Fargo, Citigroup and Bank 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.

  While not 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.

L'affaire DSK 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 this site.

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

July 2: Montana, 7 branch deal

July 2: Maine deal

July 3: Illinois deal, Heartland and Farmer City

July 5: Kansas deal, Southern Kansas

July 5: Nebraska, Valley Bank

July 6: Texas, LubCo (Lubbock)

July 9: California, Opus Bank buying 10 branches in and around LA

July 10: 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 America...

On Angola's Oil Funds, IMF Tells Inner City Press It's Working on Discrepancies

By Matthew Russell Lee

UNITED NATIONS, 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 2011?"

  Rice had 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 finances."

  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 problems."

  As to the IMF, Rice said that the "Board concludedyesterday 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 mid-July...

July 2, 2012

Now the estimate for JPMorganChase's London whale dalliance is $4 to $6 million...

In Greek IMF Tragedy & Lagarde Guilt, Africa Ignored As Sudan Protests, Coups

By 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?

Pledges to 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?

And 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

So Mitsubishi 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 is... confidential.

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

Deutsche Bank 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...

IMF Peppered on Lagarde's Linking Greece to Niger, But Sudan UNanswered

By 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 enough?

  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 system"?

  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 independence."

  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 Thursday morning:

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 40%"?

What 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"?

On 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?

Watch this site.

May 29, 2012

Losers: 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 release.

Meanwhile, Facebook's botched IPO cost Citigroup's automated trading desk about $20 million.

May 21, 2012

So JPMorgan Chase's gambling loss morphed from $2 billion to more than $3 billion, and some still say that "real reform" was put in place...

On Sudan IMF Has No View on Oil Transit Fee, Notes Country's in Arrears

By 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 repeatedly asked the International Monetary Fund for its view of the oil fee dispute and about possible debt relief for Sudan.

  At the IMF's Spring 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 following arrived:

Subject: Sudan questions
Date: Thu, May 17, 2012 at 1:55 PM
From: [Spokesperson at] imf.org
To: Matthew Russell Lee [at] innercitypress.com

This is in response to your questions on Sudan and South Sudan:

Q - What is the IMF doing on or about the Sudan - South Sudan oil transfer fee dispute?

At 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?

The 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 resources.

These answers are appreciated; among the questions that remain outstanding is

"What 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.

On Myanmar, IMF Won't Assess Reversion to Repression, Kachin Not Considered

By 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 their money.

  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?

Meral 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 General Ban Ki-moon visited Myanmar he thanked and welcomed a company specializing in surveillance technology, including to Gaddafi's Libya, click here for that story.

  Meral Karasulu emphasized 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

IMF Notes Heglig Impact, Dodges on Sudans Oil Transfer Fee, Answers Romania

By Matthew Russell Lee

UNITED NATIONS, May 3 -- During the International 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:

after the press 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, from in 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.

    Lead IMF 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:

In response to your question on South Sudan during today’s press briefing, you can attribute this to an IMF spokesperson:

"Conflict in 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 possible."

While appreciated, this was the question posed by Inner City Press:

"What 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.

April 30, 2012

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 timely.

Aurora is a subprime, some say predatory, lending unit of the scandal wracked Lehman Brothers. For the record:

"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 practices."

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 whites.

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.

April 23, 2012

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.

At IMF, Canada's FinMin Flaherty Tells ICP Glad for Delay of Volcker Rule, Geithner

By Matthew Russell Lee

WASHINGTON DC, 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 about what 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 further developments."

  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 site.

April 23, 2012

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.

April 16, 2012

"A transparent 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.

North Fork, 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.

As IMF Tells Bangladesh How to Regulate Banks, Insiders Rush for Licenses

By 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:

"former president 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.

As IMF Praises and Turns from Iceland, Cites Basel, Calls Hungary Anti-Bank

By 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 and accountability.

  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 2011."

  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 new rules.

  Regarding bank regulation in Iceland, the IMF says

"A 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 this site.

April 9, 2012

IMF Eyes Hungary, Has Adviser in South Sudan, Complaints on Lagarde Access

By 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 transcript:

HAWLEY: "a 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 transcript:

HAWLEY: "Matthew 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 "Transparency."

  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.

December 12, 2011

Bad karma: Bank of New York Mellon moved to evict Occupy Pittsburgh from "its" park. Will there be repercussions?

First Niagara's 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 we...

December 5, 2011

By 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:

"on 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)

“On 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:

“Of 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 developments.

  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 morning's briefing."

There was at least a response to the Yemen question, above. But nothing on the other. Watch this site.

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...

November 28, 2011

A BankAtlantic 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...

November 21, 2011

This is the new one:

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, Continue

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 12/09/2011

Watch this site.

November 14, 2011

Belatedly and 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.

Troublingly, 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

Rabobank Admits Subprime Exposure & Purchase of Failed Banks, Desjardins on Citi Deal

By 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  America.

  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.

Why 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...

October 24, 2011

At Occupy Wall Street, People's Trial of Goldman Sachs Set for Nov 3

By 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.

October 17, 2011

Occupy Wall Street Visits JPMorgan Chase with Police, Goldman & Capital One Next?

By Matthew Russell Lee

WALL 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. How indeed.

  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.

October 10, 2011

Another example 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 --

As Police Arrest Occupy Wall Street Protesters, Focus on Banks, Benghazi Analogy?

By 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, JPMorgan, Bank of 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 force.

  "Obama's moved so far to the right," a protester complained, staring as if hyponotized into the swirling squad car lights.

At 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.

InnerCityPress YouTube videos sampling interviews: click here

 A 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 this site.

Occupy Wall Street Target JPMorgan Paid Police Monitors, Paid Blair for Occupied Palestine

By Matthew Russell Lee

UNITED NATIONS, October 2 -- As over 700 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

"JPMorgan 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."

Given that the protests are largely directed that bailouts to and abuse of the political system by JPMorgan, Citigroup, Bank of America, Wells Fargo 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?

Ray 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 explained?

And 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 has 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 Martin Nesirky:

Inner 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?

Spokesperson 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.

Inner 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?

Spokesperson: 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.

September 26, 2011

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.

September 19, 2011

Now First 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 opposed.

September 12, 2011

So Bank of America denies it plans to close 600 branches. OK - how many does it plan to close?

In Lebanon, 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....

September 5, 2011

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.

August 29, 2011

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?

August 22, 2011

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...

August 8, 2011

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.

August 1, 2011

Serial acquirer 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 fast...

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

When Christine 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.

Brazilian 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.

Inner City Press: 1) it shouldn't buy BofA out of the other problems. 2) the AGs let their thunder be stolen...

June 27, 2011

A potential 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. Game on.

Distracted by DSK & Hacking, IMF Ignores Sudan & Afghan Banks

By Matthew Russell Lee

UNITED 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.

  When the 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.

  Inner 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.

  But in his post-DSK era, these June 23 questions were entirely ignored:

With South 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?

Afghan 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 criticism?

In Belarus, 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?

  Nor in 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, transparency.

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 operations.

  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

Amid Lagarde & DSK Scandals, IMF Won't Answer on Belarus or Jamaica

By Matthew Russell Lee

UNITED 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.

During 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?”

  IMF 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).

  After not acknowledging the timely submitted questions during the briefing, afterward Inner City Press received this email from the IMF about Belarus:

Subject: Your question on Belarus
From: [ ] @imf.org
Date: Thu, Jun 9, 2011 at 10:43 AM
To: Matthew.Lee [at] innercitypress.com

Matthew, With 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 Fund-supported program.

Regards, [ ] IMF Press Office

  It's 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.

  On Jamaica, the IMF asked for more specifics, to which Inner City Press replied:

Jamaican 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 IMF”?

Separately, 2) what did the IMF tell Finance Secretary Hughes about this?

  After not taking this question during the briefing, then asking two rounds of counter questions about it, the IMF finally replied:

Subject: RE: 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

Matthew, We 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.

The 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].

  So, 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 to repeatedly emailed questions about its policies on gifts. To be continued.

The 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 on this.

June 6, 2011

Another merger 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.

Also, 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 Authority...

May 23, 2011

By Matthew Russell Lee, News Analysis

UNITED NATIONS, May 18 -- The arrest for sex crimes of International Monetary Fund managing director Dominique Strauss Kahn, and his interim replacement by his American deputy John Lipsky, have together revived a story exclusively reported by Inner City Press in 2009.

Then, two senior advisers to UN Secretary General Ban Ki-moon told Inner City Press of worries that 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.

Under 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.

Until 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.

Now, at least until the IMF situation is resolved, Team Ban's 2009 nightmare scenario is suddenly closer to coming into play.

Eastern 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.

Now 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 site.

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 what?

May 16, 2011:

As IMF Chief Strauss-Kahn Is Arrested, Denials of Rule-breaking Recalled, Immunity & Air France Arrangement Questioned

By Matthew Russell Lee

UNITED NATIONS, May 15 -- With Dominique Strauss-Kahn of the International Monetary Fund having been detained and then this morning arrested 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” in 2008.

  In this case, IMF spokesman William Murray has been quoted that the IMF “has not immediate comment” on the arrest or charges.

  IMF 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.”

  At that time, the IMF answer other of Inner City Press' questions, while ignoring this one. Two weeks later, Inner City Press asked:

Sent: 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 City Press

This time, the question drew a quick answer, albeit a dismissive one, from Mr. Murray:

From: 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

Matthew,

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 way.

But does the IMF have rules, that they require not be violated?

 It's now reported 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.

Footnote:  Inner 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, click here.)

  Earlier this year, Inner City Press (un) covered the 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 trial.

  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

JPMorgan Chase & 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:

In Indonesia, Citi on Hot Seat

Debt Collection Brought In-House After Outside Agents Accused in Man's Death

JAKARTA, 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 credit-card debtor.

This month, 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 credit-card debt.

South Jakarta 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 his nose.

...The 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.

The latest 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.

In 1995, 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.

"These are 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.

Last December, 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 wealth-management customers.

Separately, 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 country.

April 25, 2011

Declining 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

IMF Promotes Bank Mergers, Says Bigger is Better, Politics & Portugal Dodged

By Matthew Russell Lee

WASHINGTON 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 countries.

  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 and accountability.

  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. See IMF transcript, below.

  Inner 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.

  Meanwhile, Borges took 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.

From the IMF's transcript:

Inner City 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?

MR. BORGES: 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 managed.

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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 deduction arbitrage."

Sounds like Wells..

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 the region....

  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

Inner City 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 Sterling:

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.

Inner City 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 whites.

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 represented?

March 21, 2011

After the 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.”

Channeling 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 level.

So GE will get off cheap, Citigroup predicts...

March 14, 2011

Citigroup, 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

Inner City 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).

In its 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.

In the 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.

Again, this militates for public hearings and the denial of Hancock's applications.

ICP also 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....

February 28, 2011

JPMorgan Chase's cover up of multi billion dollar fund transfers by Madoff is an outrage, sure - but what were the regulators doing?

February 21, 2011

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?

February 14, 2011

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....

Shareholders 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 year.

February 7, 2011

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."

BB&T Corp. 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?

January 31, 2011

With 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.

January 24, 2011

Let's review: 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...

January 17, 2011

Citigroup in 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 lending...

Another 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, Bafin...

January 10, 2011

India's capital 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....

January 3, 2011

J.P. Morgan 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....

December 27, 2010

Deutsche Bank 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?

December 20, 2010

Ah the 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”?

December 13, 2010

HSBC's failure 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.

December 6, 2010

IMF Fudges on Ireland & Democracy, on Africa's Reduced Votes, Maldives Deferred

By Matthew Russell Lee

UNITED 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.

The IMF 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.

Inner 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.

On 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.

But what 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, we'll see.

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?

Update of 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?

November 29, 2010

The Journal: “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.

November 22, 2010

Citigroup says 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.”

November 15, 2010

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.

November 8, 2010

   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...

November 1, 2010

“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?

Yes, Household 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.

While the 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.

Inner City 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 problems.

Inner City 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...

October 18, 2010

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 for Reid.

October 11, 2010

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.

October 4, 2010

So Bernanke 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...

September 27, 2010

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...

Sample puff 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 and independent-minded.'”

September 20, 2010

From JPMorgan 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...

September 13, 2010

On Pakistan, IMF Won't Explain Lack of Debt Relief, Why & When Loans, MDG Games

UNITED NATIONS, September 9 -- Despite the flooding crisis in 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?”

Ms. 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.”

But 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.

But she did not read out, or answer, this: “Does IMF dispute that Pakistan's debt payments ($500 million) are larger than the $450 million loan?”

Nor did 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.

Inner 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?”

To this, no answer. Watch this site.

Footnote: 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 time.

* * *

UK disclosure: “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 manufacturers...

September 6, 2010

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...

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."

"Regions 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 loan.

"The loss 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.

The NASCAR 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.

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....

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.

From DJ: “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?

Much too 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.”

IMF Cuts Off Funds for Central Africa, Goes on Vacation, Ignores Guinea Bissau, Ukraine, Hungary and even Haiti Questions

UNITED 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.

  The cut off was justified, based on corruption. But when will the problem be solved and the funding be restored?

   On July 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 call fortnightly.

  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.)

On July 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.”

She also 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.”

So what 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.

In the 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, BEAC. Hmm...

Inner City Press' other questions, which the IMF has yet to acknowledge much less respond to:

On Guinea-Bissau, does naming of coup leader to the top Army post have an impact on IMF re-scheduling consideration of HIPC & MDRI?

Also on Hungary, why is the IMF opposed to Orban's proposed bank tax?

Regarding Haiti, some have questioned why the IMF's new $60 million is not a grant but a loan. Can you please explain?

On Ukraine, 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

A securities 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 not surprised?

At Citigroup, "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...

Bank of 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...

As Romanian Court Rules Against Pension Cuts, IMF Nods at 5% VAT Increase

UNITED 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.

Two weeks earlier, Ms. Atkinson had responded to Inner City Press' question about the Constitutional Court in this way, as transcribed by 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 about.”

And so 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 this result?”

Ms. 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.

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.

FFW obtained 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 transactions.”

Meanwhile, 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 public hearings.

As Romania's Wage Cuts Challenged in Court, IMF Says Not Concerned, Lead Nowhere

UNITED 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. Video here, from Minute 30:04.

Inner 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."

This makes it sound like review by the Court is routine -- or "entirely appropriate," as Ms. Atkinson put it. But Reuters reported that the "government can start applying the austerity measures ahead of any court judgment, but if declared unconstitutional they would have to be revoked."

If 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?

Ms. 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.

Footnote:

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

So while 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.

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 not surprised?

Citigroup in 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

Amid Protests, IMF Says Wage Cuts Were Romania's Choice, IMF for Vulnerable

UNITED 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 about 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:

"This gives 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 increases..

"The 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 within society."

Tell that 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

J.P. Morgan 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 businesses. Good.

May 10, 2010

Citigroup 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.

April 26, 2010

FOIA, and 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...

April 19, 2010

Three former 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 banks...

Large loans 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 concluded.

According to 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.

Björgólfur Thor 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.

April 12, 2010

In the 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 whites.

Several 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.

April 5, 2010

JPM Chase's 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.

March 22, 2010

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 new Citi?

With Euro Tanking On Reports of Greece Turning to IMF, of Half Answers, on Dodd Bill and Sri Lanka

By Matthew Russell Lee

UNITED 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.

  Near 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, Dominique Strauss Kahn, previously bragged that the IMF would "intervene" in Greece upon request.

  France's finance minister 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.

  Her president Sarkozy has a personal motive to oppose IMF help to Greece: Strauss Kahn is polling ahead of him for the next French election.

   Inner City 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.

Update: later these two answers came in from the IMF:

Re Senator 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.

Re Sri 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.

Best regards,
Yoshiko Kamata
Media Relations, IMF

March 15, 2010

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.

Citigroup, 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

IMF Says "No Agreement" With Sri Lanka, Meets in Hungary, Omits Bulgaria, Angola and Chavez Questions

By Matthew Russell Lee

UNITED 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.

  Two 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 Sarath Fonseka?"

  On March 4, Inner City Press submitted five questions, some repeatedly. Spokesperson Caroline Atkinson read out her own summary of the question, about the third tranche 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 released."

  Then Ms. Atkinson said, I understand we have more online questions, we'll wait for technology. See transcript below.

  But 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?"

  Ms. 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?

  Inner City 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.
 
Update: after 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. "

  Two 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:

On Angola, is 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?

Bulgarian Finance 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" issue?

  This Bulgaria / Greece question, Inner City Press submitted repeatedly. But it was not acknowledged.

Update: 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 IMF.

 Of 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.

Update: Later on Thursday, the following on Angola:

Subject: Angola
From: Thomson, Alistair at IMF
To: Inner City Press
Date: Thu, Mar 4, 2010 at 5:15 PM

Matthew, 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 agreement.

We will continue to follow all this. Watch this site.

From the IMF's transcript:

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.

InnerCityPress.org footnote: The banks that helped conceal Greece's debt bomb included not only Goldman Sachs but also, on an arms deal no less, Deutsche Bank....

March 1, 2010

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 this site.

With 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

After IMF Vote, Sri Lanka Releases Letter, Drops IDP Release from 80 to 60%

By Matthew Russell Lee

UNITED 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 the IMF.

  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."

   When 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 seventy.

   In 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 IMF, Sri 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 on.

At the UN's July 24 noon briefing, before the IMF executive board vote, Inner City Press asked UN Associate Spokesman Farhan Haq:

Inner City 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?

Associate 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.

   Those detained 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.

IMF footnote: the belatedly released Sri Lankan Letter of Intent to the IMF about the loan puts in a different light the IMF Director of Communications' public May 21 response to Inner City Press' questions about IDPs and relocation, that "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?

Reconstruction of the North and East and the protection of vulnerable groups adversely affected by the conflict will be an integral part of our program. To this end the government has moved quickly to provide humanitarian assistance to those affected by the conflict and to develop a post-war reconstruction plan. The immediate priority is addressing the humanitarian needs of the estimated 280,000 internally displaced persons (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.

Watch this site.

July 20, 2009

As CIT 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 you so?

  After 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.

   Bloomberg News, notably, spun 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."
 
  But this 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...

July 13, 2009

Shares of 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....

July 6, 2009

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.

June 29, 2009

Japan's 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.....

June 22, 2009 --

While 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

UNITED 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 streets.

   "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."

  Another HSBC report by Prakriti Sofat is 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.

   The 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 here for the Inner City Press story) now says the proposal is not yet certain, is not agreed to.

  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 Turkmenistan, respectively.

  HSBC 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.

June 15, 2009

So while 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 on specifics."

Yeah...

June 8, 2009

Bank of 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....

So the 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 chose.

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 report predicts.

May 25, 2009

High rate, subprime accounts make up one-third of Citigroup's and Bank of America's credit card portfolios...

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 Citigroup...

May 11, 2009

Now Citi 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

Amazingly, 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

According to 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 in Arkansas.

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 $20,000.

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 $13,035.13 outright.

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 appropriate staff
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

In the run-up to its annual shareholders' meeting, this time in the Hilton and not Carnegie Hall, Citigroup has been criticized for misleadingly offering $5,000 loans and not disclosing in the advertising the interest rate -- 30%. But CitiFinancial has been doing that for a long time...

Bank of 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

  Job well 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?

  Beyond 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?

April 6, 2009

Subprime 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 Latinos, 1.35.

            "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.

March 30, 2009

Geithner Promotes Megabanks' Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives

Byline: 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 administrations.

  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.

  Already, Congress 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 the public.

  The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engaged in rule-making, it must provide notice to the public, and allow and weigh public comments.  The New York Fed under Geithner tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies these processes. The New York Fed on June 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 in crises."

     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.

The financial 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, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital Management LLC - Citadel Investment Group, L.L.C.

  Fast forward to March 2009, with Geithner despite tax evasion installed as Obama's Secretary of the Treasury, and with Lehman having failed and Wachovia been swallowed by Wells Fargo. Now he is promoting monopoly powers in the market for an even smaller group of banks, just seven: Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank -- which despite European headquarters received billions of dollars in U.S. Troubled Assets Relief Program bailout funds through AIG.

March 23, 2009

   Citigroup's 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 problem...

March 16, 2009

In DC, "Inevitable" Fraud as Obama Jokes with JPM Chase, Meets Citi and ExxonMobil

Byline: Matthew Russell Lee of Inner City Press

WASHINGTON, March 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 JPMorgan 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 Parsons. Citigroup veered into predatory lending, JPM Chase at a minimum securitized it, while lending to payday lenders and pawnshops. What then is so funny?

On Sri Lanka, IMF Says Its Pending Loan Would "Support Government Policy Goals," To Wait and See

Byline: Matthew Russell Lee of Inner City Press: News Analysis

WASHINGTON, March 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 might be.

  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.

March 9, 2009

  Citigroup's stock went below one dollar a share last week -- along with HSBC closing 800 HFC and Beneficial storefronts, a fitting end to an era?

March 2, 2009

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, too...

  Eye of 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...

February 23, 2009

   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 (government)...

February 16, 2009

 Citigroup, 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 week, JPMChase's Jaime 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 Chase.

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 York, JPMorgan Chase has just awarded bonuses, on the theory that particular units didn't lose money. Your tax dollars at work...

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.

January 26, 2009

As JPMorgan Chase Shutters WaMu Branches, Regulators Missing, Commitments Gone

Byline: 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 Lynch.

   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 branches closings.

  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 more commitment.

 This 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...

January 19, 2009  

Fed's Geithner Evaded Taxes at IMF, Used Statute of Limitations Later, Mishanded Citigroup

Byline: 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.

  Worse, Geithner 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 financial crisis.

  But what of Geithner's role, as the President of the New York Fed, in mis-regulating Citigroup, an institution which has already swallowed $45 billion in Troubled Assets Relief Program funds, and billions more in guarantees for toxic loans still on its books? Said otherwise, how can those who oversaw -- or turned a blind eye to -- the origins of the financial meltdown be presented as the only ones who can now save the day?

 Also 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.

  Leaving the Federal Reserve Board is Randy Kroszner, who had served the Fed's point Governor on community and consumer issues. A new Fed advisor on these issues was recently withheld from the press without explanation by the Fed's public relations office. Fed chairman Ben Bernanke hides behind the Federal Open Markets Committee news blackout requirements in order to skip speaking to non-financial audiences, but disagrees with and ignored the requirement of public notice and comment while granting bank holding company status to Morgan Stanley, CIT, Goldman Sachs and GMAC.

  So JPMorgan 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.

  BofA 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. 

   HSBC has 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 has foreclosed:

  2096 RYER AVE BRONX 2862 Multi-family $374,900 N

  5730 POST ROAD BRONX 1809 Multi-family $599,000 N

  605 WALES AVE BRONX 2700 Duplex TBD N

  2194 WASHINGTON AVE BRONX 2403 Multi-family $325,000 N

  4027 EDSON AVE UNIT 1 & 2 BRONX 1848 Duplex $339,900 N

  2782 CRESTON AVE BRONX 2000 Multi-family TBD N

January 12, 2009

  More chickens 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."

January 5, 2009

  Talk by HSBC and Wells 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 --

"Less 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"

 We'll wait to hear the spinmeisters at Wells and HSBC try to explain this one away...

December 29, 2008

   So HBOS is said to be cutting off Oz Minerals, not extending loans, the extractive party is over...

December 22, 2008

  So Capitol One goes forward to scoop up Chevy Chase in DC... What in your wallet -- a bank with a history of racially-based redlining?

  Who knew? 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 on this.

December 1, 2008

  HSBC client companies' violations include... client companies embroiled in conflicts over lands and forests with the Penan communities 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..

November 24, 2008

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 capitalism, indeed...

 The 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

  Asked at 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 and HSBC and BNP 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 regulatory approvals.  

  And, one 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.

  The same evasion 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.

November 10, 2008

  So how many WaMu branches is JPMorgan Chase planning to close? The bank refuses to say, but we aim to find out...

 HSBC, 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#

November 3, 2008

   Great 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

From the mail bag

Subj: A US Bank story

From: [Name withheld in this format]

To: Inner City Press

Date: 11/1/2008 12:53:33 P.M. Eastern Standard Time

In 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.

The 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.

It 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”.

Strange? Perhaps not except for the fact that it was during a torrential downpour.

The 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.

Finally, we succumbed to the pressure and gave permission to this accounts manager to forward our name to the Consumer Finance Division. Of course, we were investigating our options with our lenders and such, but none pursued us on a daily basis as did the loan officer from US Bank, promising this and promising that. The heavy handed sales tactics and pressure clouded our better sense, because we 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.

It 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.

We 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.

We 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.

I 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.

People look 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.

However, 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.

Finally, on morning in mid February 2002, as we walking out the door to go and sign the paperwork finalizing the refi. We get phone call from our loan officer. She tells us that their has been a stipulation added that simply destroyed the whole deal. We were told that because of my wife's short time at new place of employment and my being unemployed suddenly had 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.

The stipulation for approval is again something that people look at me as if I am idiot.

I 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 basement livable.

In 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.

In 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.

Our 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.

I 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 consumer

Did just the opposite.

If 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.

The 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.

It 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.

October 27, 2008

  PNC proposing 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.

  HSBC's 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...

October 20, 2008

   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. (C), Wells Fargo Corp. (WFC), Goldman Sachs & Co. (GS), Morgan Stanley (MS), Bank of New York Mellon Corp. (BK) and State Street Corp. (STT). 

  Meanwhile --

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.

  Then at 11:22, 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.

   This 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.

  Inner City Press 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# 

October 13, 2008

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...

  There are other responsive records which Inner City Press is pursuing.

 Meanwhile, while Inner City Press / Fair Finance Watch has already commented to the Fed demanding they hold a comment period on Wells Fargo's proposal to buy Wachovia, now Wachovia says it will bypass its own shareholders -- with the NYSE's rubber stamp. Note to Fed: this doesn't make it an emergency to bypass the public too. But the Fed on Friday said, vaguely, that it will begin "immediate consideration" of Wells Fargo's application.  But no FDIC involvement = no emergency.

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 wasn't true...

October 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

Byline: 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.