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: BloggingHeads.tv 6/1/7  6/14/7   6/29/07  Reuters AlertNet 7/14/07  Until next time, for or with more information, contact us.

May 12, 2008

GE Money and others in Sweden -- " The first foreign bank in Sweden was established in 1986, with the first branch opening four years later. Most of the 29 foreign banks (at end-2006) focus their activities on the corporate banking and securities markets. The largest foreign bank (aside from the Nordea Group) is Danske Bank, now established as the country's fifth-largest bank. A fairly recent foreign entrant is Kaupthing (Iceland), which took over JP Nordiska in 2002. The most active non-Nordic banks are GE Money Bank (US), Dexia Credit (France/Belgium) and ABN Amro" -- which bet on world food prices rising...

The U.S. "Country Reports on Terrorism," has been closely watched in recent years after the U.S. offered to take the North off the list. North Korea was put on the list, joining Cuba, Iran, Sudan and Syria, in January 1988 after its agents bombed a South Korean airliner in November the preceding year. All 115 people aboard the plane were killed. The report said North Korea is not known to have sponsored any terrorist acts since then. Getting off the list is one of Pyongyang's most coveted benefits, since it would lift wide-ranging prohibitions that effectively restrict economic assistance and diplomatic interchanges. After striking a September 2005 deal under which Pyongyang agreed to eventually abandon its nuclear programs, the U.S. toned down the segment on North Korea by striking out detailed accounts of the country's past abductions of Japanese citizens. This year, the report gave more emphasis to the U.S. commitment to delist Pyongyang once conditions are met. 'As part of the six-party talks process, the United States reaffirmed its intent to fulfill its commitments regarding the removal of the designation of DPRK (North Korea) as a state sponsor of terrorism in parallel with the DPRK's actions on denuclearization and in accordance with criteria set forth in U.S. law,' said the report. We'll see.

May 5, 2008

  HSBC begrudgingly agreed last week to extend the deadline for the completion of its proposed acquisition of a majority stake in Korea Exchange Bank from Lone Star Fund by two months to July 31.  The proposed deal has been hindered by an ongoing tax-related trial over the U.S. private equity fund's acquisition of the stake in KEB in 2003.  The statement said HSBC or Lone Star may terminate the agreement if the deal isn't completed on or before July 31.  "The proposed transaction is entirely in line with our stated strategy to focus on high-growth economies and I continue to be of the view that it is in the best interest of all KEB stakeholders and of HSBC," HSBC Group Chairman Stephen Green said. HSBC's statement made no reference to the ongoing trial -- or the sleaze...

  Consumer lending is booming in the Czech Republic -- while GE Money Multiservis has not yet disclosed its economic results, Cetelem CR granted loans worth Kc2.8bn to clients in Q1 2008, 18 percent more than a year ago. Cetelem CR operates in the Czech Republic since 1996, and is one of the 20 subsidiaries of French bank Cetelem S.A.  Cetelem is a unit of BNP Paribas... The calm before the storm?

April 28, 2008

South Korea's Financial Services Commission Chairman Jun Kwang-Woo Wednesday said he hopes to soon find a way to resolve the issue of Lone Star Funds' stalled sale of Korea Exchange Bank.  South Korea's sixth largest bank by assets is majority-owned by Dallas-based Lone Star, which agreed last September to sell its shares to HSBC for $6.3 billion. Lone Star's exclusivity in the agreement with HSBC will end on April 30... "It will be between Lone Star and HSBC, not the government, to decide whether to extend the contract," said Jun. That's just how HSBC likes and pays for it - government and the public out of the way...

  GE's Immelt's been told to try to sell off GE Money. But it's too late, some say...

"This week you'll see several organization announcements from our management committee about their direct reports, and we expect the rest by the end of the month," Steve Black and Bill Winters, co-heads of J.P. Morgan's investment-banking business, told employees in a memo sent Monday. "People selection is the most important and most difficult task in any merger, and we want to make sure we spend the time to get it as right as we can." They promised to inform all J.P. Morgan Chase and Bear employees whether they would have a job no later than the merger's expected close on June 1. We'll see....

April 21, 2008

Citigroup has recently sold - and in some markets closed - retail bank branches "but also said it would expand CitiFinancial, its consumer lending group," the American Banker of April 18 reported, without noting that CitiFinancial is subprime...

HSBC bragged last week that it is launching a new private bank in Ireland. "Ranked the third largest private bank in the world by Euromoney, HSBC Private Bank offers wealth management, banking and trust services in over 93 locations around the world" -- including some breakaway republics, with the presumptive offer of creative money washing...

GE Money spokeswoman Nora Grase said last week that GE is likely to merge with the recently acquired Baltic Trust Bank and operate under brand GE Money Bank,  which is used also by other banks of the concern.  GE Money communication director in Central and Eastern Europe Jan Hainz told the press that the company is interested to develop in Latvia, despite the instable economic situation, and GE Money sees a potential for development of banking services in Latvia. Hainz said that there are still several countries in the Central and Eastern European region in which GE Money is not represented, including Estonia and Lithuania, and the company wants to obtain experience in Latvia's banking sector to be able to use it later in other countries. GE Money launched operations in Latvia's consumer lending market in May 2004 by purchasing RD Lizinga Grupa leasing company. In November 2006, GE Money acquired a 98 percent stake in Latvia's Baltic Trust Bank. Baltic Trust Bank ranked 14th among 24 Latvian banks by assets at the end of February. Watch out for predatory lending...

April 14, 2008

            Institutional Shareholder Services -- hardly a consumer activist group -- urges Citigroup shareholders to vote off the Citi board Alain Belda, CEO of  of Alcoa, as well as former Chevron CEO Kenneth Derr, Xerox CEO Anne Mulcahy and Time Warner Inc. Chairman Richard D. Parsons. ISS said it believes Citigroup's compensation committee, which is chaired by Parsons and includes Belda and Derr, "has lacked strong stewardship of compensation practices.'' Yeah, you might say that...

Delaware vice-chancellor Donald Parsons has stayed litigation challenging the proposed acquisition of Bear Stearns by JPMorgan Chase, deferring to a similar court case in New York. Parsons noted that the Delaware lawsuit mirrors five lawsuits that have been consolidated on an expedited basis by the New York Supreme Court. That court has scheduled a May 8 hearing on a preliminary injunction barring a shareholder vote to approve the deal. "The judge also noted the unique circumstances of the planned government-assisted merger" -- so now, the Federal Reserve's outrageous exclusion of any public review of the deal is used by court to avoid judicial review...

  And this is not even dealing yet with the Fed's sleazy deal with Blackrock, answers on which are due on April 18...

April 7, 2008

            In the first study of the just-released 2007 mortgage lending data, Inner City Press / Fair Finance Watch finds that National City, often rumored to be up for sale after unloading its subprime unit First Franklin to Merrill Lynch, in 2007 confined African Americans to higher-cost loans above the rate spread 1.77 times more frequently than whites. National City's disparity to Latinos was 1.73. Fully 25,012 of National City's 246,138 mortgages in 2007, or 10.16%, were high cost loans over the rate spread. 

            Keycorp, based in foreclosure-ridden Cleveland like National City, and also rumored to be up for sale, in 2007 confined African Americans to higher-cost loans above the rate spread fully 2.2 times more frequently than whites.

            2007 is the fourth 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.

            U.S. Bancorp continued to make super high-cost loans subject to the Home Ownership and Equity Protection Act (HOEPA) -- that is, at least eight percent over comparable Treasury securities.

            Regions Financial, in a new low, provided its data at the deadline but only in paper format, on over 2000 pages, so that it could not yet be computer-analyzed. Lehman Brothers provided only a PDF file of over 6000 pages, to avoid any analysis of disparities.

            Where the rubber will meet the road will be in how the Federal Reserve and other agencies act on specific disparities at specific lenders, including as these are formally raised to them in timely comments on merger applications, such as that of Bank of America to acquire Countrywide, and the needed review of JPM Chase - Bear Stearns.

March 31, 2008

            In Australia, "borrowers who want to take Federal Treasurer Wayne Swan's advice and move to a new lender face exit fees from their mortgages of up to $8750. Swan has advised dissatisfied mortgagors on several occasions to "vote with their feet" and change to a different bank. Taking that advice may prove more expensive than staying put. Early exit fees on a standard variable rate mortgage now average $1451. The lowest exit fee is $200 and the highest is $8750. GE Money charges $8750 for ending a $500,000 mortgage within the first 12 months."

  That is, GE Money is the most predatory lender in Australia...

From last week's NYT, consider "Randy and Dawn McLain of Phoenix. The couple decided to sell their home after falling behind on their first mortgage from Chase and a home equity line of credit from CitiFinancial last year, after Randy McLain retired because of a back injury. The couple owed $370,000 in total. After three months, the couple found a buyer willing to pay about $300,000 for their home -- a figure representing an 18 percent decline in the value of their home since January 2007, when they took out their home equity credit line.  CitiFinancial, which was owed $95,500, rejected the offer because it would have paid off the first mortgage in full but would have left it with a mere $1,000, after fees and closing costs, on the credit line. The real estate agents who worked on the sale say that deal is still better than the one the lender would get if the home was foreclosed on and sold at an auction in a few months. Mark Rodgers, a spokesman for CitiFinancial, declined to comment on the McLains' situation, citing privacy considerations.

    Yeah, right. This is the company that lost millions of consumers' Social Security numbers...

March 24, 2008

GE Money announced it has an agreement with tire manufacturer Michelin to provide consumer financing to buy the tires. GE Money will provide the financing through Car-CareOne, a private-label credit program managed by GE Money's sales finance unit. Car owners can choose from 90-day, six month or 12-month no-interest programs for buying Michelin products. Watch out for the balloon payments after that, if GE's other predatory lending is any guide (Michelin guide, in this case)...

    "HSBC being a global local bank, aims to become the main bank in Russia," said Stuart Lawson, acting chairman of the board in Russia of HSBC Bank, said on March 12. HSBC announced its intention to appoint Lawson chairman of HSBC in Russia after last year he resigned from Soyuz Bank. "The appointment of Stuart Lawson to the position of HSBC Russia Chairman of the Board will have a considerable effect on business development," Stephen Green, chairman of HSBC, was quoted as saying. The first three representative office of HSBC in Russian regions were opened in 2007 in St. Petersburg, Yekaterinburg, and Novosibirsk. According to Lawson, the bank will set up offices in two or three more regions, including Rostov. "It complies with HSBC intention to become a regional bank in all the business dimensions, including retail financial services," he said. Look out for HSBC's predatory lending...

March 17, 2008  WashPost - Guardian (UK)

    The day after news of the Federal Reserve's murky bailout of Bear Stearns through JPMorgan Chase, Inner City Press / Fair Finance Watch filed with the Federal Reserve Board in Washington, and the Federal Reserve Bank of New York, a petition, complaint and series of requests, portions of which are available by clicking here. ICP has now made a similar filing with the Securities and Exchange Commission. As reported by TheStreet.com, "Bear CEO Alan Schwartz said Wednesday on CNBC that Bear expects to meet profit expectations. As CEOs sometimes do while struggling to ascertain what's going on at their companies, he dismissed rumored liquidity problems and said the broker's finances remain strong." ICP has requested SEC inquiry into and action on these statements. Meanwhile, it's reported that Bear Stearns' CEO recently paid cash to buy two apartment in the former Plaza Hotel in New York, without a mortgage...

            So how did Eliot Spitzer get caught? North Fork Bank, recently re-branded Capital One, filed a Suspicious Activity Report last July. Like most SARs, it went nowhere. Until HSBC filed its own, about transactions with shell companies QAT International and QAT Consulting Group, connected to Emperor's Club VIP. Now investigators took an interest, tracing back to Spitzer. Why was he banking with North Fork, of all places?

            HSBC defends tax evasion -- the head of HSBC Holdings PLC's (HBC) private banking operations in Switzerland last week criticized tactics used by Germany in its tax evasion row with Liechtenstein, saying they posed serious obstacles for the banking industry. "I think it's time to leave the industry...when governments buy stolen goods to basically get their way through," said HSBC Private Banking (Suisse) Chief Executive Peter Braunwalder, who is stepping down none too soon in October. Braunwalder said it should be up to national governments rather than private banks to track down money deemed to be stashed away from the exchequer. "If they (the authorities) find that the money is missing, they can ask for assistance and we will help," he said. But "they want to charge 65% tax on their people and...then they go to Liechtenstein, Luxembourg to ask them to do their job?" he asked rhetorically. Braunwalder was speaking at the presentation of HSBC Private Banking (Suisse)'s annual results. "I see this industry becoming more and more difficult...the German government is doing things that shock me," Braunwalder said.

            And HSBC's Household's predatory lending wasn't shocking?

March 10, 2008

 Barclays has been contacted by the Department of Justice and the New York district attorney with questions about payments made in dollars through its New York branch. The payments may have been made by people or companies from states which are on the U.S. blacklist of nations it believes sponsor terrorism. The probe referred to in Barclays' notes to its annual 2007 results on February 19, where it warned "the potential financial effect of any resolution could be substantial''.

ABN Amro was fined $80 million in civil penalties in 2005 for transactions through its New York offices which the U.S. government said failed to meet the necessary controls on money laundering. RBS said in its annual results published last week that ABN is the subject of an ongoing criminal probe by the DoJ over the same issue. Negotiations over a possible $500 million settlement are ongoing, RBS said.

            HSBC last week noted in its results that it has a "small representative office in Tehran''. HSBC said it recognized that should it break the U.S. rules on sanctions, there would be "serious legal and reputational consequences''.

            Thomas Tobin, the chief executive of HSBC's operations in Vietnam, said HSBC is in talks to increase the stake in Techcombank to 20%. "The law says 15% is the upper limit, but it is possible to seek the prime minister's permission to get 20%," he said. And we thought they didn't lobby...

March 3, 2008

   In our last report, we covered the judicial shut-down of the Wikileaks.org web site, in flagrant violation of the First Amendment. This week we can report that, following outcry, the decision was reversed, and Wikileaks continues as before. Even so the bank, Julius Baer, now tries to spin its previous request to the court. "It wasn't our intention to shut down the Web site," bank spokesman Martin Somogyi said. "Our intention was to remove the documents." With extreme prejudice and prior restraint, it seems. U.S. District Judge Jeffrey S. White, reversing himself, complained that "to the court's way of thinking, there is a definite disconnect between the evolution of constitutional jurisprudence and modern technology." Ya don't say...

February 25, 2008

   We devote this week's abbreviated Inner City Press Bank Beat to censorship asked for by Bank Julius Baer, resulting in San Francisco Federal District Court Judge Jeffrey S. White enjoining Wikileaks.org for having exposed tax evasion and money laundering. This attack on free speech and freedom of the press, if not denounced by the wider banking industry, may be viewed as being endorsed by them. Click here for Judge White's order, which required its server to "immediately clear and remove all DNS hosting records for the wikileaks.org domain name and prevent the domain name from resolving to the wikileaks.org website or any other website or server other than a blank park page, until further order of this Court." There are already calls to impeach Judge White. For now, mirror sites remain up at www.wikileaks.de and at IP address http://88.80.13.160/...

February 18, 2008

  In a Viewpoints piece in Friday's American Banker newspaper, the former head of Commerce Bank Vernon W. Hill the 2d makes reference to "so-called community activists demand an ever-increasing number of government-mandated programs." Maybe he means those who sounded the alarm, before regulators or investors wanted to hear, about predatory lending. And maybe his attitude explains Commerce's spotty record, which TD Banknorth now wants to take-over...

February 11, 2008

  Another deal that's dying: Santander - Sovereign. Last week Banco Santander S.A. admitted that its investment in the Philadelphia-based thrift hasn't panned out. The Madrid-based bank took a $1.08 billion writedown of its 24.9 percent stake in Sovereign to more accurately reflect the thrift's declining value. Given the current uncertainties surrounding the U.S. market and the caution needed in these times, right now we can only consider that we have a contract that expires,'' Santander Chairman Emilio Botin said at a press conference in Madrid. Ole!

HSBC is reportedly looking to sell the UK network it bought along with Household, HFC, only waiting for a Financial Services Authority investigation into the way it was selling payment-protection insurance. The investigation concluded last month with small-in-context  fine. That does not mean that HSBC does not continue expanding elsewhere its predatory lending and, as noted, predatory credit insurance...

February 4, 2008

            GE on the Gulf, from a press release last week: "GE's Aviation business signed orders of $10 billion in products and services at the Dubai Airshow 2007... GE Money formed a joint venture with Al Futtaim Group, a UAE-based diversified business group, to provide consumer finance products." GE takes predatory lending to the UAE...

            A South Korean court Friday found Lone Star Funds guilty of stock manipulation, levied a fine on the company and sentenced the head of its local unit to jail. The Seoul Central District Court sentenced Paul Yoo, the head of Lone Star's South Korean unit, to five years in jail for manipulating the stock price of the credit-card unit of Korea Exchange Bank, in which Lone Star owns a controlling stake. The court fined Lone Star and KEB each $263.6 million. South Korea's Financial Supervisory Commission after the ruling said it will wait for the outcome of other legal cases related to Lone Star's acquisition of KEB in 2003, although those cases aren't directly related to the Dallas-based fund. So Friday's verdict is likely to further delay the sale of Lone Star's controlling stake in KEB to HSBC Holdings.

  Which is probably a blessing for Korean consumers, given HSBC's predatory lending...

January 28, 2008

   Merrill Lynch's new CEO, the plastic-faced John Thain, gushed to BBC from Davos that Merrill's turned the corner, still some subprime positions, but it's all been appropriately priced. We'll see.

In India, Citibank has 39 branches across 27 cities. Meanwhile the subprime Citifinancial has 450 branches pitching unsecured lending and mortgages. CEO Nayar claims the unit has pioneered unsecured lending in India, luring in 2.5 million customers.

In Australia, GE Money "has dropped partners that sold few mortgages and retained about 40 of the strongest partners. The credit crisis has affected the mortgage origination business through higher funding costs. However, GE Money CEO Mike Cutter says mortgages continue to be one of the company's major products." Yes, GE continues exporting predatory lending...

January 21, 2008

            GE Money said last week that a computer tape with the credit-card information on 650,000 customers of J.C. Penney Co. and other retailers is "missing." GE Money is notifying consumers that a backup tape is missing from a vendor's storage facility, spokesman Richard Jones said. Jones refused to identify the retailers whose customers will be notified, beyond J.C. Penney. "This is not an instance of theft," Jones claimed. "The investigation does not indicate that there was any wrongdoing whatsoever." We'll see.

            HSBC's bottom-feeding has run into delays, now in South Korea. There, HSBC last year announced plans to acquire Lone Star's stake in Korea Exchange Bank. But Lone Star's salesman, Paul Yoo, now faces a ten-year prison term and $4.5 million fine for price manipulation. Impact on HSBC? Not yet clear.

            In further chickens-coming-home-to-roost news, Bank of America last week said it will axe 650 jobs and sell its equity prime brokerage....And now Moody's said it will review BofA's "ability and willingness to raise capital to support its balance sheet after a number of sizable acquisitions, including Countrywide."

January 14, 2008

 BB&T Corp. recently paid the U.S. government $10,000 to settle allegations that it allowed funds to be withdrawn from an account held by a known terrorist. The Treasury Department's Office of Foreign Asset Controls says BB&T permitted an automatic debit "against an account held for a specifically designated global terrorist," and did not voluntarily disclose the matter. Question: so BB&T got fined only $10,000? Some deterrent...

  There's a hole in Citigroup's January 8 memo announcing a consolidated "end-to-end U.S. residential mortgage business" including origination, servicing, and securitization operations, with Bill Beckmann reporting  to Carl Levinson and Jamie Forese --  CitiFinancial, Citibank, and Smith Barney would continue to originate mortgages separately. CitiFinancial is a subprime unit, one with most risk, for some reason not included. Meanwhile, the consolidated unit will, according to Citi's Jeff Perlowitz, "be a nonconforming shop." Great...

            GE has repaid some but not all of the corporate welfare it received in New York State. The Empire State Development Corp. has recovered only 60 percent of $800,000 it doled out to GE's WMC subprime mortgage unit to create jobs that never materialized. Now the WMC office at 1 Ramland Road in Orangeburg, NY is closed.  GE has said it would hire 300 workers within three years and keep them in place through 2010. The Rockland County Industrial Development Agency also provided WMC with a break on sales tax on the purchase of up to $3.5 million in equipment and related expenses, a benefit that was valued a $97,000 through the end of 2006. IDA Executive Director Ronald Hicks has said the agency will seek reimbursement plus penalties. Watch GE try to wriggle out of that one, too...

January 7, 2008

  Now even the stock analysts are saying National City (and Fifth Third and KeyCorp) erred in rushing to snap up banks in the south, now hit by real estate lending losses. So what about Royal Bank of Canada's push for Alabama National BanCorporation? And what about irregularities in trading of the latter's stock? More to follow, for now see "Consumer group protests RBC Centura Bank's pending buyout of Alabama National Bancorporation," Orlando Sentinel, Jan. 3, 2008

            HSBC announced on January 2 that it signed an agreement to sell Wealth & Tax Advisory Services USA to "participating WTAS managing directors in a management buy-out for up to $65.9 million. WTAS provides tax advisory services in the U.S. to high net worth individuals including HSBC Private Bank customers." Ah, tax avoidance -- or could it be, tax evasion?

December 31, 2007

   It doesn't stop. Inner City Press / Fair Finance Watch (ICP) has just filed a timely challenge to the application by Royal Bank of Canada and RBC Centura (RBC) to acquire Alabama National BanCorporation, based on worsening lending disparities at RBC Centura, on RBC's continuing funding of fringe financiers such a pawnshops such as E Z Cash Pawn in Clayton County, Georgia and Pawn Outlet OF Skyland, Inc., of Skyland, North Carolina, and on layoffs and gun-jumping by Alabama National.  FFW's comment, filed under the Community Reinvestment Act with the Federal Reserve Bank of Richmond, was submitted before the Fed's December 28 deadline.

            In the most recent year for which HMDA data is publicly available, 2006, RBC Centura in the Charlotte, North Carolina Metropolitan Statistical Area (MSA) denied the mortgage refinance applications of African Americans 4.44 times more frequently than those of whites. In the Atlanta, Georgia MSA in 2006, for conventional home purchase loans, RBC Centura denied the applications of Latinos 2.9 times more frequently than those of whites. Also in the Atlanta MSA in 2006, RBC Centura denied the home improvement mortgage applications of African Americans 4.2 times more frequently than those of whites, while also declaring "withdrawn" fully 38% of home improvement applications from African Americans. There should be an inquiry into this, including at the public hearings FFW is requesting.

            While strikingly excluding people of color from its offers of normally-priced, prime credit, RBC and RBC Centura have continued funding and enabling predatory / fringe financiers such as high-cost pawnshops. As simply two examples:

GEORGIA CLAYTON COUNTY SUPERIOR COURT CLERKS OFFICE, UCC RECORD

Debtors: JDH INVESTMENTS, INC.

Debtor Address: JDH INVESTMENTS, INC.
                E Z CASH PAWN

Secured Parties: RBC CENTURA BANK

Secured Party Address: RBC CENTURA BANK
Filing Type: CONTINUATION

Filing Date: 2/12/2007

Filing Number: 03107000298

Original Filing Number: 03102002156

Filing Office: CLAYTON COUNTY STATE COURT CLERKS OFFICE
               9151 TARA BLVD
               JONESBORO, GA 30236 

--

NORTH CAROLINA SECRETARY OF STATE, UCC RECORD

Debtors: PAWN OUTLET OF SKYLAND INC

Debtor Address: PAWN OUTLET OF SKYLAND INC
                PO BOX 871
                SKYLAND, NC 28776

Secured Parties: CENTURA BANK

Secured Party Address: CENTURA BANK
                       PO BOX 500
                       ROCKY MOUNT, NC 27802

Filing Type: CONTINUATION

Filing Date: 2/9/2007

Filing Time: 5:00PM

Filing Number: 20070014594C

Original Filing Number: 001481801

Filing Office: SECRETARY OF STATE/UCC DIVISION
               300 N SALISBURY ST, LEGIS OFF BLDG
               RALEIGH, NC 27603

            The companies appear to be jumping the gun before regulatory approval, taking it for granted. See, for the record, the Birmingham Business Journal of December 17, 2007--

"Alabama National BanCorp. is expected to cut jobs after its acquisition by RBC Centura Banks Inc. becomes official in early February. William Matthews, chief financial officer of Alabama National, said the company began notifying employees in recent weeks about the job eliminations, which will not take effect until the bank's systems conversions are complete in late spring and early summer. 'It is true that some redundancies were created and unfortunately that means some positions are eliminated,' Matthews said.

            Are these notifications under the WARN Act? Before regulatory and / or shareholder approval? This should be explored at the public hearings FFW is requesting.

  There are other adverse managerial factors to be discussed at the requested public hearings. See, e.g., the Globe and Mail of September 25, 2007, "RBC ordered to produce Norshield documents" --

"An Ontario judge has ordered Royal Bank of Canada to produce all documents relating to its dealings with scandal-plagued hedge fund Norshield Asset Management (Canada) Ltd., which filed for receivership in 2005. The ruling is the latest twist in a series of legal battles involving RBC, Norshield and Cinar Corp., a prize-winning Montreal animation company that was sold to a group of Toronto investors in 2003 after being mired in controversy. Mr. Justice James Spence of the Ontario Superior Court ruled yesterday that the documents, which include bank records in Canada and offshore, were relevant to a lawsuit filed against RBC and others... The litigation committee has launched a series of a lawsuits aimed at recovering $121-million (U.S.) Cinar allegedly invested eight years ago in Caribbean firms connected to Norshield. That money has allegedly gone missing. Norshield has insisted it did nothing wrong. The firm collapsed after heavy redemptions which the company blamed on growing client concern about the Cinar allegations.... RBC has been caught up in the fray because it was Cinar's principal banker and it provided some financial services to the Caribbean firms and Norshield. The Cinar litigation committee has sued the bank for $121-million (U.S.) alleging it handled the transfer and is responsible for the loss. The bank has denied the allegations and suggested that if money has gone missing, it is the fault of Cinar managers or the offshore companies. This summer, as part of the lawsuit, the committee filed a motion seeking a long list of documents from the bank... Lawyers for the litigation committee filed hundreds of pages in court to back up their request. The documents included an internal RBC memo which showed the close relationship between the bank's senior executives and Cinar's co-founders, Ronald Weinberg and his late wife Micheline Charest.  One document indicated that RBC's chief executive officer at the time, John Cleghorn, was 'well known to Mrs. Charest.' The documents also included an internal RBC memo dated March 27, 2000, when allegations of misconduct relating to misuse of tax credits first surfaced at Cinar. 'Difficult relationship to manage since its inception: high number of RBC executive interventions required,' said the memo, which was written by a senior market manager at the bank."

            For these and other reasons, RBC's proposals, including for
RBTT Financial Group in Trinidad and Tobago in the Caribbean, should be subject to enhanced regulatory scrutiny and public hearings and, on the current record, should not be approved / allowed.

December 24, 2007

   The Colombia unit of HSBC sucked up a capital injection of $20 million from its parent. "This capital injection is a sign of the growth potential we have (in Colombia)," Roberto Brigard, chief executive of HSBC Colombia SA, said in a statement. In October, HSBC's workers in Colombia went on a strike demanding higher wages...

            How green is GE's valley? GE announced last week it is investing $54 million to become part owner of a ship drilling for oil off the coast of Brazil, and that "the equity investment in offshore drilling is a first for GE Energy Financial Services." And now, a FCC rule change has been jammed through which will allow a company in the 20 largest markets to own both a newspaper and a radio or television station...

December 17, 2007

  Pundits name JPMorgan Chase as along the most likely candidates to buy GE's credit card unit, which issues private-label and cobranded cards with a number of retailers like Wal-Mart Stores. Good luck...

Getting over -- the Taiwan government will pay HSBC $1.46 billion to take over Chinese Bank, a member of the bankrupt Rebar Group, Johnson Chen, the president of Taiwan's government-owned deposit insurer, said Friday.

December 10, 2007

  The pace of bank merger is way, way down. Even firms not directly involved in subprime are damaged goods: no one knows how far the problems are spread, under the surface. The pending TD Banknorth - Commerce deal has finally been submitted to the Federal Reserve for review, with a comment period running through January 3...

Testifying last week in England, Citigroup's CEO for markets and banking for Europe, Middle East and Africa William Mills  said Citi manages its seven SIVs at "arms' length" and on commercial terms. But when queried on the bank's responsibility to the SIVs, Mill said: "From a reputational point of view, if we don't step in and support these vehicles, will that somehow hurt our reputation in the market? What the market is trying to establish is, if in fact the liquidity crisis continues, will Citigroup provide the liquidity to fund these vehicles so that they won't have to go into an asset disposal mode, especially in this environment, where people think that would add more fuel to the fire?" Citi apparently cares about its reputation to big-ticket investors -- but less so, when it twice settled predatory lending charges, with the FTC and Federal Reserve...

December 3, 2007

            HSBC last week "became the first bank to bail out specialized funds known as structured investment vehicles. HSBC plans to gradually shut down two bank-sponsored SIVs [Cullinan Finance Ltd. and Asscher Finance Ltd. Janus Capital Group Inc.] and take $45 billion in mortgage-backed securities and other assets owned by the funds onto its own balance sheet... Meanwhile, a group of the world's largest banks, led by Citigroup Inc., Bank of America Corp. and J.P. Morgan Chase & Co., are seeking to raise a 'super fund' of as much as $100 billion that would buy assets from the SIVs to prevent a mass fire sale of assets."

            Assets in structured investment vehicles sponsored by Citigroup Inc.  fell 20% to $66 billion as of Nov. 30 from $83 billion at the end of September, spokesman Jon Diat said. "We continue to focus on liquidity and reducing leverage," Diat said in an e-mailed statement. Citigroup runs seven SIVs...

            Prosecutors arrested a former top Japanese defense bureaucrat and his wife yesterday on suspicion they accepted lavish gifts from companies -- including one firm linked to General Electric Co. -- in exchange for contracts, officials said. Former Vice Defense Minister Takemasa Moriya, 63 years old, was arrested on suspicion he accepted a dozen free golf trips valued at about 3.9 million yen ($35,850) from 2003 to 2006, knowing that favors were expected in return, the Tokyo District Prosecutor's Office said in a statement... One of the defense contracts under scrutiny is the ministry's 2004-05 purchase of five General Electric C-X engines for next-generation Japanese cargo aircraft. The deal was handled -- without bids -- by Yamada Yoko, which was a Japanese agent for the 600 million yen GE engine at the time, a Defense Ministry spokeswoman said.

November 26, 2007

 GE will build two power stations in Turkmenistan. "President Gurbanguly Berdymukhamedov has given the American partners a concrete task: build two new power stations in Ashgabat," Vatan television reported last week.  The government had discussed modernizing the "entire electrical system" with an official from General Electric, the report said. Top European Union and U.S. energy officials were in Turkmenistan on Thursday to discuss foreign investment in the energy sector of the gas-rich ex-Soviet nation. Foreign investors have been paying increased attention to Turkmenistan since the death last December of eccentric dictator Saparmurat Niyazov. His successor Berdymukhamedov has signaled he is open to closer relations with investors. But human rights are still an issue -- though not to GE, apparently...

  Singapore has no plans to change banking secrecy laws, an official at the Monetary Authority of Singapore (MAS) said last week. "They allow for the necessary transparency in combating criminal activity, while safeguarding investors' interest for safety and security," the official said. The EU is pressing for more transparency in Singapore's banking regime and participation in the EU savings tax directive, so the MAS position could undermine talks for a trade agreement between Singapore and the EU. Singapore insists that it won't become a shelter for money laundering, particularly with the opening of two multi- billion dollar casinos in 2009 and its proximity to countries that are battling terrorist groups. Singapore is resisting pressure to join in the EU withholding tax arrangements, introduced in 2005, which impose a tax on the investments of EU nationals residing in another EU country. They are seen as the main stumbling block to a trade agreement. Switzerland caved in to the pressure and now collects withholding tax for remittance to the member states of the EU. In its statement, the MAS noted: "The Singapore constitution does not allow us to collect taxes on behalf of a foreign country."

November 18, 2007

  HSBC Holdings on November 14 said it took a higher-than-expected impairment charge of $3.4 billion on bad debts at its HSBC Finance unit in the third quarter. "I don't think anybody knows if we've reached the bottom," Stephen Green spun on a conference call. HSBC said that the group's principal sponsored conduits - Solitaire, Bryant Park, Regency and Abington Square - are funding "satisfactorily" with no asset impairments.  It added that its off-balance sheet SIVs managed by HSBC - Cullinan and Asscher - also currently have funding arrangements in place. "Asset quality within the SIVs remains high, although two financial institution issuers of assets held by the SIVs were downgraded subsequent to the quarter end," it said. We'll see...

  GE Money Singapore looks down-market, its CEO Iqbal Singh told reporters during the company's recent fifth anniversary celebration. Alongside high-rate personal loans, GE will roll out a credit card with a limit of $500, and pitch its high-cost loan products at 400 electronic payment kiosks across the island. Yoshiaki Fujimori, CEO of GE Money's Asia operations, said-in-a-statement, "This represents our long- term commitment to Singapore and our confidence in this market." Indeed...

   North Korean officials are to meet US diplomats, Treasury officers and Secret Service agents in talks in New York this week to discuss steps Pyongyang could take to abandon counterfeiting and money laundering activities for it to be integrated into the global financial system. The two-day talks from Monday, convened at Pyongyang's request, will be "related to money laundering and other forms of illicit finance," a US State Department official said. The US team will be led by the Treasury's deputy assistant secretary Daniel Glaser North Korea will be represented at the talks by a six-member delegation led by Ki Kwang-ho, a director at Pyongyang's finance ministry, South Korea's Yonhap news agency reported -- hopefully, it might be added.

November 12, 2007

  GE is gunning for the Bank for Foreign Trade of Vietnam, the third-biggest commercial bank in the country. The Vietnamese government plans to sell at least 15 percent of the company, known as Vietcombank, the people said Thursday, declining to be identified as discussions are confidential. The stake may be worth about $700 million... HSBC, the largest bank in Europe by market value, bought a 10 percent stake in Bao Viet Insurance & Finance for $255 million in September.

  In Athens, US embassy spokesperson Carol Kalin said Greek authorities have been asked to "investigate" the bank as US allies have been urged to take "similar or comparable measures" to those adopted by Washington. The US last month blacklisted Bank Melli and Bank Mellat, accused of providing banking services for Iran's nuclear agencies, and Bank Saderat, which allegedly funnels funds to Hezbollah, Hamas, PFLP-GC, and Palestinian Islamic Jihad. The bank from 2001 to 2006 transferred 50 million dollars from the Central Bank of Iran to its branch in Beirut via London for the benefit of Hezbollah fronts in Lebanon, and has also transferred several million dollars to Hamas, the State Department says. "As we announced on October 25, we had a new round of US sanctions on certain Iranian entities, including Bank Saderat. This is part of our effort to advance diplomacy on Iran," Kalin said. "We have asked our allies to take similar or comparable measures to those we've taken."

November 5, 2007

            At Citigroup Chuck Prince, who defended Sandy Weill's purchase of Associates First Capital Corporation and lastly engineered Citigroup's takeover of Ameriquest's Argent, is slated to resign, subprime fallout...

            BizWeek says Troy Norton, 84, a retired prison guard who lives in Bismarck, Ark., claims in a lawsuit filed in June in U.S. Bankruptcy Court in Hot Springs that he was a victim of improper collection attempts by Bank of America Corp. and two collection agencies. He obtained a discharge of certain debts in June, 2006, after medical bills prompted him to seek Chapter 7 protection. Court documents show that he received eight collection letters from the bank on credit-card debt of $4,218 that a judge had canceled...

            Rita Childers, 76, thought she had left behind an $855 bill owed to GE Money Bank, when the account was discharged in a Chapter 7 bankruptcy she filed in 2005. The former real estate agent in Klamath Falls, Ore., had quit her $30,000-a-year job to care for her husband, who suffers from Alzheimer's. Social Security and his veteran's pension didn't cover their bills. After the Chapter 7 case, Childers fell behind again and filed under Chapter 13, which allows debtors to repay creditors over time. GE Money had transferred the account to a debt collector that filed new claims in the Chapter 13 to recoup the canceled $855 debt. In April, Childers sued GE Money, which then withdrew the claim, citing a paperwork mistake. In an e-mail, GE Money said it tries "to avoid these errors and fixes them if they occur."  Yeah but they just keep occurring...

October 29, 2007

            So Merrill's CEO reached out to Wachovia without his board's approval. One assumes that preliminary testing of the waters for mergers takes place all the time. But when a CEO's under fire, and a deal would result in huge payout, it's more controversial. Mix in Merrill's subprime follies and O'Neal is on thin ice...

           Sanctioning: "We call on responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat, Bank Saderat, and all companies and entities of the IRGC," U.S. Treasury Secretary Henry Paulson said in a statement. And in Toyko they wondered, how would they pay for and settle on the 10% of their energy that comes from Iran?

  Bank Melli has several subsidiaries: Bank Kargoshaee, in Tehran; Bank Melli Iran Zao, in Moscow; Melli Bank, in London; and Arian Bank, a joint venture with Bank Saderat in Kabul. Bank Mellat has branches in Armenia, Britain, South Korea and Turkey. Bank Saderat specializes in the financing of Iranian's foreign trade balance. Its international businesses are mainly concentrated in the Gulf countries and Lebanon, but it is also active in France, Germany and Greece....

October 22, 2007

            HSBC has disputes not only with its subprime borrowers, but also with its workers. In Colombia, HSBC employees went on strike for 10 days, at the end of which HSBC said in an emailed statement, "Both sides reduced their pretensions to achieve mutual benefits." No, HSBC has yet to reduce its pretensions...

            While banks may join the conspiracy of the the Master Liquidity Enhancement Conduit being set up by Citigroup, Bank of America and JPM Chase? Wachovia, HSBC and Dresdner, according to the WSJ, as well as other non-US-based banks like Bank of Montreal, Barclays PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC. Bank of Montreal's SIV is Links Finance Corp., with some $22 billion in senior debt. Standard Chartered has two SIVs, Whistlejacket Capital Ltd. and White Pine Corp., with a combined $16.7 billion in senior debt in mid-July...

            It's a way to cook their own books, and avoid reporting losses. That non-banks like PIMCO are not participating, despite the U.S. Treasury Department's Paulson's closed-door claims to the contrary to Italian central banker Mario Draghi, is telling. This is all about banks helping themselves. And taking advantage of each other: Inner City Press has learned that JPM Chase's Jaime Dimon has called the conduit an opportunity to make money from his old nemesis Citigroup. "Make it worthwhile," Dimon told Paulson. "Gouge them," Dimon in essence ordered his staff. Just as these banks said of consumers...

October 15, 2007

   Revolting revolving door: on the American Bankers Association's committee to weaken anti-money laundering laws are a slew of former regulators: Richard Small, the Federal Reserve AML "guru" who sold out to Citigroup then GE Money; William Fox, former Financial Crimes Enforcement Network (Fincen) director, now at Bank of America;  Werner, another former Fincen director and now at Merrill Lynch; and William Langford, a former director of regulatory affairs at Fincen and now a senior vice president of global AML at JPMorgan Chase. The three top banks, the biggest brokerage and GE Money all hired directly from the agencies, and now use them to lobby for de-regulation...

October 8, 2007

  Who will buy Barclays? A deal-enabler tells DJNS that "Bank of America is the obvious suitor. It is interested in beefing up its wholesale and investment banking operations." Not said is that, even with its and the Fed's accounting tricks, BofA is at the 10% deposit cap in the U.S. and must look overseas...

The NYT of October 5 ran a piece sucking-up to GE, beginning

David R. Nissen, who runs GE Money, remembers how the corporate powers at General Electric used to react whenever the subject of joint ventures came up. ''The basic philosophy was, 'If you don't have full control, don't do the deal,''' Mr. Nissen recalled. Times have changed. In South Korea, GE Money, G.E.'s retail lending arm, has 43 percent stakes in Hyundai Capital and Hyundai Card, which offer auto loans, mortgages and credit cards. It has formed joint ventures with several Spanish savings banks to provide consumer loans and credit cards. And it has a consumer banking venture with Garanti Bank in Turkey, in which G.E. and the Dogus Group, Garanti's parent, each own 25.5 percent, with the rest owned by institutional investors. Garanti manages that venture. Joint ventures ''have been one of our most powerful strategic tools,'' Mr. Nissen said, noting that net income for the ventures is growing at twice the rate of his core business.

            And not a word about GE's overseas subprime lending, nor last week's focus, its U.S. cosmetic surgery loans. The secret predator...

October 1, 2007

  And the spread just continues. In the past week, HSBC has wielded  approvals for insurance joint-venture in China, with National Trust, for 10 branches in Peru, and to become the first international equity broker in the United Arab Emirates. And alongside it all, exporting and spreading predatory lending...

September 24, 2007

            During the upcoming month Brussels will look into the takeover of mini-BPH by GE Money. For EUR 625.5m the Americans are supposed to buy 66 percent of the bank, which remained after the division of Bank BPH. GE Money will buy the smaller part of the bank with 200 outlets. The bigger part will be merged with Pekao SA ...

September 17, 2007 - As Fed Releases Mortgage Study, Subprime Disparities Worsen at Citigroup, HSBC, Wells

            HSBC is moving to acquire a 10% stake in Vietnam insurance and financial services group, Vietnam Insurance Corporation (Bao Viet) $255 million. The deal will include the secondment of specialist employees and the provision of training to Bao Viet, HSBC said. Stephen Green, HSBC Chairman, said: "This investment and strategic partnership with Bao Viet reflects a growing commitment to Vietnam, and is in line with HSBC's stated strategy of targeting investment at high growth markets with international connections."

            How long will it be before HSBC rolls out single premium credit insurance and the other predatory product lines it acquired along with Household International?

            In New Zealand, used car lender Senate Finance has signed a deal with GE Money. Under the arrangement GE Money will start financing Senate's lending book while Senate will continue to operate as a loan broker and to service its network of dealers and customers.  A wholly owned subsidiary of Dorchester Pacific, Senate lends in the Auckland used car market, and was previously funded exclusively by Dorchester. "It's business as usual at Senate," Dorchester Pacific chief executive Andrew Walker said.

            And at GE Money, which will apparently buy high-cost loans from anywhere...

September 9, 2007

  As the chickens come up to roost at Countrywide for its disparate lending, Bank of America steps in to buck it up, to the tune of $2 billion. Is this foray back into subprime lending relevant to BofA's proposal to acquire LaSalle? You bet it is...

The letter to HSBC last week from Knight Vinke Asset Management laid out a series of critiques, including that HSBC should "a strategy more focused on emerging markets, put more people with experience in those areas on its board, and changed the way top executives are compensated to more closely align performance with pay." But what about HSBC's bungling and predatory descent into (and export of) Household's subprime lending?

September 3, 2007

    So now Barclays' exposure to U.S. subprime is reportedly taking it out of the running to acquire ABN Amro. Live by the sword (of predatory lending), you can suffer by it too...

   Meanwhile HSBC is buying into South Korea, a country now belatedly imposing interest rate caps on consumer finance, while GE Money tries to flee Japan for just that reason.

August 27, 2007

   GE is considering leaving Japan now that consumer protections are in place, cutting interest rates from 29 to 20 percent. Among the reported potential bidders are UBS and Deutsche Bank -- advised by Alan Greenspan...

   On August 20, Royal Bank of Scotland told the Federal Reserve that its anti-money laundering policy should be withheld from ICP Fair Finance Watch. Quickly this counter-argument was filed:

RBS argues that its Anti-Money Laundering policy should be withheld, "since disclosure might provide information which might assist persons seek to circumvent those policies and procedures and to engage in money laundering."

  But Fortis and Santander provide their anti-money laundering policies. Therefore the record on this application contains a contradiction -- if RBS' argument is accepted, then Fortis and Santander are assisting and enabling money laundering. If, on the other hand, this is not what Fortis and Santander are engaged in, RBS' policy must be released.

 We note pervious RBS AML issues, including regarding sanctioned entities in Afghanistan. The policy should be released, including so that timely commenters, who timely requested the application, including but not only under FOIA, can review and comment on it.

            And lo and behold, by the end of the week RBS released its AML policy, which is now being analyzed...

    If HSBC tries to buy KEB in South Korea from Lone Star, it would export Household's predatory lending model into the South Korean market -- just another reason to oppose it...

August 20, 2007

    In response to the July 24 comments of Fair Finance Watch opposing Royal Bank of Scotland's application to the Federal Reserve to acquire ABN Amro, including due to the fact that "RBS supports predatory lenders," RBS' outside counsel at Shearman & Sterling, Bradley K. Sabel, has told the Fed that

"When New Century filed for bankruptcy, RBS Greenwich Capital agreed to provide debtor-in-possession (DIP) financing to assist New Century in its efforts to reorganize... RBS Greenwich Capital also agreed to provide an initial bid on certain mortgage assets of New Century that were being sold... In exchange for providing that bid, RBS Greenwich Capital received a Bankruptcy Court-approved break up fee of $954,000."

            It's reminiscent of Royal Bank of Scotland's Greenwich Capital's predatory enabling of the predatory lender ABFI in Philadelphia, and is indicative of those still profiting even from the chaos in the subprime lending market...

While it's good to see the American Banker describe Chris Dodd as "in the crosshairs," there's this quote: "As a committee chairman, Sen. Dodd is about results, and results can be achieved in many ways," a spokesman for the senator said. "Legislation is one of those ways, but not the only way." Question -- why not name the spokesman? Guess -- could it be... Shawn Maher? And even further inside baseball, the same Banker article quotes Jaret Seiberg as "a senior vice president of financial services policy for Stanford Washington Research Group" without noting that he previously was a reporter on just this beat for... the American Banker.

  Classic Dodd, to the Sun:   on willingness to meet with foreign dictators: "Three of them I've already met [Hugo Chavez, Fidel Castro, Hafez al-Assad]. ... I'd never meet with Ahmadinejad, he's a thug." But what about Kim Jong-il of North Korea?

From the august (15) Argus Leader in South Dakota:

The court of public opinion already appears polarized on what critics call predatory lending practices - companies charging exorbitant interest rates and penalty fees. "'It's not illegal, but it's very unethical,' said Richard Cook, a former federal government analyst and author who lives in College Park, Md. 'It's legalized loan-sharking. It was one of the specialties of the Mafia. But that's one organized crime doesn't have to do now because it's legalized.' Sioux Falls Mayor Dave Munson, who worked 18 years for Citibank, calls that criticism unfair."  So, from Citibank to mayor in the city Citi ran to, to export high rate, which are called "unethical" by an ex-Fed consultant...

   From Deal Journal: " No one outside Citigroup knows just how much the meltdown in global credit markets has cost the banking giant, but that hasn’t stopped analysts from guessing. Sanford Bernstein estimates Citi could take a $2 billion to $3 billion hit to its third-quarter earnings from the meltdown in the subprime mortgage market and the steep decline in leveraged-buyout-related loans and bonds. It could post losses of $1.2 billion to $1.5 billion on buyout loans loans and $500 million to $1 billion on subprime mortgages in the period, according to this writeup of the analysis from Bloomberg. No one knows the extent that Citigroup may have hedged its exposure to the risky debt, so the final tally of the damage won’t become clear until Citi reports its results."

          And even then...

   From DJ Bogota: "General Electric Co. (GE) announced a plan to carry out a tender offer to buy as much as 10.69% of Colombia's Red Multibanca Colpatria SA (COLPATRIA.BO) from minority shareholders to boost its stake in the bank, the U.S. company said Monday in a filing to the Colombian securities regulator...In February, GE announced it had agreed to purchase a 39.3% stake in Colpatria, Colombia's ninth-largest bank in terms of assets, from Grupo Mercantil Colpatria, a Colombian holding company." And whatever GE did with its WMC subprime unit in the United States, GE Money is still committed to exporting the predatory lending model it has learned...

August 13, 2007

            Bank of America, so arrogantly pressing forward to swallow up LaSalle, last week saw the payday lender it assists, Advance America, hit by a class action. And what has BofA to say?

            Meanwhile, Citigroup last week announced its acquisition of Waco, Texas-based Big Red -- a soda company. Citi then brought in a new manager from Red Bull. Meanwhile, Citigroup is said to be hunting for SunTrust...

            Why is HSBC Rural Bank Co. opening in Suizhou in central Hubei province? To further make nicey-nicey with the Chinese government, sure. But ever since HSBC bought Household International, when it says, "under-served," watch out for the predatory lending...

August 6, 2007

  The Dutch newspaper last week quoted ABN Amro's CEO Groenink that Fortis would be overpaying in its bid for... ABN Amro.

   It has emerged in Brazil that HSBC has lent to and enabled an ethanol producer, Para Pastoril e Agricola, in the Amazon state of Para, now accused of keeping its workers in "slave-like" conditions: 13 hour days for less than $20 a month.

  Citigroup says it is not considering bailing out of a deal to finance the acquisition of energy provider TXU Corp., despite reports to the contrary. What was that, about Citigroup's environmental standards?

July 30, 2007

   ICP's Fair Finance Watch has filed timely comments opposing the applications of RBS, Santander and Fortis to acquire ABN Amro:

July 24, 2007

Richard Walker
Vice President & Community Affairs Officer
Federal Reserve Bank of Boston
Public and Community Affairs Department, T-7
P.O. Box 55882
Boston, Massachusetts 02205

Re:   TIMELY COMMENT IN OPPOSITION TO THE PROPOSAL FOR ROYAL BANK OF SCOTLAND, BANCO SANTANDER AND FORTIS TO ACQUIRE ABN AMRO HOLDINGS AND SUBSIDIARIES INCLUDING REQUEST FOR HEARINGS

Dear Mr. Walker and others in the FRS:

  On behalf of the Fair Finance Watch and its affiliates, including Inner City Press (collectively, "FFW"), this is a timely comment opposing and requesting public hearing on, and complete copy of, the applications by Royal Bank of Scotland, Banco Santander and Fortis to acquire ABN Amro Holdings and subsidiaries. Even as the overall proposal faces legal challenges in Europe, the Federal Reserve Board's web site lists the initial comment period as running through July 25. This comment is timely. In light not only of the lending disparities set forth below, but also the legal issues raised by the proposal(s), RBS' engagement with predatory lenders, and legal and other questions about the deal, public hearings should be held on this and the other ABN Armo proposals.

 FFW understands that litigation and appeals continue in Europe; the FRB should extend the comment period until the reality or hypothetical natures of this proposal is clear.

In 2006 nationwide at  Royal Bank of Scotland's Charter One Bank unit, African Americans were confined to higher cost loans over the rate spread 1.49 times more frequently than whites.

In 2005, Santander's Sovereign was 3.10 times more likely to confine Latinos than whites to higher cost loans over the rate spread (of 3% over comparable Treasury securities on a first lien, 5% on a second lien). Also, Sovereign denied 26.96% of applications from Latinos, versus only 10.39% of applications from whites, a denial rate disparity of 2.59.

   Sovereign was 2.76 times more likely to confine African Americans than whites to higher cost loans over the rate spread. Sovereign denied 28.21% of applications from African Americans, versus only 10.39% of applications from whites, a denial rate disparity of 2.76.

RBS continues supporting predatory lenders. The NY Times of April 10, 2007 reported:
"New Century Financial, a subprime lender that has filed for bankruptcy protection, should not be allowed to sell $50 million worth of mortgages to a subsidiary of the Royal Bank of Scotland, a United States trustee said yesterday in court papers.

Before the sale is approved, New Century should be forced to eliminate or reduce a $1 million breakup fee associated with the deal and to say how it will protect consumer financial data, the trustee, Joseph J. McMahon Jr., said in court papers filed in Federal Bankruptcy Court in Wilmington, Del.

The breakup fee, which New Century would pay to the Royal Bank of Scotland if the sale was not completed, is nothing more than a '$1 million windfall' for Royal Bank, Mr. McMahon said in the filing. Federal trustees monitor bankruptcies on behalf of the Justice Department.

New Century, based in Irvine, Calif., specialized in making loans to home buyers with poor credit before it filed for bankruptcy protection on April 2. The company is planning to sell most of its assets within the next few weeks, including its remaining loans, loan servicing division and loan origination platform.

New Century said Carrington Capital Management had offered about $133 million for the loan servicing unit, which collects and manages mortgage payments. The Royal Bank subsidiary, Greenwich Capital, has agreed to pay $50 million for about 2,000 mortgage loans, most of which are in default.

Judge Kevin J. Carey in the Wilmington court will consider approving the rules governing the Royal bank sale in a hearing today, and the Carrington sale on Thursday.

Both offers would be considered opening bids in a court-supervised auction.

A New Century spokeswoman did not immediately return a call seeking comment. Officials at Greenwich Capital could not immediately be reached for comment."

  Public hearings should be held. ICP is a protestant to this proposal, and should be provided copies of all communications regarding this proposal -- including a full copy of the applications, forthwith --  and should be provided an opportunity to participate in any communications between the applicants and your agency. All documents and records related the proposal (on an ongoing basis), including complete copies of the Applications, and other records in your agency’s  possession related to the proposal, should be provides as quickly as possible, as they become available.

Very Truly Yours,

Matthew Lee, Esq.
Executive Director

  Then Banco Santander was reported to have continued to do business with sanctioned Bank Sepah until at least March 2007.  How this might impact the Santander - RBS - Fortis bid for ABN Amro, including their pending applications before the U.S. Federal Reserve, remains to be seen. Federal Reserve, take notice...

July 23, 2007

 ... Analysts say a takeover of Korea Exchange Bank by HSBC, would be positive for the U.K. lender -- they don't, however, say it would be positive for consumers in Korea, into which HSBC would bring the predatory lending it acquired along with Household International....The U.K.'s Daily Telegraph reported Tuesday, citing people close to the situation, that HSBC is interested in taking a controlling stake in the Korean bank and has contacted U.S. private-equity company Lone Star Funds, which has been trying to sell its 51% holding in the Korean lender.

            Seeking the super-profits to be made by exporting predatory lending to the developing world, GE Money Bank "plans to withdraw from Austria and is seeking a buyer for its business in the country," GE Money Bank spokesperson Aida Peter told Austrian daily Oesterreich on July 19, 2007. The move is attributed to the smaller profitability in the country. Earnings in Austria have remained below the expectations of GE, Peter added. The Austrian activities will be sold in 2008., he said. GE Money Bank is said to be interested in foreign investors as potential buyers, informed sources said. German Bayerische Landesbank (BayernLB), which is in the process of taking over Austrian bank Hypo Group Alpe Adria (HGAA), is said to be among the possible candidates for buying GE Money Bank Austria.

  But it makes sense to GE to remain in the Czech Republic, since it has received corporate welfare, upheld by the European Commission, which announced last week  it has decided that the state-aide guarantee measures and other measures in favor of the Czech banks Agrobanka Praha a.s. and GE Money Bank a.s. (former GE Capital Bank a.s.) are compatible with EU state aid rules and has closed its formal investigation procedure. Ahead of Czech accession to the EU in May 2004, the Czech Republic notified the EC a series of measures in favor of Agrobanka Praha, a.s. and GE Capital Bank, a.s. adopted by Czech authorities during 1996 to 1998 to assist the restructuring of Agrobanka Praha, a.s. and facilitate its sale to GE Capital Bank. "As a result of the formal investigation proceedings, the Commission decided that the measures constitute state aid within the meaning of Article 87 (1) of the EC Treaty," the EC said. That is, legalized corporate welfare for GE...

July 16, 2007

   Bank of America, fast becoming one of the most arrogant financial institutions in the world, last week wrote to the Federal Reserve Board, in response to the comments of Fair Finance Watch, that "at the time of Board approval... the combined company will hold less than 10 percent of nation's deposits." If so, it's by cooking the books. Reportedly, B of A has complained, inaccurately, that "foreign" banks like Royal Bank of Scotland, regarding which we'll soon have more, are exempt from the 10% deposit cap. That's a lie, but for B of A, increasingly, that's nothing new. It no longer even responses to issues raised about its enabling of payday lenders like Advance America Cash Advance. But see a forthcoming alternative weekly story coming out in North Carolina. Maybe B of A will try to sweep this predatory lending issue under the rug by buying (or withholding) advertising in alternative weekly. For shame... Meanwhile, B of A's Frans van der Grint told DJ that Bank of America now wants to complete the transaction as quickly as possible. We'll see.

Citigroup, sued last week in the U.S. for racial discrimination in mortgage lending, claims it has industry-leading practices. At a higher level, from Citi's point of view, its CEO says the company wants to list on the Tokyo stock exchange "as soon as possible"...

July 9, 2007

   Fortis plans to open 230 Fortis Credit4me credit shops in Germany by 2009, Marc Hentgen, head of Fortis Consumer Finance Deutschland, told German Handelsblatt daily on July 6, 2007. Fortis' concept is similar to the loan shop chain easycredit of German Norisbank, subsidiary of local banking group Deutsche Bank AG. The Belgian-Dutch group plans to also offer investment products at its "Credit4me" outlets.

  Meanwhile, the UK Daily Mail reports that the Financial Services Authority is understood to be investigating mortgage firm GE Money Home Lending for its troubled 'sub-prime' lending...

  From a press release -- "HSBC has formally opened its third Customer Service Unit in Abu Dhabi at Khalidiya Area. The unit is located inside the Spinneys Supermarket, Khalidiya. The Centre was inaugurated by Mohamed Almulla, Chief Executive Officer of HSBC in Abu Dhabi in the presence of Lester Wynne-Jones, Regional Head of Personal Financial Services. The new Centre, the ninth for HSBC in the UAE, will offer a one-stop-shop for customers to submit applications for new accounts, loans, credit cards" -- and predatory loans...

July 2, 2007

  This week, focus on Latin America: shares in Banco de Chile SA jumped on Friday after the company said its parent, Quinenco SA had resumed negotiations with Citigroup. Late Thursday, Banco de Chile said that Quinenco, an investment holding company, had "reinitiated conversations with Citigroup to carry out a strategic association of its financial operations in Chile." Predatory lending descends on Santiago...

            GE Money will reportedly install an $11 million call center in Guatemala that is scheduled to be operational by May or June next year. The call center will employ some 1,400 Guatemalans and the decision comes after more than a year of studying where to put it, the newspaper quoted GE Money's Latin American director Edmundo Vallejo. The center, which is being built in conjunction with Banco America Central, will primarily serve both the bank's local clients as well as Spanish speaking GE Money customers in the US and Mexico.

            The National Association of Securities Dealers has fined Wells Fargo Securities LLC $250,000 for not disclosing that a series of research reports about Cadence Design Systems Inc. were written by an analyst who was seeking a job with the semiconductor designer... 

  Just after the Federal Reserve's rubber stamp approval, Mellon Bank has agreed to pay $16.5 million to the federal government to settle claims that it allowed overwhelmed employees to destroy thousands of federal tax returns and payments in 2001. Mellon had a contract with the Internal Revenue Service to process income tax returns and tax-payment checks. Mellon employees, feeling overworked and unable to meet deadlines imposed by the contract, destroyed more than 77,000 returns and checks totaling $1.3 billion ....

June 25, 2007

  Fresh from their rubberstamp approval by the Federal Reserve, BONY intends to close on Mellon on July 1, and to start cutting jobs. Although we're not crying, they've already cut board members. The survivors, from Mellon, are Mr. Kelly, are Mellon Vice Chairman Steven Elliott; former Carnegie Mellon University President Robert Mehrabian; University of Pittsburgh Chancellor Mark Nordenberg; U.S. Steel Chief Executive Officer John Surma; Wesley von Schack, former CEO of Pittsburgh energy company DQE; Edmund Kelly, chairman of insurer Liberty Mutual; Ruth Bruch, a senior vice president at Kellogg Co. and the intrepid Mr. Kelly...

  Consider this, from the Straits Times of Singapore:

"On June 8, my father went to HSBC Jurong East branch to help me deposit money in my bank account, which I had just opened recently. A bank teller first asked about the origins of the money and then remarked that she was afraid my dad was a terrorist. My dad had a rude shock. Although I understand banks are required to carry out Customer Due Diligence (CDD) measures under MAS Act Cap 186 Prevention of Money Laundering and Countering the Financing of Terrorism, the bank teller could have handled the matter more appropriately. After I gave my feedback to HSBC, its reply was less than satisfactory. Instead of accepting responsibility for poor customer service, the customer service manager of Jurong East branch explained in a phone conversation that the teller was temporary and even suggested my dad go to the branch to receive an apology. In a subsequent letter, she advised me of the bank's requirement to seek details of the source and use of funds to comply with strict international regulations regarding money laundering and terrorism. A check on MAS Act Cap 186 reveals that banks undertake CDD measures only if the transaction exceeds $20,000. However, my dad's transaction was less than this amount... With all the government initiatives to make Singapore the regional banking centre and service centre, it is worrying that a temporary employee, I would think not properly trained by HSBC, is allowed to handle sensitive banking transactions. Even more disturbing is how HSBC management handles customer feedback."

June 18, 2007

    JPMorgan Chase calls it patriotism, to build in Lower Manhattan for its investment bank. Of course, the tax breaks, discounted electric power and rent subsidies worth $100 million didn't hurt. Chase has previously threatened to move to Connecticut or New Jersey...

            Citigroup and Deutsche Bank will have to go on trial for market rigging related to Parmalat SpA's collapse in 2003...

June 11, 2007

            Increasing exposed as a predator, Deutsche Bank buys subprime loans already in default then tries to foreclose on them: Michelle Tucker in Jacksonville, Florida, Sima Shwartz in Worchester, Mass.  Now Ohio Attorney General Marc Dann has said he might sue. Here's hoping...

            Deutsche Bank's misdeeds are not limited to predatory lending and service to dictators like Turkmenbashi. Pending now in New York's highest court in Albany is a case concerning Deutsche Bank Trust Company of NY's mis-administration of the trust of Harry Winston. App. Div. Docket No. 2006-01070. As recited in the pleading, Deutsche Bank was "woefully unprepared to oversee a diamond business. Richard Ritzel, [Deutsche] Bank's officer response for the day to day operations of the trust had no expertise in the jewelry industry and no experience in running any kind of business. In fact, no one in the Bank's trust department, including any member of its Special Assets Group, which supervised operating businesses, had any expertise in the jewelry industry"... Deutsche "Bank did not prepare (or did not preserve) records reflecting its performance as trustee or the performance of the trust." $120 million are simply unaccounted for...

June 4, 2007

   HSBC last week was fined $850,000 for mismanaging "hundreds of containers of abandoned chemicals... NYS said HSBC knew of the abandoned chemicals, as well as frozen pipes and faulty fire suppression system at the site. However, HSBC didn't contact the NYS Department of Environmental Conservation or any state or local emergency responder to report the threat as required under state law."  Meanwhile HSBC makes loud claims about carbon neutrality and climate change funding. Environmental responsibility begins at home, though, no?

            Among the consortium trying to buy Doral Financial Corp. is not only Bear Stearns, but also... GE.

May 28, 2007

  Sleazy Fremont has belatedly disclosed that Ellington Capital Management had bought its subprime residential mortgage business for $2.9 billion. What does this say about Ellington's standards?

            A leaked Citigroup memo by Steve Freiberg says that Ray Quinlan has decided to retire as president of retail distribution in the North American division of
Citigroup's consumer-banking unit. Peter Knitzer will temporarily take charge of New York-based financial services company's operations in North America. The subprime Citifinancial unit will report directly to Freiberg. Citigroup also named Ed Eger head of international credit cards. He
will report to Ajay Banga, Freiberg's fellow co-chairman in the global consumer group. Predators all...

            Mystifying subprime: GE has rejected any suggestion of a bad debt problem for its local consumer and business finance operations after a jump in the reported level of impaired loans last year. A spokesman said the accounts for GE Capital Finance Australasia, as reported yesterday, did not fully reflect the performance and profitability of the operations. ''This particular legal entity includes some parts of our commercial finance and some parts of our consumer finance business, rather than our actual operation,'' the spokesman said. GE Capital Finance includes the AGC consumer and business finance operations, acquired for $1.65 billion from Westpac five years ago.

May 21, 2007

            Bank of New York, now sued for $22 billion by the Russian customs service, still argues that its merger application to acquire Mellon should go forward, without even a re-opening of the Fed's comment period. We'll see.

From a National Mortgage News report last week, 2006 subprime mortgage volume and status of " CitiFinancial (e)  $23,500  Parent stopped reporting B&C vol in 06." How transparent...  And how 'bout this? Citigroup has now purchased a 10% stake in RRR, formerly ZAO Centrosol, a railway car leasing company in Russia...

      Strange days: on May 17, Wachovia's spokeswoman Christy Phillips-Brown announced that Wachovia was asked "by the U.S. State Department to help them process an interbank transfer of funds held at other banks, which are the subject of negotiations with North Korea. We have agreed to consider this request and our discussions with various government officials are continuing." Since dealing with Banco Delta Asia is still illegal, one wonders both how the U.S. could cynically waive the law for one transaction, and what it would owe Wachovia for this "service." It creates conflicts, which will be explored...

May 14, 2007

            Why is it not surprising that Chase's Jaime Dimon would be dining with the CEO of Dow Chemical -- under attack by Amnesty International for still not addressing the Bhopal issues it bought with Union Carbide -- and fingering some of Dow's officials, J. Pedro Reinhard and Romeo Kreinberg? Let the depositions begin...

  Kyodo News says the US is considering letting an unnamed American bank handle the money at Macau's Banco Delta Asia, waiving its own Patriot Act. If the deal is approved, the Macau bank would transfer the cash to a US bank which would in turn send it to a third country, Kyodo News said.

Asked whether the United States would make an exception to let a US bank handle the money, State Department spokesman Sean McCormack said it was up to the Treasury Department. "It's a heck of a lot more complicated than anybody would have ever thought," McCormack said of unfreezing the money. Yep...

May 7, 2007

            Story of the week was a Dutch court blocking ABN Amro's cynical poison-pill attempted sale of LaSalle to Bank of America, and BofA responding by suing ABN Amro. No honor among thieves...

            From the Guardian: "The Swiss bank UBS has thrown in the towel on a high-profile attempt to run an in-house Wall Street hedge fund after suffering big losses betting on America's controversial sub-prime mortgage industry. In an embarrassing admission of defeat, UBS announced today that it was shutting down Dillon Read Capital Management - a fund established two years ago by the bank's former head of investment banking, John Costas, with a rumored investment of between $2bn (1bn) and $3bn... Although UBS gave few details of the hedge fund's activities, it revealed that it had run into trouble because of difficult conditions in the US mortgage securities market."

            And who's big in UBS? Ex-senator and subcrime defender Phil Gramm...

April 30, 2007

            Citigroup analysts said GE should spin off NBC Universal, GE Money and the real estate division.  "GE's size and complexity is working against investor interest in the stock and has contributed to further valuation erosion," the Citi analysts wrote. Talk about the pot calling the kettle black...

            Bank of New York's arrogance -- late providing its mortgage data then arguing that the disparities don't matter, through Michael T. Escue of its law firm Sullivan & Cromwell -- hits a new low. This is another reason this bank should not be allowed to expand. This is the bank that seeks to withhold large portions of its application, which cite Inner City Press v. Federal Reserve Board, then withholding the arguments from... Inner City Press. It's almost funny.

April 23, 2007

            From the Federal Reserve Bank of NY, Inner City Press on April 21 received a copy of Bank of New York's heavily redacted application to acquire Mellon. BONY revised its still-too-extensive redactions to its application on April 16;  ICP has a right to comment on this material. BONY, which initially did not respond as other banks did to ICP's request for 2006 HMDA data, finally provided its data on April 20.

            In the most recent year for which HMDA data is (now) available, 2006, Bank of New York confined residents of The Bronx, the most predominantly minority county in New York State, to higher cost loans over the Federal Reserve-determined rate spread TWENTY FIVE times more frequently than residents of Manhattan, and 2.92 times more frequently than residents of Westchester County. As the FRB will remember, Bank of New York initially fought to exclude The Bronx from its CRA assessment area. Now BONY has a disparate lending record in The Bronx -- and Brooklyn too, where BONY in 2006 confined borrowers to rate spread loans 10.7 times more frequently than Manhattan.

   This is much worse, particularly in The Bronx, than in 2005, when BONY confined its Bronx borrowers to higher cost loans over the rate spread 7.87 times more frequently than in more affluent and less minority Manhattan. Bank of New York's disparity-ratio between borrowers in Brooklyn and Manhattan was 6.5. Both got worse in 2006. FFW demands public hearings, including on BONY's multi-faceted enabling of other predatory lenders, its admissions of money laundering, its secretiveness and anti-competitive effects. ICP contends that this proposed combination would be anti-competitive. BONY apparently disagreed, but the bases of its argument are still being hidden, with entire pages of its antitrust memo blacked-out. BONY repeatedly cites the case Inner City Press v. FRB, then redacts even portions of its argument. FFW has contested these redactions and withholdings, and requested an extension of the comment period until the information to which FFW and the public have a right is released.

From the mailbag --

Subject: RBS Watch news
From: [Name withheld in this format]
To: Inner City Press

Sent: Thu, 19 Apr 2007 4:56 AM
Fred The Shred received a massive pay rise
http://business.scotsman.com/index.cfm?id=597182007
http://thescotsman.scotsman.com/business.cfm?id=416292007
staff typically have received less than 2%
RBS have come down heavily on staff to force them to move their personal
banks to one of their group accounts:
http://news.bbc.co.uk/1/hi/business/6482979.stm
I work at one division, retail services, and staff are already receiving disciplinary notices for failing to take up a "YourBank" account. One of the things that particularly annoys people is that incurring an unauthorized overdraft is considered a disciplinary offence, which is a private matter and should be nothing to do with one's employer!

April 16, 2007

  The ICP Fair Finance Watch has filed a timely comment opposing and requesting public hearing on the applications by the Bank of New York (BONY) and affiliates to acquire Mellon Financial and affiliates ("Mellon"), emphasizing BONY's mult-faceted enabling of other predatory lenders. FFW has requested an inquiry into and evidentiary hearing on BONY's enabling of, for example, the now-bankrupt subprime lender People's Choice Home Loans, the troubled lenders Novastar and Centex, the disparate lender First Franklin, and others,  in light of the current troubling revelations about the subprime industry, which the Federal Reserve missed.

            BONY has enabled some of the most disreputable of subprime lenders, some of which have recently collapsed. See, e.g., the PEOPLES CHOICE HOME LOAN SECURITIES CORP, FORM TYPE: 424B8, filed August 11, 2006:

Swaps and Cap Provider -- "The Bank of New York, a New York banking organization, will provide an interest rate swap for this transaction. The office of the swap provider is located at 32 Old Slip - 15th Floor, New York, New York, 10286."

            Note that PEOPLES CHOICE HOME LOAN, which refused to provide its 2005 HMDA data in any useful form, has since declared bankruptcy. What due diligence did BONY engage in, before enabling this rogue company? Public hearings should be held.

            See also, NOVASTAR CERTIFICATES FINANCING CORP, FORM TYPE: FWP, filed June 23, 2006, "a pool of subprime mortgage loans consisting of two groups -- a group of residential first-lien and second-lien, fixed and adjustable rate mortgage loans designated as Group I (which is comprised entirely of conforming balance mortgage loans and in which the Group I Certificates represent a beneficial interest) and a group of residential first-lien and second-lien, fixed and adjustable rate mortgage loans designated as Group II (which is comprised of conforming and non-conforming balance mortgage loans and in which the Group II Certificates represent a beneficial interest); ... Co. has entered into an agreement with The Bank of New York Company...

            Note that NOVASTAR, following its well documented problems, announced last week it has started a formal process to explore a range of "strategic alternatives." What due diligence did BONY engage in, before enabling this rogue company? Public hearings should be held.

            See also, CENTEX HOME EQUITY LOAN TRUST 2006 A, FORM-TYPE: PROSP, DOCUMENT-DATE: May 16, 2006, filed May 16, 2006.

            BONY is also a trustee (and often, foreclosure). See, e.g., NATIONSTAR FUNDING LLC, FORM TYPE: 424B5, filed January 31, 2007: "The Bank of New York. Custodian The Bank of New York Trust Company, National  ... The Bank of New York, as trustee."

            See also, C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-, FORM TYPE: 424B5, filed December 7, 2006, "rate swap agreement with The Bank of New York, as swap provider, for the benefit of the... rate cap agreement with The Bank of New York, as cap provider."

            See also, FIRST FRANKLIN MORTGAGE LOAN TRUST, SERIES 2007-FF2, FORM TYPE: 424B5, filed February 28, 2007, "provided by The Bank of New York in its capacity as swap  ...... COUNTERPARTY AND SWAP COUNTERPARTY The Bank of New York, whose address is 32 Old..."

            First Franklin was until recently a part of National City Corp, which in 2005 made 177,526 higher cost loans over the Federal Reserve-determined rate spread.

            Also in 2005, Bank of New York confined its Bronx borrowers to higher cost loans over the Federal Reserve-determined rate spread 7.87 times more frequently than in more affluent and less minority Manhattan. Bank of New York's disparity-ratio between borrowers in Brooklyn and Manhattan, at 6.5, was almost as pronounced. FFW has requested BONY's 2006 HMDA data, but has yet to receive it. FFW will be commenting on this 2006 data upon receipt, and the comment period should be extended.

            On other managerial issues, Bank of New York, which the Federal Reserve hit with a $38 million money laundering fine in 2000 (for having moved $7 billion in hot Russian money), then settled again, without even paying a fine, in April 2006.  The Fed and the New York Banking Department slapped Bank of New York on the wrist for  new deficiencies in the bank's money laundering controls, giving it 60 days to comply with yet another order. The comment period should be extended, and public hearings held.

April 9, 2007

   In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. 4/4/07-- "Banks Prone to Sell Minorities Pricy Loans," Reuters / Washington Post

   Where the rubber will meet the road will be in how the Federal Reserve and other agencies act on specific disparities at specific lenders, including as these are formally raised to them in timely comments on merger applications, Fair Finance Watch concludes -- and will test...

  Meanwhile, the award for the most smug and ill-informed article to date on the subprime crisis goes to The New Yorker and its business columnist, who blames borrowers and apparently did no research....

April 2, 2007

            GE Money Bank, BNP Paribas, Credit Mutuel are reportedly the final three bidders for the 200 branches of Unicredito's Polish BPH bank currently up for sale.

    The Bush administration has been using the Treasury Department's powers and contacts to encourage major international banks to halt transactions with Iran. "Secretary Paulson and Secretary Rice have used their influence with corporate and financial leaders around the world to essentially give the message to European Arab and Asian bankers that Iran is not a good credit risk," Nick Burns said. According to Dow Jones, three European banks, including HSBC already have acquiesced to the Treasury's requests.   We'll see...

March 26, 2007

            Barclays to buy Holland's ABN Amro, for $80 billion dollars, says the Wall Street Journal. Not mentioned is Barclays significant entry into subprime lending, first by buying Wachovia's subprime mortgage servicer HomEq, then a nationwide lender, EquiFirst, from Alabama's Regions. Why is this angle not being covered? The sole predatory reference in the Google News database for the past month is to a Barclays Capital report of February 22, about other companies' predatory lending and delinquency rates. Apparently a glass house does not dictate what one can throw, having the right friends.

March 19, 2007

  GE Money, now in 54 countries, recently had CEO Dave R. Nissen in India, where he told reporters:

"We are quite concerned about the US mortgage market where there is a bubble in near prime and sub-prime markets. European economies are doing quite well. The biggest worry in Asia we have is about bubbles in credit cards. It happened in South Korea and Taiwan. Will it happen in China and in India? We don't think so, but there is high growth and intense competition in India."

Last week in dropping Wal-Mart's ILC application, Wal-Mart Financial Services President Jane Thompson said the company's July 2005 bid was "surrounded by manufactured controversy." Made in a sweatshop...

March 12, 2007

   The pace of global bank mergers doesn't stop. In just the past week, Deutsche Bank is on record eying deals in Brazil, where Goldman Sach is reported plan to start a bank.  SocGen bought into Macedonia, while Scotiabank is hunting all over Latin America. Going subprime in Nova Scotia, GE Money last week  "launched its consumer mortgage business in the Maritime provinces, as part of its national expansion strategy. Also known as non-conventional mortgages and offered via mortgage brokers, the GE Money offering is primarily directed to consumers who may find it difficult to qualify for traditional, bank-originated mortgage loans."

The Mexican banking arm of HSBC Holdings Plc said last week that Paul Thurston has been named as the company's new CEO, replacing Alexander Flockhart. Grupo Financiero HSBC ranks as Mexico's fourth-largest banking group, $26.04 billion in assets at the end of December.

  Meanwhile in the U.S., Comerica unceremoniously announced it will move its headquarters out of Detroit, and head to Dallas...

Chase on subprime cavalier: Charlie Scharf, the head of JPMorgan Chase's retail banking business, said that the bank won't be hurt severely by the subprime downturn. While it may have a "negative impact ... it's quite manageable for a company like ours," Scharf said.  JPMorgan has about $20 billion in subprime loans, representing about 5% of its total assets, the company said Tuesday. About $13 billion of that is in mortgages, with another $1.5 billion in home equity loans. The rest of the subprime portfolio is split between credit cards and auto loans....

March 5, 2007

 From FinancialWire: "Bank of America Corp.'s $3.3 billion acquisition of Charles Schwab Corp.'s wealth management subsidiary U.S. Trust will take about three months longer to complete than originally estimated.  Charles Schwab expects to close the all-cash sale early in the third quarter instead of the early second-quarter target establi