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

Welcome to Inner City Press’ Bank Beat. We aim to scrutinize the industry, from high to low. Our other Reporters cover Community Reinvestment, the Federal Reserve, and other beats. ICP has published a (double) book about the Bank Beat-relevant topic of predatory lending - click here for sample chapters, an interactive map, and ordering information. The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters." See also, "City Lit: Roman a Klepto [Review of 'Predatory Bender']," by Matt Pacenza, City Limits, Sept.-Oct. 2004. The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site. Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere, which include bank-related topics.

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

March 25, 2019

IMF Slams Kyrgyz National Bank Acquisition of a Troubled Institution As Conflict of Interest

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, March 20 – When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. On March 20, the IMF has issued this about the Kyrgyz Republic: "A team from the International Monetary Fund (IMF) led by Christian Josz visited Bishkek from March 6–19 to hold discussions on the 2019 Article IV Consultation with the Kyrgyz Republic. At the end of the mission, Mr. Josz issued the following statement: “The economy of the Kyrgyz Republic grew by 3.5 percent in 2018, benefiting from stable regional environment. Inflation at 1.5 percent on average for the year, a moderate fiscal deficit of 1.3 percent of GDP for 2018, gross official foreign exchange reserves at 4.0 months of imports and a stable banking sector point to the success of stabilization policies, carried out by the government and National Bank of the Kyrgyz Republic (NBKR). ... Tax exemptions and the public-sector wage bill as a share of GDP should be reduced to create the fiscal space for investment in human capital and infrastructure. The NBKR should maintain a vigilant eye on inflation and allow the exchange rate to fluctuate in response to changing economic dynamics. “Putting the economy on a higher and more inclusive growth path will hinge on improving the business climate and rule of law. Reforms aimed at strengthening the financial sector, increasing energy tariffs, and improving governance are critical to achieving these objectives. “The anomalous situation created by the recent acquisition of a troubled bank by the NBKR should be resolved avoid a conflict of interest with its role as banking supervisor, maintain a level playing field in the banking sector and protect NBKR balance sheet. Following a valuation of the bank in question by a reputable independent expert, it should be transferred to the state in the shortest timeframe possible." Here's the IMF's March 7 transcript: "There is question on Haiti coming from Matthew Lee in New York. I'll take a couple of Matthew's questions as usual. And Matthew is asking about any updates I can give him on Haiti. And I can say that an IMF team is in Port Au-Prince as we speak to complete the Article IV consultation. But more than that, to discuss a possible IMF financial arrangement with Haiti. And we will hear more on that very, very soon. But I can say that the mission will propose that what the mission will propose is highly concessional, on the most concessional terms we can offer for Haiti and it will highlight social protection. It will highlight the fight against corruption while deferring any fuel price adjustments until the government is able to guarantee that the most vulnerable will be protected from any negative effects. Those of you who follow Haiti, you know, will understand the context of what I have just said. And again, the mission will communicate its findings at the end of the visit."

March 18, 2019

On Greece IMF Warns of Crises Legacies Saying Bank Lending Remains Negative

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, March 12 – When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. On March 12, the IMF has issued this about Greece: "On March 6, 2019, the Executive Board of the IMF concluded the First Post-Program Monitoring Discussions with Greece. The economic recovery in Greece is accelerating and broadening. Growth is projected to reach 2.4 percent this year (up from an estimated 2.1 percent in 2018) supported by exports, private consumption and investment as sentiment improves. A gradual recovery in private deposits has facilitated a further relaxation of capital flow management measures, though bank lending remains negative. Over the medium term, economic expansion is expected to slow down to just above 1 percent. Greece’s medium-term debt repayment capacity is adequate, but subject to rising risks amid still significant vulnerabilities. Debt-to-GDP is projected to remain on a downward trajectory in the medium term thanks to continued high primary surpluses agreed with European partners, nominal GDP growth, and debt relief, which provided for a substantial precautionary cash buffer and low debt service on official loans. However, risks (both domestic and external) have intensified, and crises legacies—including high public debt and impaired private balance sheets— and a weak payment discipline continue to pose significant vulnerabilities.... Directors also called for accelerating public financial management reforms and tax compliance efforts and addressing the structural causes of arrears. They also recommended deeper contingency planning for the possible realization of rising fiscal risks. Directors encouraged the authorities to take a more comprehensive, well‑coordinated approach to strengthening bank balance sheets and reviving growth‑enhancing lending. Noting the high level of non‑performing exposures (NPEs), they encouraged the authorities to bring together key stakeholders and base policy measures on cost‑efficiency assessments of various NPE reduction options, while considering the impact of forthcoming regulatory changes and related fiscal implications. Directors encouraged further strengthening of the legal toolkit to facilitate private‑sector based NPE reduction before considering state support, and to avoid measures that could further erode payment discipline, while improving bank internal governance.”

March 11, 2019

In SDNY US v Middendorf KPMG Case Goes To The Jury From Monday 9:30 For However Long It Takes

By Matthew Russell Lee, Periscope

FEDERAL COURTHOUSE, March 8 – As the the criminal trial involving a scheme to defraud the SEC went to the jury on March 8 (if only for fifteen minutes) in U.S. District Court of the Southern District of New York, Judge J. Paul Oetken made just two corrections to his reading of the 50 page jury charge, on pages 7 and 23. The three alternates were released but told to still not research the case; the remaining 12 were told if they send out a note not to indicate where the vote stands. (Across Pearl Street a jury note is US v. Christopher Howard was never made public or read into the record; one wonder would would or will happen here). The jurors had already arranged to leave at 2 pm, so they had only fifteen minutes until Monday at 9:30 am. Back on February 22, witness Brian J. Sweet was subject to re-cross about which companies were on his so-called Wada list pilfered from the Public Company Accounting Oversight Board and given to KPMG, including Citi and Northern Trust. These names were read out after a lengthy sidebar involving all 12 of the defense lawyers and the government's three, compete with white noise so the jury couldn't hear. Sweet's agreement with the government, including not being prosecuted for mortgage fraud, were put into evidence; some expressed surprise that Sweet wasn't in jail already. "You broke your agreement with the government," Sweet was told on cross.

"I think that's up for them to determine, Ma'am," Sweet replied. Yes, but how? And when? SDNY Judge J. Paul Oetken canceled his other pre trial conference upstairs scheduled for the morning, to keep the KMPG trial on track. This is Judge Oetken, who a week before expressed support for a confidentiality agreement to cover claims that Qatari royals cheat their employees out of overtime, see below. The KPMG case is United States v. David Middendorf, et al., 18 Cr. 36 (JPO); others in the mix include Thomas Whittle 1:18-cr-00036-JPO-3, David Britt 1:18-cr-00036-JPO-4, Cynthia Holder 1:18-cr-00036-JPO-5, and Jeffrey Wada, whose lawyer it was who sought and got into evidence Sweet's bail and bond documents. It is being tried in the same large first floor SDNY courtroom that UN briber Ng Lap Seng was convicted in.

March 4, 2019

Timely comment to the FDIC: "Federal Deposit Insurance Corporation, Atlanta, GA 30309-3906
Re: Timely Comment on Application of Ameris Bank to acquire Fidelity Bank
Dear Regional Director and others at the FDIC: This is a timely first comment opposing and requesting an extension of the FDIC's public comment period on the Application by Ameris Bank to acquire Fidelity Bank. Fair Finance Watch has reviewed Ameris' lending in 2016 and now 2017, the most recent year for which Home Mortgage Disclosure Act (HMDA) data is available, in the Atlanta and other Metropolitan Statistical Areas (MSAs) and finds the data to be disparate.

In the Atlanta MSA in 2016 for home purchase loans, Ameris denied the applications of African Americans 2.11 times more frequently than those of whites. Ameris made 582 such loans to whites, only 206 to African Americans and only 48 to Latinos. Ameris got WORSE in 2017, with a denial rate disparate risen to 2.24, and its loans to African Americans down to 157 (from 206), a steeper decline than for whites.

In the Jacksonville MSA in 2016 for home improvements loans, Ameris made five such loans to whites and none to African Americans or Latinos. It got worse in 2017: nine to whites, still none to African Americans.

The company plans to locate its bank HQ and BHC HQ in different cities, and to leave Moultrie, Georgia behind: "While Ameris Bancorp moved its executive offices to the Riverplace Tower on Jacksonville’s Southbank three years ago, the banking company still officially lists its headquarters as Moultrie, Georgia. However, a preliminary proxy statement filed for its proposed acquisition of Fidelity Southern Corp. finally acknowledges Jacksonville as its corporate headquarters. As Ameris negotiated terms of the merger with officials of Atlanta-based Fidelity Southern in September, “Ameris also reaffirmed its intent for Atlanta, Georgia to be the location of its bank headquarters and operations center following the transaction with its holding company headquarters remaining in Jacksonville, Florida,” the proxy said. When Ameris announced the deal in December to buy the parent company of Fidelity Bank for stock valued at $751 million, it did say the bank subsidiary would be headquartered in Atlanta and the executive offices would be in Jacksonville. However, it also said Moultrie would remain the official holding company headquarters." This is murky and also militates for an evidentiary hearing.

Also for the record, and to be belatedly addressed at the requested evidentiary hearings: “Georgia bank socking customers with overdraft fees,” Atlanta Journal Constitution, January 3, 2017: “Ameris Bank collected the most overdraft/insufficient fund fees per account of any U.S. bank, says the analysis, which is based on federal government data from the first three quarters of 2016. Ameris collected an average of about $176 per account.. The No. 2 bank on the list of the top 10 collected an average of about $131 per account. The national average was $17.76.” This is predatory. On the current record, Ameris' applications should be denied."

February 25, 2019

In SDNY US v Middendorf Sweet Grilled On When He Told KMPG Wells Fargo Would Not Be Inspected

By Matthew Russell Lee, Exclusive, Periscope

FEDERAL COURTHOUSE, February 21 – As the second week of the criminal trial involving a scheme to defraud the SEC and the Public Company Accounting Oversight Board in U.S. District Court of the Southern District of New York came to a close - almost - on February 21, witness Brian J. Sweet was being cross examined about how and when he told his new employer KPMG that Wells Fargo would not, in fact, be inspected by the Public Company Accounting Oversight Board. He said repeatedly that he was asked for such information from his first week at KPMG. Meanwhile the defense lawyers - there are 12 of them, at least - are asking to unseal Sweet's bail and bond documents and any conditions he agreed to. His grilled will continue after "extra fine" coffee and breakfast on Friday, SDNY Judge J. Paul Oetken told the jury at 5 pm on Thursday. After the jury left, one of the dozen defense attorneys launched into an argument the government twice called ludicrous about a rule being unknowable and thus a violation of due process. He was allowed to make his record by Judge Oetken, who a week before expressed support for a confidentiality agreement to cover claims that Qatari royals cheat their employees out of overtime. The KPMG case is United States v. David Middendorf, et al., 18 Cr. 36 (JPO)...

February 18, 2019

Beyond the troubling BB&T - Suntrust proposal, some smaller mergers we are looking into:

Feb 7-8, PA/Md: Somerset Trust Co., First Bank of Lilly announce merger agreement;

Feb 6, Mississippi: First National Bank to [apply to] merge with BankFirst;

Feb 6, MA: Abington Bank will [try to] merge with Pilgrim Bank;

Feb 5, GA: United Community Banks, Inc and First Madison Bank & Trust announced today a proposal for United to acquire First Madison in an all-cash transaction.

Feb 4, NJ: Bank of Princeton proposes to buy five Beneficial Bank branches in NJ...

February 11, 2019

As BB&T Tries Taking Over Suntrust Disparate Lending and Branch Closures To Be Raised

By Matthew R. Lee, FOIA docs

SOUTH BRONX, February 7 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, which would close a still undisclosed number of branches and extend BB&T disparate lending patterns, many linked it to deregulatory moves in Washington. These include an assault on the Community Reinvestment Act, being led by Comptroller of the Currency Joseph Otting, who while at OneWest Bank led a false commenting process to push through a merger with CIT Group.

Fair Finance Watch, which has been tracking BB&T as well as Otting's and the Federal Reserve's anti-CRA moves, finds that for example in the Atlanta Metropolitan Statistical Area in 2017 BB&T denied the home purchase mortgage applications of African Americans 2.2 times more frequently than whites, while making only 50 such loans to African Americans, and 23 to Latinos, compared to 458 to whites, all more disparate that other lenders in the market.

While some portray the proposed merger as a fait accompli, the Fed and OCC must hold public comment periods and consider the banks' CRA records, even as they race to undermine the law. Inner City Press will submit requests under the Freedom of Information Act, as it has on OneWest - CIT and now for Otting's schedule as Comptroller.

On January 16 Inner City Press asked the OCC on the expedited basis for records to disclose Otting's meetings with the banking industry and others: "Dear OCC FOIA Officer: Inner City Press / Fair Finance Watch (ICP) makes this request for records pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, and OCC regulations. ICP requests copies of records sufficient to show all of Comptroller Otting's scheduled meetings, appointments, and scheduled events from the date he became Comptroller to the date of your response including but not limited to Outlook calendar entries and daily briefing books for Comptroller Otting on those dates... ICP requests that you expedite the processing of this request. There is media interest and there exist possible questions concerning the OCC's integrity, which affect public confidence. See e.g. this article and the CRA ANPR since." We'll have more on this.

February 4, 2019

Deutsche Bank Which Underwrote Predatory Mortgages Now Wants Long Briefs in SDNY Motion Practice Ensues

By Matthew Russell Lee

FEDERAL COURTHOUSE, January 29 – In the US District Court for the Southern District of New York, investors are arguing against letting Deutsche Bank out of litigation about Residential Mortgage Backed Securities.

The case is 1:15-cv-10031, and on January 28 Deutsche Bank's lawyers tried to argue for longer than allowed briefs: "Magistrate Judge Freeman: We represent defendants Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas, as trustees for the residential mortgage-backed securitization trusts at issue in the above-referenced actions (collectively, “Defendant”). Defendant requests that this Court (i) strike the briefs that the Phoenix Light plaintiffs (collectively, “Phoenix Light”) and Commerzbank filed this weekend in opposition to Defendant’s respective motions for summary judgment in those actions, because each of those briefs contained 27,945 words (92 pages), approximately twice the word limit set by this Court; (ii) order that each of Phoenix Light and Commerzbank may file an amended opposition brief that complies with the applicable 14,000-word limit within seven days after its non-compliant brief is struck and that any such amended brief may only contain text that is in its current, non-compliant brief (i.e., each Plaintiff should only be permitted to excise language from its current brief and not add new language, argument or citation); and (iii) order that Defendant’s reply briefs are due 35 days after Commerzbank and Phoenix Light file any compliant oppositions. As Defendant’s reply briefs are currently due on February 15, Defendant respectfully requests a telephonic conference on these issues at the Court’s earliest convenience."

Inner City Press will be following this...

January 28, 2019

IMF on West Africa Talks Basel II and III Principles Amid UN Cheikh Gadio CEFC Bribery Echo

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, January 18– When the International Monetary Fund held its biweekly embargoed media briefing on January 17, Inner City Press submitted six questions including two on Yemen and Zimbabwe which the IMF answered, see below. On January 18 on West Africa the IMF issued this: "A staff team from the International Monetary Fund (IMF), headed by Ms. Céline Allard visited Ouagadougou, Abidjan, Dakar and Cotonou from January 10 to 24, 2019 for discussions with the institutions of the West African Economic and Monetary Union (WAEMU) on Common Policies for Member Countries of the Union. At the conclusion of the mission, Ms. Allard issued the following statement: “Real GDP growth in the WAEMU is estimated above 6 percent in 2018 for the seventh consecutive year, despite adverse terms of trade shocks and security concerns in some member-countries. Inflation has remained low reflecting the peg to the Euro, but also continued solid agricultural production and the limited pass through of higher world oil prices. Fiscal consolidation efforts are estimated to have led to a reduction of the aggregate fiscal deficit to 3.9 percent of GDP in 2018 from 4.3 percent of GDP in 2017. Unfavorable terms-of-trade have contributed to an increase of the external current account deficit. Public debt and its service have also increased, reflecting still large fiscal deficits and public-sector operations. International reserve import coverage rose to 4.3 months at end-2018 from 3.9 months at end-2017. This increase benefited from Eurobond issuances by Côte d’Ivoire and Senegal which also contributed to an easing of liquidity in the banking sector. In the context of the implementation of prudential and regulatory reforms, the banking sector has continued to perform well, despite the persistence of areas of vulnerabilities. “The growth outlook remains favorable but is subject to downside risks. Real GDP growth is projected to stay above 6 percent over the medium-term, in a context where all WAEMU countries have made a strong commitment to implement their national fiscal consolidation plans and development programs aimed at improving competitiveness and strengthening the dynamic of private investment. The main risks to the outlook include delays in implementing national reform programs, further security concerns as well as uncertainties on global growth and international financial market conditions. “The adjustment of member countries budget deficits to the WAEMU criterion of 3% of GDP starting from this year and a better control of other sources of public debt dynamic are crucial to ensure macroeconomic stability and sustain growth. Fiscal consolidation will require bolstering domestic revenue mobilization, which will also create fiscal space to meet important development needs, including investment in infrastructure, social and security spending. “In view of the positive developments regarding foreign exchange reserves, the mission assessed the current monetary policy stance as appropriate, but it encouraged the BCEAO to stand ready to adjust its monetary policy in the event of important changes. The transmission of monetary policy would be enhanced by greater liquidity and depth of the secondary market for government securities and the interbank market, which are essential for the development of the regional financial market and therefore of the private sector. “The mission noted with satisfaction that the first year of introduction of major reforms to modernize the financial sector, consistent with Basel II/III principles, went well. These reforms include gradually increasing minimum capital requirements for banks over several years, introducing a new accounting plan, moving to consolidated supervision of banking groups, strengthening the resolution framework, and setting up a deposit guarantee and resolution fund. The effective implementation of these important reforms should help make the financial system more stable and resilient to shocks and give it more space to finance WAEMU economic development. 'The members of the IMF team express their gratitude to the authorities and to all their other counterparts for the candid and constructive discussions and the warm hospitality extended to them.'" Back on January 18 the IMF said this, on Senegal: "On January 14, 2019, the Executive Board of the International Monetary Fund (IMF) completed the seventh review of Senegal’s economic performance under the program supported by the Policy Support Instrument (PSI) approved on June 24, 2015 (see Press Release No. 15/297). The Board also concluded the 2018 Article IV Consultation with Senegal. Senegal’s macroeconomic situation is stable. Real GDP growth in 2017 was 7.2 percent and is projected to remain robust at 6.2 percent in 2018, while inflation remains low. The fiscal deficit is projected to reach 3.5 percent of GDP in 2018 and the 2019 budget is in line with the WAEMU fiscal deficit convergence criterion of 3 percent of GDP. The current account deficit widened significantly in 2017, partly driven by higher global commodity prices, and is projected to remain above 7 percent of GDP in 2018. Program performance under the PSI remains broadly satisfactory with all but one of the end-June 2018 assessment criteria and indicative targets met. Progress was made on reforms with two prior actions met and four of the six structural benchmarks set for the PSI 7th review met. Following the Executive Board’s discussion, Mr. Furusawa, Deputy Managing Director and Acting Chair, issued the following statement: Senegal’s economic performance has been positive, with strong growth and low inflation. Steadfast implementation of the comprehensive reform strategy in the Plan Senegal Emergent (PSE) II will be important to sustain high growth rates over the medium term and make the private sector the main driver of growth.Policies to address gender and inequality issues will contribute to poverty reduction and well-distributed growth. Performance under the PSI-supported program has been broadly satisfactory, with all but one of the end-June 2018 assessment criteria and indicative targets met. Progress was made on reforms with two prior actions met and four of the six structural benchmarks set for the PSI 7th review met. The near-term macroeconomic outlook remains favorable, but downside risks include increases in global energy prices, adverse impact of drought, security threats, increases in the cost of public borrowing, and slowing implementation on reforms to boost revenues and private investment. The 2019 budget is aligned with the WAEMU fiscal deficit convergence criterion of 3 percent of GDP. Implementing revenue reforms, including a streamlining of tax expenditures, would help meet ambitious revenue projections and make continued progress over the next few years towards meeting the tax revenue WAEMU convergence criterion of 20 percent of GDP. In 2018, large expenditure cuts were needed to offset lower than projected revenues. Going forward, it will be important to implement budgeted levels of public investment and social spending while maintaining fiscal discipline. Steadfast implementation of approved measures will be key to strengthening budget implementation. Creating a strong policy framework for managing oil and gas resources consistent with international best practice would ensure optimal and transparent use of these resources." Where is Cheikh Gadio, former FM who helped CEFC China Energy move to bribe Chad's Deby?

January 21, 2019

Amid Targeting of Community Reinvestment Act BancorpSouth Deals in Texas and Alabama Challenged on Disparate Lending

By Matthew R. Lee, Video, story, FOIA docs

NEW YORK CITY, January 14 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. On January 14, Fair Finance Watch and Inner City Press filed comments and an information request with the FDIC opposing BancorpSouth's applications to acquire banks in Alabama and Texas: "This is a first timely comment opposing, requesting hearings and an extension of the comment period on BancorpSouth's application to acquire MERCHANTS TRUST, INC. 1901 North College Avenue JACKSON, ALABAMA and CASEY BANCORP, INC. 305 East Colorado Boulevard DALLAS, TEXAS. Inner City Press / Fair Finance Watch has compared the most recent public disclosure HMDA data of BancorpSouth to that of the previous years 2015 and 2016 when BancorpSouth was (rightly) “in the penalty box” (see below) - and finds that BancorpSouth continues to get WORSE. In 2015 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth's denial rate for whites was 7% while for African Americans it was 19% -- 2.71 times higher. That was troubling. But it got worse. In 2016 in the Jackson Mississippi MSA for conventional home purchase loans, BancorpSouth's denial rate for whites was 7.1% while for African Americans it rose to 22.9% -- 3.23 times higher. And now worse still - in the Houston Texas MSA in 2017 for conventional home purchase loans, BancorpSouth denied African Americans MORE THAN TEN TIMES MORE FREQUENTLY THAN WHITES. This is even more troubling - and ICP timely requests a hearing on BancorpSouth's proposals... In Texas, in the Tyler TX MSA in 2016 BancorpSouth made 30 conventional home purchase loans to whites - and NONE to African Americans. This no such loans to African Americans in this MSA continued in 2017. In the Mobile, Alabama MSA in 2017 for conventional home purchase loans, BancorpSouth denied African Americans MORE THAN FIFTEEN TIMES MORE FREQUENTLY THAN WHITES. ICP is requesting evidentiary hearings and that these proposed acquisitions, on the current record, not be approved. There is no public benefit." BancorpSouth is one of the few banks to have settled redlining charges - then sought to evade regulation. We say no.

January 14, 2019

Lawsuit Against Eleven Lebanese Banks in New York Accuses Them Of Assisting Foreign Terrorist Organization

By Matthew Russell Lee, CJR PFT CEFC Video

UNITED NATIONS GATE, January 83 – As international bribery scandals particularly in Portuguese speaking countries are exposed through UN Secretary General Antonio Guterres cover-up of his role in Lisbon based Gulbenkian Foundation's attempted sale of its Partex Oil and Gas' operations in Angola and elsewhere, now another case in Federal Court in New York City, this time involving Mozambique, in Brooklyn, see below. And here's another case we'll be watching: Riad Salameh, Governor of the Banque Centrale du Liban (BDL), has affirmed that a civil lawsuit by approximately 1,200 plaintiffs has been brought against 11 Lebanese banks for assisting Hezbollah. The plaintiffs, all US citizens, have filed the lawsuit in court in New York. The defendants in the lawsuit include the following banks: 1. Bank Audi 2. Bank of Beirut 3. Bank of Beirut And The Arab Countries (BBAC) 4. Banque Libano-Française (BLF) 5. BLOM Bank 6. Byblos Bank 7. Fransabank 8. Jammal Trust Bank 9. Lebanon And Gulf Bank (LGB) 10. Middle East Africa Bank (MEAB) 11. SGBL The civil action was brought on January 1 2019, under the Anti Terrorism Act by American nationals who were injured, and by the estates and families of American nationals who were killed or injured, by reason of acts of international terrorism in Iraq between 2004 and 2011 that were committed, planned or authorized by the United States designated Foreign Terrorist Organization...

January 7, 2019

In EDNY Mozambique Former FM Indicted In Lusophone Bribery Scandal Echoed By UN Guterres and Gulbenkian

By Matthew Russell Lee, CJR PFT CEFC Video

UNITED NATIONS GATE, January 3 – As international bribery scandals particularly in Portuguese speaking countries are exposed through UN Secretary General Antonio Guterres cover-up of his role in Lisbon based Gulbenkian Foundation's attempted sale of its Partex Oil and Gas' operations in Angola and elsewhere, now another case in Federal Court in New York City, this time in Brooklyn. It involves Mozambique and its former finance minster working with Credit Suisse, a member of Guterres' UN Global Compact, to defraud the people of that country. Three former Credit Suisse bankers were arrested in London yesterday on US charges that they took part in a fraud scheme involving US$2 billion in loans to state-owned companies in Mozambique: Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37. The three were charged in an indictment in the EDNY Brooklyn, New York federal court with conspiring to violate the FCPA and to commit money laundering and securities fraud, according to spokesperson John Marzulli. Former Mozambique Finance Minister Manuel Chang was arrested in South Africa as part of the same criminal case. A fifth man, Jean Boustani, was arrested on Wednesday at New York's John F Kennedy Airport. Boustani is a Lebanese citizen who worked for an Abu Dhabi-based contractor of the Mozambican companies. "The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank," Credit Suisse said in a statement. When the guarantees were revealed in 2016, foreign donors, including the International Monetary Fund (IMF), cut off support for Mozambique. Inner City Press inside the UN asked Mozambique diplomats about it - until it was roughed up and banned by Guterres. Meanwhile Guterres was refusing throughout 2018 to begin any UN audit into China Energy Fund Committee, implicated in the UN bribery prosecution US v Patrick Ho, Guterres had a secret: his role on the board of Gulbenkian Foundation which was trying to sell its Partex Oil affiliate to CEFC. See Inner City Press' first exclusive report here.

December 31, 2018

This bank, Cadence, defrauded the public by withholding its argument to the Fed for a rubber stamp speeded up merger approval, now it says: "HOUSTON & ATLANTA--(BUSINESS WIRE)--Dec 24, 2018--Cadence Bancorporation (NYSE: CADE) (“Cadence”) and State Bank Financial Corporation (NASDAQ: STBZ) (“State Bank”) jointly announced that Cadence has exercised its right to increase the exchange ratio in accordance with the terms of the definitive merger agreement between Cadence and State Bank.

State Bank shareholders will receive 1.271 shares of Cadence Class A common stock for each share of State Bank common stock. After closing, legacy Cadence and State Bank shareholders will collectively own approximately 63% and 37% of the combined company, respectively.

The adjusted exchange ratio results in approximately 4.3 million additional Cadence shares being issued to State Bank. Cadence intends to repurchase these additional shares in the market. The Company’s board of directors has amended the share repurchase authorization to include approximately 4.3 million of total shares.

“This merger represents a major step forward for Cadence,” said Paul B. Murphy, Jr., Chairman and CEO of Cadence Bancorporation. “It unites two exceptionally strong teams of bankers with a shared culture of responsive service. The synergies resulting from our combined organizations will deliver significant customer and shareholder value, and positions us well for continued growth. We are optimistic about our future and are pleased to welcome the State Bank team.”

State Bank Chairman Joe Evans said, “We continue to be excited about this partnership. We have spent a lot of time together over the last six, seven years comparing notes, comparing philosophies and believe that this combination is going to result in a very powerful regional bank. We are thrilled to be in business with Cadence.”

The merger is expected to be completed on January 1, 2019, subject to the satisfaction of customary closing conditions." Yeah...

December 24, 2018

Barclays Bank Fined For Whistleblower Hunt by NYSDFS While OCC Closes Its Ears On WSFS Abuses

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, December 19 – The British bank Barclays has been fined $15 million for trying to unmask and presumably retaliate against a whistleblower, by the New York State Department of Financial Services. CEO Jes Staley was named in the whistleblower's letter, leaving him with a direct conflict of interest in investigating it. The fine is light but the enforcement action is welcome - at the UN, for example, retaliation is the rule, not the exception. But there are other moves afoot in bank wrongdoing news. The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. At the November 19 deadline, not yet posted was Inner City Press' November 17 fourth comment, just as Otting's OCC absurdly waited 13 days to try to rule it does not have to consider Fair Finance Watch's comments on WSFS Bank's application to acquire Beneficial. Now, after the OCC gleefully closed its comment period on that, WSFS on December 13 announced it will close 25 branches. One would think Otting would have to re-open the comment period. But that's not how Otting rolls.

December 17, 2018

Some mergers we are looking at:

Dec 7, IL: SENB Bank announced a proposed merger with Gateway Community Bank;

Nov 29, Texas: Alliance BancShares announced a proposal to acquire Mount Vernon BankShares;

Nov 28, PA: First National Bank of Girard says it proposes to merge into GNBank (formerly Girard National Bank);

Nov 27, CT-MA: People's United announced a proposal to acquire BSB Bancorp, headquartered in Belmont, Massachusetts;

Nov 26, FL - AL: Florida-based CenterState Bank Corp announced a proposed acquisition of Birmingham-based National Commerce Corp;

Nov 16, AL: BankFirst Capital announced a merger agreement to acquire FNB Bancshares of Central Alabama, the parent company of FNB of Central Alabama;

Nov 16, NC - FL: First-Citizens Bank & Trust Company (known as First Citizens Bank) unveiled a proposal to take over Biscayne Bancshares;

Nov 13, MS - TX: BancorpSouth Bank announced a merger agreement with Casey Bancorp, Inc. and its wholly-owned subsidiary, Grand Bank of Texas.

December 10, 2018

On Jamaica IMF Worries of Protracted Wage Negotiations with What It Calls Unsettled Groups

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, December 7 – When the International Monetary Fund on Jamaica issued a statement on December 7, it expressed concern about protracted wage negotiations with so-called "unsettled groups." Is the IMF worried about the length of the talks, or the possible outcomes? Here's the IMF statement: "An International Monetary Fund (IMF) staff team led by Uma Ramakrishnan visited Kingston from December 3 to 7, 2018, to take stock of progress on Jamaica’s economic reform program supported by the IMF’s precautionary Stand-By Arrangement (SBA). At the end of the visit, Ms. Ramakrishnan issued the following statement:
“Positive developments continue to sustain Jamaica’s economic reform program. The unemployment rate is at an all-time low of 8.4 percent, with significant gains among women and younger workers. Inflation is in the Bank of Jamaica’s (BOJ) target range of 4–6 percent. Gross international reserves were at US$3.4 billion at end-November. Growth for this fiscal year is expected to be 1½–2 percent. Looking ahead, lower global oil prices, if sustained, should support a narrower current account deficit and support domestic demand.
“Continued buoyancy in tax revenue is supporting more capital spending, helping economic activity and living standards. Public debt is expected to fall below 100 percent of GDP by the end of this fiscal year, for the first time since FY2000/01.
“Protracted wage negotiations with the unsettled groups, however, pose risks to this positive picture as they create budgetary uncertainty. This could weigh against efforts to reallocate resources away from the wage bill and toward priority spending areas such as crime, social protection, and disaster resilience. Beyond the current wage negotiations, more fundamental reforms to the compensation framework for public sector employees and a streamlining of government functions, will be necessary to sustainably reduce the wage bill.
“The BOJ and the Financial Services Commission (FSC) are jointly undertaking a risk-based pilot program for consolidated supervision, informed by the recent IMF’s Financial Sector Assessment Program (FSAP). There is also close cooperation between the BOJ and the FSC aimed at better monitoring and sharing of financial sector regulatory information.
“During the visit, the team met with Prime Minister Andrew Holness, Minister of Finance and the Public Service Dr. Nigel Clarke, Bank of Jamaica Governor Brian Wynter, and Jamaica’s high-level officials from different ministries, agencies and the central bank. The team also engaged with members of the private sector, labor unions, and the opposition." At least there was this read-out. When the IMF held its biweekly embargoed media briefing on November 15, Inner City Press asked four questions including, "The Pakistan People’s Party’s leader in Senate, Sherry Rehman, as asked 'What is going on with the IMF meetings? Neither the prime minister nor the finance minister briefed the parliament on the terms of the negotiations. Before briefing the IMF with the terms of agreement regarding the country’s foreign debts, the government should have discussed it in parliament. What is with this secrecy?' What is the IMF's response?" IMF Spokesperson Gerry Rice said Matthew Lee has asked about the status and that an IMF team is still in Islamabad discussing a potential new program; he would not confirm if a $5 to $6 billion request is expected.

December 3, 2018

On Money Laundering Deutsche Bank Is Raided While UN Briber Ho Used HSBC and Mashreqbank Which Settled

By Matthew Russell Lee, Video, Q&A, HK here

UNITED NATIONS GATE, November 30 – Now Deutsche Bank, which profited as trustee from predatory mortgage lending, has been raided - for month laundering. Will it make the bank sell? Police have searched the offices of all the members of Deutsche Bank’s board as part of an investigation into money laundering allegations linked to the Panama Paper. DB's shares fell 3 percent and touched a record low as a raid that began on Thursday at the bank’s towering Frankfurt headquarters extended into a second day. We'll have more on this - and this: four months after the arrest for UN bribery of former Senegalese foreign minister Cheik Gadio and Patrick Ho, the head of China Energy Fund Committee full funded by CEFC China Energy, his ultimate boss at CEFC Ye Jianming was brought in for questioning in China. Now Inner City Press is covering the trial, here. Among the hooks for the prosecution was payments of alleged bribes not only through HSBC but also Mashreqbank based in Dubai. On October 10 Mashreqbank has been hit with and settled money laundering charges by the New York State Financial Services Department: "Although the Branch's customer base consists principally of foreign financial institutions located in high-risk regions, examiners determined that due diligence files
nonetheless lacked robust information about its foreign correspondent customers' markets." We'll have more on this. On October 4 Ho was again denied bail. Periscope video here. Now on October 9 the prosecution has requested that the trial begin later than the scheduled November 5, writing to Judge Loretta A. Preska among other things that "this past Friday, October 5, 2018, the defendant submitted a classified notice pursuant to Section 5 of the Classified Information Procedures Act (“CIPA”). The defendant could have filed such notice a number of weeks ago, but waited until the very last day on which such a filing would be deemed timely under CIPA. The defendant also did not notify the Government that he intended to submit such a notice until the Court directed the parties to confer during last
week’s conference. The Government now has to draft, have approved for submission, and submit
a classified response in opposition, in which it intends to request a hearing concerning the use, relevance, and admissibility of classified information that would otherwise be made public by the defense during the trial, and expects, assuming appropriate authorization is provided, to request that the hearing be held in camera." If Ho's lawyers were slow, the US government's Voice of America is more so: it took it five days to report on the public bail hearing held in lower Manhattan on October 4. Tellingly, the report did not include VOA's long-time UN embedded reporter Margaret Besheer, nor did it mention Ho's arms brokering to South Sudan nor the name of previous and convicted UN briber Ng Lap Seng. Besheer has worked with Secretary General Antonio Guterres' spokesman Stephane Dujarric to bar Inner City Press from even entering the UN and is involved with a pro-UN correspondents group which took $50,000 from Ng then provided the venue for his photo op with the UN Secretary General. (It turns out Guterres maintains a secret "banned" list including political activists, story here.) Similar quid pro quos are expected with Guterres on December 5 on 42nd Street, watch this site.

November 26, 2018

In SDNY SocGen Bank Hit With $1.3B Penalty for Sanctions Violations As UN Briber Ho Nears Trial

By Matthew Russell Lee, Video, Q&A, HK here

UNITED NATIONS, November 19 – While the UN bribery case of US v. Patrick Ho, including allegations of violations of Iran sanctions and Libya and South Sudan arms embargos as well as transfer of funds through Mashreqbank and HSBC comes to trial later this month, on November 19 this sanctions violation settlement: "Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James D. Robnett, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Mark Bialek, Inspector General, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (“IG-FRB/CFPB”), announced criminal charges against Société Générale S.A. (“SG” or the “Bank”) consisting of a one-count felony information charging SG with conspiring to violate the Trading with the Enemy Act (“TWEA”) and the Cuban Asset Control Regulations promulgated thereunder (the “Cuban Regulations”) for SG’s role in processing billions of dollars of U.S. dollar transactions using the U.S. financial system, in connection with credit facilities involving Cuba (the “Cuban Credit Facilities”). The case is assigned to United States District Judge P. Kevin Castel.
Mr. Berman also announced an agreement (the “Agreement”) under which SG agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay penalties totaling $1,340,165,000 to federal and state prosecutors and regulators, refrain from all future criminal conduct, and implement remedial measures as required by its regulators. Assuming SG’s continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of three years, after which time the Government will seek to dismiss the charges. The $1.34 billion in penalties represents the second largest penalty ever imposed on a financial institution for violations of U.S. economic sanctions." Yet. Four months after the arrest for UN bribery of former Senegalese foreign minister Cheik Gadio and Patrick Ho, the head of China Energy Fund Committee full funded by CEFC China Energy, his ultimate boss at CEFC Ye Jianming was brought in for questioning in China. Among the hooks for the prosecution was payments of alleged bribes not only through HSBC but also Mashreqbank based in Dubai. On October 10 Mashreqbank was hit with and settled money laundering charges by the New York State Financial Services Department: "Although the Branch's customer base consists principally of foreign financial
institutions located in high-risk regions, examiners determined that due diligence files
nonetheless lacked robust information about its foreign correspondent customers' markets." We'll have more on this. On October 4 Ho was again denied bail. Periscope video here.

November 19, 2018

Inner City Press Asks IMF of Pakistan Talks and Sri Lanka "Coup" Ongoing Answers Here

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, November 15 – When the International Monetary Fund held its biweekly embargoed media briefing on November 15, Inner City Press asked four questions including, "The Pakistan People’s Party’s leader in Senate, Sherry Rehman, as asked 'What is going on with the IMF meetings? Neither the prime minister nor the finance minister briefed the parliament on the terms of the negotiations. Before briefing the IMF with the terms of agreement regarding the country’s foreign debts, the government should have discussed it in parliament. What is with this secrecy?' What is the IMF's response?" IMF Spokesperson Gerry Rice said Matthew Lee has asked about the status and that an IMF team is still in Islamabad discussing a potential new program; he would not confirm if a $5 to $6 billion request is expected. Inner City Press also asked, "On Sri Lanka, any updated thinking or action from the IMF given the dissolution of parliament, no confidence in Rajapaksa motion? Who are the IMF's technical counterparts? Any changes?" Rice said the IMF continues to monitor the political situation and remain in touch with its "technical counterparts." Not yet answered: "On Cameroon, while the IMF's recent report discussed the Cup of African Nations, what is the IMF's assessment of the impact of the ongoing conflict and travel restrictions in the country's Anglophone regions?
On Libya, the US has said it is “critical is promoting greater transparency of Libya’s economic institutions, including the Central Bank of Libya. These reforms will support much-needed conversation among Libyans about enhancing fiscal transparency and promoting a more equitable distribution of the country’s oil resources. The United States stands ready to support this economic dialogue, at Libya’s request and in close coordination with the UN Support Mission for Libya (UNSMIL), the World Bank, and the International Monetary Fund.” What is the IMF doing in/for Libya?
On Saudi Arabia, can you further explain the basis of Mr Azour's statement that current and foreseeable responses to the killing of journalist Jamal Khashoggi will no impact the Saudi economy? Asked whether the IMF felt a need to re-examine its expectations for the economy since the Khashoggi affair erupted, Jihad Azour, director of the Middle East and Central Asia department at the Fund, said it did not. 'What would have an impact is how oil prices will have moved going forward, and a certain number of other indicators like the pace of fiscal adjustment and the reforms that Saudi authorities will implement going forward,' Azour said." Back on November 1, Inner City Press asked four questions, including, "On Saudi Arabia, what is the IMF's estimate of the impact of l'affaire Khashoggi on the country's economy, as well as of the US' call for a (sequenced) cessation of hostilities in its war on Yemen?" IMF Spokesperson Gerry Rice, after reading out this "question from Matthew Lee," emphasized that the IMF doesn't do politics. He said, however, that the IMF is concerned about the humanitarian situation in Yemen and stands ready to re-engage although there are no operations there now due to the conflict. On Khashoggi's murder he said it is too early to estimate how much it will impact confidence in the Kingdom - it already has - and, in what others may take as news, he answered that the impact for now is modest.

November 12, 2018

WSFS Take Over Of Beneficial Bank in Philadelphia Is Challenged By Inner City Press As CRA Targeted by Otting

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, November 6 – The US Treasury Department is in a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. On November 6 at 5 pm, before any midterm elections results came in, Fair Finance Watch filed comments at deadline with Otting's OCC, on Wilmington Savings Fund Society (WSFS) Bank's application to acquire Beneficial Bank in Philadelphia and closed 30 branches, despite WSFS' disparate lending record: "This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by WSFS Bank to Acquire Beneficial Bank. In the the Wilmington MSA in 2017, WILMINGTON SAVINGS FUND SOCIETY, FSB (WSFS Bank) had a denial rate for the home purchase loan applications of African Americans that was 5.48 times higher than for whites - an outrage, significantly more disparate that other banks in the market. For Latinos, WSFS Bank was and is worse, with a denial rate for home purchase loans 7.43 times higher for Latinos than for whites.
   This is not a lending record and pattern to impose on Philadelphia. And consider this: if approved, WSFS “plans to close 30 WSFS and Beneficial Bank offices, a quarter."
   See, “WSFS bosses Mark Turner and Rodger Levenson plan to close 30 of the combined companies’ 120 branches and eliminate around 350 of their 2,100 jobs.”
   There is more to say, and there are more markets. But concerned as we are about the OCC seeming to take outrageous disparities even less seriously than before, we ar timely submitting this one, for your action. This is systematic redlining; this proposed acquisition could not legitimately be approved and WSFS Bank should be referred for prosecution for redlining by the Department of Justice and the CFPB. But will today's OCC do it? The branch closings provides a second ground for the requested evidentiary hearing." What will Otting's OCC do? On October 17, yet more on Otting's assault on the CRA became known. He has taken to devaluing or lumping together and not putting in the docket or online the comments of community groups, calling them mass comments or form letters - when he himself not only solicited mass comments for the OneWest - CIT merger from which he personally profited, but even got some fraudulent comments. Inner City Press / Fair Finance Watch submitted the documents obtained under FOIA into the record before the OCC. Now, on a ten day delay, the OCC has put into the file a cursory memo of its October 12 meeting with bankers ranging from Citigroup (Lloyd Brown and Devika Murray Bacchus), Capital One (James Matthews), TIAA and Regions to Wells Fargo, Fifth Third, Huntington and PNC, among others. This has t