Inner City Reporter's Bank Beat: Mergers, Community Reinvestment Act, Antitrust, Revolving Doors

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. Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere, which include bank-related topics.

Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere. Click here for a recent BBC piece on Inner City Press' reporting from the United Nations. New: Follow us on TWITTER BloggingHeads.tv Click for March 1, 2011 BloggingHeads.tv re Libya, Sri Lanka, UN Corruption by Inner City Press. Until next time, for or with more information, contact us.

January 18, 2021

Capital One Money Laundering Gets $390M Fine From FinCEN As PNC Is Sued For Usury

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Jan 15 – Capital One has been fined $390 million by FinCEN, for anti-money laundering violations. This comes on top of predatory lending, on autos and otherwise. Inner City Press and Fair Finance Watch will have more on this.

Meanwhile, PNC Bank and its Midland Loan Services have been sued for usury, predatory lending and civil conspiracy, under New York and Federal law.

The complaint docketed on December 29 in the U.S. District Court for the Southern District of New York, which Inner City Press covers, describes PNC's lending on a number of homes and allegedly racking up $250 charges.

It questions the reporting on line 205 of the HUD statement. When the plaintiff questioned it, he was called an "assh*ole."

The case is filed while PNC seeks to buy the US retail banking business of BBVA for $16 billion, an application to the Federal Reserve Board and other regulators which is subject to the Community Reinvestment Act.

The case is Barli v. PNC Bank, NA et al., 20-cv-11027 (Castel)

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January 11, 2021

IMF Is Asked Of China Belt and Road By Inner City Press and Cites Transparency Video Here

By Matthew Russell Lee, Patreon Video
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Jan 8 – When the International Monetary Fund held a press briefing about China and its Article IV review, on January 8, Inner City Press posed a question and got an answer, below.

Inner City Press asked the IMF's Helge Berger, Mission Chief, about China's so-called Belt and Road Initiative: "Your Article IV report cites China's "overseas lending projects" amid "rising geopolitical tensions and economic and trade frictions." How does the IMF think that rising debt levels among African countries, and increased skepticism about the "Belt and Road" will impact or be addressed going forward? -Matthew Russell Lee, Inner City Press. Video here.

Berger responded about the IMF's work to provide lower income countries "breathing space." He said while the IMF generally welcomes the BRI it stresses the need for transparency, where the money is going.

(An aside: Inner City Press has reported on the CEFC China Energy Fund Committee's activities in Chad and Uganda and in the UN, on which the UN is UNresponsive.)

Other questions included China's digital currency (Inner City Press also reports on crypto-currency cases in the U.S. District Court for the Southern District of New York and elsewhere). Berger said when used overseas an issue is that residents could start using another country's currency, if it is easier.

January 4, 2021

PNC Bank Is Sued In NY For Usury As Applies For BBVA Under CRA So Conference March 1

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 30 – PNC Bank and its Midland Loan Services have been sued for usury, predatory lending and civil conspiracy, under New York and Federal law.

It questions the reporting on line 205 of the HUD statement. When the plaintiff questioned it, he was called an "assh*ole."

Now on December 30 the case has been assigned to SDNY District Judge P. Kevin Castel, who has ordered: "ORDER INITIAL PRETRIAL CONFERENCE: COUNSEL FOR PLAINTIFF (OR THE REMOVING DEFENDANT) SHALL IMMEDIATELY SEND A COPY OF THIS ORDER TO ALL PARTIES. Counsel for all parties shall appear for an Initial Pretrial Conference, held pursuant to Rule 16 of the Federal Rules of Civil Procedure, March 1, 2021 at 12:00 p.m. Principal trial counsel shall appear at this and all subsequent conferences. SO ORDERED. Initial Conference set for 3/1/2021 at 12:00 PM before Judge P. Kevin Castel. (Signed by Judge P. Kevin Castel on 12/30/2020)."

The case is Barli v. PNC Bank, NA et al., 20-cv-11027 (Castel)

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December 28, 2020

Stefan Qin Accounts At CoinBase and Kraken Are Frozen by Ex Parte SDNY Order for SEC

By Matthew Russell Lee, Exclusive Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 23 – An asset freeze against Stefan Qin's Sigma Fund was sought and obtained by the U.S. Security and Exchange Commission at 7 pm on December 23.

No defense lawyer was present.

Inner City Press covered and live tweeted it, here: (and added more on Patreon here)

It's 7 pm and the SEC has gotten an ex parte hearing to freeze accounts, before U.S. District Court for the Southern District of New York Judge Lorna G. Schofield.

"Qin, Virgil Capital & Sigma Fund 'held millions worth of digital assets at 39 trading platforms." SEC lawyer Susan Lamarca said she spoke with defendant's lawyer, who said they would only appear if required.

SEC: "This is ex parte, to freeze assets."

SEC: "Qin is a citizen and resident of Australia and part-time resident of New York. He is currently believed to be in Seoul, South Korea and owns these LLCs through Virgil Technologies LLC, domiciled in the Cayman Islands."

SEC: "Qin claims to use a proprietary trading algorithm for the Sigma Fund to generate better returns that an investment in Bitcoin." SEC asks: "defendants to disgorge their ill-gotten gains according to proof, plus perjudgment interest thereon."

SEC lawyer says the assets are in CoinBase and Kraken, who are temporarily maintaining a compliance hold. But it could end anytime. "It won't last long."

SEC: we spoke with both platforms. They agreed to maintain the hold for a couple of days.

Now Qin knows

SEC lawyer: we've spoken with a lawyer who represents Qin in another investigation. We reached out to him. Judge Schofield: I am prepared to enter the temporary restraining order and freeze the assets of the entity defendants, and a document preservation order

Judge Schofield: I would not put the account numbers in a public order. Should I put it in a sealed appendix?

SEC lawyer: You do not need to put it in an order. We may found other accounts. Numbers are not necessary at all.

More on Patreon here.

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Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron.

Feedback: Editorial [at] innercitypress.com

December 21, 2020

In Citibank Wire Transfer Case Judge Furman Hopes Industry Learns From Black Swan Event

By Matthew Russell Lee, Patreon Song
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 16 – As Citibank tries to recoup the money it wired out on August 11, 2020, the virtual / Zoom trial began on December 9 before U.S. District Court for the Southern District of New York. Inner City Press is covering it.

Here for now some of the Day 1 blow by blow.

And Day 2 documents / Defendants exhibits zipped on Patreon here, one on DocumentCloud here, saying "Please retain the funds received 8/11 into Battalion CLO VIII Ltd. on account of the Revlon Term Loan 2016 pending further instruction. Please do not book, and carry the funds as a cash break for the time being."

Hear, for now, this song.

On Day 6 and last, there were closing arguments and questions, and this: Judge Furman begin with questions about the Banque Worms decision. There's some talk about getting a phone charger. Counsel classily presses on. It's not easy being a court reporter. Judge Furman: Page 47 of Plaintiff's brief argues the District Court erred...

Closing arguments still going. Lot of talk of imputed knowledge; Judge Furman asks if there's any excited utterance showing the defendants knew something was wrong, even before Citibank notified them. Judge Furman also asks why Citibank didn't get a grace period

OK - it's over. Judge Furman: It was a well-tried case, but I hope the industry finds a better way of dealing with this, even if it was a black swan event. I will get you a decision as quickly as I can.

Note: the defendants, after Saturday December 12, stopped sending any of their exhibits. Watch this site.

Day 5, the evidence wrapped up - but again exhibits were withheld despite request(s). Some of it:

Q: the official books of those investors would be in one place, and what Symphony had was the shadow books, correct? A: You could say that, yeah. Q: Is there any specific segregation you could identify?

A: State Street, P zero. Bromton, P zero. CLO, T plus one.

Judge Furman: Could you explain? A: T plus zero, same day. T plus one, we can do it from the day prior. Now, questions about exhibits still withheld from Press.

After long re-direct of Vaughan, now on the stand is Eric Lee of Symphony. Citibank's lawyer: You're on West Coast time, so thanks for getting up early. Are you familiar with pre-payment notices? A: Yes.

Judge Furman tells the lawyers he has gotten a letter on subject matter jurisdiction issues but not reviewed it yet; he'll tell them if he gets any thoughts from it. Also, he's gone back to look at transcript of final pre-trial conference & will allow Citi experts

And that's it - the evidence is over Citibank closed with an hour and two minutes left; defendants with an hour and 15 minutes left. Closing arguments tomorrow morning.

Now Judge Furman is telling counsel what he'd like to hearing about tomorrow, on "the timing question" -- he cites a Judge Patterson decision, Banque Worms' commentary on finality - when each defendant found out about the payments.

Inner City Press will have more on this.

December 14, 2020

At Citibank Wire Transfer Trial Waiver Question As Defendant Docs Says Retain the Funds Here

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 11 – As Citibank tries to recoup the money it wired out on August 11, 2020, the virtual / Zoom trial began on December 9 before U.S. District Court for the Southern District of New York. Inner City Press is covering it.

Here for now some of the Day 1 blow by blow.

On Day 3, after discussion of springing maturity, it got to this: whether the defendants had waived privilege by excusing their refusal to return the money as being based on legal advise, including from at least out outside law firm. Judge Furman ended the trial at noon, setting a Monday 7 pm deadline for some filings and musing that closing arguments might be Tuesday afternoon. Here's some of the day:

Witness: "There's nothing that prevents me from playing in the NBA, but it's not going to happen." Judge Furman: Is there a question? Inner City Press heading to courthouse. Today's Citibank trial only goes until noon.

Lengthy Zoom sidebar on the issue of whether Brigade witness waived privilege by talking about legal advice that Brigade didn't have to pay the money back.

Citibank wire transfer trial is suspended until Monday 9 am. More exhibits admitted this morning

On Day 2, Brigade's Jeff Frusciante described his morning of August 12, 2020, working from home in Connecticut. He said he could not remember how he communicated about the Citibank wire transfer; he was asked about Brigade's document retention policy.

Meanwhile Inner City Press' written requests, following instructions, from defendants' exhibits have been stonewalled - not a single such exhibit has been provided, despite follow up. In the docket, there's a reference to skepticism about demands for confidentiality. Skepticism is growing. Here's some of Day 2
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FDIC Abuses FOIA Exemption 8 To Withhold All Communications From Inner City Press

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SOUTH BRONX, SDNY, Dec 11 – How pro-bank has the FDIC become?

Well, when Inner City Press submitted a FOIA request for the absurd redactions by Multi-Bank to its application for a denovo bank in Florida, the response was that there will be no review of the redactions to the application - until the application is approved.

Also, the FDIC uses FOIA exemption 8 to say that every single one of its communications about the application are exempt. This is a new low; it and the FDIC, like the OCC and Fed, will have to change. Inner City Press (and Fair Finance Watch) requested:

This is a FOIA request for (all of) the overly redacted "public" application of Multi-Bank Application For DeNovo State Bank in Florida. Inner City Press has seen the redacted version, which withholdings from the public and press information about those involved and their plans. The entire application should be provide, along with all of the FDIC's communications with these applicants for the past year (including for preparation of public comment - it should be expedited and provided on a rolling basis).

Here is the FDIC's response of December 11:

This is in response to your November 29, 2020 Freedom of Information Act (FOIA) request... In general, the non-confidential portions of an application for deposit insurance for a de novo bank, an application to establish a branch, and other applications are publicly available in the appropriate FDIC Regional Office until 180 days following final disposition of the filing... for access to the public file, please contact: FDIC Atlanta Regional Office ATTN: RMS Regional Director 10 10th Street, NE, Suite 800 Atlanta, GA 30309 Since a FOIA request for these records is premature under our regulations, we are administratively closing this portion of your request.

So there is no review of redactions. Outrageous

. Communications Between the FDIC and Applicants By its very nature, the information that you requested, if it exists and could be located, would be information contained in, or related to, the examination, operating, or condition reports prepared by, on behalf of, or for the use of the FDIC in its regulation or supervision of financial institutions. All of that information, if it exists and could be located, would be exempt from disclosure in full under FOIA Exemption 8, 5 U.S.C. § 552 (b)(8). Therefore, this portion of your request is denied under Exemption 8

Inner City Press has appealed

December 7, 2020

Inner City Press Asked IMF of Kenya Mombasa Railroad and Mozambique So Answers Here

By Matthew Russell Lee, Patreon Video
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 3 – When the International Monetary Fund held its embargoed media briefing on December 3, Inner City Press posed questions including on Kenya and Mozambique, which got answered.

IMF Spokesperson Gerry Rice read out two of Inner City Press' questions: "On Kenya, the finance ministry says it is discussing a $2.3 billion lending program with the IMF, including an initial disbursement of $725 million from IMF in the first half of 2021. What is the status of talks and what is the IMF's view of the Standard Gauge Railway from Mombasa to Nairobi has a budget of a full Sh 327 billion, which some say indicates that the budget for this project was padded?"

Rice said discussion are underway and it should go to the IMF Board in early 2021. He referred to an earlier IMF report on the railway - more on that in transcript, and video here.

Rice also read out this, from Inner City Press: "On Mozambique, what is the impact on the IMF's approach of the decision by the EU on €100 million in direct support to the State Budget, with “monitoring and transparency” clauses? Does the IMF include similar clauses, in Mozambique and elsewhere?"

Rice said yes, such clauses were included in the IMF's disbursement to Mozambique in April. Again, transcript here, video here.

November 30, 2020

In Wire Transfers Case Citibank Wants Its Trade Association In As Amicus

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Nov 23 – For the Citibank wire transfers virtual trial scheduled for December 9, there is a dispute about which technological platform to use.

On November 9 U.S. District Court for the Southern District of New York Judge Jesse M. Furman held proceeding. Inner City Press covered it.

Judge Furman has written in advance that he "is currently conducting a fully remote bench trial - using TrialGraphix, which is a zoom-based platform - and it has worked remarkably well."

Then Citibank's lawyer John Baughman complained that the lead defense counsel Michael Carlinksy's brother is a principal in TrialGraphix, and Citibank does not want that platform used.

Judge Furman asked the parties to propose to him other platforms. To his credit he said he'd like if possible to provide video and not just telephone access to the press and public. A YouTube channel was suggested.

On November 23 Citibank's counsel at Mayer Brown filed a letter supporting the intervention and amici of the Loan Syndication and Trading Association and The Clearing House and Bank Policy Institute. Why not - "of course, Citibank is a member of organizations whose members share interests with Citibank." But eight of the 10 defendants are members of LSTA. Watch this site.

The case is In re Citibank August 11, 2020 Wire Transfers, 20-cv-6539 (Furman)

Bank of America Opposes Pay To Barclays Katz As Fact Witness So Letter Due Nov 25 in SDNY

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras -