Inner City
        Press' Bank Beat Reporter


     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  Click for March 1, 2011 re Libya, Sri Lanka, UN Corruption by Inner City Press.  Until next time, for or with more information, contact us.

April 14, 2014

  There's more to say, but this is on Mercantile of Michigan:

April 12, 2014

Board of Governors of the Federal Reserve System
Attn: Chair Janet Yellen, Secretary Robert deV. Frierson
20th Street and Constitution Avenue, N.W.
Washington, DC 20551

Re: Comments in Extraordinary Circumstances On, Requesting Hearings & an Extension of the Comment Period On the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank

Dear Chair Yellen, Secretary Robert deV. Frierson and others in the FRS:

Starting in October 2013, Inner City Press / Fair Finance Watch has on fair lending grounds protested the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank. To assess in Mercantile's record is improving or further deteriorating, ICP asked Mercantile through counsel for its 2013 HMDA-LAR. It is attached, for inclusion in the record.

Amazingly, the bank has provided its LAR only in paper form, so that it cannot be computer analyzed. This contrasts to other banks' timely responses to ICP with their LAR in the requested .DAT format in which it is filed.

Reviewing the 2012 HMDA data, ICP examined Mercantile's and its mortgage company's home purchase, refinance and home improvement lending in its Grand Rapids, Michigan headquarters MSA and finds them outrageous.

In 2012 in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 42 such loans to whites, NONE to African Americans or Latinos.

In 2012 in the Grand Rapids MSA for refinance loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 159 such loans to whites. It had a 100% denial rate for African American applicants.

In 2012 in the Grand Rapids MSA for home improvement loans, both Mercantile's bank and mortgage company lent only to whites.

This is outrageous. So is the bank's cynical decision to provide its 2013 LAR in un-analyzable form. The comment period should be extended, the bank admonished and its applications denied.

April 7, 2014

On US Bank's application to acquire more than 90 branches from Royal Bank of Scotland, Inner City Press has submitted a Freedom of Information Act request for the entirety of a largely redacted / black-out response by US Bank, showing that several RBS products would be dropped. Now that US Bank has admitted to the Federal Reserve that it would eliminate Charter One's Credit Builder and energy efficiency loan programs, and make it more difficult for the customers it would acquire to avoid fees, the Fed should schedule public hearings. So far, the comment period was re-opened and extended to April 25, when more analysis will be submitted.

March 31, 2014

Too big to fail? "Japan's Sumitomo Mitsui Financial Group Inc. has held preliminary talks with Royal Bank of Scotland Group PLC about the possibility of buying its U.S. retail-banking business, according to people familiar with the discussions. Executives from the two banks recently have met to discuss a possible deal for RBS Citizens, which boasts nearly 1,400 branches and $122 billion in assets across 12 states in the Northeast and Midwest, these people say... Authorities in the U.S. and Japan would have to agree to allow Sumitomo Mitsui, already one of the world's biggest banks, to get even bigger--a potentially tall order in an environment where regulators are wary of too-big-to-fail banks." We'll see.

March 24, 2014

Old National has provided WARN Act notice in Indiana of at least 40 merger related layoffs...

March 17, 2014

On Ukraine, IMF Defers Most Press Questions While Mission “In Field,” Insiders?

By Matthew Russell Lee

WASHINGTON, March 13 – The day after several US Senators argued that International Monetary Fund quota reform would have to be approved by Congress to enable the IMF to meaningfully assist Ukraine, Inner City Press asked IMF spokesperson Gerry Rice if this is true. Video here, from Minute 12:05.

  Rice genially said several times that the question couldn't or wouldn't be answered while the IMF mission is “in the field” in Ukraine. He initially gave the same answer to Inner City Press' question that had nothing to do with Ukraine: is it true, as Russia reportedly argued at the most recent G-20 meeting, that quota reform could be accomplished without US approval, under some set of rule changes?

  Rice during the briefing repeated this could not be answered while the mission is in Ukraine. Later it was conveyed that the reform is not possible without US approval. The answer is appreciated: a benefit of asking in person. But Inner City Press (and the Free UN Coalition for Access) hope to make the online asking of questions work better from now on.

  The IMF visit to Ukraine should end tomorrow, so we'll see – on Sudan and South Sudan as well: responses will be published upon receipt.

  In another non-Ukraine question, Inner City Press asked Rice about a book published earlier this week in Hungary, that the then-economy minister in 2011 told Goldman Sachs that the government would be going to the IMF for a program. Since much currency trading ensued, Inner City Press asked if the IMF has any rules limiting its government interlocutors from trading on or sharing insider information.Video here, from Minute 31:12.

  Rice said there are confidential provisions. But are those only for the contents of communication and not the existence of communications or negotiations? We'll see.

Word in update New York is the AG is looking at Evans bank NA; we looked at 2012 date for the Buffalo MSA:

for home purchase loans, 59 loans to whites, one to an African American applicant, no Latinos.

worse: for refinance loans, 147 loans to whites, NONE to African Americans or Latinos...

And on marketing / outreach:

for home purchase loans, 71 applications from whites, one from an African American, none from Latinos.

worse: for refinance loans, 185 applications from whites, NONE to African Americans or Latinos...

So yeah, they should be looked at. And so should others...

March 10, 2014

M&T Bank with its stalled merger proposal with Hudson City Bancorp cut CEO Wilmers’s pay by 23 percent last year as the stock lagged. Wilmers, who said executives should make sacrifices in their compensation in his most recent annual shareholder letter, was awarded $3.05 million for his work last year, the Buffalo, New York-based bank said today in a regulatory filing. That included a salary of $950,000, a $425,000 cash bonus and $1.68 million in restricted stock. He was awarded $3.95 million for 2012. While Wilmers, 79, saw his cash bonus increase, his salary was cut 49 percent from last year and the amount of stock he received declined 12 percent, according to the filing...

March 3, 2014

Under review in New York are Ocwen's affiliates Home Loan Servicing Solutions Ltd., which has bought mortgage-servicing rights from Ocwen, and Altisource Portfolio Solutions SA, which provides IT services to Ocwen...

In the United Kingdom, there are increasing calls for a community reinvestment act -- as Royal Bank of Scotland tries to sell its Chicago-land branches to US Bancorp, and to spin off Citizens Bank...

February 24, 2014

Now, on a delay (from Jan 27 to Feb 11) Huntington's lawyers at Wachtell, Lipton have provided Inner City Press / Fair Finance Watch with a copy of their letter to the OCC, arguing unpersuasively that the 226 Third Street branch in Marietta, Ohio is sufficient to close down the one at 478 Pike Street, more than a mile away, despite consumer complaints. We'll see...

February 17, 2014

M&T, whose Hudson application Inner City Press protested in 2012 and is still pending, now is challenged on fair lending and says it will close 10 branches in New York. We'll see.

February 10, 2014

Here's a combination that should be reviewed, in the new New York: "Atlas Bank, a division of Kearny Federal Savings Bank." Really?

February 3, 2014

Talk about arrogance: with the proposed Mercantile - Firstbank merger subject to Additional Information letters from the Federal Reserve after ICP/FFW's fair lending protest, Mercantile CEO Michael Price said Price "said they are making 'steady progress' towards completing the merger." What, without approval? Exactly what steps are being taken?

January 27, 2014

The CEO of Old National, Robert G. Jones, has replied to the Office of the Comptroller of the Currency, acknowledging lending figures Inner City Press / Fair Finance Watch raised, but saying they are OK. We disagree and put these pages of the letter online here; we'll have more on this.

January 20, 2014

Last month Inner City Press / Fair Finance Watch commented on Old National's application to buy Tower Financial (below); now Old National wants to buy United in Ann Arbor, Michigan. We'll be there..

Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Old National's home purchase, refinance and home improvement lending in the Indianapolis, Evansville and Fort Wayne MSAs and finds them outrageous.

In 2012 in the Indianapolis MSA for conventional home purchase loans, Old National Bank lent ONLY to whites. It made 78 such loans to whites; none to African Americans or Hispanics. In Table 4-1, it made 25 loans to whites, one to an African Americans and NONE to Latinos, denying both applications it received from Latinos. This is a pattern.

For refinance loans in Indianapolis, Old National made 601 such loans to whites, 18 to African Americans and seven to Latinos.

For home improvement loans in the Indianapolis MSA, Old National in 2012 made 89 such loans to whites, one to an African American and NONE to Latinos, denying both applications it received from Latinos. Yes, this is a pattern.

In 2012 in its Evansville (Headquarters) MSA for conventional home purchase loans in 2012, Old National Bank made 195 such loans to whites; six to African Americans and NONE to Latinos, denying the application it received from a Latino applicant. In Table 4-1, it made 80 loans to whites, three to African Americans and ONE to a Latino.

For refinance loans in Evansville, Old National made 775 such loans to whites (while denying 371 from whites), 8 to African Americans (while denying 12 from African Americans) and only two to Latinos, while denying 6 applications from Latinos. The denial rate disparities are a pattern.

For home improvement loans in the Evansville MSA, Old National in 2012 made 155 such loans to whites (while denying 133 from whites), 5 to African Americans (while denying 7 from African Americans) and only two to Latinos, while denying three applications from Latinos. The denial rate disparities are a pattern.

Finally, for now, in the Fort Wayne MSA where it seeks to buy Tower, Old National Bank in 2012 for home purchase loans and home improvement loans lent only to whites. For refinance loans in Fort Wayne it made 28 loans to whites, one to an African American and NONE to Latinos, denying both applications it received from Latinos. This is a troubling pattern.

Also troubling regarding Old National is its history of branch closing. According to its hometown newspaper the Evansville Courier News & Press (September 10, 2013)

"since 2004 Old National has purchased 175 banking offices, either through acquiring smaller financial institutions or buying selected office locations. Old National has also shed 140 banking offices by consolidating 121 locations and by selling 19 other offices."

Old National is a bank with a disparate lending record that specializes in buying and closing bank branches.

January 13, 2014

As Indiana-based Old National now moved on United Bank & Trust in Ann Arbor, Michigan, it still hasn't completed its attempted acquisition of Tower; in 2012 in the Indianapolis MSA for conventional home purchase loans, Old National Bank lent ONLY to whites. It made 78 such loans to whites; none to African Americans or Hispanics. In Table 4-1, it made 25 loans to whites, one to an African Americans and NONE to Latinos, denying both applications it received from Latinos. This is a pattern on which we'll have more....

January 6, 2014

This week we first look overseas: in South Sudan, amid the slaughter, it's said Kenya Commercial Bank considering pulling out. But threatened with difficulty then maintaining or regaining licenses, it decided to stay and was praised for it. Which shows if one doesn't want branches to be closed...

The US Community Reinvestment Act should be enforced throughout the country (and world), and across the full spectrum of banks. On that principle, Inner City Press / Fair Finance Watch's challenge to Mercantile Bank's application to acquire FirstBank in Michigan proceeds. When last we reported, Mercantile tried to rebut FFW's analysis of its lending disparities by submitting self-serving letters, for example one from a borrower of saying, "I am a person of color."

Now we can report, as Mercantile did not, that the bank is being sued for alleged violations of the Fair Housing Act and Equal Credit Opportunity Act. The facts at issue are more relevant to the Federal Reserve, and on the merger, than the letter Mercantile solicited and submitted. Watch this site.

December 30, 2013

Rockville - United in Connecticut have disclosed the four branches they would close in the merger they have yet to apply for, here. In this case, the longest distance is slightly over a mile. The companies should be applying to the Federal Reserve Board soon...

December 23, 2013

Blind leading the blind -- FIG Partners tells its clients:

"Yesterday, MBWM-Mercantile Bank filed an 8-K stating that due to the timing of certain regulatory processes and approvals the pending merger with Firstbank Corporation (FBMI) will most likely not be completed on 1/1/14 as previously planned. Instead it appears the transaction will close later in 1Q14 possibly in February. The delay appears to be related to certain CRA (Community Reinvestment Act) and fair lending issues. Based on our conversation with management there does not appear to be much merit to this accusation but time will tell."

Yeah, time will tell.

December 16, 2013

Inner City Press / Fair Finance Watch has commented to the Federal Reserve and Office of the Comptroller of the Currency about the lending record of Indiana-based Old National as it attempts to buy Tower Bank and Trust:

Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Old National's home purchase, refinance and home improvement lending in the Indianapolis, Evansville and Fort Wayne MSAs and finds them outrageous.

In 2012 in the Indianapolis MSA for conventional home purchase loans, Old National Bank lent ONLY to whites. It made 78 such loans to whites; none to African Americans or Hispanics. In Table 4-1, it made 25 loans to whites, one to an African Americans and NONE to Latinos, denying both applications it received from Latinos. This is a pattern.

For refinance loans in Indianapolis, Old National made 601 such loans to whites, 18 to African Americans and seven to Latinos.

For home improvement loans in the Indianapolis MSA, Old National in 2012 made 89 such loans to whites, one to an African American and NONE to Latinos, denying both applications it received from Latinos. Yes, this is a pattern.

In 2012 in its Evansville (Headquarters) MSA for conventional home purchase loans in 2012, Old National Bank made 195 such loans to whites; six to African Americans and NONE to Latinos, denying the application it received from a Latino applicant. In Table 4-1, it made 80 loans to whites, three to African Americans and ONE to a Latino.

For refinance loans in Evansville, Old National made 775 such loans to whites (while denying 371 from whites), 8 to African Americans (while denying 12 from African Americans) and only two to Latinos, while denying 6 applications from Latinos. The denial rate disparities are a pattern.

For home improvement loans in the Evansville MSA, Old National in 2012 made 155 such loans to whites (while denying 133 from whites), 5 to African Americans (while denying 7 from African Americans) and only two to Latinos, while denying three applications from Latinos. The denial rate disparities are a pattern.

Finally, for now, in the Fort Wayne MSA where it seeks to buy Tower, Old National Bank in 2012 for home purchase loans and home improvement loans lent only to whites. For refinance loans in Fort Wayne it made 28 loans to whites, one to an African American and NONE to Latinos, denying both applications it received from Latinos. This is a troubling pattern.

Also troubling regarding Old National is its history of branch closings, and attempt to stay just below the $10 billion threshold for scrutiny under the Dodd Frank Act.

According to its hometown newspaper the Evansville Courier News & Press (September 10, 2013)

"since 2004 Old National has purchased 175 banking offices, either through acquiring smaller financial institutions or buying selected office locations. Old National has also shed 140 banking offices by consolidating 121 locations and by selling 19 other offices."

Old National is a bank with a disparate lending record that specializes in buying and closing bank branches. It seeks to continue to fly under the radar. The article continues:

"Old National currently has $9.6 billion in assets. Jones said the bank’s assets will remain just below the $10 billion mark even after the Tower acquisition.The $10 billion threshold is important because of banking rules that were put into place as part of the Dodd-Frank financial reforms following the recent recession. Banks with $10 billion or more in assets are limited in how much they can charge merchants in debit card transaction fees. Smaller banks are not subject to this limit. Jones said Old National would expect to lose between $8 million and $12 million a year in transaction fees once it hits the $10 billion asset mark. To remain below the $10 billion threshold following the Tower transaction, Old National can reduce its assets by taking steps such as reducing its investment portfolio or selling residential mortgages."

Old National with its disparate lending record and business strategy of reducing services in communities seeks to game the system by staying just under the threshold.

ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved.

December 9, 2013

in examining the 2012 Home Mortgage Disclosure Act data of Michigan's Mercantile Bank, Inner City Press found that in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent only to whites. Its mortgage company made 42 such loans to whites, none to African Americans or Latinos.

After Inner City Press put this and other date in an October comment on Mercantile's application to acquire Alma, Michigan-based FirstBank, the Federal Reserve asked Mercantile a round of questions on November 6, and another on November 26. These included:

"Describe any other community outreach efforts (e.g., credit needs ascertainment, marketing / advertising, and product development) by Mercantile to make credit available to residents throughout the bank's assessment areas, including to African America or Hispanic individuals or residents of minority census tracts in those areas, including in the Grand Rapids MSA.

"Mercantile stated (page 11) that, effective in 2013, the monthly reports to the bank's CRA Committee include the number of minority loan applications and originations and that these changes were implemented to bring focus to the bank's efforts to increase the number of minority loan applications. Indicate when this expanded reporting began..."

Could it be too little, too late? On November 26, Mercantile filed with the Securities and Exchange Commission that its plan to close the deal by the end of the year, and for FirstBank to not file a 2013 SEC Form 10-K, no longer held.

Another proposed merger in Virginia, of United Bancshares and Virginia Commerce Bancshares (VCBI) has similarly been delayed by comments by NCRC and members, including Inner City Press. United Bancshares went out and hired the Sullivan & Cromwell law firm, to try to push its application through with the Federal Reserve.

Is this a trend? It would seem so. In discussions between Inner City Press and a pro-industry cynic (that is, an arbitrageur), theories emerged such as that regulators have "excess capacity" or feel some responsibility for the subprime lending triggered meltdown of 2008.

In the alternative, as community and consumer groups turn their attention to smaller banks and find disparities that had heretofore escaped their scrutiny, they bring them to the attention of regulators who, at least for now, seem to take them more seriously.

The lesson for banks might be to clean up and improve their lending records before applying for mergers. Or to not set aggressive closing dates and then have to extend them. On this, we agree with the arbitrageur.

December 2, 2013

There is interest in the NCRC challenged proposed merger of United Bancshares with Virginia Commerce Bancshares (VCBI). ICP also commented; Union Bancshares went out and hired Sullivan & Cromwell. But still the deal isn't approved, and the arbs are taking notice...

November 25, 2013

IMF in Sri Lanka Ignoring CHOGM Issues Unanswered, Sudan Ignored

By Matthew Russell Lee

UNITED NATIONS, November 21, updated twice -- The International Monetary Fund visited Sri Lanka, during the same time frame there was worldwide news about crackdowns on the press and families of those disappeared or killed by the government. But the IMF's Naoyuki Shinohara issued a statement mentioning none of that, basically cheering for the government.

  During the IMF's bi-weekly media briefing on Thursday, Inner City Press submitted this question, and others set forth below [the IMF at deadline says an answer is pending on the DRC]:

"In Sri Lanka, does IMF acknowledge any impact of the issues raised during the CHOGM, but not mentioned by Naoyuki Shinohara?"

IMF spokesperson Gerry Rice, purporting to answer questions posed not only "in the room" in Washington but also online, including a repeat question from a financial reporter usually in the room, never acknowledged this one. (The only way Inner City Press has gotten a substantive answer from the IMF on Sri Lanka was by going to the briefing in person, and even then...).

  This time, IMF Spokesperson later on Thursday sent this:

Dear Mr. Lee, On your Sri Lanka question: The CHOGM discussed a broad range of issues, as is typical for these meetings. The IMF did not participate or take positions on the issues discussed or outcomes.

Mr. Shinohara’s visit focused on areas specific to the IMF’s mandate – including recent economic outturns, fiscal and monetary policies, structural reforms, and measures that might help to facilitate sustained growth and low inflation.

As has become its pattern under Christine Lagarde, the IMF ignored Africa questions:

In DRC, what is IMF's view of, and role in, the draft Oil Law, since Oscar Melhado said to avoid "mistakes made with the mining sector"?

[After the briefing, an IMF spokesperson wrote, "I’m following up on your question on DRC will get back to you asap.]

On Sudan, please explain Edward Gemayel's Oct 12 statement that: "Sudan has a long track record of implementing sustainable economic policies" - and if IMF acknowledges any role in or responsibility for the unrest including 200 dead related to subsidy cuts?

  While unanswered is what the IMF does in the Sahel, where the World Bank for example has announced new programs. If only because many are part of FrancAfrique and Lagarde's in charge of the IMF, an answer if not a program would be expected. Watch this site.

Footnote: Again the IMF had no comment on the US having spied on it. Nor did it have an answer on Honduras saying it wants an IMF program. At least Rice took that question - but perhaps only because it was "in the room." Africa? Forget it - or, forgotten by the IMF?

November 18, 2013

JP Morgan Chase Gets Asked of Predatory Lending & Even Tony Blair, Cancels Q&A

By Matthew Russell Lee

UNITED NATIONS, November 13, updated -- It was back on November 6 that JP Morgan Chase started teasing a November 14 Twitter Q&A by an unnamed executive, urging that questions be posed using the hashtag #AskJPM.

  The foreseeable push-back didn't begin then. But the day before answers were promised, the hubris of bailed-out predatory lender JPM Chase believing it could launder itself through social media was brought to light.

  And so the questioning began, ranging from "Can I have my home back?" through "Do you own anything you didn't steal?" Inner City Press' UN-focused following up, "Does Tony Blair still work for, or get paid by, JPMorgan Chase? For what, exactly?"

  (Blair, alongside being the UN Quartet's representative on Palestine and Israel, took a job with JPMorgan Chase among others, and refused in the UN to answer Inner City Press' questions about the conflict of interest.)

  After much mocking, @JPMorgan called it off: "Tomorrow's Q&A is canceled. Bad Idea. Back to the drawing board."

  Such is the level of righteous anger, after the predatory lending, after the bail-outs. But that's among people -- in Congress, the wheels being greased, JPMorgan and Citigroup have already rehabilitated their image. That's what made them blind. Watch this site.

Footnote: Returning to a UN perspective, what would happen if the UN in Haiti asked people what they thought, after Secretary General Ban Ki-moon deemed all cholera claims "not receivable"? This is why large parts of the UN system not only never promise to answer questions -- they never do. They communicate one-way. But social media questions should be answered...

Update: it's reported that two-thirds of the 80,000 #AskJPM tweets were negatives. So who WERE those other one-third?

November 11, 2013

Not only will RBS speed up its spinning off of Citizens - now it is settling some predatory lending / underwriting charges in the US: "Royal Bank of Scotland Group PLC (RBS, RBS.LN) has agreed to pay more than $150 million to settle Securities and Exchange Commission charges over a subprime residential mortgage-backed security offering in 2007. RBS Securities Inc., which was known as Greenwich Capital Markets at the time of the offering, didn't admit to or deny the allegations that it misled investors over whether the loans backing the offering met its underwriting guidelines. The SEC said nearly 30% of the loans were below the guidelines, even though the firm said they 'generally' met them." Predators....

Among proposed mergers we're looking at:

In North Carolina, NewBridge Bancorp and CapStone Bank... In Washington State, Heritage Financial Corporation and Washington Banking Company. Also in the Pacific Northwest, Bank of the Cascades outbidding Banner Bancorp to try to buy Idaho's Home Federal Bank. Up in Alaska, Northrim BanCorp announced a proposal to buy Alaska Pacific Bancshares. And Huntington Banchares' proposal to acquire Advantage Bank. The analysis: "Mergers and acquisitions were virtually nonexistent in Ohio following the recession, with only 16 bank deals from 2008-12." But now they're back - and so are we.

November 4, 2013

Royal Bank of Scotland is moving up its divestiture of Citizens Bank in the US: an stock sale of 20 to 25 percent in the second half of 2014, all of the rest by the end of 2016. And if an actual bid to buy the US subsidiary comes up before then?

October 28, 2013

IMF Stresses Lagarde NOT Call for Wealth Tax, Ignores Africa

By Matthew Russell Lee

UNITED NATIONS, October 24 -- That the International Monetary Fund under Christine Lagarde has devoted more and more of its members' money to Europe is one thing. But her IMF now won't even answer basic questions about other continents, most notably sub-Saharan Africa.

At Thursday's bi-weekly IMF press briefing, amid in-room questions about Ireland and Greece and Cyprus, Inner City Press, Inner City Press submitted two questions about Africa: Sudan and the Democratic Republic of the Congo.

On Sudan, after Managing Director Lagarde's meeting with Sudanese financial minister Abdel-Rasool, what steps if any have been taken regarding the country's debt, what are the prospects and issues?

On DR Congo, does Gecamines reportedly concealing its possible sale of its stake in Kamoto Copper Co. to Dan Gertler impact on the chances of the IMF reviving its $532M DRC program or starting a new one?

But despite multiple submissions, and a separate e-mail, these Africa questions were not even read out. Rather, repetitive questions about Europe, a question about Egyptian officials saying the IMF insulted that that was not answered, old Argentina questions (the IMF said it had "nothing fresh"), and a pointed clarification that the IMF is not, repeat not, recommending a wealth tax. Of course not!

That clarification was made electronically to deputy spokesperson William Murray. He said, my colleagues want me to make this clear. But the colleague did not highlight or allow the Africa questions.

Finally, just before the 10:30 embargo, on the DRC this came in:

Subject: RE: Question Received
From: ____ at IMF
Date: Thu, Oct 24, 2013 at 10:21 AM
To: Matthew Russell Lee [at]

Hi Matthew: Please find below the responses to your question on DRC. We’ll get back to you on Sudan.

· As we have already said, the Fund stands ready to start program negotiations with DRC if the authorities request it.

· Background: In May 2013 the authorities published an affidavit on the Comide transaction, paving the way for the reengagement of the IMF in a program context if the authorities request it.

The point is, now there is another Gecamines cover-up. That doens't change anything? Watch this site.

October 21, 2013

Last week's Intelligence Squared debate on breaking up the big banks featured "one of America's most outspoken Federal Reserve presidents, Richard Fisher, joins forces with former IMF chief economist Simon Johnson to debate in favor of breaking up the big banks. Arguing against them: Douglas Elliott and Paul Saltzman, two financial industry titans, advocating for the continued growth of big banks. To prevent the collapse of the global financial system in 2008, Treasury committed 245 billion in taxpayer dollars to stabilize America’s banking institutions. Today, banks that were once “too big to fail” have only grown bigger, with JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs holding assets equal to over 50% of the U.S. economy. Were size and complexity at the root of the financial crisis?"

The answer is yes. But the debaters bared touched on CRA or consumer protection. An oversight we aim to counteract...

October 14, 2013

On August 12, Inner City Press / Fair Finance Watch filed a timely protest to the proposed deal of Republic and H&R Block. And now the deal had fallen apart. Good riddance.

Investors Bancorp's application are still pending -- the disparities are just too great.

October 7, 2013

It's global: "Mizuho Bank, a core unit of Japan's second-largest lender, lent money to crime-syndicate members for more than two years without cutting them off or alerting the authorities."

Then, "Mizuho Bank said that at least four senior executives in charge of legal compliance knew about loan transactions with crime-syndicate members for more than two years from 2010 but that they didn't alert the bank's chief executive or its board." Can you say, scapegoat?

September 30, 2013

IMF Says Nothing Is Its Fault in Greece or Pakistan, Ignores Sudan, Defers on Iran

By Matthew Russell Lee

UNITED NATIONS, September 26 -- Nothing is ever the fault of the International Monetary Fund under Christine Lagarde, it seems.

Thursday morning at the IMF's embargoed press briefing spokesperson Gerry Rice answered a question about the depreciation of the rupee in Pakistan by saying not only is it not the IMF's fault, the IMF will solve it.

  A journalist down from the UN asked Rice about the view that the rise of "Golden Dawn" in Greece is related to austerity policies. Oh no. Of course not.

  From New York, Inner City Press has asked about Sudan (and South Sudan, and Palestine) --

On Sudan and the deadly protests there of the elimination of fuel subsidies, does the IMF have any view if the elimination was implemented too quickly? What is the status between the IMF and Khartoum, including on any debt relief?

On South Sudan, what is the status of discussions on a Rapid Credit Facility and a government program to be monitored by IMF staff?

On Palestine, what is the IMF's view of yesterday's Communique by the Ad Hoc Liaison Committee?

  How will the IMF answer these questions? Will the IMF give it answer to a question about Iran and Hassan Rouhani -- when is the last time an IMF managing director met a leader of Iran? -- only to the wire service that asked the question in person, or to all press which cover the Fund? Watch this site.

September 23, 2013

Umpqua - Sterling? We'll be there.

September 16, 2013

On Syria, ICP Asks & IMF Says No Mission Since Early 2011, Spillover

By Matthew Russell Lee

UNITED NATIONS, September 12 -- At the UN, all or most talk is about Syria including Secretary General Ban Ki-moon jumping the gun and telling France not only WHEN his chemical weapons report will be released, but what it will say.

  Is the IMF under Christine Lagarde similar focused?

For the IMF's bi-weekly briefing Thursday morning, Inner City Press submitted this question:

"Has IMF done any work or estimates on impact of Syria crisis including refugees and impact on trade in neighboring countries like Jordan, Lebanon, Turkey or Iraq?"

IMF spokesperson Gerry Rice acknowledged Inner City Press' question; his answer was that due to the security situation, there has been no IMF mission since early 2011. He said the IMF is monitoring the potential spillover, but has no updated information. Well.

Inner City Press also asked this question, about the Great Lakes region to which the Security Council -- and it seems, no press -- will be traveling in October:

"On the DR Congo and Great Lakes, the World Bank announced a major program. Does the IMF have any comparable programs in or with the Great Lakes countries?"

Watch this site.

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September 9, 2013

Blast from the past: when Adams Bank and Trust applied to open a new branch in Nebraska, the Federal Reserve Board got "public comments received from prospective competing banks in Colby and from residents of the surrounding areas. The commenters assert that their community’s demographic and economic characteristics would not profitably support another branch and that the area’s financial services needs are adequately met by the financial institutions currently operating there." Saying "we don't want more banks" was one of the bases for the "convenience and needs" concept in US banking law...

Also in Nebraska: a new banking entity, Heartland Bank. The Hastings Tribune reports that the merger of Geneva State Bank and State Bank of Riverdale would create a bank with more than $350 million in total assets. The merger is expected to be completed before year's end, pending regulatory approval John Wilkins is chairman and CEO of Geneva State Bank, and he says the merger "makes a lot of sense to both communities we serve."

September 2, 2013

Talk about wan: when Chile's Banco de Credito responded to a CRA challenge to its application to acquire City National Bank of Florida, though the law firm of ARHMF, all it did was cite an old CRA exam...

August 26, 2013

Inner City Press / Fair Finance Watch has told the OCC, on the Applications of Republic Bank, NA to acquire assets and liabilities of H&R Block Bank: both institutions have a history of high cost lending to consumers, through tax refund anticipation loans and otherwise.

See, for the record, "Steve Trager: Pending H&R Block bank deal could return Republic Bank to being mega tax refund provider," Insider Louisville, July 11, 2013

Even if Republic denies that headline from its headquarters city, public hearings should be held on what Republic would do with H&R Block's "Emerald Card" program, particularly given its subsidiaries and plans, Republic Prepaid Systems, "an issuing bank to offer general purpose reloadable prepaid debit, payroll, gift and incentive cards through third party program managers" and Republic Credit Solutions, "preparing to pilot short-term consumer credit products through multiple channels.”

Reviewing 2011 HMDA data, the most recent data available (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Republic Bank & Trust Co's refinance and home improvement lending in the Louisville, Kentucky and Cincinnati MSAs and finds them outrageous.

In the Louisville MSA in 2011 for refinance loans, Republic 40.4% of applications from African Americans, versus on 20% of applications from whites. Its denial rate for Latinos was even higher: 45.5%

For home improvement loans, Republic denied 50% of application from African Americans versus 24.8% of applications from whites. Its denial rate for Latinos was 100%.

In the Cincinnati MSA in 2011, Republic made 27 refinance loans to whites and NONE to African Americans, nor Latinos. It made seven home improvement loans to whites, none to African Americans (denial rate 100%) nor Latinos.

On the current record, the applications / notices should not be approved.

The OCC has responded that the public comment period has been extended to September 11. How appropriate. Watch this site.

August 19, 2013

We've said Capital One wants to be Number 5 with the monopolist quartet - and now it's in multi-family. "Capital One has a USD296.5 billion portfolio as of year to date. The company is pleased with the acquisition and its influence to the company's market position. Michael Slocum, current President of the lender's Commercial Banking Group, said, "The combination of Capital One's multifamily business and Beech Street will make us a top 5 national multifamily originator." We'll have more on this.

August 12, 2013

Look at Investors Bancorp, bragging it will consummate its Roma proposal - but it was slated for May 31, no approval because disparate lending record, raised by Inner City Press / Fair Finance Watch:

August 5, 2013

IMF's Spain Report Thrice Mentions Bankia, Lagarde Question UNanswered

By Matthew Russell Lee

UNITED NATIONS, August 2 -- The International Monetary Fund's annual report on Spain, under embargo until 10 am today, runs some 66 page but mentions Bankia only three times, all of them in financial tables.

But as Inner City Press asked the IMF at its briefing on July 11, Managing Director Christine Lagarde was on the witness list of the Spanish political partyUnion, Progress & Democracy, which alleged fraud in the weakening and bail out of the bank.

The IMF answered Inner City Press' questions from that day on Sri Lanka, and more recently on South Sudan.

On Sri Lanka: "The one on Mr. Singh is accurate. The Island and Daily Mirror coverage of Mr. Mathai's talk was much better in our view and may be helpful to you."

From the IMF's transcript of Inner City Press' question:

I have a question on South Sudan. We'll jump to Africa. I think we'll move off Europe for awhile. On South Sudan:

“How does the IMF view the recent firing of the vice president and ministers and non-passage of the petroleum act? What impact may this have?”

Thanks for that question. The effects on both countries, both South Sudan and Sudan, are likely to be quite severe, given the rundown of their reserve buffers since 2011, and a progressive build up of economic and social tensions. We can't give you a precise analysis of what these firings mean in terms of the severity of the economic dislocations in South Sudan and Sudan, but we basically hope that both countries will implement their recent agreements, given their importance for regional peace and economic stability. We also think that implementing these agreements will help relieve the economic pressures that have been building up since oil was shut down there in January of 2012.

But on Bankia and Lagarde, nothing.

That process led Bankia to put its subsidiary City National Bank of Florida up for sale. BankUnited, which Inner City Press covered last week, was said to be among the suitors, but Chile's Banco de Credito e Inversiones ended up with the winning bid on May 24, for $882.8 million.

Analysis now proceeds on that proposed acquisition. Until July, Inner City Press used and cited SNL Financial in stories such as these. A request to continue, and specifically about BankUnited and this, is pending before Christina M. Twomey of SNL's Public Relations. We hope to have more on this - and on Larry Summers and the Fed. Watch this site.

July 29, 2013

So for $2.3 billion, Pacific Western Bank plans to acquire CapitalSource Bank, eh?

On South Sudan Firings & Oil, IMF Tells ICP Effects Will Be "Severe," UN Mute

By Matthew Russell Lee

UNITED NATIONS, July 25, updated -- While the UN has yet to speak on the mass firing of ministers by South Sudan's Salva Kiir, when Inner City Press asked the International Monetary Fund at its embargoed Thursday briefing, the IMF by contrast has an answer.

Inner City Press asked, "On South Sudan, how does IMF view the recent firing of Vice President and ministers... Petroleum Act and impending shut off of oil, what impact may these have?"

IMF deputy spokesperson William Murray said, "the effect on South Sudan and Sudan are likely to be quite severe, given the run down of their reserve buffers since 2011 and a progressive build up of economic and social tension."

About the firings, Murray said the IMF can't be precise what they mean for severe economic dislocation. But, he said, the IMF "hopes both countries implement their recent agreements." Who doesn't?

From the IMF's transcript of Inner City Press' question:

I have a question on South Sudan. We'll jump to Africa. I think we'll move off Europe for awhile. On South Sudan:

“How does the IMF view the recent firing of the vice president and ministers and non-passage of the petroleum act? What impact may this have?”

Thanks for that question. The effects on both countries, both South Sudan and Sudan, are likely to be quite severe, given the rundown of their reserve buffers since 2011, and a progressive build up of economic and social tensions. We can't give you a precise analysis of what these firings mean in terms of the severity of the economic dislocations in South Sudan and Sudan, but we basically hope that both countries will implement their recent agreements, given their importance for regional peace and economic stability. We also think that implementing these agreements will help relieve the economic pressures that have been building up since oil was shut down there in January of 2012.

Simultaneously at the UN in New York, US Secretary of State John Kerry brought up South Sudan, or really Jonglei state, making a call for humanitarian access on President Kiir "and others." What others?

Kerry was at the UN for a meeting about the Great Lakes region, with by video Jim Kim, president of the World Bank (but no one from the IMF) in attendance. But even Ban Ki-moon said the "first" order of business was Syria. And his UN has yet to speak about the firings in South Sudan. Is he waiting for instructions? Watch this site.

Footnote: Inner City Press has also asked the IMF about Belarus and Burundi: "On Burundi, what is IMF's advice to the country, does the IMF share concerns (such as those expressed by UN Peacebuilding configuration chair this week), what are the next steps?"

Update: After embargo, this arrived from an IMF spokesperson on Burundi - and on a previously asked Zimbabwe question:

· “The IMF continues to be engaged with Burundi through a three-year financing arrangement aimed at mobilizing domestic revenues, catalyzing donor support and strengthening public financial management.

· In order to keep the program on track in light of recent revenue slippages, the authorities submitted a revised budget to parliament this week. This will provide a framework for continued donor engagement through a series of sectoral conferences related to the implementation of projects in the priority sectors outlined within the authorities’ Poverty Reduction Strategy.

On Zimbabwe, the World Bank's country manager has said that "arrears clearance is the main thing." Does the IMF agree? What is the IMF look for from Zimbabwe?

· Zimbabwe is currently making payments to the Fund (and to the World bank and African Development Bank as well), but the country remains in arrears to the IMF and other multilateral and bilateral creditors

· We agree with the authorities that a comprehensive arrears clearance strategy supported by development partners will be essential for Zimbabwe going forward.

· The IMF supports the Zimbabwean authorities’ efforts to work towards arrears clearance.

Meanwhile an IMF spokesperson on July 25 sought clarification of an Inner City Press submitted two weeks earlier about Sri Lanka. Inner City Press has provided the clarification, asking if the IMF stand behind quotes attributed to IMF resident representative in Colombo Koshi Mathai and even more so Anoop Singh, IMF's Director for Asia and the Pacific region. We'll publish IMF's belated answer if and when received; watch this site.

July 22, 2013

There's another merger in Arkansas we're looking at: Gerald J. Ford's bid to buy Metropolitan National Bank...

July 15, 2013

Republic Bank & Trust Co. is acquiring most of H&R Block Bank -- that is, a bank known for tax refund loans buying the Emerald Card program. For now: “The agreement, which is subject to regulatory approvals, calls for Republic to acquire $3 million in assets and $470 million in deposits from H&R Block. As a result, Republic would receive an estimated $467 million in cash from H&R Block at closing.” We'll have more on this.

July 8, 2013

So Acacia, after trying to sell itself to Customers Bancorp Inc. but having that “terminated because of delays in receiving regulatory approvals,” now sells to Stifel Financial Corp. But what of Customers? Has it improved in any way? We'll have more on this.

July 1, 2013

Last week, a merger proposal announced by Home BancShares, with operations in Florida to buy Liberty in Arkansas for $280 million - we're watching.

June 24, 2013

More Deep South action: Natchez, Miss.-based Southwest Security Inc. unit United Mississippi Bank ($286.0 million) is set to acquire Bude, Miss.-based Peoples Bank of the South ($82.0 million) through a stock purchase transaction, it was reported June 20. More on this?

June 17, 2013

What a trio: Green Dot Bank, the subsidiary bank of Green Dot Corp., on June 7 agreed to try to acquire from GE Capital Retail Bank reloadable prepaid cards bearing the marks of Walmart - jeez...

June 10, 2013

Hedge funds that profited on the way down from the collapses, for example Paulson & Company, the Carlyle Group's Claren Road Asset Management and Perry Capital, are now buying up the preferred shares of Fannie Mae with a eye to taking it private.

  They are buying in the markets, with little disclosure or oversight, and lobbying in DC. Also in the mix is James Millstein, "fixer" of AIG, now ready to cash in through, what else, Milstein & Company.

  On the other side, Fannie Mae has become a grab-bag, with fees imposed on mortgages for entirely unrelated government goals. Who wouldn't want such a pinata?

June 3, 2013

So Capital One "in the process of selling receivables associated with HSBC's partnership with electronics retailer Best Buy to Citigroup," according to SNL Financial. "Fairbank said he had hoped his company and Best Buy 'could've gotten to a meeting of the minds.'"

And what ever happened with that "add-on" settlement and sleaze?

May 27, 2013

Bank of America is looking to dump about 40 branches with deposits of around $1 billion in southeastern New York and northeastern Pennsylvania, probably to either F.N.B. Corp. National Penn Bancshares or the previously-fought Community Bank System...

May 20, 2013

The proposed acquisition of Munster, Ind.-based CFS Bancorp Inc. by Muncie, Ind.-based First Merchants Corp. would take First Merchants into the top five rankings of banks in terms of Indiana market share and make it the second-largest bank based in the Hoosier State, spreading its footprint into the northwest corner of the state, and even into the southern Chicago suburbs, per SNL Financial.

Combined, they'd be at $5.4 billion, "the second-largest financial holding company headquartered in Indiana. The combined company w[ould] have nearly 100 banking offices in 26 Indiana counties, as well as two counties in both Ohio and Illinois."

May 13, 2013

We reported on its before, but now it seems it's getting closer: Banco do Brasil closing in $900 million deal for Bankia's Miami-based City National Bank of Florida, apparently beating out BB&T, PNC, New York Community Bancorp, Toronto-Dominion Bank -- and, unreported, BankUnited... Watch this site.

May 6, 2013

  Here's portions of a filing:

As an initial matter, and for the record on this application, ICP submitted a Freedom of Information Act request to the FDIC for the whole application and for any and all records reflecting FDIC communications with the applicant about the proposal for the past six months, and asks for an expedited ruling and documents, on which the FDIC has unilaterally extended its time to response until after May 2. The comment period should and must be extended.

Reviewing 2011 HMDA data, the most recent data available (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Renasant's home purchase and refinance lending in the Memphis and Atlanta MSAs and finds both outrageous.

In the Memphis MSA in 2011 for conventional home purchase loans, Renasant made 60 such loans to whites, and only TWO such loans to African Americans, and only ONE to a Hispanic.

For Table 4-1, Renasant made 46 such loans to whites, and only FOUR such loans to African Americans, and only THREE to Hispanics.

Cumulated home purchase lending in this MSA: Renasant made 104 home purchase loans to whites, and only SIX such loans to African Americans, and only FOUR to Hispanics. This is inconsistent with other lenders' demographics of lending in this MSA.

For refinance loans in the Memphis MSA in 2011, Renasant made 112 such loans to whites, and only SIX such loans to African Americans, and only ONE to a Hispanic. This is inconsistent with other lenders' demographics of lending in this MSA.

In the Atlanta MSA in 2011 for conventional home purchase loans, Renasant made 27 such loans to whites, and NONE to African Americans or Hispanic.

For Table 4-1, Renasant made 16 such loans to whites, and only ONE such loans to an African American, and only ONE to a Hispanic.

Cumulated home purchase lending in this MSA: Renasant made 43 such loans to whites, and only ONE such loans to an African American, and only ONE to a Hispanic. This is inconsistent with other lenders' demographics of lending in this MSA.

For refinance loans in the Atlanta MSA in 2011, Renasant made 204 such loans to whites, and only TWELVES such loans to African Americans, and NONE to Hispanics. This is inconsistent with other lenders' demographics of lending in this MSA.

Also for the record, is facing a class-action lawsuit filed by securities law firm Robbins Geller Rudman & Dowd. The case claims that the merger proposal underwent a "fundamentally flawed process," only benefits Renasant and is detrimental to shareholders of First M&F.

The management and board of First M&F were also alleged to have violated their fiduciary duty by relying on conflicted analysis from Keefe Bruyette & Woods, First M&F's financial adviser, and providing shareholders with inadequate information about the deal, the report added.

Moreover, the suit also claims that First M&F's management did not look for a higher bid than Renasant's and agreed to deal-protection devices preventing other banks from bidding an offer higher than Renasant's.

Renasant has previously closed offices without replacing them: it shuttered its Trussville, Ala., branch and did not plan to open any replacement office, the Birmingham (Ala.) Business Journal reported Nov. 3, 2011."

On the current record, Renasant's F&M application should not be approved....

April 29, 2013

Takes one to know one: John Kanas of BankUnited claims “regulators should have applauded Chairman and CEO Robert Wilmers and M&T Bank for taking over a 'weakened' institution like Hudson City Bancorp Inc. and 'approved on the spot.' But the delayed deal approval until M&T strengthens its Bank Secrecy Act compliance programs 'poured cold water on [it] and put it off for God knows how long.'” That's per SNL Financial.

We on the other hand would say, why let a bank lax on money laundering take over a very disparate bank?

April 22, 2013

Revolving door: OCC Chief Counsel Amy Friend is recusing herself for a year from discussions on the Dodd-Frank Act's Volcker rule in order for her to avoid conflicts of interest, according to SNL Financial. The conflict of interest stems from Friend's previous stint with consulting agency Promontory Financial Group LLC before she joined the OCC in February. While she worked with Promontory as a managing director, she advised a number of large institutions that are now being overseen by the OCC on matters related to the Volcker rule.

Friend handled former clients such as Citigroup Inc., Wells Fargo & Co., Morgan Stanley, American Express Co., Bank of New York Mellon Corp., Grosvenor Capital Management LP, LPL Financial Holdings Inc., MidCountry Financial Corp., National Australia Bank Ltd., Mitsubishi UFJ Financial Group Inc., and Fidelity Investments, a group of companies headed by FMR LLC, while she was in Promontory Financial. According to an OCC memorandum, Friend will recuse herself for a year from OCC business that involves her former employer as well as Morgan Stanley or five other former clients. She will not be recusing herself from OCC matters that involve former clients that she has not worked with for 12 months prior to her departure from Promontory.

Revolving door...

At IMF, South Sudan on Budget Support, Comoros on Restrictions, BRICS Bank

By Matthew Russell Lee

UNITED NATIONS, April 20 -- When four African finance ministers spoke to the press Saturday at the IMF Spring Meeting, it was South Sudan which stood out. Its minister Kosti Manibe Ngai, calling his country “just a baby,” stated that for the last year it has foregone 98% of government revenue, due to the oil stand-off with Sudan.

While under the Matrix of Implementation agreed to, but not yet even note much less congratulated by the UN Security Council, the oil's set to start flowing, Kosti said that donors will be coming through with $250 million in direct budget support in the coming year. (Click here for Inner City Press' reporting on the Matrix, and the Security Council's silence.)

Such support, with no strings attached, stands in contrast for example to the trend in Rwanda, where donors attach conditions leading to the country increasingly saying it is willing to go it alone, if it must.

At the IMF there was discussion of “diaspora bonds,” and Ali Soilihi of the Comoros decried IMF restrictions which refuse to classify “ex-im loans from India or China” as concessionary.

Cameroon's Ngozi Okonjo-Iweala talked up his economy -- and the recent release of the French Moulin-Fournier family, on which (Boko Haram) note he passed the floor to Ngozi Okonjo-Iweala of Nigeria.

She went big-picture, on how the downturn in the Eurozone has hurt African exports, and on the need to coordinate Continent-wide on credible statistics and transparency.

Among the questions, a reporter from the Democratic Republic of Congo asked about minerals just being exported from Africa for processing elsewhere. It brought to mind the looming conflict in Katanga, another DRC region where the Kabila administration's power is notably weak.

  A Chinese reporter not surprisingly asked about the BRICS bank. Is that and not the IMF the future for some countries in Africa?

  Earlier in the week at the UN, an answer to Inner City Press is that the IMF is all about Europe now, deeper and deeper into Ireland, Greece and Cyprus. So whither Africa? Watch this site.

India Fin Min Chidambaram Tells ICP Obama's IMF Reform Vote Delayed, Will Meet Lew

By Matthew Russell Lee

UNITED NATIONS, April 17 -- On his way to the International Monetary Fund - World Bank meetings in Washington, India's Finance Minister P. Chidambaram stopped in New York City on Wednesday, and Inner City Press asked him about IMF reform. Video here.

  Inner City Press asked specifically about quota and governance reform. Chidambaram replied that the “review is incomplete because the US has not voted.”

  The US has a 17% vote, which can block the required 85% majority.

  Chidambaram continued that “they promised to vote after Obama's swearing in, but it's gotten delayed.” He said he believe “it will happen, but later than we would have liked it to happen.”

  In Washington, Chidambaram will meet with new US Treasury Secreary Jack Lew, formerly of Citigroup. Will he raise India tech visa issues? Apparently not -- he noted that the new bill that has been introduced is 1,500 pages long, adding, “we don't have 1,500 page bills back home.”

  He was asked about corruption, and his answer was that of the twenty questions he has gotten in the past two days, only two were about corruption. He said that up in Boston -- just after the Boston Marathon bombings -- he spoke to MIT, an investor.

Some were surprised he continued with the Boston leg of his trip. Ironically, many international journalists based in New York have been sent up to Boston, to sit writing speculative stories they could have written in New York, or in their own basement, like “tax day is hated by right wingers.” Great insight.

At Chidambaram's press availability, in the Waldorff Towers, a coffee service was waved off; a media based on high frequency stock traders asked a question about its own proprietary data. Was this a sales pitch? In more than one way? Watch this site.

April 15, 2013

Look who's scoping out City National Bank of Florida? Now it's Banco do Brasil SA. In BankUnited still in the game?

April 8, 2013

In March 2013 Inner City Press and Fair Finance Watch began a challenge to Investors Bancorp's application to acquire Roma. In the NYC MSA in 2011 for conventional home purchase loans, Investors Bank made 220 such loans to whites, and only TWO such loans to African Americans. Its denial rate for Latinos was FIVE TIMES higher than for whites.

 On April 5, Investors Bancorp announced it will try to also acquire $300 million Gateway Community Financial Corp - this also will be opposed, on the current record.

IMF Compares Ireland to Florida & California, Tells ICP of Faster Foreclosures

By Matthew Russell Lee

UNITED NATIONS, April 3 -- Amid reports that the International Monetary Fund is pushing Ireland to ease and speed up the repossession of homes for mortgage debt, Inner City Press on Wednesday asked the IMF's Ireland Mission Chief Craig Beaumont to compare the situation there to that in the United States.

Beaumont told Inner City Press that Ireland is “not too different from Florida, Nevada and California, where arrears rose quite high. There is something to be learned,” he said.

But what?

Beaumont said that the IMF “will be monitoring how the reform, removing an unintended barrier to repossession, how that impacts the actual number of cases moving forward and time taken to conclusion.”

Conclusion, it seems, is the loss of the home. Beaumont referred Inner City Press to the IMF's report under embargo until 11 am Wednesday, US East Coast time (4 pm in Dublin, from where Beaumont spoke). We'll have more on that. Watch this site.

April 1, 2013

IMF Defensive on Cyprus & Lagarde Legal Bind, Ignores Africa, Sudan & Tunisia: Then Answers

By Matthew Russell Lee

UNITED NATIONS, March 28, updated -- The seizing of bank deposits in Cyprus was not surprisingly the main focus of the International Monetary Fund's bi-weekly embargoed press briefing on Thursday.

In a careful worded and repeated response, IMF spokesperson Gerry Rice called the situation in Cyprus “complex and unique in nature” and said the precedent of savings account levies would be “difficult to extend to the rest of Europe and the world.”

Rice was asked, but does the IMF want to extend it? Reference was made to Spain and Portugal. Rice repeated the same line. It was reminiscent of the claim that the Unilateral Declaration of Independence of Kosovo was “sui generis.”

Still non-Africa, Rice took questions about Ukraine (online) and on Slovenia, from Bloomberg. Tellingly, Slovenia's prepared to put an IMF-er in as its finance minister.

Rice was asked, diplomatically, about Christine Lagarde's “legal problems in France” and if the IMF's governing bodies had been briefed on them. Rice said she is able to continue her work, but would not discuss any briefing of the board.

Of the proposed BRICS development bank, Rice was asked though not by the Western wires. Rice said the IMF is following the challenge “with interest” since infrastructure in Africa is also of interest to the IMF.

Is it? Inner City Press submitted, by e-mail and twice through the IMF's Online Media Center, questions on Sudan and Tunisia. Receipt was acknowledged, but neither was read out much less answered. Infrastructure, indeed. Watch this site.

After not taking the question, afterward an IMF spokesperson replied to Inner City Press:

We welcome the recent security and oil-related agreements between the two countries, which could enable South Sudan’s oil production to resume and relieve the economic pressures that have been building up since oil was shutdown in January 2012. The Fund stands ready to continue supporting both countries going forward.

We are providing policy advice to the Sudanese authorities that would allow them to address the domestic and external imbalances, which resulted from the secession of South Sudan. The Fund is also providing well targeted technical assistance in key areas like tax policy and administration, public financial management, banking sector reforms and exchange rate reforms.

As you know, we have also launched a three-year capacity building program for South Sudan on key areas including foreign exchange issues, central banking, oil revenue legislation, non-oil taxation, expenditure management, and macroeconomic statistics.

And later at 1 pm, this came in on Tunisia, from an IMF spokesperson:

The fuel price increases that came into effect earlier this month are part of the measures underlying the 2013 budget that was approved by Parliament last December. These increases would help ensure that spending on subsidies, particularly on energy products that benefit mostly the better-off, are contained. A better targeted social safety net, as part of a larger subsidy reform, should be put in place to mitigate the impact on poorer households.”

And then a link! Hi Matthew, Please find below the link to the subsidies reform paper that was drafted by the IMF and includes examples and statistics for countries across the region. It was launched yesterday

March 25, 2013

Florida dealing: On March 22, Boca Raton, Fla.-based 1st United Bancorp bragged it entered into a definitive agreement to buy North Palm Beach, Fla.-based Enterprise Bancorp Inc. in a deal valued at about $45 million. 1st United Bancorp and unit 1st United Bank ($1.56 billion), will TRY TO acquire Enterprise Bancorp and its subsidiary, Enterprise Bank of Florida ($233.4 million). Note that: TRY TO.

To see TD Bank challenged for funding the Keystone XL pipeline does good for the soul.

March 18, 2013

So the Securities & Exchange Commission has allowed Citigroup, JPMorgan Chase and Bank of America to block shareholders' proposals that directors explore the break-up of these banks. Strange, after the financial meltdown and bailouts...

In Tunisia, IMF Asks of Ennahda Government's Mandate, of Sri Lanka Moody's

By Matthew Russell Lee

UNITED NATIONS, March 14, updated – The engagement of the International Monetary Fund in what's called the Arab Spring remains halting – or halted.

On Thursday Inner City Press asked IMF deputy spokesman William Murray, “In Tunisia, what is the status of IMF programs in light of unrest including over reduction of subsidies and rising prices, and the now shorter-term government?”

  During the IMF's embargoed briefing, Murray replied that our negotiations for a precautionary stand-by arrangement are ongoing on a technical level. As you noted, a new government has been formed. Staff is now inquiring about its intention and mandate.

The new government, including Ennahda, says it will only stay in power until elections later this year. What mandate does it have?

Taxi drivers are set to go on strike on March 18. The Tunisian Organization for Consumer Protection has called for protests against fuel price hikes.

In late February, Moody’s Investors Service joined other rating agencies, cutting Tunisia’s credit rating to near junk status.

Inner City Press has asked the IMF another question about Moody's: “On Sri Lanka, now Moody's says, 'A new IMF funding program would have helped build up foreign reserves.' How does that square with IMF's previous answers about no new program? (Moody's report is called 'Sri Lanka — The Post-IMF Backdrop: Downward Growth Pressures and Elevated External Pressures.')”

Inner City Press has also asked, among other questions, for the IMF's comment if any “on the arrest of former IMF VP Goodall Gonde in Malawi.”

From the IMF's transcript:

MR. MURRAY: That's obviously to be discussed. I don't have guidance on that. Let me get to a couple of questions here on the Media Briefing Center and then I'll get back to you. Let me read it out:

INNER CITY PRESS: "In Tunisia, what is the status of IMF programs in light of unrest, including reduction in subsidies and rising prices, and now a short-term government?"

MR. MURRAY: Negotiations for a precautionary Stand-By Arrangement are ongoing at a technical level with the Tunisian authorities. As you noted, a new government has been formed and staff is now inquiring about its intentions and mandate. In any case, the IMF continues to stand ready to help Tunisia in any way deemed necessary during this difficult political transition process.

Update: this was answered, after the embargo time, with this: "regarding your comments, we have no comments on the Gondwe case." But a former IMF official is charged with treason and plotting a coup... On Sri Lanka, this:

"Matthew: We have nothing more to offer than what I mentioned in my last email to you—along with the latest press release I attached.  A bit puzzled by your question—and not sure where you are headed.

An IMF-supported program could have helped Sri Lanka build up their reserves and, more importantly, boost market confidence. The mission and the authorities explored the possibility of a new IMF program designed to build on Sri Lanka’s achievements under the SBA. Productive discussions took place on a number of issues, including further fiscal and related reforms that would consolidate and extend these achievements.   However, the authorities announced that they were not continuing negotiations with us since they wanted our assistance only if it was in the form of budget support, which we were not able to provide. From our side, we had some concerns about the budget, and in particular about weak government revenues, that would in any case have required substantial further discussion. The mission and the authorities will stay in close touch and continue the close partnership between Sri Lanka and the IMF. "

But on February 14 the IMF told Inner City Press, "In view of Sri Lanka’s ready access to international capital markets, IMF financial support for Sri Lanka’s budget is not required at this juncture." Now even Moody's says different. Where is this going?

March 11, 2013

Sleazeball on the move? New York Community Bancorp is reportedly checking out Pasadena, Calif.-based OneWest Bank FSB, successor to IndyMac. The owners of OneWest, reported to include John Paulson and George Soros, first looked to U.S. Bancorp and UnionBanCal. NYCB? Bad news...

March 4, 2013

Regarding BankUnited, “BDO observed that for early certificates there was a weakness in the controls over the review process for single-family asset charge-offs. BDO identified one charge-off that was overstated by $501,272.” They're also involved in a brouhaha with Universal Health Care Group Inc. on Feb. 13 blasting Bank United as "irrational," "poorly conceived" and "unnecessary" the demand by BankUnited NA to liquidate the stock in several health insurers through a "foreclosure sale.” So why are they being allowed to expand in New York? Watch this site.

February 25, 2013

In Panana, HSBC aims to sell off its banking operations to Bancolombia SA for $2.1 billion in cash, saying it will close in the third quarter. We'll see. Antonio Losada, CEO of HSBC Latin America, said HSBC Bank (Panama) is being sold so the bank can focus on its core markets of Brazil, Mexico and Argentina. Yeah, right...

February 18, 2013

A deal we will be looking at is Renasant Corp's proposal to acquire Kosciusko, Miss.-based First M&F Corp - they say they'd close at least seven branches, we'll start on that issue. Watch this site.

February 11, 2013

Customers Bancorp, trying to buy Acacia, is getting grilled over several rounds by the Federal Reserve, following ICP/Fair Finance Watch's comments. The answers don't seem to be convincing the regulators. Yet Customers wants to buy more and more.

Miami-based Pacific National Bank, $355.0 million, controlled by the government of Ecuador, is up for sale, according to SNL Financial. We may have more on this one – and definitely on Customers.

Feburary 4, 2013

So at Capital One, is Richard Fairbank ready to hit the road? The hiring, from outside, of new CFO Stephen Crawford has set off that theory. Critics of Capital One's subprime lending practices (and add-ons through venders) should know: it was Crawford who advised Fairbank on buying HSBC's subprime card operations....

As IMF Stops $240M DRC Loan for Opacity, UN Stonewalls, Waits for Drones

By Matthew Russell Lee

UNITED NATIONS, January 31 -- The UN has been in the Democratic Republic of Congo for well over a decade, back to Dag Hammarskjold, in fact. And what has come of it?

   On Thursday Inner City Press posed Congo questions to the UN in New York, after the International Monetary Fund in Washington.

   During the IMF's embargoed morning briefing, Inner City Press asked about the IMF's freezing of $240 million in loans to the lack of transparency in the mining industry, which involves ENRC, Glencore and, of course, Freeport-McMoRan.

   An IMF spokesperson responded, before 11 am, "Hi Matthew, On your DRC question, the ECF arrangement expired on December 10, 2012... it was not extended as requested by the authorities because published information related to the transfer of mineral assets by a state-owned enterprise, which was considered necessary to complete the review, was deemed insufficient by the IMF."

   Then at the UN's noon briefing, Inner City Press asked about the UN's and now the DRC's delayed investigation into 126 rapes in Minova by the Congolese Army in November. UN deputy spokesperson Eduardo Del Buey would not explain by UN Peacekeeping chief Ladsous' statement that the probe would be finished in January is not being abided with. Video here, from Minute 6:54.

   But from what spokesman Del Buey said, it's again clear the UN is relying on and supporting Congo's government, no matter what. Inner City Press asked about two new leaked e-mails from inside MONUSCO, about its patrols on the Rwanda border.

   Del Buey said the UN would not comment on documents "that may or may not have been leaked" to Inner City Press -- despite the UN's MONUSCO mission just the day previous saying that the Press should check with the UN about such documents.  Video here at Minute 13:34. Transparency, anyone?

  Would the IMF lend to its UN family (dysfunctional) sibling UN Secretariat and Department of Peacekeeping Operations?

  Nor, five hours after the briefing, has Del Buey explained why Ladsous' supposedly urgent drone request will not be opened until the second part of March.

   Inner City Press put the same drone question, and one about the failure in Addis Ababa of Secretary General Ban Ki-moon's DRC framework, to outgoing Security Council president Masood Khan on Thursday afternoon.  Video here, from Minute 7:27.

  He called the differences in Addis "procedural," and deferred on the drone question. But at least he answered, all month, unlike Ladsous.  For the six minute beta #LADSOUS2013 video, click here. Watch this site.

January 28, 2013

After Capital One CFO Gary Perlin said "suppression in the third quarter benefited meaningfully from the effect of the remaining [Statement of Position] 03-3 mark on delinquent loans acquired from HSBC," Capital One announced it will return to the ABS market for the first time since 2009. So how good were those HSBC subprime and ING DIRECT acquisitions? Watch this site.

January 21, 2013

In Greece, IMF Presses For NBG-Eurobank Merger, to 40% Market Share

By Matthew Russell Lee

UNITED NATIONS, January 18 -- The International Monetary Fund has been known to press for the privatization of banks. But in Greece, as reflected in the IMF Staff Report released at 10:30 am today, the Fund is actively cheering on anti-competitive mergers, including to create a bank with a 40% market share of deposits.

Whatever happened to antitrust, and consumer protection?

The IMF's Staff Report breathlessly reports that "the system is also consolidating to lower costs. Two smaller banks were acquired by two core banks, and merger steps between two large banks, NBG and EFG, are now underway."

Bank mergers are not automatic - regulators are required to review them, including for antitrust. But the IMF goes on to state that "the authorities will allow the NBG-Eurobank merger to proceed. This could have significant business and funding advantages."

After some brief cautionary language, the IMF relies on the "EC’s DGCompetition [to] review the anti-trust aspects of the deal."

So does the IMF, which pushes for and praises this making of monopolies, have no antitrust or consumer protection duty at all? Watch this site.

Footnote: the IMF's Staff Report on Portugal will be released at 12:30 pm, Washington time, today.

January 14, 2013

Profile of HSBC, in its US headquarters city, from Reuters:

"When the housing market crashed, so did Volker's contractor business, and he was unable to keep up with payments on his barn-like two-story house in Buffalo, New York. His mortgage servicer, HSBC, foreclosed on the home in 2009. A few months later, while he was staying with his girlfriend, he stopped by the house to find an HSBC padlock on the doorknob and bank stickers plastered across the door. Shattered glass covered his front steps. When he crawled through a broken window, he found the place trashed - by whom, he doesn't know. Even the toilets were gone. Hearing nothing more from the bank, he figured the house was no longer his. The place continued to decay. Gutters tore loose from the eaves. The yard turned into a dump for balding tires. Volker's neighbors started complaining to the Buffalo Housing Court, which eventually tracked down Volker at the rental where the 49-year-old was living and ordered him to appear in court. That's when Judge Carney told him that he was still the owner. "I was stunned," Volker says. "I never for a moment thought I still owned this house."

"Volker worked with a realtor to try to get HSBC to take several short-sale offers - deals under which the bank would allow Volker to sell the house for less than the amount owed on it - but he says HSBC turned them down. Since then, he's been asking the bank to agree to a deed in lieu, whereby he would give the house back to the bank. So far, he hasn't been able to make that happen. He has $1,000 in water and trash bills and faces up to $30,000 in demolition fees if the city decides his house is a safety hazard and must be torn down. HSBC declined to comment on Volker's case."


January 7, 2013

In the pending merger proposal of FirstMerit to buy Citizens Republic, FirstMerit tried to withhold nearly all of its submissions to the Fed. But through the Freedom of Information Act, Inner City Press has obtained some of the withheld material, including about the two banks' "small amount of cross-border activities."

December 31, 2012

From the land of dirty deals, Investors Bancorp is gunning to buy Roma Financial Corp in New Jersey. Investors is in New York as well, and its record is disparate. We'll have more on this.

December 24, 2012

Talk about sleaze: EZCORP Inc. on Dec. 20 announced the completion of several acquisitions, including its previously announced purchase of online lender Go Cash. The acquisition was part of a share placement by Cash Converters and preserves EZCORP's ownership percentage at about 33%, according to SNL Financial. The company also moved into the Arizona market through its acquisition of 12 USA Pawn & Jewelry stores in Tucson and Bullhead City.

Bottom feeders...

December 17, 2012

So HSBC settles for money laundering for drug dealers, but there's no criminal sentence, no jail time, nothing. Meanwhile, SNL Financial reports that "Synovus Financial Corp.'s bulk sale of distressed assets as a net positive that could boost interest in the company as an M&A target. On Dec. 13, Columbus, Ga.-based Synovus announced the completion of a bulk sale of distressed assets. Including this transaction, the company expects to sell distressed assets."

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

December 10, 2012

If Spain's Bankia tries to sell Miami-based City National Bank of Florida, well, "there will be blood," given that bank's disparities. Watch this site.

December 3, 2012

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

By Matthew Russell Lee

UNITED NATIONS, November 29, updated -- The International Monetary Fund is much in the news, and not only on Greece and Egypt.

  But Press questions submitted to the IMF for its Thursday briefing questions on Rwanda, Bosnia, Hungary, Sudan and South Sudan, as well as a long IMF dodged question on Sri Lanka.And none, by deadline, were answered. Here were the questions:

On Rwanda, Mr. Shinohara's statement did not directly mention aid cuts offs amid the M23 controversy. What *is* the IMF's position on that?

On Sudan and South Sudan, how does Khartoum's announcement that no South Sudan oil can flow through for now impact the IMF's views and programs?

In Bosnia, will the opposition boycott of one of the regional governments impact the IMF's relationship and program, impacting public servants getting paid, as Bosniak-Croat federation prime minister Nermin Niksic has said? [Update: this was later answered

IMF Spokesperson: “During the mission earlier this month, staff had reached agreements with the authorities in Bosnia and Herzegovina on government budgets for 2013 that are consistent with the objectives of the Stand-By Arrangement. Once these budgets are adopted by the respective parliaments, we can proceed with presenting the first review under the arrangement to the IMF’s Executive Board.”]

On Hungary, what does the IMF think of the country's new foreign currency bond plan? Does it mean no IMF program any time soon?

On Egypt (obviously), what is the effect of Morsi's moves on the IMF program?

  Gerry Rice, spokesman, ran the briefing mostly "in the room," taking an online question on Argentina and the New York court ruling, on which he would not comment. But how about this?

The International Monetary Fund lent into Sri Lanka's military build-up, then when challenged tried to downplay it.

  Two weeks ago, Inner City Press asked the IMF to comment on the Rajapaksa government's new 2013 budget, which reportedly has $2.2 billion for defense / "urban development," a 26% increase over 2012. Inner City Press asked, "Given past IMF claims defense spending was not rising, what is IMF comment now?"

  The IMF did not give a substantive response, but a spokesperson replied, "On Sri Lanka, the 2013 budget is expected to be finalized and presented in early November (we understand November 8). We have not yet seen the 2013 budget, and thus would not be in a position to comment at this time."

  The spokesperson, asking to be identified as such, told Inner City Press "it would be the best if you could follow up on this later this month."

  And so at the IMF briefing two weeks ago and today, after the Sri Lanka budget was released, Inner City Press asked again: "On Sri Lanka, now that the budget is out: given past IMF claims defense spending was not rising, what is IMF comment now?"

In light of news all over the world this month, Inner City Press also asked, "in light of this week's UN report on its failures in Sri Lanka during the killings in 2009, does the IMF as a member of the UN system have any review of or comment on its performance with regard to the killings, accountability and defense spending in the country?"

  But during the IMF's embargoed briefing two weeks ago and this morning, alongside question after question on Greece, no answer was given. [Update: the Sri Lanka question was later answered, below]

   What about the fortnight old questions on Mali and Romania which Inner City Press submitted, and those above, through the IMF Media Center and by email?

   Inner City Press e-mailed again, asking for an explanation before deadline / embargo time. None was received. Then later, these, which we publish in full:

On Sri Lanka:

IMF spokesperson: "The 2013 budget envisages only a moderate increase in defense spending, less than the budgeted increase in total spending and below the projected growth of GDP. As a result, the share of defense spending in total spending and in GDP is declining. This is a welcome development, in line with the Fund recommendation to gradually reduce the defense spending and create room for increased capital spending."

Question: In Bosnia, will the opposition boycott of one of the regional governments impact the IMF's relationship and program, impacting public servants getting paid, As Bosniak-Croat federation prime minister Nermin Niksic has said?

IMF Spokesperson: “During the mission earlier this month, staff had reached agreements with the authorities in Bosnia and Herzegovina on government budgets for 2013 that are consistent with the objectives of the Stand-By Arrangement. Once these budgets are adopted by the respective parliaments, we can proceed with presenting the first review under the arrangement to the IMF’s Executive Board.”

Hurricane Sandy's impact: the New York Department of Finance Services went weeks without issuing a Weekly Bulletin of merger applications. So the Apple - Emigrant comment period must still be open, right? Especially since the Department only now acknowleged receipt of Inner City Press' Freedom of Information Law request for a copy of the application, and STILL hasn't provided it...

November 26, 2012

So Citizens Republic "would have to improve its operating metrics and be able to participate in FDIC-assisted deals. However, in the spring of 2012, concerns surfaced that due to "the uncertain economic recovery, a continued low interest rate environment, fewer opportunities for accretive FDIC-assisted transactions and increasing regulatory compliance costs," it would be more difficult than expected to achieve management's long-term goals. As such, Citizens decided to reevaluate its long-term plans in July 2012, hiring financial adviser J.P. Morgan Securities LLC to help with the process. J.P. Morgan initially provided a list of 15 potential strategic partners for the company. Citizens authorized J.P. Morgan to contact six of these companies on an anonymous basis to determine whether there was an interest in considering a potential strategic transaction," per SNL Financial.

Must have been hard to figure out which the "anonymous" target was. And there was FirstMerit. And now, here's the challenge. Watch this site.

November 19, 2012

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

Reviewing 2011 HMDA data, the more recent data available (and largely unaddressed in existing CRA performance evaluations and fair lending exams), in the Akron MSA that year for conventional home purchase loans FirstMerit Bank made 140 such loans to whites, and only 12 such loans to African Americans (and only two to Latinos). It denied African Americans 1.97 times more frequently than whites; it denied Latinos 2.63 times more frequently than whites.

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

In the Cleveland MSA in 2011 for conventional home purchase loans FirstMerit Bank made 163 such loans to whites, and only THREE such loans to African Americans (and NONE to Latinos). It denied African Americans 2.02 times more frequently than whites; it denied Latinos 3.54 times more frequently than whites.

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

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

For the record, and in support of ICP's request for a hearing, there are integration worries:

Standard & Poor's Ratings Services on Sept. 13 revised its outlook on Akron, Ohio-based FirstMerit Corp. to negative from stable, believing the company's deal to acquire Flint, Mich.-based Citizens Republic Bancorp Inc. could pose integration and risk-management difficulties...The transaction is the largest acquisition in FirstMerit's history. The rating agency further noted that though Michigan and Wisconsin are to a large extent similar to FirstMerit's traditional market of Ohio, they present new challenges and potentially different competitive dynamics.

If the integration is unsuccessful, unexpected asset quality problems exceeding the marks taken at the time of the acquisition rise, or risk-adjusted capital falls below 7%, the ratings could be cut. On the other hand, in the long term, if FirstMerit effectively grows in these new markets, S&P could revise the outlook back to stable.The agency does not expect to upgrade the ratings in the near to immediate term.

Moody's shared a similar perspective of the deal Sept. 13.

Despite this, FirsMerit is already talking about further acquisitions, with Executive Vice President and Chief Credit Officer William Richgels telling analysts that "We are going to be keeping in touch with those that we have been speaking with, and we're going to continue to evaluate other opportunities for growth."

There is also litigation. According to SNL Financial:

Flint, Mich.-based Citizens Republic Bancorp Inc. ($9.67 billion); its board; and Akron, Ohio-based FirstMerit Corp. ($14.62 billion) are facing four class-action lawsuits for allegedly having breached their fiduciary obligations to shareholders in relation to their stock-for-stock merger agreement, reported.

The approximate value of $22.50 per Citizens Republic share — which Citizens shareholders are to get when exchanged with 1.37 shares of FirstMerit under the agreement — has dwindled because of FirstMerit's receding share price, the lawsuits claim.

One lawsuit, by Cecily Hoogerhyde, said FirstMerit had been trading at more than $17 per share before the announcement, which then decreased to as low as $14.94, "causing the implied consideration to drop nearly 10[%], to less than $20.50 per share" as opposed to the original implied value of $22.50, which the lawsuit said was also "inadequate," according to the Oct. 10 report.

The other lawsuits were filed by Michael Decker, Peter Block and a fourth, unidentified plaintiff, the news outlet reported.

The cases have been lodged in the 7th Circuit Court in Genesee County, Mich., before Circuit Court Judge Richard Yuille

On the current record, FirstMerit's applications should not be approved.

November 12, 2012

  And now it can be said - this was filed:

November 2, 2012

Southern District Office
Director for District Licensing
500 North Akard Street, Suite 1600
Dallas, TX 75201

RE: Timely Opposition to BankUnited's application to acquire Herald National Bank

Dear Director for District Licensing:

Inner City Press / Fair Finance Watch has serious concerns about BankUnited’s proposal to acquire Herald National Bank and its branches in affluent Manhattan and suburban Long Island, as well as to open four branches in New York -- three in the most affluent parts of Manhattan and one in suburban Suffolk County, totally excluding upper Manhattan, The Bronx, Brooklyn and Queens.

Our organization and several NCRC members in Florida have raised concerns in connection with BankUnited currently underway CRA exam -- these applications for branches in affluent parts of New York should be postponed until that exam is finished and public; right now, they should be denied.

As recently as August, it's reported that BankUnited is still entertaining offers to be bought -- all the while having put Herald National Bank "on ice" during non-compete litigation. Bank expansion applications subject to CRA shouldn't be allowed to be an enticement for wheeling and dealing, but to serve communities and public benefits. These do not.

It has been reported that BankUnited couldn't even make this proposed acquisition, and open these branches until February 1 -- we suggest that the applications be adjourned or withdrawn until then. For the record:

"Kanas settled a lawsuit from Capital One, which had accused him of violating a non-compete agreement in the New York market. By Feb. 1, BankUnited will be able to open branches in New York and more aggressively pursue clients and employees there.

And, now it’s clear exactly where those branches would be.

The applications received by the Office of the Comptroller of the Currency on Sept. 27 state that BankUnited wants to open branches at 299 Park Ave., 136 E. 57th St. and 960 Avenue of the Americas in New York City. It also wants a branch in Long Island at 445 Broadhollow Road in Melville.

Herald National Bank, which will be merged into BankUnited soon, already has branches at 623 Fifth Ave. in New York City and at 58 S. Service Road in Melville.

At the same time, BankUnited notified the OCC about three branch closures in Florida. It closed two branches in Port St. Lucie on Sept. 28 and plans to shutter a branch in Sun City Center in Hillsborough County in the coming months."

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

Inner City Press / Fair Finance Watch is concerned about the following data about BankUnited, which has been collected by NCRC  and provided to members and partners at their request: In Miami-Dade County, BankUnited made just 9.8 % of its home loans to low- and moderate-income borrowers in 2010 and decreased it lending to 8.8% in 2011. By contrast, all lenders, as a group, issued 16.5% of their loans to LMI borrowers in 2010 and 17.6% in 2011.

The lending data is even more striking when you consider that 39.3% of households in Miami-Dade County are low- and moderate-income.

In Broward County BankUnited made 30% of its loans to low- and moderate-income borrowers in 2010 but significantly decreased its lending in 2011 making just 6.3% of its loans to these borrowers. In contrast, all lenders, as a group made 26.9% of their loans to LMI borrowers in 2010 and 23.3% in 2011.

The lending data is even more striking when you consider that 38.8% households in Broward are low- and moderate-income.

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

BankUnited record of meeting the needs of African American borrowers is poor.

In Miami-Dade County BankUnited made just one loan to an African-American borrower in 2010 and zero in 2011.

In Broward County BankUnited made three loans to African Americans in 2010 and zero in 2011.

BankUnited is not serving the needs of low- and moderate-income neighborhoods.

The bank had poor lending distribution not just to low- and moderate-income borrowers but also to low- and moderate-income census tracts. The most recent data shows that BankUnited made 6.7% of its home loans to LMI census tracts in Miami-Dade during 2010 and then decreased this lending in 2011 to just 1.8%. In contrast, all lenders, as a group, issued 12.2% of their loans to LMI census tracts in 2010 and 11.0% in 2011.

In Broward the pattern continues with the bank making 10% of its home loans in LMI census tracks in 2010 and then decreasing to 4.2% in 2011. In contrast, all lenders, as a group, issued 10.7% of their loans to LMI census tracts in both 2010 and 2011.

According to the latest data, the bank does an adequate job of providing bank branches in low-income neighborhoods in Broward County. However, data indicates that the bank is not doing an adequate job of branching in low- and moderate-income neighborhoods in Miami-Dade County. In Miami-Dade County, the bank has just 18.2% of its branches in low- and moderate-income communities. In contrast, all lenders, as a group, have 23.5% of their branches in LMI neighborhoods. Furthermore, BankUnited receives just 6.2% of its deposits from LMI communities in the county. In contrast, all lenders, as a group, receive 24.2% of their deposits from LMI neighborhoods during 2011. This may be an indication that the bank needs to better advertise its deposit products and services to LMI communities in Miami-Dade.

According to the most recent Call report data, BankUnited had approximately $4.8 billion in loans and $7.4 billion in deposits for a loan-to-deposit ratio of 64 percent, which is low for a bank with approximately $11.8 billion in assets. Also, it is a full 10 percent lower than the Florida Section 109 loan-to-deposit ratio of 74 percent for all banks headquartered in Florida (Section 109 is a federal regulatory assessment of how a bank’s loan-to-deposit ratio compares against the ratio of other banks on a state level).

The OTS’ previous exam gave BankUnited a Low Satisfactory rating on the lending test. The 2010 and 2011 data suggests that BankUnited merits a downgrade in its lending rating from Low Satisfactory to Needs to Improve because of low lending levels and a poor distribution of loans by income of borrower. The minimal lending levels to African Americans are a fair lending concern that must be rigorously evaluated on the fair lending review accompanying the CRA exam. In addition, the paltry lending volumes suggest that BankUnited’s overall rating should change from Satisfactory to Needs-to-Improve since its branches are collecting deposits but then not lending.

Collecting deposits and not lending on a level commensurate with deposits is one of the classic forms of redlining and neglect of the community’s credit needs.

These applications to acquire Herald National Bank, and for branches in affluent parts of New York should be postponed until that exam is finished and public; right now, they should be denied.

Thank you for providing us with an opportunity to comment on this important matter.


Matthew Lee, Esq., Executive Director
Inner City Press / Fair Finance Watch

November 12, 2012

Fed Met M&T 10 Days Before Hudson Deal, FOIA Shows, Appeal & Protest

By Matthew R. Lee, Exclusive

SOUTH BRONX, November 9 -- When M&T on August 27 announced biggest bank merger deal of the year, a $3.81 billion proposal to buy Hudson City Savings Bank, it was not the first time the Federal Reserve had heard about.

  Inner City Press, which has challenged M&T's application under the Community Reinvestment Act, on November 9 got a belated Freedom of Information Act response from the Federal Reserve Board, less than two hours before the Fed said the extended comment period would close.

  The documents released to Inner City Press show that on August 17, a full ten days before the public announcement, Federal Reserve Bank of New York official John Ricketti wrote to five others within the Fed:

"Wilmers called me this afternoon to inform me that M&T is looking to acquire M&T. [sic] He will be talking to his board about the acquisition at next Tuesday's board meeting and asked to come in Wednesday to talk to us (we're setting something up for late Wednesday afternoon). I'll be up in Buffalo for the board meeting to discuss the [REDACTED] and expect to learn more from him Monday night (I have a one-on-one meeting with him)."

  After that, much is redacted. Click here to view.

   The Fed advised M&T that its application to buy Hudson would probably be protested -- accurately, given that Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans.

  Of this, a Fed memo of August 24 said "this will require review of any issues that are raised and [REDACTED].

 To view, click on cover email, and talking points One and Two.

  After the August 17 contact but before the proposal was announced, the Fed met on August 22 from 4:30 to 5:30 with "Wilmers" and Rene Jones, Michael Pinto and outside council Rodgin Cohen.

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

  After the meeting, the New York Fed's Ivan Hurwitz sent a memo to the Fed in Washington, most of which has been blacked out.

  On August 24, the Fed's John Ricketti wrote another memo, with talking points, about his meeting with Rodgin Cohen and Rene Jones, much of its redacted.

Then on August 27, Cohen [Rodge] called the Fed's Tom Baxter, and Wilmer called "Dudley," both summaries redacted.

After the deal was announced, M&T had more meetings with the Fed on September 7. Only after they submitted an application did Inner City Press submitted a FOIA request on October 2, and an initial protest, on October 7.

Now Inner City Press has timely requested a further extension of the comment period, to review the documents so belatedly released, and to appeal what is being withheld.

Withheld is the substantive part of "Confidential" Exhibit O, what M&T will actually PAY to Merger Sub, and nearly all of the anti-money laundering program, material changes and due diligence findings. The Board Resolutions and Agreement and Plan of Merger are all blacked out, which is ridiculous.

  Since the announcement, Super Storm Sandy hit, and SNL Financial reported the Hudson City "said it was still too early to determine how many of its mortgage loans were located in tidal flood zones."

  Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 44 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

Picking up on the challenge, the Buffalo News contacted M&T for its comment. M&T spokesman C. Michael Zabel countered that "we support community-based organizations."

But reporting by Inner City Press find this questionable, throughout M&T's footprint down to Virginia. M&T's next move was to reach out to friendlier media and announce that its merger application is proceeding - without mentioning the protest or why it was reaching out.

Similarly, M&T hyped up after the protests it celebration of Hispanic Heritage Month at its Newburg, New York branch, and got it reported without any mention of its lending record, much less the challenge.

But at least on M&T, the word got out in New York and New Jersey, where Hudson is based. Watch this site.

November 5, 2012

Six purported shareholders of Citizens Republic Bancorp Inc. filed class-action lawsuits against FirstMerit Corp. in September and October alleging the proposed merger price and terms for the Flint, Mich.-based company are unfair, according to both companies' Form 10-Qs.

The lawsuits, filed in Circuit Court of Genesee County in Michigan, also allege Citizens' directors failed in their fiduciary duties by approving the transaction. They seek an injunction to or rescissory damages and other equitable relief.

By name, as reported by SNL Financial, the suits are: Hilary Coyne, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.; Vladimir Gusinsky Living Trust, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.; Cecily Hoogerhyde, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.; Michael Decker, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.; Robert Block, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.; and Blair Cole, individually and on behalf of all others similarly situated v. Citizens Republic Bancorp, Inc.
  We'll have more on this.

October 29, 2012

BankUnited in Florida has applied to open four branches in New York: three in the most affluent parts of Manhattan, and one in suburban Suffolk County. Not only is this redlining, it also jumps the gun: due to a non-compete clause and settlement, the branches couldn't even be opened until February of 2013. Inner City Press has commented - receipt confirmed - asking for the applications to be suspended or withdrawn pending among other things a review Florida NCRC members have requested. We'll have more on this.

October 22, 2012

In the UK, according to SNL Financial, "the Parliament's Treasury Select Committee on Oct. 19 released a report stressing the need for the new Prudential Regulation Authority to have the power to approve large bank mergers. The committee made the recommendation that the government explicitly legislate for the new agency to have that power in a report that concluded that the FSA 'should and could have intervened' in the disastrous acquisition by Royal Bank of Scotland Group Plc of ABN AMRO Group NV in 2007. RBS needed a £45 billion government bailout following the acquisition. The Prudential Regulation Authority is one of two successor agencies to the FSA due to begin operations in 2013."

And what changes should be made in the USA?

October 15, 2012

Predatory rewarded: the FDIC received 20 bids for failed Bloomington, Minn.-based First Commercial Bank, according to a bid summary last updated Oct. 9, reported by SNL Financial. State regulators closed First Commercial Bank on Sept 7. The FDIC-selected winner, Louisville, Ky.-based Republic Bank & Trust Co. ($3.17 billion), placed an all-deposit, whole-bank bid with an asset discount of approximately $79.4 million. And while, as per FDIC rules, the details of the second-place bid — also known as the cover bid — were omitted from the disclosure, the other nonwinning bids offered asset discounts ranging from $34.9 million to about $126.8 million.

Why would the FDIC, which purported to beat up on Republic for predatory / tax refund lending through Jackson Hewitt and Liberty Tax, now give it another bank without any application subject to public comment?

October 8, 2012

On Rwanda, IMF Tells ICP It Studies M23-Related Delay in Aid Until Next Week

By Matthew Russell Lee

UNITED NATIONS, October 4 -- For at least three weeks Inner City Press has asked the IMF "On Rwanda, does the cutting of aid based on alleged support of M23 rebels in DRC have any impact on IMF analysis of or programs in the country?"

   Finally as the last question at the IMF's October 4 media briefing spokesman Gerry Rice took the question. He replied, "An IMF mission is in Rwanda... Delays in aid disbursement is one of the issues the mission is looking into. We expect the mission to complete its work early next week and we will issue a press release at that time."

   At the UN, there was a flurry of activity on the Democratic Republic of Congo and its neighbor, Rwanda in September but as noted the topic is not even listed on the agenda of the Security Council for October.

  After last week's closed-door mini summit on the topic at the UN, Inner City Press was told that the most vocal in pushing sanctions against Rwanda was Belgium, for the allegations of support to the M23 mutineers made in the UN report coordinated by Steve Hege, whose 2009 writings about the FDLR and Rwanda have yet to be explained (they were taken off the Internet after Inner City Press linked to them).

  On Tuesday Inner City Press asked income Security Council president Gert Rosenthal of Guatemala why DRC is not on the agenda, is it just on hold? Video here, from Minute 22:48.

  Rosenthal told Inner City Press that on "Eastern DRC, the Security Council has been waiting for some type of agreement among the Great Lake governments, so far it has not come forth."

  Referring to Inner City Press' question he said, "the way you put it, the topic being on hold, is an accurate reflection of where we are right now. The situation is not good, and that is the reason we are reminding ourselves in the footnote that the topic may come to us this month, though not specifically scheduled." Watch this site.

From the IMF's October 4, 2012 transcript:

There is another question on Rwanda, "Does the cutting of aid based on alleged support of rebels in DRC have any impact on IMF analysis or of programs in the country?" I can say an IMF mission is in Rwanda to conduct a fifth review under the Policy Support Instrument and the discussions for the 2012 Article IV consultation. To answer Matthew directly, delays in aid disbursements is one of the issues the mission is looking into. We expect the mission to complete its work early next week and we'll issue a press release at that time.

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

By Matthew Russell Lee

UNITED NATIONS, October 4 -- Just before Sudan spoke last Saturday at the UN General Debate, the IMF "encouraged the authorities to step up their dialogue with creditors and donors to garner support for debt relief." Sudan's arrears to the IMF itself are part of the problem.

  Sudanese foreign minister Ali Karti in his September 29 speech called for debt relief. At the IMF's next media briefing on October 4, Inner City Press asked two questions on Sudan:

"In the UN General Debate, Sudan's Foreign Minister Ali Karti said the country's debts should be forgiven. Any response? Do Sudan's and South Sudan's agreements last week in Addis Ababa have any impact on IMF analysis of or programs in either country? Any IMF comment on the agreements?"

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

"The Fund welcomes the agreement on oil related and other issues between the two countries. We look forward to its implementation and to the resolution of other bilateral issues. The Fund stands ready to continue supporting both countries going forward."

But what support does the IMF give to Sudan? What about Ali Karti's call for debt relief?

Thursday in the UN Security Council, one of the "unresolved bilateral issues," Abyei, was to be discussed. Watch this site.

From the IMF's October 4, 2012 transcript:

"In the U.N. general debate Sudan's foreign minister said the country's debt should be forgiven in response. Do Sudan's and South Sudan's agreements last week in Addis have any impact on IMF analysis or programs in either country? Can you comment on those agreements?" My comment would be that the Fund welcomes the agreement on oil related and other issues between the two countries and we look forward to its implementation and to the resolution of other pending bilateral issues, and the Fund stands ready to continue supporting both countries going forward.

October 1, 2012

On LIBOR, and only after a Freedom of Information Act appeal, we have received this:

From: Jose Alonso
To: jeremy c kress
Cc: stanley crisp; Mark Baker; David Goode
Date: 07/10/2012 06:08 PM
Subject: Fw: Mitsubishi UFJ Said to Suspend Two London Traders on Libor Probe


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

I told Bob that BOG staff was interested in the status of the investigations as part of our application review process.

At the end of the email he expresses concerns as to the impact of this line of inquiry on the SBBT application an offers to meet with you and other interested parties. I will assume that you would invoke ex-parte concerns on such a meeting.

Yes, such a meeting would have, and perhaps did, violate the Fed's rule against ex-parte communication. No summary of the meeting was provided, at least along with Governor Jay Powell's September 25 FOIA appeal ruling...

September 24, 2012

Back in April, Inner City Press / Fair Finance Watch filed comments with the FDIC opposing GE - MetLife bank. Now there's this, from SNL Financial:

"GE Capital Retail Bank, a unit of General Electric Co., will acquire approximately $7 billion in deposits from MetLife Bank NA, rather than GE Capital Bank. According to a Form 8-K filed Sept. 21, most key terms of the 2011 agreement remain unchanged. However, the amended transaction will be subject to regulatory approval by the OCC, and approval by the FDIC will no longer be needed. Upon completion of the sale, MetLife Bank will terminate its deposit insurance and MetLife Inc. will deregister as a bank holding company."

This is a scam. We'd hope to hear about it from Tom Hoenig of the FDIC, for example.

September 17, 2012

FirstMerit's $1.3 billion bid for Citizens Republic might put FirstMerit into Michigan and Wisconsin, as well as closing branches in Ohio - but even the rating agencies are dubious about FirstMerit's abilities...

GE's proposed acquisition of the deposits of MetLife Bank, which ICP protested months ago, remains unapproved by the FDIC. Some are saying that, unlike other applications, it requires action by the FDIC board. We'll see.

September 10, 2012

The FERC has given Deutsche Bank Energy Trading 30 days to show cause as to why it should not be fined $1.5 million and required to disgorge $123,198 (plus interest) of unjust profits for allegedly manipulating California energy markets, SNL Financial reported. The agency on Sept. 5 alleged that employees of Deutsche Bank, including some at the senior level, developed a scheme under which the bank's traders asked the California ISO to schedule exports of power over the 17-MW Silver Peak intertie in order to eliminate import congestion. The bank would then profit from the move because it possessed congestion revenue rights for the intertie.

September 3, 2012

In a telling incipient deal, Société Générale SA said Aug. 30 that Qatar National Bank expressed interest in buying the 77.17% stake that the French bank controls in National Société Générale Bank in Egypt, SNL Financial noted. SocGen added that an application was filed with the Central Bank of Egypt for due diligence of the unit but added that the "discussions are preliminary and there can be no certainty as to whether an agreement will be reached." The Egyptian unit is based in Cairo and had 160 branches across the country as of year-end 2011, according to its full-year 2011 report. It booked a full-year 2011 net profit of 1.49 billion Egyptian pounds, up 11% year over year. Ah, Arab Spring..

August 27, 2012

As to Mitsubishi UJF, trying to buy Santa Barbara Bank & Trust, the Fed is trying to withhold whole paragraphs about LIBOR -- unacceptable. Watch this site.

August 20, 2012

  In the wake of the NYSDFS action against Standard Charter, Deutsche Bank is being looked at for similar money laundering for Iran and others.  In denial, Deutsche Bank spokeswoman Friederika Borgmann said the bank had decided by 2007 to stop engaging in new business with countries such as Iran, Syria, Sudan and North Korea and also exit existing businesses as far as legally possible. We'll see.

Meanwhile the New York State Department of Financial Services quickly filed and settled charges against Standard Chartered Bank for laundering money for Iran to evade sanctions against that country, the same NYSDFS has been remiss in its more local duties.

  A major New York bank franchise, Emigrant Bank, is up for sale to Apple Bank for Savings, but the NYSDFS appears asleep at the switch. The NYSDFS is rubbing stamping mergers and branch closings, and not responding to comments from the public.

  On August 6, Inner City Press / Fair Finance Watch submitted a timely challenge to the NYSDFS against a pre-merger branch closing by Emigrant. While not responding, the NYSDFS then provided notice of a merger application filed August 8, saying the comment period expired August 6 - click here to view.

 The NYSDFS has not explained this either. Can you say Kafka?

August 13, 2012

First, Brazil's Banco Itau was said to be interested in buying in the United States, looking at Royal Bank of Scotland's Citizens Bank franchise, or Santander - Sovereign or even BNP's Bank of the West. Then they denied it. But do they protest too much?

Past (and future?) CRA rogue WesBanco is buying into Pennsylvania...

August 6, 2012

Still sleazy: Community Bank System Inc. is closing five branches, three of which are former HSBC Bank USA NA branches divested by First Niagara. Among the remaining two, one of the branches is from among the three additional branches that Community Bank is acquiring from First Niagara. Supposedly the consolidation will be effective Sept. 10 and the consolidations will not result in any layoffs.

Green Dot just gave back much of its goodwill — and market value — in one 24-hour period. Green Dot shares lost 61.15% on July 27, prompted by management's decision to slash the firm's full-year guidance in anticipation of rapidly increasing competition.

Green Dot now expects just 5% growth in the average number of active cards, down from the greater-than-20% forecast provided in April. Cash transfer growth was cut as well, to 15% from 20% in the first quarter. The slowdown is likely to hit earnings hard, with the company forecasting 2012 EPS at $1.29 to $1.32, down from the original range of $1.65 to $1.70. That guidance cut marked the second time this year that Green Dot has softened its predictions.

"We see a greater level of uncertainty going forward in our business as our market and the prepaid industry in general continues to evolve," Chairman, President and CEO Steven Streit said on a July 26 conference call, monitored by SNL Financial...

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a FOIA request concerning withheld submission related the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust, which ICP timely protested.

Many of the applicants' submissions are being withheld, including directly on issues raised in ICP's timely protest. For example, and this is specifically requesting, a July 31 submission recites an FRB questions about Tax Refund Anticipation Loans (raised by ICP), and says "Please see Confidential Exhibit 1."

ICP is request that and the other withheld exhibits.

Similarly, in a July 24 submission, there is a question about Swiss regulators' inquiring into interest rate manipulation (that is, LIBOR scandal) - and it says "Please see Confidential Exhibit 2."

ICP is request that and the other withheld exhibits.

July 30, 2012

   Two of the vendors that sold the credit card add-ons cited in Capital One's settlement with the CFPB and OCC also do business with Wells Fargo, Citigroup and Bank of America: private equity owned Affinion Group Holdings, and Intersections, for which Bank of America is more than half of the company's income....

As IMF Briefs on Spain, Former Chief Rato Pushed Bankia to Bailout, Safeguards?

By Matthew Russell Lee

UNITED NATIONS, July 27 -- When the International Monetary Fund's mission chief for Spain James Daniel held an embargoed (until now) press call Friday morning, he was asked about the flame out of Bankia, which was chaired by former IMF chief Rodrigo Rato.

  While not followed up on the call, Rato's and now the IMF's role raise questions about the need for safeguards given the revolving door through which former IMF officials pass. Can former IMF-ers benefit from bail outs or "programs" of the the IMF?

  The story of Bankia and its IPO is an ugly and extensive one. The global co-ordinators on the deal were Deutsche Bank -- which, as Inner City Press has noted, has a former official now on the Federal Reserve Board -- J.P. Morgan, Bank of America Merrill Lynch, and UBS.

  The retail underwriters on the retail tranche were Bankinter, Sabadell and Barclays, now of LIBOR fame.

L'affaire DSK garnered worldwide media coverage. But what of financial scandals involving former IMF officials? Watch this site.

July 23, 2012

So just in the last week there are announcements of a credit union merger proposal in Washington State (Prevail and Harborstone), the buy-up of United Community Bnak in Texas, and of Inland in Ontario, California; there is CRA-challenged WesBanco making a move into Pittsburgh. And there is a proposed deal in New York we will keeping a close, close eye on. Watch this site.

July 16, 2012

HSBC is subject to a Senate hearing this week, on funding support for terrorism... JPMorgan Chase's losses mount, along with evidence of what Jaime Dimon knew and when he knew it...

Even without major nationwide news there are a lot of small regional deals, like

July 2: Montana, 7 branch deal

July 2: Maine deal

July 3: Illinois deal, Heartland and Farmer City

July 5: Kansas deal, Southern Kansas

July 5: Nebraska, Valley Bank

July 6: Texas, LubCo (Lubbock)

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

July 10: Maryland, federal savings bank deal

July 10: Texas: Comanche - Texas Savings

And that's just in 10 days. Overseas, HSBC is selling in Monaco and buying in Egypt, GE is selling, so is Santander in Latin America...

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

By Matthew Russell Lee

UNITED NATIONS, July 12, updated -- After a series of questions take by the Internation Monetary Fund on Thursday about Greece and Ireland, Portugal and Cyprus, Inner City Press' question about Angola and transparency was asked by spokesman Gerry Rice:

"On Angola, what is the IMF's response to requests that the IMF insist on an audit of the oil revenue unaccounted for from 2007 to 2011?"

  Rice had an answer prepared in his binder, from which he read, saying, "the IMF attaches great important to the transparency of governments in management of public finances."

  He said the IMF and Angola have "devoted efforts" in light of the "large discrepancies observed in this accounts since 2011."

  Rice claimed this has "produced important results" such as "highlighting factors underlying the discrepancies" and "promoting the introduction of institutional measures" for "accountability" for "Angola's oil revenue."

  But where did the money go, other than to real estate in and around Lisbon? Who is being held accountable?

  Rice continued that "the Angolan authorities say the intend to complete work" soon, that they "have adopted measure to address underlying problems."

  As to the IMF, Rice said that the "Board concludedyesterday its 2012 Article 4 consultations with Angola" and that "there will be more info on that discussion, a Public Information Notice" soon. We'll see.

  Inner City Press submitted two other questions, on Sri Lanka and Hungary. On the latter, the IMF half answered, that the authorities are requesting only a Stand By Agreement, "not a PLN."

July 9, 2012

Germany's Bafin is probing Deutsche Bank for LIBOR manipulation. DB's last quarterly report disclosed that the bank had received subpoenas and requests from regulators and government entities in the U.S. and Europe in connection with setting currency rates. Watch for mid-July...

July 2, 2012

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

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

By Matthew Russell Lee

UNITED NATIONS, June 28 -- The International Monetary Fund and its director Christine Lagarde often use Africa, or the idea of Africa, as a place that they vaguely help or at least care about.

But at Thursday IMF briefing, amid repeated questions about Greece, Cyprus, Spain and Hungary, not a single sub Saharan Africa question was taken, much less answered. It's not that they weren't asked. Inner City Press submitted questions about the Democratic Republic of the Congo and these, among others:

In Sudan, the IMF earlier this month urges the government to institute "emergency measures." Have the steps since announced, which have given rise to protests that have been cracked down on, been consistent or inconsistent with the IMF's advice?

Pledges to the IMF have given rise to questions & protests in South Africa, the Philippines and elsewhere, by those who say the money could be better spent at home on the poor. What is the IMF's response?

And again: What is the status of IMF programs in and reviews of Mali and Guinea Bissau, given coups in each country?

  But the IMF did not take the questions (in previous weeks, it has answered Inner City Press' questions about Sudan by email after the fact.)

  Now, the IMF gives austerity advice to Sudan, then when protests erupt, the IMF would answer or even take the question.

  A journalist ran in late, citing an interview at the American Enterprise Institute, and still got another answer on Greece. Perhaps it is Lagarde's guilt for telling Greeks to pay taxes when she doesn't. But what about those children in Niger? Watch this site.

June 25, 2012

While the CFPB may have tried to downplay it, Capital One had by far the most complaints against it, see and search for Capital One. We'll have more on this.

June 18, 2012

So Mitsubishi UFJ's application to acquire Santa Barbara Bank & Trust is now essentially amended to say at least five branches would be closed, in Gilroy, Hollister Main, Salinas-Harden Ranch, Watsonville and Lompoc. The policy is... confidential.

June 11, 2012

So the FDIC, even after the subprime meltdown, rules that GE Capital Financial Inc, buying the deposits of MetLife Bank, is NOT responsible for the predatory lending of WMC, because it "was a subsidiary of a different financial institution (GE Capital Retail Bank)." This hairsplitting is shameful -- and dangerous. Watch this site.

June 4, 2012

Deutsche Bank AG bragged that its special situations group won the auction for a $911 million loan portfolio being sold by two units of Capmark Financial Group: Midvale, Utah-based Capmark Bank and Capmark Finance LLC. Typically, DB did not reveal the price it paid...

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

By Matthew Russell Lee

UNITED NATIONS, May 31 -- The International Monetary Fund's biweekly embargoed press briefing on Thursday focused almost entirely on the protests to Managing Director Christine Lagarde's comments that Greeks should pay their taxes -- while she does not pay taxes -- and as one Greek journalist focused in on, her comparison of Greece and Niger.

  IMF spokesman Gerry Rice responded to this last by paying the IMF has to serve all of its members including the low income ones; he directed the press to Lagarde's clarification if not apology on Facebook. But is it enough?

  The questions on Greece kept coming, until Rice said, this will be our last question on Greece. But it wasn't.

  Inner City Press submitted a number of questions, including "On Hungary, can you respond to an analysis (by Citigroup) that "the IMF may still require structural expenditure cuts and changes to the tax system"?

  Rice said, on Hungary, that there are "no dates... to start negotiations," adding that "we do continue" to be in touch with "the Hungarian authorities. A lot of actions are needed," he said, "to ensure central bank independence."

  Then the questioning turned back to Greece. Rice said there will be no new mission until elections and a new government. One wonders how big the protests would be, if Lagarde went there now?

  Others of Inner City Press' questions have yet to be answered, on Pakistan, the Democratic Republic of Congo, Cote d'Ivoire and one on Sudan, on which the UN Security Council was simultaneously meeting on Thursday morning:

On Cote d'Ivoire, can you confirm that next month a decision is expected on "an IMF-backed debt relief deal calling for relief of $5-billion of the country's debt, reducing its current stock of debt by 40%"?

What is the status of Pakistan reaching out for a new facility? Is it true the "IMF wants Pakistan to raise tax revenue from the present 10% of GDP to 15% of GDP by 2013"?

On Sudan, because some are critical of the IMF's Edward Gemayel recent recommendation of a "structural reform program," could you explain what this means for the Sudanese?

Watch this site.

Footnote: the press corps covering the IMF backed each other up in pushing questions on Greece and Lagarde's comments, in contrast for example to some in the UN press corps these days.

  Follow ups were sharp, and journalists didn't allow themselves to be used as a way to turn away from or even refuse others' questions. It seemed unlikely there would be pressure to take down stories, or for purges or expulsion. Does money in the water make the reporting more serious? Even within the same mega wire services?

May 29, 2012

Losers: Citigroup has sold 404 million common shares in Akbank TAS through an equity offering, representing a 10.1% equity interest in Akbank, for 5.24 Turkish liras per share. Total proceeds from the transaction are expected to be about $1.15 billion at the current exchange rate, resulting in an after-tax loss of about $243 million in the second quarter. The transaction is estimated to generate approximately 23 basis points of Tier 1 common capital under Basel III, according to a May 25 news release.

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

May 21, 2012

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

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

By Matthew Russell Lee

UNITED NATIONS, May 17 -- As tensions have escalated between Sudan and South Sudan about oil transfer fees and the size of Sudan's debt, Inner City Press has repeatedly asked the International Monetary Fund for its view of the oil fee dispute and about possible debt relief for Sudan.

  At the IMF's Spring Meetings in Washington last month Inner City Press put the question to IMF regional expert Masood Ahmed. Finally on Thursday afternoon, after Inner City Press re-submitted the question to the IMF's embargoed briefing that morning, the following arrived:

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

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

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

At the request of the African Union, the IMF has provided estimates of the fiscal and external impact of South Sudan’s separation on both countries. The Fund has not taken any position on the amount of financial assistance or oil transit fees that South Sudan could pay.

Q - … and about any debt relief for Sudan?

The Fund is discussing with the authorities economic policies to help stabilize the situation and implement reforms to sustain more inclusive growth. These could underpin a new Staff Monitored Program. Despite Sudan’s good cooperation on policies and payment to the Fund under successive SMPs, Sudan remains in arrears to the IMF and therefore ineligible to use Fund resources.

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

"What is the status of IMF programs in and reviews of Mali and Guinea Bissau, given coups in each country? "

If the IMF's work on the Sudans was at the request for the African Union, what about ECOWAS and these two coup d'etats? Watch this site.

May 14, 2012

So JPMorgan Chase gambles and loses $2 billion, and on Meet the Press Jaime Dimon says there was "almost no excuse." So, what's the partial excuse? Dimon claims JPMorgan Chase has supported 70% of Dodd Frank. But what about the Volcker Rule? Then on the McLaughlinGroup, Financial Times editor Gillian Tett says FT will editorialize for "better regulation" after l'affaire JPMorgan Chase. We'll see.

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

By Matthew Russell Lee

UNITED NATIONS, May 7 -- When the International Monetary Fund's Meral Karasulu took questions about the IMF's work in and assessment of Myanmar on Monday night, one expected military rule and fighting in the ethnic zones to be a topic.

  But amid the IMF's rosy view, pitching for example natural gas reserves, the world's major wire services focused on exchange rates, natural gas and, in the case of AFP, the Paris Club creditors getting paid back their money.

  Inner City Press asked Meral Karasulu two questions: how likely does the IMF think that a reversion to military rules, and did the IMF even consider the continued conflict in Kachin state in its assessment?

Meral Karasulu politely dodged the first question, saying that the IMF has no "comparative advantage in political analysis," even that it would be "inappropriate" to consider the risk of reversion.

  But as reported exclusively last week by Inner City Press, when UN Secretary General Ban Ki-moon visited Myanmar he thanked and welcomed a company specializing in surveillance technology, including to Gaddafi's Libya, click here for that story.

  Meral Karasulu emphasized the Myanmar's main economic activity is not in the ethnic areas.

  Asked where Myanmar's reserves actually are, Meral Karasulu said in three state owned banks controlled by the Ministry of Finance.

When she was asked what percentage of Myanmar's budget is devoted to the military she said she did not know. (Perhaps relatedly, on Sri Lanka where the IMF does have a lending program, it downplays the growth of military spending even after the scorched earth military compaign of 2009).

Of corruption in Myanmar, Meral Karasulu said she has "no anecdotes," and that during country visits the IMF can't see it. Meral Karasulu will return to Myanmar in the second half of May. Watch this site.

May 7, 2012

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

By Matthew Russell Lee

UNITED NATIONS, May 3 -- During the International Monetary Fund's Spring Meeting last month, Inner City Press asked the the spokesperson for the IMF's Masood Ahmed about the conflict between Sudan and South Sudan:

after the press conference, in which my question was about Egypt, I asked Masood Ahmed about Sudan, South Sudan and the IMF, on which he's written, and specifically his / the IMF's view of the oil transfer fee (and impact of stopping oil pumping and destroying the Heglig field). I was told to email the question so here it is: I cover the UN, and Sudan diplomats say they want $34 a barrel transfer fee, South Sudan offers some 40 cents, citing example of Chad to Cameroon, and Azerbaijan to Turkey. What is the IMF's view of this oil transfer fee issue?

   But even as, or because, the conflict military and diplomatic around Heglig continued to heat up, the IMF never answered.

    And so to the IMF's bi-weekly embargoed briefing on May 3 Inner City Press, from in front of the UN Security Council where the day prior Sudan's Ambassador spoke of an investigation and possible reparations for Heglig, resubmitted the above question as well as a question about Romania.

    Lead IMF spokesman Gerry Rice on camera answered the Romania question, saying that even after the fall of the government the IMF mission remains in dialogue and will report back.

   On the reformulated Sudans question, the IMF replied:

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

"Conflict in border areas and a prolonged shutdown of oil production will have serious implications on both countries' economies and people's livelihoods. We look forward to a mutually beneficial resolution of oil and other bilateral issues as soon as possible."

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

"What is the IMF doing in Sudan and South Sudan given the economic and oil transfer fee roots of the conflict between them? South Sudan cites the IMF for the less than a dollar a barrel transfer fee it proposes. I asked Ahmed Masood during the Spring meeting but have not heard back. What IS the IMF's position?"

So Inner City Press has asked again, and is now told "Sure. Will get back to you on this." Watch this site.

April 30, 2012

ICP has commented to the FDIC, and NYS DFS:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a comment opposing and requesting public hearings on the application by New York Community Bank to acquire substantially all of the assets, and $2.3 billion of deposits of Aurora Bank FSB.

On the FDIC's web site, the comment period on this application runs through May 5, 2012. This comment is timely.

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

"Aurora had become one of the largest players in that market, originating $25-billion worth of loans in 2006. It was also the biggest supplier of loans to Lehman for securitization. Lehman had acquired a stake in Aurora in 1998 and had taken control in 2003. By May, 2006, some people inside Lehman were becoming worried about Aurora's lending practices."

NYCB is a bank which has sought to fly under the radar -- for example, a recent search of the FFIEC HMDA data back for "New York Community Bank" reveals only one HMDA reporter, 0000016022-3, reporting geography specific data in only three MSAs.

In these MSA, NYCB is decidedly disparate in its marketing and lending.

In the Phoenix MSA in 2010, the most recent year for which data is publicly available, NYCB made 292 conventional home purchase loans to whites and NO such loans to African Americans. Based on its disparate marketing, NYCB received only four such applications from African Americans, and denied three of them. To Latinos, NYCB more only 14 such loans, compared to the 292 to whites.

In the Fort Lauderdale MSA in 2010, NYCB made 38 conventional home purchase loans to whites, and NO such loans to African Americans.

In the West Palm Beach MSA in 2010, NYCB made 83 refinance loans to whites and only ONE such loan to an African American applicant, and only seven to Latinos.

The FDIC [and NYSDFS] should require answers, extend the comment period and hold public hearings.

April 23, 2012

In the course of spinning its first quarter earnings numbers, Capital One's CEO let it slip that $75 million are being set aside to deal with fraudulently sold products. "Oops." This has been raised to the OCC and Federal Reserve; watch this site.

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

By Matthew Russell Lee

WASHINGTON DC, April 20 -- The Volcker Rule on proprietary trading by banks was one of the responses to the subprime financial meltdown of 2008.

  On Friday at the IMF, Inner City Press asked Canadian Finance Minister Jim Flaherty about what it has reported as the Group of 20's opposition to the rule, especially for its treatment of non-US sovereign debt.

  Flaherty told Inner City Press, "it came up informally a couple of times... I can tell you, Canada is please there's been delay in planned implementation date, concerned about extraterritorial effect, I've discussed with Secretary Geithner and we look forward to further developments."

  Geithner, as we've noted and even asked the US State Department to explain, did not show up for the Finance Ministers meeting about Rio + 20 and sustainable development held Friday at the World Bank. But has Geithner given Flaherty some re-regulatory assurance?

  Flaherty was also asked about a "disagreement" he had with Germany's Finance Minister Wolfgang Schauble, concerning whether European countries were doing enough about their crisis to avoid Flaherty's requested veto and loss of European seats in the IMF.

  Flaherty said he's known Schauble for as long as he's been Germany minister, Flaherty has served longer. Could that be the problem?

Inner City Press asked him directly, beyond the alleged differential treatment of sovereign debt, if the mixing of banking and proprietary trading played a role in the meltdown.

  "We're all entitled to our views," Flaherty replied. "In the Canadian situation, proprietary trading was not an issue for us. Some would argue it was not causative. I'll leave to others to debate." Yeah - while he whispers to Tim Geithner about it, then at the G20 in Mexico.

  Later Friday afternoon outside the IMF a protest marched by, to chants including Occupy Wall Street. Few journalists looked up from "making the donuts," so to speak, packaging Christine Lagarde's canned quotes to Charlie Rose as news. And so it has gone at the IMF. Watch this site.

April 23, 2012

In the course of spinning its first quarter earnings numbers, Capital One's CEO let it slip that $75 million are being set aside to deal with fraudulently sold products. "Oops." This has been raised to the OCC and Federal Reserve; watch this site.

April 16, 2012

"A transparent effort by Capital One to impede lawful competition" has been alleged, by two who should know: John Kanas and John Bohlsen formerly of NY-based North Fork Bank. They had served in executive roles with Capital One following the December 2006 sale of North Fork Bancorp. Inc. before departing by mutual agreement in August 2007. Their respective separation agreements contained provisions restricting them from engaging in the consumer or commercial banking business in New York, New Jersey and Connecticut until August 2012. Both executives participated among a group of investors that formed BankUnited and acquired the assets of a south Florida institution of a similar name upon its failure in May 2009. Capital One described the government-assisted deal as "the first step" of Kanas' and Bohlsen's plan to create "a second North Fork" in the New York market.

North Fork, like Capital One, underserved lower income and communities of color. So, a plague on both their houses. The case is pending before the U.S. District Court for the Eastern District of Virginia. A hearing on the plaintiffs' summary judgment motion has been set for April 27, but Capital One has requested that the court simultaneously hear summary judgment motions from both sides on May 11.

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

By Matthew Russell Lee

UNITED NATIONS, April 11 -- While the International Monetary Fund often insists it does not impose conditions on loans, for the $1 billion program it announced Wednesday for Bangladesh, it required among other things lower fuel subsidies, and centralizing bank regulation.

  Inner City Press asked David Cowen, IMF Mission Chief for Bangladesh, about this bank regulation condition, and about the rush by Bank Bangladesh to give licenses to nine new banks chartered by political insiders, on the eve of the IMF decision.

  Cowen described the required amendments to the Bank Companies Act, for "fit criteria for bank directors," and said that the IMF was aware of the recent license grants, and hadn't had the chance to discuss them with Bangladesh authorities.

  He said regular procedures for licensing new banks had been followed -- indeed -- and that the banks should be subject to the regulations applicable to all banks in Bangladesh.

Here's a description of the six most recent banks and their sponsors:

"former president and Jatiya Party chief H.M. Ershad (Union Bank), ruling party lawmakers Fazle Noor Taposh (Modhumati Bank) and Mohiuddin Khan Al Amgir (Farmers Bank), S.M. Amjad Hussain (South Bangla Agriculture and Commerce Bank) and Ashequr Rahman (Meghna Bank) and Moniruzzaman Khan Khandaker (Midland Bank), the income tax lawyer to Shaikh Hasina."

What was that again, about "fit criteria for bank directors"?

  Meanwhile HSBC is trying either to sell its 13 Bangladesh branches, reportedly to Standard Chartered, or simply to close them by some accounts.

  On April 10 HSBC announced it is in talks to sell off its operations in Pakistan and is moving in on a sale of its South Korean businesses to the Korea Development Bank.

  Beyond Bangladesh, other Asian markets where HSBC has fewer than 20 branches are Brunei Darussalam, Macao, New Zealand, the Philippines and Sri Lanka. Watch this site.

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

By Matthew Russell Lee

UNITED NATIONS, April 12 -- Has Iceland turned the corner away from financial meltdown? The International Monetary Fund seems to think so. On Thursday the IMF released three reviews of the country and held an embargoed conference call for the press hosted by Julie Kozack, tellingly her last as IMF Mission Chief to Iceland. She will be moving on to Lithuania and Poland.

  The IMF has praised Iceland's write-down of debts, while criticizing Hungary's restructuring, complaining that "all losses from the implied debt reduction would be borne by the banks alone."

  As previously noted by Inner City Press, the IMF likes bank mergers. Last April, IMF European Department Director Antonio Borges told reporters on Friday that Belgium was smart to have pushed Fortis to being acquired by BNP Paribas. He urged more such mergers.

  Inner City Press asked Borges if the IMF proposed any safeguards at all, given that concerns exist that when a local bank is acquired by one based far away, there will be less reinvestment and accountability.

  Borges, while calling this an “interesting question,” bragged that the IMF organized a coordinated effort to get large banks to treat communities, particularly in Emerging Europe, fairly, and that this had worked

  And so it seems, the IMF likes bank mergers. In Iceland this is footnoted, that "data for Landsbankinn and Islandsbanki reflect the impact of their respective mergers with Sp Kef. and Byr in the second half of 2011."

  Only yesterday, the IMF minimized the rushed licensing of nine new banks by political insiders in Bangladesh on the eve of its program with that country, saying that at least they'll be subject to new rules.

  Regarding bank regulation in Iceland, the IMF says

"A strong, intrusive, and independent supervisory agency is essential to help avoid the build-up of risks that can lead to crisis... additional examiners with credit risk expertise may be needed in the onsite inspection area and the credit risk bureau may need more resources to become a powerful supervisory tool. Staff underscored that preserving the FME’s independence, and its capacity and willingness to act, is essential to ensure that the needed strengthening of supervision continues, toward full compliance with Basel Core Principles."

But what of bank regulation in countries like the United States, UK, France and Germany? Watch this site.

April 9, 2012

IMF On Sri Lanka Deficit, No Reference to Defense, No Timeline for Egypt Deal

By Matthew Russell Lee

UNITED NATIONS, April 5 -- At the International Monetary Fund's briefing on April 5, Inner City Press asked about Egypt and Sri Lanka. The Egyptian answer was short and picked up by wire services -- "the timeline for concluding an agreement is not fixed and will depend on how quickly progress is made by all sides on these issues" -- but the Sri Lanka answer was provided later and so is published here.

  Inner City Press asked, "What is the status of the IMF's program in Sri Lanka? Is the IMF only looking at balance of payments? When would it consider releasing the next and final tranche?"

  Later, just after embargo deadline, the following came in:

From: IMF Media Relations
Date: Thu, Apr 5, 2012 at 10:37 AM
Subject: Question Received
To: Matthew Russell Lee [at]

Dear Matthew, Thank you for your question. Please attribute the following to Gerry Rice, Director of External Relations Department, IMF.

On April 2, the Executive Board approved the completion of the Seventh Review of the Stand By Arrangement, which enables the disbursement of SDR 275.6 million (approximately $400 million). The Board also approved the extension of the program by 2 months to July 2012 to allow time for the completion of the Eighth and final review.

The main pillars of the program are to rebuild Sri Lanka’s reserves, while transitioning to a more flexible monetary and exchange rate policy framework, reducing the budget deficit to sustainable levels, and strengthening the financial system.

  This follows back and forth with the IMF regarding Sri Lanka's increased defense spending.

  The question of if the IMF is only looking at balance of payments refers, for example, to the recent UN Human Rights Council resolution on Sri Lanka and accountability for crimes in the final stages of its military conflict in May 2009 -- after which defense spending continued nevertheless to climb, impacting the very budget deficit the IMF refers to.

  Meanwhile the military SCAF government in Egypt is reportedly poised to take out an IMF loan. Inner City Press asked, What is the IMF's reaction to the reported deal in Egypt around an IMF program? Will the program now go forward? Does the IMF think enough 'stakeholders' agree?"

  It was to that that the IMF responded, "the timeline for concluding an agreement is not fixed and will depend on how quickly progress is made by all sides on these issues." Watch this site.
* * *

The Fed has, so far, allowed BB&T to amend its application to acquire BankAtlantic, to tell ICP about its application late, and not yet to extend the comment period. ICP has complained:

This is a third comment on the applications by BB&T to acquire scandal-plagued BankAtlantic. BB&T has significantly amended the proposal after an adverse court ruling -- the changed structure should trigger a new public comment period.

Troublingly, while BB&T outside law firm Wachtell, Lipton send the amendments to the Fed on March 19 by courier, they were only sent to Inner City Press the follow (this) month. So Inner City Pres is requesting an extension of the comment period.

It would be ludicrous to argue that the changes to the proposal, the result of a court order, are not substantial. As such, it is unclear to ICP why no new public notice appears to have been published.

As described, BB&T would assume about $285 million of BankAtlantic Bancorp TruPS obligations in exchange for a 95% preferred interest in a newly established limited liability company, which will comprise about $423 million of loans and $17 million of other net assets. BB&T has estimated $350 million of recoverable preference value in the limited liability company. Once BB&T recovers $285 million in preference amount from the limited liability company, its interest in the company will terminate. BB&T would also have an incremental $35 million guarantee to assure BB&T's recovering within seven years of the $285 million preference amount.

ICP has recently obtained BB&T 2011 HMDA-LAR and will be commenting on its, in a week's time. The comment period must be extended.

April 2, 2012

  In the first study of the just-released 2011 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that banking behemoths Citigroup, JPMorgan Chase and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

2011 is the eighth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 3.38 times more frequently than whites in 2011, worse that its 2.25 disparity in 2009, Fair Finance Watch has found.

Citigroup confined Latinos to higher-cost loans above the rate spread 2.42 times more frequently than whites in 2011, worse that its 1.72 disparity in 2009, the data show.

Growing Southern bank BB&T, even absent its subprime unit Lendmark, in 2011 confined African Americans to higher-cost loans above the rate spread 2.59 times more frequently than whites

Fair Finance Watch has continued its enforcement project in the South, most recently raising issues under the Community Reinvestment Act on BB&T's proposal to acquire BankAtlantic. In response, the Federal Reserve Board extended the comment period. Much of BB&T's application has been blacked out or withheld in full, which Inner City Press is challenging under the Freedom of Information Act.

Inner City Press & FFW have also joined others concerned with Deutsche Bank's decertification as a financial services holding company to escape Dodd Frank including its capital adequacy rules -- particularly given Deutsche Bank's role in the subprime scandal, as lender, securitizer and now major forecloser.

The law required that the 2011 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline, most notably Capital One and Bank of America, despite confirming receipt of the request. Further studies will follow: watch this site.

March 26, 2012

Citibank in 2007 bought 20% of Turkey's Akbank. Now it is cutting that in half -- Akbank says, only to comply with Basel III. We'll see.

IMF Says Consults Broadly in Egypt, Focus on Democracy Doubted, Mali Silence

By Matthew Russell Lee

UNITED NATIONS, March 22 -- After Egyptian Finance Minister Mumtaz al-Said bragged that the International Monetary Fund does "not object to the government's economic program," Inner City Press on Thursday again asked IMF spokesperson David Hawley for the IMF's "response to criticism that it is negotiating with an unelected military government in a way that the parliament opposes."

  David Hawley replied, "In response to Matthew Lee's questions, I'd note that the purpose of the mission that's just wrapped up in Cairo is to consult broadly with stakeholders in Egypt to ensure that should there be a program that it enjoys broad political and social support, thank you very much."

  While the IMF's regional director Masoud Ahmed held a number of meetings in Cairo, the concerns still exist.

  Also on democracy, Inner City Press submitted this question: "On Mali, please describe the IMF's recent work there, the country's level of debt, and what the IMF knows and thinks about the reported coup or mutiny."

  In front of the UN Security Council, from where Inner City Press submitted its four questions to the IMF, it also asked US Ambassador Susan Rice about Mali: is it a mutiny or a coup? She said, "looks like a coup." The Security Council is slated to meet about Mali at 4:30 pm.

  But the IMF did not answer or even acknowledge the question, despite this sample statement on its website:

A mission from the International Monetary Fund (IMF) visited Bamako from September 5 to 16, 2011 to conduct discussions on the seventh review of the arrangement under the Extended Credit Facility (ECF), which will expire at end-2011, and on the preparation of a new three-year program eligible for IMF support. The team met with Mariam Kaïdama Cissé, Prime Minister; Lassine Bouaré, Minister of Economy and Finance; Sambou Wagué, Minister of Budget; Oumar Ly, National Director, Central Bank of West African States (BCEAO); and representatives from the National Assembly, civil society, unions, and the private sector.

Christian Josz, IMF Mission Chief for Mali, issued the following statement:

'The economic program of the government of Mali supported by the IMF remains on track'

   We aim to have more on this. Inner City Press also submitted questions on South Sudan and Sri Lanka which have yet to be answered.

  At Thursday's briefing, Hawley said on Myanmar that "the Article IV was held beginning of this year and is going to the Board. The authorities have agreed to publication, I believe for the first time, of the Article IV and that will take place in the weeks ago." That, he said, will allow a discussion of the managed float of currency. Watch this site.

March 19, 2012

In 2008 Deutsche Bank "reported it has established a subsidiary in Peru to participate in the foreign exchange, government bonds and derivatives markets of the mining country."

So, exploitative mining and... DB's subprime troubles are even mentioned in France:

"Deutsche Bank a annoncé avoir réglé un litige juridique remontant à la crise du crédit hypothécaire à risque (subprime) aux Etats-Unis"

But they haven't really regle-ed or fix it at all...

March 12, 20012

The FDIC has objected to Patriot Financial Partners LP and Castle Creek Capital LLC acquiring a roughly 90% stake in Saint Augustine, Fla.-based Prosperity Banking Co. unit Prosperity Bank. The application was withdrawn Feb. 21. The Fort Lauderdale, Fla.-based BankAtlantic/BB&T Corp. transaction, recently blocked by a Delaware court, was modeled on Prosperity's deal with Patriot and Castle...

IMF Says Hungary's Fillegi Will Not Meet Management, of CB, Philippines

By Matthew Russell Lee

UNITED NATIONS, March 8 -- While Hungarian minister Tamas Fellegi says in his upcoming visit to the International Monetary Fund in Washington he will "meet with management," when Inner City Press asked IMF spokesman Gerry Rice on Thursday, Rice said "no meeting with management is anticipated," only with the mission chief.

  Inner City Press asked where things stand, including on proposed amendments to Hungary's Central Bank law. Rice said the IMF is looking for "sustained commitment on major policy issues before proceeding with discuss on a program... including the issue of the Central Bank law."

  While most questions taken at the biweekly IMF briefing concerned Greece, Inner City Press and several others also asked about Egypt. Asked about the impact of the rift between Egypt and the US about the non-governmental organization workers, Rice claimed "we are international financial institution of 187 countries, not effected by bilateral relations among two member countries." Even if one is the US, with its quota and voting strength?

Footnotes: the IMF by deadline left two of Inner City Press' question unanswered:

South Sudan has cited the IMF as supporting its oil transfer fee offer to Sudan of 69 cents a barrel. Has the IMF played a role in this fee negotiation, and this price?

Senegal's actual growth rate has recently been measured as barely one half of what the IMF estimated. Was the IMF wrong? Or what happened?

And on an IMF conference call this week when Inner City Press asked if the IMF's mission to the Philippines considered charges that the Central Bank there may have leaked the bank records of Chief Justice Renato Corona, the answer was that it hadn't been considered... yet. Watch this site.

March 5, 2012

Delaware Court of Chancery Judge J. Travis Laster has questioned Alan Levan's assertions that blocking the sale to BB&T could lead to BankAtlantic Bancorp's failure. "The apocalyptic picture painted by [BankAtlantic] Bancorp at trial contrasts sharply with the history of the sale transaction... it is far from clear that failure is imminent or that [BankAtlantic] Bancorp lacks other options."

February 27, 2012

IMF Spins Egypt's Need, Half Answer on Unelected Military SCAF, Pledge

By Matthew Russell Lee

UNITED NATIONS, February 23, updated 11:36 am -- Even as criticism of the International Monetary Fund grows in Egypt and for not living up to its so-called Arab Spring pledge of $35 billion, the IMF at its biweekly briefings refuses to take or answer questions in this regard.

  As it did on Feburary 9, Inner City Press as soon as Thursday's briefing began asked, "How much of the $35 billion 'Arab Spring' pledge has the IMF disbursed, given the criticism from, among others, UAE's Younis Haji al-Khouri?"

  This time, Inner City Press added this specific: "On Egypt, what is the IMF's response to public calls that the new Egypt cannot be bound by IMF contracts with an unelected military government, and that all or some of Egypt's $36 billion in debt should be forgiven?"

  Christine Lagarde's spokesman Gerry Rice took a full half hour of questions about Greece, then online questions ranging from the Dominican Republic and Italy to Argentina and a single question on Egypt. But it was not about debt relief or loans to unelected military governments, but rather a softball, what does the IMF suggest?

  Rice began "we don't yet have a program with Egypt so I won't get into details" -- then said that "growth has stalled" and "foreign exchange reserves dropped."

  The pitch, then, is that Egypt needs the IMF, even if its the SCAF taking out more debt on top of the $36 billion run up under Mubarak.

Update of 11:36 am -- an hour after embargo deadline, these answer were provided and we publish them in full:

Dear Mathew,  Sorry we could not take up your questions during the press briefing, but I can offer you the following responses on the Arab Spring and Egypt.

On the Arab Spring: As we said in the context of the Deauville initiative and as the Managing Director of the IMF repeated in her interview with Asharq Al Awsat recently, the IMF can make available $35 billion in loans for the MENA region’s oil- importing countries upon request. Such loans would be in support of the governments’ and the central banks’ macroeconomic policy programs and at their request and, like elsewhere, are provided on favorable terms to help countries transition to where they can once again secure financing from the market. At the moment, we are in discussions with the Egyptian authorities on a possible IMF-supported program to help stabilize Egypt’s economy, restore confidence, lay the foundations for job-creating growth, and ensure that vulnerable households are protected during the transition. And we stand ready to engage in similar discussions with any country that requests it.

Egypt: As we said repeatedly, we clearly want to support a program that addresses Egypt’s economic challenges, is designed and fully owned by the Egyptian authorities, and enjoys broad political support. The latter is essential to ensure the success of any economic reform program.

   We'll have more on this.

Footnote: Because the IMF under Lagarde has become even less responsive than under DSK -- who recently spent a night in jail during an ongoing police investigation of a prostitution ring -- Inner City Press killed off a recent UN lunch hour at an event by the IMF's Special Representative to the UN Elliott Harris.

Inner City Press asked Harris, what about the criticism of the IMF not spending Lagarde's Arab Spring pledge? What about the charge that the IMF's austerity bailout in Greece is meant to help countries (and banks) other than Greece?

Harris genially replied that Lagarde's pledge represented only lending "capacity," and emphasized that Egypt hasn't accepted an IMF program. He said he "regrets" Greece. Don't we all. Watch this site.

February 20, 2012

Now this has gone in: a timely second comment on the applications by BB&T to acquire scandal-plagued BankAtlantic. On February 3 Inner City Press / Fair Finance Watch (ICP) requested a copy of, and commented on, the applications, noting scandal in the public record and that notice of the proposal had disappeared from the Federal Reserve's H2A of applications subject to public comment.

A portion of the application, referring to wrongfully withheld exhibits, was provided; then comment period was extended to February 17, on information and belief due to the lack of H2A notice to the public. It is unclear if the brief extension, only for ICP, cures this -- we say "no," and ask for a further extension, including for the public at large, after satisfactory notice is given.

The eight page application provided shows that BB&T has sought to withhold basic antitrust information that other applicants routinely make public. It says, as simply one example, "See Confidential Exhibit 3, Competitive Analysis, for a quantitative analysis on the impact of the merger in the relevant market." Also being withheld is information about what BB&T would be buying, and not buying. ICP has submitted a formal FOIA request through the Fed's web site. This information must be released, and the comment period extended.

ICP has for this submission looked at BB&T's lending records in 2010, the most recent year for which data is available, first in the MSAs the application references.

In the Port St. Lucie MSA, based on it marketing, BB&T in 2010 for conventional home purchase loans received 36 applications from whites, making 23 loans with six denials. BB&T based on its marketing received NO APPLICATIONS from African Americans, and only one from a Latino, which BB&T then reported as "withdrawn." This is troubling.

Similarly for refinance loans, BB&T in 2010 in this MSA received 49 applications from whites, making 29 loans with five denials. BB&T based on its marketing received NO APPLICATIONS from Latinos, and only one from an African-American, which BB&T then reported as "incomplete." This too is troubling.

In the Miami MSA, based on it marketing, BB&T in 2010 for conventional home purchase loans received 96 applications from whites, making 47 loans with 24 denials. BB&T based on its marketing received only two applications from African Americans, making one loan with one denial.

Similarly for refinance loans, BB&T in 2010 in this MSA received 142 applications from whites, making 79 loans with 31 denials. BB&T based on its marketing received only five applications from African Americans, making two loans with two denials.

In the Ft Lauderdale MSA, based on it marketing, BB&T in 2010 for conventional home purchase loans received 120 applications from whites, making 58 loans with 35 denials. BB&T based on its marketing received only 13 applications from African Americans, making five loans with three denials.

Similarly for refinance loans, BB&T in 2010 in this MSA received 189 applications from whites, making 111 loans with 38 denials. BB&T based on its marketing received only SIX applications from African Americans, making three loans. This is troubling.

Also troubling is that the BB&T chairman and CEO listed in the application, Kelly King, is on the board of directors of the Richmond Fed, to which BB&T is applying. This conflict of interest should be addressed, including in whatever Order the Board issues on this proposal.

BankAtlantic and this proposed transaction are embroiled in scandal. For further example and for the record in this second timely submission:

"BankAtlantic Bancorp said it could hold a stock rights offering to its existing shareholders as of Feb. 27 in case its deal with Winston-Salem-based BB&T Corp. does not go forward as planned. The Fort Lauderdale, Fla., bank (NYSE: BBX) announced a deal in November to sell its banking franchise, along with most of its assets and all of its deposits and branches to BB&T (NYSE: BBT). However, that deal is being challenged in a lawsuit by the investors in BankAtlantic Bancorp’s corporate debt, in the form of trust-preferred securities (TruPS). The acquisition deal calls for BankAtlantic Bancorp to retain about $623 million in assets, mostly noncurrent or criticized loans and repossessed properties, and keep about $320 million in TruPS debt outstanding. It would repay its outstanding interest to the TruPS investors, but they would either be repaid in full or have BB&T assume the obligation for that debt. A judge in Delaware is expected to rule on that matter by March 1."

The comment period should be extended at least until after this March 1 ruling. There's also the SEC.

On the current record, the merger applications should not be approved.

February 13, 2012

Following ICP's comments last week on the proposed acquisition of Bank Atlantic, the Federal Reserve on February 10 wrote to ICP stating

"This concerns your request, dated February 3, 2012, for an extension of the public comment period on the notification... to acquire all the voting securities of BankAtlantic, Fort Lauderdale, Florida, a federal savings association. The comment period for the proposal closed on February 3, 2012.Based on all the facts of record, the Secretary of the Board, acting pursuant to authority delegated by the Board (12 CFR 265.5(a)(2)), has determined to extend the period for receiving your comments on issues related to this proposal..."

We'll have more on this.

February 6, 2012

This ICP filed last week on the proposal to acquire BankAtlantic:

BankAtlantic and this proposed transaction are embroiled in scandal. For example and for the record in this timely submission:

"The SEC on Jan. 18 charged Fort Lauderdale, Fla.-based BankAtlantic Bancorp and its chairman and CEO, Alan Levan, with misleading investors about escalating problems in one of its significant loan portfolios in 2007. The agency, in a civil lawsuit, charged that the company and Levan made misleading statements in public filings and earnings calls to conceal the deteriorating state of a large portion of the company's commercial residential real estate land acquisition and development portfolio."

"The SEC also charged that the company and Levan committed accounting fraud by scheming to minimize the company's losses on its books by improperly recording loans they were trying to sell from this portfolio in late 2007. According to the complaint, two senior BankAtlantic loan officers described the portfolio to each other in a 2007 email as 'ticking time bombs' and 'explosive piles of crap.'"

"Also, the holders of some of BankAtlantic Bancorp's trust preferred securities continue to challenge the transaction. The company on Jan. 6 received a notice of default from Wells Fargo Bank NA as trustee under the indentures and declarations of trust relating to TruPS of BBC Capital Trust IX and BBC Capital Trust XII."

In the Miami Metropolitan Statistical Area in 2010, the most recent year for which aggregate Home Mortgage Disclosure Act data is available, for refinance loans BankAtlantic made 17 loans to whites and NONE to African Americans, denying seven of the eight applications it received from African Americans.

In the Fort Lauderdale MSA in 2010, for refinance loans BankAtlantic made 34 loans to whites and only seven to Latinos and only two to African Americans, denying five of the ten applications it received from African Americans.

On the current record, the merger applications should not be approved.

January 30, 2012

First Niagara Financial Group President and CEO John Koelmel told SNL Financial that the company still plans on closing an additional 30 to 35 branches. We'll see about that...

January 23, 2012

Slowly, too slowly, some pigeons come home to roost.

General Electric, which engaged in predatory lending through WMC, is now reportedly under investigation -- just as it proposes to acquire $7.5 billion in deposits from Met Life.

Royal Bank of Scotland's former boss, Sir Fred "the Shred" Goodwin, faces the loss of his knighthood, after he helped enable predatory lending by securitizing and trading in the loans through RBS Greenwich Capital Markets. PM Cameron said, "There’s a forfeiture committee in terms of honors that exists and it will now examine this issue. I think it’s right that it does so."

Why isn't more being done in the US? Some now say that the time of AG Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, at Covington & Burling that represented the Big Four and other predators plays a role in it - watch this site.

January 16, 2012

  As the biggest bank merger of 2012 so far was announced Wednesday, Morgan Keegan for sale to Raymond James for $930 million, Morgan Keegan's recent settlement of subprime related fraud charges was not lost on community activists. Would it be raised to regulator? Why not?

Nickeled and dimed, per even the WSJ: Next month, Toronto Dominion / TD Bank unit will start charging noncustomers a $5 fee to cash checks at any of its branches. PNC now charges $25 to close some accounts.

Customers at Citizens Bank, a unit of Royal Bank of Scotland, now have to pay $50 a month if they fall below minimum account balances on some money-market accounts.

Bank of America charges some of its banking customers a $25 fee if they dip below minimums on premium-checking accounts.

U.S. Bancorp already hits customers with a 99-cent fee to make a mobile deposit.

In December, Citigroup's Citibank unit raised fees on some of its checking accounts. Monthly maintenance fees on the lender's basic-checking accounts jumped to $10 from $8. Also, banking customers have to maintain at least a $1,500 balance, up from zero—or set up direct deposit and pay at least one bill online each month—in order to dodge the fees.

As IMF Spins on Greece & Hedge Funds, No Answers on Ukraine, Sri Lanka

By Matthew Russell Lee

UNITED NATIONS, January 13 -- The International Monetary Fund under Christine Lagarde has become even less transparent, answering fewer and fewer press questions.

  During the IMF briefing on January 12, the first one in four weeks, Inner City Press submitted four questions, including this: "On Greece, please describe the IMF's engagement with hedge funds asking them to accept a hair cut: are hedge funds reacting differently than banks and what is the IMF doing?"

  IMF spokesman Gerry Rice did not posed the hedge fund or the other questions. After the briefing, another IMF spokeswoman wrote to Inner City Press: "We will get back to you on your questions bilaterally Matthew. Gerry had already responded on Greece."

  But Gerry Rice had not responded, on Greece, about "private sector" hedge funds. On the afternoon of January 13, the IMF put this out:

"In response to press queries on the talks between Greece and its creditors on private sector involvement (PSI), we are issuing the following line. This is attributable to an IMF spokeswoman:

'We look forward to the resumption of talks between Greece and its creditors. It is important that this lead to a PSI agreement that, together with the efforts of the official sector, ensures debt sustainability.'"

  While bland, at least it's a response. Here are the other three questions Inner City Press submitted during the January 12 briefing, which more than 24 hours later have not been answered "bilaterally" or at all:

On Ukraine, what if the relation between that country's negotiations with Russia on gas prices and the IMF resuming talks, after Ukraine passed the bankruptcy legislation it said the IMF wanted? What else would the IMF like to see?

On Sri Lanka, what is the IMF's response to Central Bank Governor Ajit Nivad Cabraal statement on January 3 that Sri Lanka will seek a fresh “follow up or surveillance program” with the IMF as the $2.6 billion loan obtained in 2009 is reportedly due to expire early this year? What is the IMF's thinking on Sri Lanka's failure to fully meet the budget deficit targets and its refusal to devalue the rupee?

On Malawi, please describe the state of the IMF's relations with Malawi, and reviving a program with Malawi, in light of recent statements by President Bingu wa Mutharika against the IMF? (he said on national radio that "Malawian government officials should stop protecting the IMF at the cost of their own citizens.. 'protect the IMF but protect the people' and that of any officials who [a]re unwilling to do so had to resign from their public posts, 'I will be glad to receive your resignation'"?)

  During the IMF's briefing in mid December, Inner City Press has submitted another question about Malawi, which also went ignored. The IMF and Africa, under Christine Lagarde? We'll see. Watch this site.

January 9, 2012

Bad karma for the ex-CitiFinancial: talks to sell the bank's OneMain consumer-lending unit to private-equity buyers have ended without a deal in place. Private-equity firms Centerbridge Capital Partners LLC and Leucadia National Corp., along with Berkshire, had been in exclusive talks since the summer to purchase OneMain, which "makes mortgage and other loans to high-risk borrowers." (WSJ)

Yeah: the predatory lending unit...

January 2, 2012

Most coverage has focused on MetLife's reasons for moving to sell deposits. But what about GE's motives for buying, and how that process will go? We'll be there - watch this site.

December 26, 2011

Here is a just filed FOIA appeal:

This is a timely FOIA appeal to the Federal Reserve Board's partial denial of my FOIA request and letter of October 23, 2011 related to the proposed acquisition of US-based Bank of East Asia by the China Investment Corporation, and Central Huijin Investment Limited and Industrial and Commercial Bank of China (ICBC), owned by the Chinese government.

The Fed's response, regular mailed on December 9 -- this appeal is timely -- decides to limit ICP's FOIA request to only the portion related to the Community Reinvestment Act, because Inner City Press mentioned the CRA. And so the White & Case submission of October 17, which ICP was supposed to get under the Fed's rules against ex parte communication, has the responses to items 4, 5 and 6 withheld as "not responsive."

This makes a mockery both of FOIA and of the Fed's rules against ex parte communication. On October 23, Inner City Press submitted including to the Office of the Secretary of the FRB a letter stating in part that

"I filed a timely challenge to the applications involving Industrial and Commercial Bank of China (and its ultimate parent the Chinese government -- since the PRC government is the ultimate controlling shareholder, this letter timely questions why the PRC government is not an applicant here) to acquire 80% of Bank of East Asia. The FRB on October 6 asked ICBC three questions, including one CRA and consumer compliance, and told ICBC to send us a copy, under the rules against ex parte communications... We note that the signatory counsel for the Industrial and Commercial Bank of Bank is the former general counsel of the Federal Reserve Bank of New York, and believe that in this context it is particularly important that the information be provided and a public hearing held. Please send all of the improperly withheld information"

Because ICP gave the example of the withheld CRA response, the Fed decided to ignore ICP's right to the rest of the submission, despite the statement about "all of the improperly withheld information" -- that is, any part of the information ICP should have gotten under the rules against ex parte communication, minus that part explicitly exempt under FOIA.

The Fed is now trying to use "non-responsive" as a way about FOIA, to withhold without even citing a FOIA exemption. It is an outrage, and on appeal ALL of the applicants' October 17 submission should be released.

December 19, 2011

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

By Matthew Russell Lee

UNITED NATIONS, December 15 -- While the International Monetary Fund is often loath to speak about human rights situations in countries, Thursday when Inner City Press asked IMF spokesman David Hawley about Hungary's Prime Minister Viktor Orban's move to assert control over the nation's central bank, Hawley was ready with an answer.

  "We are carefully examining recent legislative proposals with respect to the central bank," the IMF's Hawley said. "Any erosion of central bank independence would be of great concern." From the IMF transcript:

HAWLEY: "a question from Matthew Lee at Inner-City Press on Hungary. His question is How would relations and a program with the IMF be impacted by the prime minister's announced plan to assert control over the central bank and demote its president? I can answer that by saying that we are carefully examining the recent legislative proposals with respect to the central bank and erosion of central bank independence would be of great concern."

  It's worth noting that one proposal, to combine central bank functions with bank regulation, is already the case at the US Federal Reserve, which the IMF does not criticize.

  Inner City Press also asked, "now that the South Sudan National Legislative Assembly on Dec. 13 voted to join the IMF, what are the next steps and what can the IMF do for South Sudan?"

  While that vote only took place December 13, Hawley said that the work to make South Sudan a full member of the IMF is "well advanced," even that the IMF has a "resident adviser in the country." From the IMF transcript:

HAWLEY: "Matthew Lee of Inner-City Press notes that South Sudan intends to join the IMF and what are the next steps and what can the IMF do for South Sudan? Discussions or work on South Sudan becoming a full member of the IMF are well advanced. South Sudan's main challenges are maintaining economic stability, investing its oil resources wisely in social and infrastructure development and to build an environment and institutions to support sustained economic development. In terms of what we're doing to support these policy goals, we're stepping up on our technical policy advice in areas where the Fund has expertise and we have a resident adviser now in the country."

  The Director of the IMF's Africa Department IMF's Antoinette Monsio Sayeh was on the schedule December 14 at the International Engagement Conference for South Sudan, on topics including "Transparency."

  But at the December 15 IMF briefing, Hawley was asked when Managing Director Lagarde will make herself available for questions from those covering the IMF, with the complaint made that she has hardly been available since she took over in June. Hawley said this would be "taken on board." We'll see.

December 12, 2011

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

First Niagara's recent capital raise have been aimed at curtailing uncertainty around the stock as it continues to work on divesting some of the branches it is seeking approval to acquire from its branch deal with HSBC. FBR Capital Markets analyst Bob Ramsey told SNL Financial that, while the company will look to maximize the value of any deals, it will likely sell the branches in three transactions. The bidders could include larger companies, such as M&T Bank Corp. and KeyCorp, with upstate New York operations, Ramsey said. Smaller companies could potentially be the buyers, such as De Witt, N.Y.-based Community Bank System Inc., but he wondered whether they would have the capital to make the acquisitions. So do we...

December 5, 2011

On Yemen, IMF Welcomes GCC Immunity Deal, Ready to Support

By Matthew Russell Lee

UNITED NATIONS, December 1 -- On Yemen, the International Monetary Fund kept meeting with Ali Saleh officials even as his government killed protesters. On December 1, Inner City Press asked the IMF, "with Ali Saleh's signature of the deal, what is the IMF's thinking and plans for the country? Whom in Yemen has the IMF spoken with and when?"

  Later on December 1 the IMF sent this response:

"on your question on Yemen, the IMF welcomes the signing of the agreement, which we hope will bring the crisis to an end. The agreement involves a formation of a new government that we look forward to working with. We understand that the new government will put in place an economic stabilization plan as per the GCC agreement, and we stand ready to support such a plan with an IMF-supported program if the new government wishes to reengage with the IMF."

  Back on March 31, Inner City Press asked then-IMF spokesperson Caroline Atkinson (now with the Obama administration)

“On Yemen, please describe IMF's engagement with current gov't after Ghazi Shbeikat's talks earlier this month, and any impact its killing of protesters has had.”

Ms. Atkinson translated this to “I have a question online about Yemen: Please describe the IMF’s engagement with the current government after talks earlier this month and any impact the violence has had.”

The violence -- that is, the killing of protesters -- has been so bad even Yemen's Permanent Representative to the UN Abduallah Alsaidi, former head of the Group of 77 and China, has quit. Here was Ms. Atkinson's (first) answer:

“Of course, in Yemen, Syria, and other cases we deplore any violence and we hope for peaceful resolution of political issues–We have a program actually outstanding with Yemen and there have been contacts at a technical level with the central bank monitoring developments.

  Then on April 28, Inner City Press asked the IMF's David Hawley to “describe the IMF's interface with Syria and Yemen, and how the crackdowns there may impact that, and how they are viewed by the IMF.”

Hawley said that the IMF's program with Yemen are “on hold in the current situation,” and then referred to comments by IMF Middle East and Central Asia director Masood Ahmed -- who is the one who said, the previous day in Dubai, that the IMF is “ready to work with the Yemeni authorities... once the situation allows.”

  Did that mean a reduction in violence -- which could be brought about, at least theoretically, by MORE repression rather than less -- or the exit of Saleh? The IMF didn't say.

  And now, after what's called the immunity deal, the IMF stands ready. We'll continue on this - watch this site.

 Footnote: The IMF had not had a press briefing for four weeks, but still on the morning of December 1 its web page did not list any press briefing. Too late, despite monitoring the web page, Inner City Press found out about a briefing, submitted the question about and a request for "an explanation of the lack of IMF web page notice of this morning's briefing."

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

Royal Bank of Scotland Group bragged on Dec 1 that the Reserve Bank of India would allow the transfer of its retail and commercial businesses in India to HSBC. "We continue to work closely with HSBC and the regulators to complete the transfer in a manner that is in the best interests of our clients and employees," a Royal Bank of Scotland spokesman said. The WSJ said The statement follows media reports flagging potential roadblocks to the deal from India's central bank. There OUGHT to be roadblocks...

November 28, 2011

A BankAtlantic Bancorp investor has filed a lawsuit to block the sale of BankAtlantic to BB&T. The suit, filed the complaint in Delaware's Chancery Court, claims the deal allows BB&T to "unlawfully cherry-pick" assets and that the two sides structured the deal with a "flagrant disregard" for BankAtlantic investors. There are CRA problems too...

November 21, 2011

This is the new one:

Sumitomo Mitsui Financial Group, Inc. and Sumitomo Mitsui Banking Corporation, both of Tokyo, Japan Continue to increase their ownership interest to 9.9 percent of the voting shares of The Bank of East Asia, Limited, Hong Kong S.A.R., Peoples Republic of China, Continue

Sumitomo Mitsui Financial Group, Inc. and Sumitomo Mitsui Banking Corporation, both of Tokyo, Japan and thereby indirectly increase their interest in The Bank of East Asia (U.S.A.), N.A., New York, New York 3 New York 12/09/2011

Watch this site.

November 14, 2011

Belatedly and not enough, First Niagara and the Department of Justice have come to a deal on the divestiture of branches acquired from HSBC. (First Niagara agreed July 31 to acquire 195 branches. Under the deal, First Niagara will divest 26 branches in Erie, Niagara and Orleans counties in upstate New York. Most of the branches that will be sold are in Erie County, in which Buffalo is located. First Niagara will sell 18 branches there, seven in Niagara County and one in Orleans.

Troublingly, First Niagara will not be divesting a majority of the branches and deposits that it is acquiring in the HSBC deal. In the three counties affected by the divestiture order, First Niagara is acquiring 59 branches and $5.30 billion in deposits. The company will keep 55.9% of the branches in those counties and 69.0% of deposits. We'll see -- watch this site.

November 7, 2011

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

By Matthew Russell Lee

UNITED NATIONS, October 31 -- When the UN scheduled a press conference Monday entitled "Financial Crisis and Cooperative Banks," it was expected that the two cooperative banks invited to speak would be akin to the credit unions being praised in the Occupy Wall Street movement, in opposition to big banks like JPMorgan Chase and Bank of  America.

  But on the UN podium was the chairman of Dutch multinational Rabobank, Mr. Piet Moerland. Inner City Press asked him about protests to Rabobank in the United States, complete with mariachi bands and complaints of discriminating against small borrowers, and also about Rabobank's statements that it was "exposed" to subprime lending in the US. Video here, from Minute 26:05.

  Moerland replied that Rabobank had to expand outside of The Netherlands because of its small population, and that the US is its most important non-Dutch market. He acknowledged the exposure to subprime lending, calling it "indirect," but bragged that Rabobank grew from 30 billion Euros in 2006 up to 40 billion Euros.

  He said in the US it's made purchases "at the request of the FDIC" - that is, of failed banks. Apparently, Rabobank has profited from the global financial crisis. Moerland said that in California, Rabobank is "about half way there." We'll see.

Why such a multinational bank would be presented at the UN as the poster child of the cooperative movement, a topic on which former UK prime minister Gordon Brown speechified to the General Assembly later on Monday, is not clear.

  Smaller but similarly mystifying was the presence of Canada's Desjardins Group. Its CEO Monique Leroux said that before growing outside of Canada -- it already has a presence in Florida in the US -- or making other expansions, it would speak with its people.

  Inner City Press asked about a recent Desjardins deal with Citigroup and Staples, to buy a credit card portfolio. Did Desjardins check with its depositors before that business transaction? Ms. Leroux referred back to a 2009 meeting at which business lines were agreed to. After that, it seems, it's just business.

October 31, 2011

   Old MF Global Holdings, having tried to suck up to JPMorgan and Barclays, is now rumored to be an acquisition target for not only Goldman Sachs but also State Street Corp. and Macquarie Group. Problematizing any soft landing might be target for Occupy Wall Street...

As Occupy Wall Street Reaches Banks in Midtown, Paper Planes & UN Response

By Matthew Russell Lee

TIMES SQUARE, October 28, updated with video -- Taking the Occupy Wall Street protest into Midtown to deliver victimized consumers' letters to Bank of America, Morgan Stanley and others, a march moved west on 42nd Street on Friday, surrounded by police. JPMorgan Chase protest video here.

  At Bank of America on Sixth Avenue, the letters were delivered in the form of paper airplanes addressed to "missing" CEO Brian Moynahan. Video here.

 Then the march, complete with two mock pirate ships, continued west to Times Square. Here on a recent Saturday night, riot cops and police horses kept protesters pinned down on either side of Broadway.

On Friday in broad daylight, the march moved north to Morgan Stanley where a song was sung. An invitation was extended to Morgan Stanley's honchos to come have lunch down near Liberty Square; jokes were made about Chase CEO Jaime Dimon. The east again to Park Avenue, where JPMorgan Chase sits on 48th Street (JPMC video here), and Citigroup nearby on Lexington.

#OccupyWallStreet on 42 St Oct 28, heading to BofA (c) MRLee

Back down in the park, generators used to heat the protesters have been seized, while in Bryant Park corporate gift shops can use them.

At the UN on October 27, Inner City Press asked for a comment on the police having fractured the skull of Iraq veteran Scott Olsen at Occupy Oakland. The spokesman for Secretary General Ban Ki-moon, Martin Nesirky, said that the authorities were investigating. President Obama, it's said, learns about Occupy Wall Street only through the newspapers. That might have to change. Watch this site.

October 24, 2011

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

By Matthew Russell Lee

WALL STREET, October 22 -- As it got colder in Lower Manhattan on October 22 the Occupy Wall Street meeting of the General Assembly considered a proposal for a people's tribunal against Goldman Sachs, for November 3. While other proposals were confronted by blocks, a form of quasi veto, this one passed by consensus.

  A block away JPMorgan Chase stood surrounded by fencing and police. It has been the subject of a number of marches from Zuccotti Park, but Goldman Sachs until now as escaped direct action. Goldman does not offer regular bank accounts or student loans, although it trades in both, and in the predatory subprime mortgages which triggered the global financial meltdown.

  At Occupy Wall Street solidarity events in Philadelphia, banks including the prospective fifth Too Big To Fail institution Capital One were denounced. But Goldman Sachs' will be the first people's tribunal. How will it proceed?

  Meanwhile the former CEO of Citibank blathered that the Occupiers should forget about the past and just look forward -- triggering responses that one should be this logic empty out the prisons.

   Bank of America was described as moving risky derivative into its FDIC-insured bank, putting the American people further at risk.

  Goldman itself defunded its previous fundee, the Lower East Side People's Federal Credit Union -- where Inner City Press has been a customer -- because it dared invited OWS to one of its events.

  But the indictment of Goldman will go well beyond being a so-called Indian giver. Its roll in securizing predatory loans make it a criminal, which until now has bought immunity. Watch this site.

October 17, 2011

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

By Matthew Russell Lee

WALL STREET, October 12 -- On a blustery Wednesday afternoon in Lower Manhattan, a crowd gathered in front of JPMorgan Chase, blocked off by police.

  At first it first no larger than past symbolic protests in front of Chase Manhattan Plaza. Then a phalanx of marchers came from Zuccotti Park out on Broadway, also contained by police. Occupy Wall Street had arrived. Click here for video by Inner City Press.

  When JP Morgan and Chase Manhattan merged, community groups challenged them for "redlining" poor neighborhoods like the South Bronx, and even sued. In the case by Inner City Press about the merger, Morgan Chase tried as a Strategic Litigation Against Public Participation (SLAPP) suit to get its extensive attorneys fees paid. It failed, but received a massive bailout.

  On October 12 it took police with a bullhorn to get the protesters to continue, on to Liberty Street and the Federal Reserve. The previous evening had seen a protest of Bank of America; around the corner is Capital One, seeking to become the fifth largest bank in the US by buying ING DIRECT.

  Still escape direct protest is Goldman Sachs. "How do you get your hands around them?" one protester asked Inner City Press. How indeed.

  Goldman underwrote many of the predatory mortgage bonds that led to the crisis, then got more bailout funds than anyone. But it gives campaign contributions to both parties, including through its executives to President Obama when he travels to New York. We will continue on this.

Footnote: amid the JPMorgan march, a TV crew from Fox 5 News approached Inner City Press. "Are you ready?" a man with a microphone said, thrusting it out. Well, no, not for that. But the news will get out.

October 10, 2011

Another example of big bank nepotism and sleaze: "Former Bank of America Corp. executive Sallie Krawcheck will receive $6 million after leaving the bank following a management reshuffle last month." Somewhere Sandy Weill is laughing....

October 3, 2011 --

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

By Matthew Russell Lee

BROOKLYN BRIDGE, October 1 -- As drizzle fell on the Brooklyn Bridge and the East River beneath it, the New York Police Department took protesters off the bridge, their hands restrained behind their backs, in busses with signs that said "Out of Service" and "Promotional Bus."

  The Occupy Wall Street protesters continue to gather steam, even as most of the media has ignored them, or mocked them for not having a single message.

  Signs clasped to the fence of Bloomberg's City Hall said, "No Bail Outs" and "Too Big Too Fail means Too Big To Allow."

   These references to the four American megabanks -- Citigroup, JPMorgan, Bank of America and Wells Fargo -- about to be joined by a fifth in Capital One seem focus enough.

  Despite the size of the bailouts and the lack of criminal prosecution for predatory lending, there has until now been little direct fightback. Now there is, and the police are out in force.

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

At the foot of the Brooklyn Bridge, Inner City Press was pushed back by a phalanx of police. A protester yelled, Are you all getting overtime? The answer was yes.

InnerCityPress YouTube videos sampling interviews: click here

 A young woman said she had come to the bridge "straight from Slut Walk," another event in Union Square. The talk in the crowd was that those arrested a second time weren't getting bail.

  The analogy to non-violent protests this year in Cairo and Tunis and Benghazi and Homs is dismissed by some staid foreign correspondents. But the energy is not dissimilar, and response is moving at least directionally toward similarity too. Watch this site.

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

By Matthew Russell Lee

UNITED NATIONS, October 2 -- As over 700 Occupy Wall Street protesters were arrested Saturday by the New York City Police Department, in the scrum at the entrance to the Brooklyn Bridge there was talk of mega-bank J.P. Morgan Chase having given money to the NYPD.

It's hardly hidden: the bank's web site brags that

"JPMorgan Chase recently donated an unprecedented $4.6 million to the New York City Police Foundation. The gift was the largest in the history of the foundation and will enable the New York City Police Department to strengthen security in the Big Apple. The money will pay for 1,000 new patrol car laptops, as well as security monitoring software in the NYPD's main data center."

Given that the protests are largely directed that bailouts to and abuse of the political system by JPMorgan, Citigroup, Bank of America, Wells Fargo and prospectively Capital One, it is certainly relevant, and to many troubling, that the police take money from the very target of the protest.

The police will use the money for laptops and "security monitoring software" - would that target the anonymizer app Vibe that's emerged, created by Hazem "White Hat" Sayed?

Ray Kelly, widely touted as a candidate to replace Michael Bloomberg as Mayor, offered his "profound gratitude" to JPM Chase CEO Jamie Dimon. Will this relationship and the mass arrests be explained?

And what of the use of MTA busses to arrest protesters, as photographed by Inner City Press in its story last night? On Sunday morning, Inner City Press asked the Transit Workers Union Local 100 for its comment and what it will do. Watch this site.

JP Morgan Chase stands accused of improper involvement not only in New York City policing, but in corrupting the Middle East peace process through UN envoy Tony Blair, who is also a JP Morgan consultant.

For some time Inner City Press has asked the UN, and Blair himself after a New York City meeting of the Middle East Quartet, about his involvement in cell phone deals in the Occupied Palestinian Territories, without answer.

On Friday, September 30 Inner City Press asked Secretary General Ban Ki-moon's spokesman Martin Nesirky:

Inner City Press: I am sure you’ve seen these stories of late about Tony Blair. Often you’ll say, speak to Tony Blair. It’s not that easy to do, as you might imagine. So I wanted to ask the UN side of it. These articles are saying that increasing questions have arisen about the double service of Tony Blair for J.P.Morgan as a consultant and as the Middle East peace envoy. And they point to particular deals around cell phones... I don’t expect the UN to say anything anti-Blair, but what is the UN’s role in reviewing those conflicts of interest? Is there a kind of review that’s done for other UN officials to view whether the outside activities or other activities of Tony Blair conflict with what he does for the UN system?

Spokesperson Martin Nesirky: Well, as we have said before, Tony Blair is the Quartet envoy. He is the Representative of the Quartet. He is not the UN envoy in the Quartet. That is not his role, okay? And so, I think you’re knocking on the wrong door here.

Inner City Press: who does the review of whether there is a conflict of interest? Is it just up to Tony Blair himself or is there some, does the Quartet have some secretariat or administrative body to review these charges?

Spokesperson: Well, I think you’d need to check with, first of all, I think it’s right, you could certainly check with Tony Blair’s office in the first instance. But, also of course, you could check with the other participants in the Quartet, as well. But, just to be clear, it’s not a UN role.

  So JP Morgan Chase with its money can corrupt the UN Middle East process -- then say "it's not a UN role." And the bank can pay the New York police, which mass arrests those protesting its bailout. What's next? Watch this site.

September 26, 2011

So at UBS a "rogue" trader burned over $2 billion, and not much of a peep yet from the regulators including the Federal Reserve. Meanwhile, Bank of America look move to sell its correspondent banking business.

September 19, 2011

Now First Niagara says that "in September" it will announce to whom it would sell of HSBC branches, it's allowed to acquire them. What a Rube Goldberg of a transaction. It will be opposed.

September 12, 2011

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

In Lebanon, Société Générale de Banque au Liban, said Sept. 9 that it gained final approval from the Central Bank of Lebanon to acquire the assets and liabilities of Lebanese Canadian Bank. The acquisition will raise the unit's total assets to $11 billion, its deposits to $8.6 billion and its loans to $3 billion. The bank will also take over Lebanese Canadian Bank's 35 branches, which will come under the unit's signage. Consequently, the unit will operate a total of 101 branches....

September 5, 2011

Wells Fargo is moving to settle in Memphis just the type of racially discriminatory predatory lending and foreclosure charges that it has previously bragged about beating in court, for example in Baltimore. We'll be watching this -- and another big bank, next week. Watch this site.

August 29, 2011

What does the FDIC consider before selling off a bank? According to SNL Financial, "Evansville, Ind.-based Old National Bancorp on Aug. 26 revealed plans to close nine branches of failed Integra Bank NA and consolidate them into other branches of the failed bank as part of an ongoing assessment that could eventually lead to more consolidations. Old National acquired the Evansville-based bank July 29, after it was shuttered by the OCC. Effective Sept. 30, Old National will close nine of Integra Bank's 52 branches. Five of the failed bank's Evansville branches will be closed, along with one branch in Mt. Vernon, Ill. In Kentucky, Old National will shutter one branch in Madisonville and transfer the accounts to another Madisonville location. The company will also close one branch each in Clay and Poole in Kentucky, transferring the accounts to branches in Providence, Ky., and Sebree, Ky., respectively." These transaction are done without public comment. But what does the FDIC consider?

August 22, 2011

In a marriage of sleaze earlier this month, Spartanburg, S.C.-based Advance America Cash Advance Centers Inc. said it agreed to purchase for $45.6 million Atlanta-based CompuCredit Holdings Corp.'s retail storefront consumer finance business -- approximately 300 locations in nine states...

August 15, 2011

   The proposal from HSBC to transfer 195 branches to First Niagara is even worse that it first looked, based only on First Niagara's weak CRA program that led to its last acquisition, of NewAlliance in Connecticut, being protested from nearly all of First Niagara's communities. Now First Niagara says that of the 195, it would closed 33, and try to sell off 67. Can any regulator accept such a disruptive and cynical "middleman" transaction?  It will be opposed...

August 8, 2011

Beyond the fair lending violations at and consumer abuse by Capital One, ING is being investigated for violating sanctions and doing business in Sudan, Cuba and Iran. This is being raised - watch this site.

August 1, 2011

Serial acquirer First Niagara, opposed by community groups and local elected officials on its recent deal in for New Alliance in New Haven, now seeks to pay $1 billion to buy 195 Northeast branches from HSBC, mainly in Upstate New York, held approximately $15.0 billion in deposits and $15.0 billion in gross assets as of May 31. First Niagara will pick up 183 branches in Upstate New York, four branches in northern Westchester County, N.Y., two branches in Putnam County, N.Y., and six branches in Connecticut. HSBC said it will be consolidating approximately 13 branches located in Connecticut and New Jersey into nearby HSBC branches by the first quarter of 2012, subject to regulatory approval. We'll be there - watch this site.

July 25, 2011

Banco do Brasil projects to have a network of up to 20 branches and 400,000 new customers in the U.S. in five years, the executive told the news agency. The prospective EuroBank acquisition is subject to approval” - and yeah, not so fast...

July 18, 2011

HSBC is putting up for sale not only its credit cards -- Capital One and Wells are the touted bidders -- but also branches, with M&T, First Niagara and Key in competition. This would clearly close a lot of branches: they should (have to) compete on that. Watch this site.

July 11, 2011

When Christine Lagarde appeared on July 10 on the Amanpour show on ABC, she said that her ethics test is what her mother would say was okay. Amanpour then didn't ask her, what would maman say about l'affaire Bernard Tapie? Bad journalism.

Brazilian federal prosecutors based in Rio de Janeiro have initiated a lawsuit against three major banks for alleged irregularities in charging of client fees between 2008 and 2010, the prosecutors said in a statement last week. The three banks are HSBC, Santander and Itau-Unibanco, Brazil's largest bank by assets...

July 4, 2011

"We have a hard time seeing a settlement with fines in the $20 billion to $25 billion range, as originally discussed," the analysts said. "We think that it will have much lower penalties than originally proposed, if it happens at all." -- Bank of America's $8.5 billion settlement with 22 mortgage investors may sharply reduce or eliminate penalties against the largest U.S. mortgage servicers under investigation by the states' attorneys general, according to Amherst Securities Group. The size of the settlement with Bank of America, the largest servicer of U.S. mortgages, and mandates to improve how the institution treats loans in default will make it harder for the attorneys general to find consensus, according to a client note Thursday from Amherst.

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

June 27, 2011

A potential acquirer for BNP Paribas' Bank of the West has now been named: US Bancorp. We'll see. Consumers and analysis have heaped scorn on Capital One's proposal to buy ING Direct. Even from a purely financial point of view, it's said to only make sense if Capital One intends on another acquisition, for example of HSBC's credit card business, the kind HSBC acquired along with the predatory Household International. But there's a $270 million break-up fee in the Capital One deal, and ING will not want to pay it. Game on.

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

By Matthew Russell Lee

UNITED NATIONS, June 23 -- With the International Monetary Fund refusing to answer or even acknowledge questions about its consideration of programs from Afghanistan through Belarus to South Sudan, set for independence on July 9, it seems the arrest and resignation of Dominique Strauss Kahn, the two candidate race to replace him and a recent hacking scandal have distracted the IMF.

  When the IMF on Thursday morning held its first press briefing in two weeks, the questions largely related to the race between Christine Lagarde of France and Agustin Carstens of Mexico to replace DSK. Two questions, one online and the other in-person, concerned the IMF getting hacked. Deputy spokesman David Hawley said that “files were copied,” but deferred other answers.

  Inner City Press submitted as it has in the past four questions by the IMF's online briefing center. In the past at least some questions have been answered, about Sudan and less frequently Sri Lanka.

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

With South Sudan set to declare independence on July 9, what is the status of the IMF's consideration of South Sudan, including in light of Sudanese president Omar al Bashir's threat to cut off the pipelines that takes South Sudan's oil to market?

Afghan authorities have complained about negotiations with IMF. On Afghanistan, can you state the status of and explain IMF's requirement that shareholders not have any management role in Afghan banks, given that this is allowed in the US, for example?

In terms of the IMF's research budget, some have questioned whether the IMF at times censors the conclusions of research. Is that true, and if so how does the IMF respond to the criticism?

In Belarus, will the new arrests of protesters in the last days have any impact on the IMF's consideration of Belarus' request for an IMF program?

  Nor in the half hour between Hawley saying “there are no more questions” -- which wasn't true -- and the expiration of the embargo were any of the four questions answered. Previously the IMF has been asked about gift filings by its top officials, and hasn't answered. Oh, transparency.

June 20, 2011

It's looking as of this writing on June 19 like PNC will be the applicant to buy Royal Bank of Canada's 400 US branches, the old Centura Bank. And the BNP Paribas will be under pressure, due to its exposure to Greece, to sell off its US operations.

  Meanwhile we can report: after the challenge to Comerica - Sterling, they have been unable to meet their goal of closing in the second quarter. Watch this site.

June 13, 2011

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

By Matthew Russell Lee

UNITED NATIONS, June 9 -- Without a managing director, without transparency and seemingly without regard to human rights, the International Monetary Fund is negotiating with Belarus about a loan larger than the $3 billion the Russians lent, conditioned on privatization to Russian firms.

During the IMF's bi-weekly briefing on June 9, Inner City Press submitted this question:

On Belarus, what is the IMF's thinking after Russia cut electrical supply this week, after crackdown on online protests and long sentences to political opponents, and what does the IMF say that to require privatization would be serving Russian buyers of Belarus assets?”

  IMF spokesperson Caroline Atkinson, facing in-person questions about Dominique Strauss Kahn, took three online questions -- about Pakistan, Argentina and Latvia -- but not this Inner City Press question about Belarus (nor another one, about Jamaica).

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

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

Matthew, With regard to your question today on Belarus. As you probably know, a previously scheduled IMF mission is currently in Minsk (the dates are June 1-13) to conduct post-program monitoring. The standing policy has been that we don’t comment on specific country matters while missions are in the field and discussions are in progress. We will update the press on the mission’s outcome when it concludes.

The purpose of this mission is to discuss policies that would restore economic stability and put the economy on the path of strong and sustainable growth. The mission will use the opportunity to exchange views with the authorities on possible next steps in response to their request for the Fund-supported program.

Regards, [ ] IMF Press Office

  It's been reported that IMF Head of the mission Chris Jarvis has met Deputy Prime Minister Sergey Rumas. Inner City Press replied with a request to be informed of any IMF press conference call about any announcement with Belarus, but the IMF press person who had replied was listed as out of the office.

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

Jamaican Finance Secretary Wesley Hughes met with the IMF, now returns to Jamaica for talks with trade unions, in connection with which Minister of State in the Ministry of Finance and the Public Service, Senator Arthur Williams, has spoken of the “Government’s inability to pay the $20 billion owed this year, and has proposed an extended payment period, to protect the gains made in the economy and to preserve its agreement with the IMF.”

So 1) does the IMF dispute that the Jamaican gov't can't pay, must extend the payment period “to preserve its agreement with the IMF”?

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

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

Subject: RE: FW: Question Received (6/9/2011 10:10:02 AM)
From: [ ]
Date: Thu, Jun 9, 2011 at 1:14 PM
To: matthew.lee [at]

Matthew, We are not going to make any comment on ongoing negotiations between the administration and the unions. I would refer your questions to the Jamaican authorities.

The government’s commitments related to the program are outlined in the documents of the second and third reviews of the stand-by arrangement, which you can consult online in the Jamaica page [of the IMF].

  So, after not acknowledging the timely submitted questions during the briefing, and even asking questions about the questions, the IMF declined to answer either of them. Some transparency. The IMF did not even respond to repeatedly emailed questions about its policies on gifts. To be continued.

* * *

The competition for ING Direct has heated up, with GE battling Capital One, while KKR tries for a minority stake. Capital One, some feel, some be the odd one out. We'll have more on this.

June 6, 2011

Another merger has been announced, with Bank United proposing to buy Herald National Bank, with a strange non-compete clause in which CEO John Kanas couldn't manage the bank he'd be buying. This should not be approved.

Also, Cincinnati-based First Financial Bank inked an agreement to acquire all 16 of the retail banking branches of Liberty Savings Bank located in Ohio. And on the seamier side, Gaddafi's favor bank Goldman Sachs Group is close to selling Litton Loan Servicing to Ocwen Financial, with an announcement possible within days.

May 30, 2011

So HSBC and Goldman Sachs are among banks that held funds for Muammar Gaddafi’s government investment fund -- HSBC held $292.7 million across 10 accounts and Goldman Sachs had almost $44 million in four accounts as of June 30, 2010, according to a document on the Libyan Investment Authority...

May 23, 2011

Amid DSK Case, Theory of Replacing Ban & US Taking IMF, China WB Revived

By Matthew Russell Lee, News Analysis

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

Then, two senior advisers to UN Secretary General Ban Ki-moon told Inner City Press of worries that the US would take over the top spot at the IMF and give the World Bank to China, which in turn would not insist that the UN Secretary General term beginning in 2012 go to an Asian.

Under that theory, if Europe lost the IMF -- as seems even more possible now -- and China got a top Bretton Woods institution spot, the Europeans could make a play for the 2012 UN term.

Until Strauss Kahn's arrest, and now US Treasury Secretary Geithner's call that a formal “interim” replacement be named, quite possibly Lipsky, those close to Ban like South Korea's Permanent Representative to the UN were bragging that a second term for Ban was in the bag.

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

Eastern Europeans candidates were already circling to succeed Ban, albeit in 2016, among them Srgjan Kerim, Jan Kubis and even Navi Pillay's deputy Ivan Simonovic.

Now Western Europeans may renew interest, if Europe loses the IMF. Staffan de Mistura is said by his staff to be interested. But surely there are others. Watch this site.

Per the WSJ, California Attorney General Kamala D. Harris is expected to announce Monday a new law-enforcement effort aimed at mortgage-industry practices. The effort will cover a range of activities, from loan origination to the packaging of mortgages into securities, and will include both civil and criminal prosecutions. Mr. Schneiderman has issued subpoenas to units of Ambac Financial Group Inc., Assured Guaranty Ltd., MBIA Inc. and Syncora Holdings Ltd.... Then what?

May 16, 2011:

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

By Matthew Russell Lee

UNITED NATIONS, May 15 -- With Dominique Strauss-Kahn of the International Monetary Fund having been detained and then this morning arrested for sexual assault allegedly committed in the Sofitel near Times Square, attention has turned to the IMF's failure to discipline him for what its Executive Board called a “serious lapse of judgment” in 2008.

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

  IMF staff, too, have been defensive about Strauss-Kahn and his compliance with rules. Inner City Press covers the IMF as well as the wider United Nations, and on March 17 Inner City Press asked the IMF to respond to what sources described as a pattern in which “DSK gets friends and family hired by IMF affiliates.”

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

Sent: Thursday, March 31, 2011 9:58:14 AM
To: IMF, Media Briefing Center

Again, Please state whether Dominique Strauss Kahn has any relatives working in the World Bank or other UN affiliated organizations, and if so why this does not run afoul of anti nepotism rules and principles? From: Matthew Russell Lee Media Outlet: Inner City Press

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

From: Murray, William [at]
Date: Thu, Mar 31, 2011 at 10:22 AM
Subject: FW: Question Received (3/31/2011 9:58:14 AM)
To: Matthew Russell Lee [at]


He has no relatives on the staff of the IMF. Given the premise of your question, let me note that the Bank and UN are wholly separate institutions from the IMF, with no fiscal or managerial connections. At the IMF we certainly have nepotism rules, and they have not been violated in any way.

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

 It's now reported that Strauss-Kahn “has an arrangement with Air France that allows him to get on any flight and sit in first class.” What kind of arrangement is that? Who paid for it, and how much did they pay? Inner City Press has asked three spokespeople of the IMF, including Mr. Murray. Watch this site.

Footnote:  Inner City Press has been asked how, if Strauss-Kahn as an IMF official has a form of immunity, he could be detained, questioned and arrested by the New York Police Department. (The IMF has a history of citing immunity, for example for Paul Ross in Pakistan, click here.)

  Earlier this year, Inner City Press (un) covered the case of a French diplomat who was arrested for attempted purchase of cocaine and resisting arrest, but was later allowed to flee the country before trial.

  The practice is to allow one such flight - but the person is not supposed to re-enter the United States -- which, in the cocaine case, has in fact happened, which neither the French government nor US State Department have yet explained, click here. Watch this site.

May 9, 2011

JPMorgan Chase & Co. was subpoenaed by the U.S. Securities and Exchange Commission over failed mortgages, it was reported last week, as the SEC probes banks sued for allegedly boosting their profits by failing to share refunds from sellers of faulty debt.

May 2, 2011

Now Citibank is accused of killing those who owe it money. In the past, Inner City Press has covered JPMorgan Chase investing in a Japanese finance company which told a borrower to sell his kidney. But this is killing:

In Indonesia, Citi on Hot Seat

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

JAKARTA, Indonesia—Citigroup Inc. said it has hired more than 1,400 people and brought its debt-collection duties in Indonesia in-house, following accusations that outside debt collectors used by the bank may have caused the death of a credit-card debtor.

This month, police arrested three debt-collection agents used by Citibank after a customer died in one of the bank's branches. Police said Irzen Octa was found dead in a Citibank branch in Jakarta after he complained about his credit-card debt.

South Jakarta Police Chief Col. Gatot Edy Pramono said the suspects met with Mr. Octa in a small room and interrogated him, according to the Associated Press. He said an autopsy found a ruptured blood vessel in his head and wounds on his nose.

...The debt-collection hires came after Indonesia's central bank said recently that Citi had violated some collection rules. Bank Indonesia Gov. Darmin Nasution said Wednesday that the central bank is considering penalties against Citi. This month, the central bank ordered the company to stop recruiting new credit-card customers while it investigated whether the bank's collection practices had led to Mr. Octa's death.

The latest episode isn't the first time questions were raised over Citi's debt-collection tactics abroad. In India, a Citi customer in Mumbai alleged in 1999 that outside debt collectors put a knife to his throat and threatened to kill him if he didn't pay his $27,000 credit-card debt. The collectors were later arrested and charged with extortion because undercover officers had witnessed the episode. Citi said at the time that its debt collectors were well-trained and not permitted to use threats.

In 1995, another India customer accused the owner of the same outside Citi collection agency of threatening to have one of his kidneys removed and sold unless he paid an overdue bill of $765. Citi, then part of Citicorp, denied the customer's account at the time.

"These are isolated cases and we have the appropriate controls in place to operate in more than 100 countries," a Citi spokeswoman in New York said Thursday.

Last December, police in India arrested a Citi employee at a branch near New Delhi amid allegations the employee colluded with others to siphon off an estimated $67.2 million from wealth-management customers.

Separately, Indonesian lawmakers called for penalties against Citigroup after a hearing this month that examined allegations that a Citi employee embezzled millions of dollars from customers. Penalties could include being blocked from taking new credit-card customers to losing its license to operate in the world's fourth most populous country.

April 25, 2011

Declining interest, rising interest rates: at this year's Citigroup shareholders' meeting, only 400 people attended, fewer than in previous years. About 25% of shareholders voted for a proposal by the City of New York Comptroller's office demanding that the board launch an independent review of Citi's mortgage and foreclosure practices. But the sleaze just continues...

April 18, 2011

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

By Matthew Russell Lee

WASHINGTON DC, April 15 -- The International Monetary Fund is unabashedly promoting the takeover of small banks by large ones, claiming that its own work in “Emerging Europe” since the financial meltdown shows that communities are better served by large banks, even if based far away or in other countries.

  IMF European Department Director Antonio Borges told reporters on Friday that Belgium was smart to have pushed Fortis to being acquired by BNP Paribas. He urged more such mergers.

  Inner City Press asked Borges if the IMF proposed any safeguards at all, given that concerns exist that when a local bank is acquired by one based far away, there will be less reinvestment and accountability.

  Borges, while calling this an “interesting question,” bragged that the IMF organized a coordinated effort to get large banks to treat communities, particularly in Emerging Europe, fairly, and that this had worked. See IMF transcript, below.

  Inner City Press began to ask about attempts to encourage or require reinvestment, for example in the UK -- but moderator Simonetta Nardin said there was no time for follow up questions.

  Meanwhile, Borges took but refused to answer two questions about Portugal, citing an IMF policy against officials working on their own countries, and also claiming that the IMF does not get involved in politics. What -- encouraging bank mergers is not political? Watch this site.

From the IMF's transcript:

Inner City Press: you seem to be saying that bank mergers—small banks being bought by big ones sort of unqualifiedly may be a good thing. In some countries people think that local banks are more accountable, that if you move the assets to a faraway headquarters that there's less responsive. What do you say to that critique and is that something that the IMF takes any account of?

MR. BORGES: you ask a very interesting question, because this is a problem we were faced with over the last few years. In many of the countries of emerging Europe, you find banks that actually are owned by other banks elsewhere and there were concerns that, as there might be problems in the domestic countries of those banks that assets would be pulled out from emerging Europe and they might suffer. And the Fund, the IMF, invested quite a bit of effort to organize a coordinated effort on the part of all these banks to behave in the best possible interests of those economies, and I must say this was quite successful, because as a result, these countries are now recovering very well and their banks are operating well. So, if anything, the experience of emerging Europe demonstrates that having large, solid banks operate in your country may be an important source of stability if things are properly managed.

* * *

A U.S. appeals court ruled April 15 that Wells Fargo & Co. wrongly claimed $115 million in tax deductions for the 2002 tax year from transactions the court called "abusive tax shelters." The so-called SILO deals involve banks that bought railcars or other equipment from the public agencies, claimed millions in depreciation tax benefits, and then leased the equipment back to the agency. The U.S. Court of Appeals for the Federal Circuit ruled that 26 SILO transactions involving Wells Fargo were "purely circular transactions" that were "abusive tax shelters." The appeals court said a trial judge in the case "permissibly found that the claimed tax deductions are for depreciation on property Wells Fargo never expected to own or operate, interest on debt that existed only on a balance sheet, and write-offs for the costs of transactions that amounted to nothing more than tax deduction arbitrage."

Sounds like Wells..

April 11, 2011

This, we like: JPMorgan Chase was unsuccessful in blocking from its annual shareholders' meeting a proposal to “prevent holding investments in companies that, in management’s judgment, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights,” targets J.P. Morgan Chase’s stock holdings in Chinese oil company PetroChina. It's said that the company’s work in Darfur supports ICC-charged genocide in the region....

  On Citigroup, a senior Indonesian lawmaker called for penalties against Citi amid allegations that a local employee embezzled millions of dollars from customers, as well as questions about its debt-collection practices. Speaking to reporters in Jakarta on Thursday, Emir Moeis, chairman of the parliamentary committee overseeing the financial sector in Southeast Asia's most populous country, said the central bank should impose "stern actions" on Citigroup, "ranging from freezing its credit-card business to revoking its entire license in the country depending on the degree of violations it has committed." Bank Indonesia has already ordered Citibank, the largest foreign bank by assets in the country, not to accept new clients for its Citigold wealth management unit after a staff member, Inong Malinda Dee, was detained by police on March 23 on charges of stealing at least $2 million from clients after obtaining signed blank checks from clients. Citi detected the problem in February, and the current investigation shows the fraud dates back to December. Police also seized expensive cars in Ms. Dee's possession.

April 4, 2011

Inner City Press / Fair Finance Watch last week put in to the Fed a comment in the extended comment period on Bank of Montreal / Harris - M&I, and a new timely comment on Comerica Sterling:

Using the 2010 HMDA data, Inner City Press has commented that Bank of Montreal's Harris confined African Americans to higher cost, rate spread loans 2.35 times more frequently than whites. M&I Federal Savings Bank confined African Americans to higher cost, rate spread loans 2.1 times more frequently than whites. Bank of Montreal's Harris denied the applications of African Americans 2.35 times, and Latinos two times more frequently than those of whites. The Fed extended the comment period on the merger once, but now seeks to close it with the fair lending information still outstanding.

Inner City Press has submitted another timely comment, that Comerica, which is seeking to acquire Houston-based Sterling, in 2010 confined African Americans 6.26 times more frequently than whites to higher cost, rate spread loans. At Comerica, 11.3 percent of loans to African Americans were over the rate spread, versus only 1.9 percent of loans to whites.

March 28, 2011

So Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup and GMAC's Ally Financial have been “summoned” to Washington for a March 30 meeting with state attorneys general and at least three U.S. agencies. How will the public be represented?

March 21, 2011

After the disaster at Fukushima Daiichi nuclear plant in Japan, Deane Dray, a Citigroup analyst covering GE opined that “while it is still early in the unfolding nuclear facility crisis in Japan, we are getting many questions from investors as to what GE’s liability might potentially be,” Dray says that any potential GE liability in this incident appears limited by something called “Channelling law.”

Channeling law is the long-standing nuclear industry practice that assigns the liability for damages from a nuclear failure on plant operators, regardless of fault for an incident. Channeling law is applicable in Japan, and protects equipment suppliers and the designers of nuclear facilities from liability. According to Japan’s Law on Compensation for Nuclear Damage and Law on Contract for Liability Insurance for Nuclear Damage, power plant operators must provide 120 billion yen ($1.2 billion) of coverage and the government provides coverage beyond this level.

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

March 14, 2011

Citigroup, shopping its CitiFinancial unit, is willing to finance a deal or retain a stake in the company. News services list several potential bidder groups. One group reportedly includes Warburg Pincus LLC and KKR & Co. LP, aligned with Boadilla del Monte, Spain-based Banco Santander SA and BlackRock Inc.. Another includes Blackstone Group LP, Brysam Global Partners, Carlyle Group LLC, Thomas H. Lee Partners LP and WL Ross & Co. LLC. Good luck...

March 7, 2011

Inner City Press / Fair Finance Watch has filed a timely Community Reinvestment Act protest below with the Federal Reserve to Hancock Holding Co. of Gulfport MS to acquire Whitney Holding Corp. of New Orleans, LA.

As simply one example, in the Hattiesburg, Mississippi Metropolitan Statistical Area in 2009, the most recent year for which Home Mortgage Disclosure Act data is available, Hancock Bank denied each and every conventional home purchase application from African Americans, while make 56 such loans to whites (and none to Hispanics).

In its headquarters Gulfport MSA, Hancock Bank denied conventional home purchase loan applications from African Americans and Hispanics twice as often as those of whites.

To impose this record on Whitney's service area, including New Orleans, would have adverse impacts, which militate for public hearings and the denial of Hancock's applications.

In the New Orleans MSA in 2009, Hancock Bank of Louisiana made 55 conventional home purchase loans to whites, bot only three to African Americans, and none to Hispanics.

In the Baton Rouge MSA in 2009, Hancock Bank of Louisiana denied conventional home purchase loan applications from African Americans 2.35 times more frequently, and of Hispanics 2.91 times more frequently, that those of whites.

In the Mobile MSA in 2009, Hancock Ban of Alabama made nine conventional home purchase loans to whites, and none to African Americans or Hispanics.

In the Tallahassee MSA in 2009, Hancock Bank of Florida denied the conventional home purchase loan applications of African American a whopping 8.6 times more frequently than those of whites.

To impose this record on Whitney's service area, including New Orleans, would have adverse impacts, which militate for public hearings and the denial of Hancock's applications.

In the New Orleans MSA in 2009, Hancock Bank of Louisiana made 55 conventional home purchase loans to whites, bot only three to African Americans, and none to Hispanics.

In the Baton Rouge MSA in 2009, Hancock Bank of Louisiana denied conventional home purchase loan applications from African Americans 2.35 times more frequently, and of Hispanics 2.91 times more frequently, that those of whites.

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

ICP also alleges that the transaction would have anti-competitive and anti-consumer effects, and timely requests a public hearing on the branch closings and loss of service which would result. Full disclosure of all branches that would be closed for the next three years should be made before the comment period closed, to allow input. ICP has requested an extension of the comment period.

* * *

   In other news: not only did Gaddafi's Libyan Investment Authority have a stake in HSBC -- now HSBC makes money from this, by not having to pay out any divident on the frozen stake....

February 28, 2011

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

February 21, 2011

What's in a name? Citigroup renamed its discredited predatory lending unit CitiFinancial as “OneMain Financial,” renaming NASCAR teams in the process and now trying to sell it. But who would buy it - Blackstone? Why?

February 14, 2011

Among the list of banks that the sharks at Keefe Bruyette & Woods pegged last week as takeover bait are KeyCorp, National Penn Bancshares (in which Warburg Pincas has just upped its stake), Synovus Financial Corp and Regions Financial Corporation, pegged by some to hook up with CIT....

Shareholders have filed 76 political contribution resolutions so far this year, according to ISS. The measures mainly seek semi-annual reports about direct and indirect corporate spending for candidates and referendums. The first 2011 vote is set for April 21 at Citigroup Inc.'s annual meeting. A similar proposal won 30.3% of votes cast last year.

February 7, 2011

As noted by SNL, Bruce Berkowitz of Fairholme Capital Management LLC, which is the largest shareholder of CIT and also one of Region's largest stakeholders, hinted at a merger between CIT Group Inc. and Regions Financial Corp. during an interview with CNBC on Feb. 2, SNL has noted. Asked about consolidation, he said Regions has a "great low cost deposit base." He continued: "We also have CIT. We're the largest owner. CIT is a great business. What a sweet spot they're in … The only thing CIT needs is a low cost deposit base. Gee, I'm going to have to think of some candidates on that one."

BB&T Corp. Chairman, President and CEO Kelly King said the company's intention to be "aggressive" in its Texas expansion does not mean paying high prices to buy franchises. King, speaking via telephone at a financial conference Feb. 2, said that while Texas is an important region for BB&T, "that does not mean we will run out and take over Texas tomorrow." Who thought they would?

January 31, 2011

With Susquehanna Bancshares Inc. agreeing to acquire Abington Bancorp in Pennsylvania for $273 million, it strikes ICP/Fair Finance Watch that Susquehanna makes a disproportionately large percentage of African American applicants NOT get loans, including by making them “withdraw” their applications. Watch this site.

Last week J.P. Morgan Chase & Co. admitted it had overcharged more than 4,000 family members and foreclosed on 14, problems it turned up after an internal review. Chase is facing a civil lawsuit in South Carolina from a service member who claims he was overcharged and is seeking punitive damages. The Servicemembers Civil Relief Act caps interest rates for loans to active-duty military members at a 6% annual rate and shields them from foreclosure. The law applies to "any debt incurred" by a service member, including credit cards and car loans. The Delaware AG's office has demanded action from Citigroup Inc., Bank of America Corp., Wells Fargo & Co., PNC Financial Services Group Inc., Ally Financial Inc. and Goldman Sachs Group Inc.'s Litton Loans.

January 24, 2011

Let's review: the "concentration limit" forbids big financial firms from merging or buying another bank or large company if it results in the firm having liabilities greater than 10% of total U.S. liabilities. The limit "could also have the beneficial effect of causing the largest financial companies to either shed risk or raise capital to reduce their liabilities so as to permit additional acquisitions," the regulators said in the study. They didn't indicate the need to break up the biggest banks, as some officials would like to see. Federal Reserve Bank of Kansas City President Thomas Hoenig, for example, has spoken in favor of dismantling large banks. Regulators now have nine months to impose concentration limits on the banking industry. It will be up to the Federal Reserve to calculate banks' liabilities and implement the rule. Institutions that may be affected include J.P. Morgan Chase, Citigroup and Bank of America...

January 17, 2011

Citigroup in India claimed last week it is working out "fair compensation" for the customers affected by a scandal at its banking branch in the northern Indian town of Gurgaon. "We have been reconciling amounts involved with impacted customers...this process [of working out compensation] will happen over a period of time," the bank said in a statement. Police in Gurgaon are investigating a case in which an employee at the Citibank branch allegedly colluded with others to siphon off an estimated $67.2 million from wealth-management customers. The alleged scam included making false promises -- sort of like Citi's predatory lending...

Another predatory lenders, or at least servicer and forecloser -- Deutsche Bank -- is lurching toward the a sale to LGT Group of BHF-Bank, which it acquired as part of its purchase of Sal. Oppenheim jr. & Cie. SCA in March 2010. Handelsblatt reported Jan. 11 that the Liechtenstein-based bank and Deutsche Bank expect to close the deal within the next few weeks, having been in exclusive talks since December 2010. The deal is still subject to the approval of Germany's market regulator, Bafin...

January 10, 2011

India's capital markets regulator and the central bank are combining efforts in the investigation of a $70 million fraud, involving an employee of Citigroup Inc.'s Indian wealth management operations, even as the net is cast wider to get to the bottom of the scam. "There are a whole lot of investigations that are being conducted. We need to get a sense of what went wrong first...Co-ordination is happening very much now and the Reserve Bank of India and SEBI are working together to find out what went wrong.” The name is Citigroup....

January 3, 2011

J.P. Morgan Chase has been sued by the trustee attempting to recoup money for the companies of convicted Ponzi schemer Tom Petters. The money involved includes millions the bank took from Petters' accounts after his downfall and profits and fees it got from Petters' purchase of iconic camera company Polaroid. In a filing in federal court in Minnesota last week, Douglas A. Kelley, the court-appointed receiver for Petters' companies, alleged that J.P. Morgan knew, or should have known, that funds it seized from Petters' J.P. Morgan accounts after his arrest were fraudulently obtained. The suit also reiterated that J.P. Morgan and its One Equity Partners also knew, or should have known, the funds used by Petters to buy Polaroid were also from his Ponzi scheme....

December 27, 2010

Deutsche Bank AG said last week it is in talks to sell its BHF Bank unit to Liechtenstein's LGT Group. Deutsche Bank acquired BHF Bank when it took over private German bank Sal Oppenheim earlier this year with an aim of boosting its private-banking and wealth-management business. Can you say, money laundering and tax evasion?

December 20, 2010

Ah the revolving door -- Obama administration official Peter Orszag is going to work for Citigroup, as Clinton's Bob Rubin did. Any more predatory lending? Or was that “democratization of credit”?

December 13, 2010

HSBC's failure in the USA with Household Finance was profiled in a lengthy Reuters piece last week. Missing from the analysis was HSBC's era of buying near failing banks in Brazil and elsewhere. This is what gave them the over-confidence about Household. Now, they want to try more inroads in China. We'll see.

December 6, 2010

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

By Matthew Russell Lee

UNITED NATIONS, December 2 -- At the IMF's press briefing on December 2, spokesperson Caroline Atkinson took question after question about Ireland while deferring answers on the Maldives and East African Community and ignoring questions submitted about IMF chief Dominique Strauss Kahn's statement that his successor should come from outside the US or EU.

The IMF talks much about governance reform, but even under its much hyped recent changes, Africa as a continent will see its voting share drop from 5.9 per cent to 5.6 per cent. Inner City Press asked Thursday about this, and this was one question Ms. Atkinson took. She referred to “dynamic and emerging” economies -- apparently not in Africa -- but said that lower income countries would also have their voices amplified.

Inner City press had submitted this simple question: “In light of Mr Strauss Kahn's statement that next IMF chief should come from outside the US and EU, is he going to formally propose that to the Board or any other step?” The question was not taken or acknowledged. We'll see.

On Ireland, despite massive protests and statements by the opposition that they are not bound by the deal with the IMF, Ms. Atkinson said that the IMF had “discussions with the major, uh, the opposition parties” and was “satisfied” enough to present the deal to the IMF Executive Board.

But what does this mean? Are successive governments bound by IMF deals? Inner City Press had first submitted this question: “on Ireland, what is the IMF's position on approvals needed inside the country?” But the question was neither taken nor even acknowledged.
  Also on democracy, Ms. Atkinson was asked about Ukraine's President vetoing an IMF suggested tax increase due to protest. Ms. Atkinson said she hadn't heard of it, but would provide information later if she did. Inner City Press had asked it. So again, we'll see.

Forbes points out that Wikileaks founder Julian Assange has said that he’s going to make a major U.S. bank the focus of a coming Wikileaks dump. And now writer Andy Greenberg also spotlights a previous interview in Computer World in which Assange said he’s sitting on a stockpile of data from Bank of America. Coincidence?

Update of December 6, 2010: Forbes points out that Wikileaks founder Julian Assange has said that he’s going to make a major U.S. bank the focus of a coming Wikileaks dump. And now writer Andy Greenberg also spotlights a previous interview in Computer World in which Assange said he’s sitting on a stockpile of data from Bank of America. Coincidence?

November 29, 2010

The Journal: “Bank of America Corp. and J.P. Morgan Chase & Co. have hit snags in efforts to restart nearly 230,000 foreclosures across the U.S., meaning some cases are likely to remain in limbo until early next year. Several complications are slowing the process, ranging from the hiring of new law firms to handle foreclosure paperwork to making sure that correct procedures are being followed as new or revised files are submitted in the 23 states where court approval is required for foreclosures. The delays aren't a sign that documentation problems are worse than previously acknowledged by the nation's two largest banks by assets, according to the companies. And Bank of America, based in Charlotte, N.C., and J.P. Morgan, of New York, haven't backed down from their insistence that no one was wrongly foreclosed on as a result of errors in affidavits or other loan documents.” We'll see.

November 22, 2010

Citigroup says it is reviewing about 14,000 foreclosure cases for potential errors, making it the latest bank to acknowledge flaws in how it handled documents used to evict homeowners. In testimony prepared for delivery at a House subcommittee hearing Thursday, Harold Lewis, a managing director of the bank's CitiMortgage unit, is expected to say Citi is reviewing about 10,000 foreclosure documents to ensure they are correct. Another 4,000 are being reviewed because they may not have been signed with a notary public present, as required by state law.”

November 15, 2010

Also brewing is an application involving Spanish savings bank Caja Madrid, and an ownership stake in City National Bank of Florida. Regulators have slapped around the latter, while Caja Madrid's record hardly gives confidence. A showdown may be looming. The application has been requested from officials at the Federal Reserve Bank of Atlanta. Watch this site.

November 8, 2010

   Citigroup, Wells Fargo and Bank of America face lawsuits over misstatements in their underwriting of residential mortgage-backed securities, the banks belatedly disclosed Friday in quarterly regulatory filings. BofA said in its filing that it faces suits over more than $375 billion in mortgage-backed securities.The Federal Home Loan Bank of Chicago filed suit in state courts in Illinois and California against a total of 17 institutions, including units of H&R Block and Barclays last month. The Federal Home Loan Bank of Indianapolis, using similar language, sued 10 institutions, including Citi, J.P. Morgan Chase and GMAC Mortgage Group, a unit of Ally Financial Inc., in Indiana state court last month. Cambridge Place Investment Management, a $3.1 billion manager of asset-backed debt, is suing a dozen banks including Citi, Morgan Stanley, Goldman Sachs and J.P. Morgan in federal court...

November 1, 2010

Citigroup Global Markets Ltd. has bought the Israeli government's entire 11.69% stake in Israel Discount Bank Ltd. (DSCT.TV) for 832 million shekels ($231 million) and will distribute those shares to other institutional investors, Discount Bank said Tuesday” of last week. Why isn't a Federal Reserve Board review required for this?

Inner City Press / Fair Finance Watch received an inquiry last week about HSBC and Household, and responded:

Yes, Household had a bad reputation well before HSBC decided to buy them. For example, when Household bought Beneficial Finance, Inner City Press / Fair Finance Watch received numerous complaints from consumers, and filed comments with regulators against the combination. As such, HSBC was on notice of these concerns.

While the regulators were considering HSBC's application to buy Household, Inner City Press / Fair Finance Watch made its views known not only to the regulators but also to board members of HSBC. The deal was structured so as to avoid Community Reinvestment Act review (Household's thrift was extinguished, its “non bank bank” (a credit card bank) did not trigger CRA review.

Inner City Press / Fair Finance Watch was called by whistleblowing employees of Household who said they were ordered to refinance all loans over a certain number of days delinquent - “putting lipstick on the pig,” they called it. Household's performance did not get better, more probably worse, in that it was ultimately managed from further away, and by management - including Mr. Flint - which was arrogant, wouldn't admit there were any problems.

Inner City Press / Fair Finance Watch had been aware of Household as a predatory lender since well before HSBC's application. HSBC battened down the hatches, tried to evade CRA review, never made improvements...

October 18, 2010

Why not impose a moratorium on foreclosures? The excuse given last week was that it would freeze up the economy. Several participants in a meeting with President Obama came back with the same sound byte, that in Nevada over 50% of home sales are on properties that have been foreclosed on.

Why was Nevada the example? Could it have to do with Harry Reid? Vice President Joe Biden is headed to Reno this week, to stump for Reid.

October 11, 2010

Bank of America Corp. is facing an Oct. 8 deadline to halt foreclosures in North Carolina, according to a letter to the bank from state Attorney General as reported by SNL. He noted in the letter, dated Oct. 5, that while BofA has halted foreclosure proceedings in 23 states across the country, North Carolina was not among them. "As soon as possible and by no later than the close of business on Oct. 8, 2010, please confirm that Bank of America has halted foreclosure proceedings in North Carolina,"he said. Additionally, he requests that the bank provide a description of how it verifies and documents information related to a foreclosure before an affidavit is submitted. He also sent letters to several other banks and mortgage lenders, among them Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. unit CitiMortgage Inc., SunTrust Banks Inc. unit SunTrust Mortgage Inc., PHH Corp. unit PHH Mortgage Corp., IMB Management Holdings LP unit OneWest Bank FSB, PNC Financial Services Group Inc., Lehman Brothers Holdings Inc. unit Aurora Bank FSB, U.S. Bancorp unit U.S. Bank NA, HSBC Holdings plc unit HSBC Mortgage Services, MetLife Inc. unit MetLife Bank NA, BB&T Corp. and Invesco Ltd. unit American Home Mortgage Servicing Inc. In those letters, Cooper asked the companies to provide information by Oct. 12 on how they are re-examining their foreclosure process in North Carolina and how foreclosure information is documented and verified. Watch this site.

October 4, 2010

So Bernanke last week said the media ten to “make the good times too hot and the bad times too cold.” This from a man who, like his predecessor, ignored timely comments that Citigroup et al were predatory lenders...

September 27, 2010

While much of the financial press puts out laudatory softball pieces about Doug Flint as new chief of HSBC -- a sample one is below -- Inner City Press remembers him from conference calls on HSBC's acquisition of Household International, dissembling and setting up a deal that hurt not only consumers but also HSBC's shareholders. Good job, Doug...

Sample puff piece: “Douglas Flint (left) may be the “compromise candidate” for the role of HSBC Holdings chairman following a power struggle, but the straight-talking chief financial officer of the U.K.’s largest bank is highly regarded by analysts and has a strong track record in regulation and corporate governance. The 55-year old Scotsman looks set to take over from Stephen Green as HSBC chairman once the appointment is rubber-stamped by the board in Shanghai next week, beating Michael Geoghegan to the post.... According to this Wall Street Journal article, the industry considers Flint “rigorous, shrewd and independent-minded.'”

September 20, 2010

From JPMorgan Chase: “We are sorry for the difficulties that recently affected, and we apologize for not communicating better with you during this issue.” Yeah, right...

September 13, 2010

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

By Matthew Russell Lee

UNITED NATIONS, September 9 -- Despite the flooding crisis in Pakistan, the International Monetary Fund is offering loans, which barely make up for the debt payments Pakistan is making. Inner City Press on September 9 asked IMF Spokesperson Caroline Atkinson the following question:

In Pakistan, given the scope of the flooding and that 60% of the population lives in poverty, why is the IMF not considering debt forgiveness, and grants instead of loans? Does IMF dispute that Pakistan's debt payments ($500 million) are larger than the $450 million loan?”

Ms. Atkinson paraphrased the first part of the question, and declined to read out the second part. She said there was a question from this reporter, that “talks about the scope of the flooding, which is indeed terrible... We are assessing, there is a damage assessment by the World Bank and ADB [Asia Development Bank], results in late October.”

But there is no dispute that Pakistan is deeply damaged. Why use the damage assessment as an excuse? Ms. Atkinson went on to say that Pakistan's financial minister was at the IMF last week, discussing an ENDA (emergency) loan that she said will be approved by the board on a date not even set yet.

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

Nor did Ms. Atkinson acknowledge another question Inner City Press submitted, after in her introduction she presented the IMF's commitment to what she called the “Millennium Development Challenge Goals” -- seeming to conflate the MDGs with the U.S. Millennium Challenge.

Inner City Press submitted this question, in the same manner as the paraphrased Pakistan question, that NGOs have

criticized the IMF 'for appearing to retreat to its “traditional position" and not providing enough flexibility on unwinding deficits without harming development spending.' Your response?”

To this, no answer. Watch this site.

Footnote: The IMF's Ms. Atkinson did read out and provide a response to an Inner City Press question on Serbia. Given the vote later today in the UN General Assembly on Serbia's resolution about the International Court of Justice, the IMF's answer will be reported at that time.

* * *

UK disclosure: “BAE Systems Plc, a global company engaged in the development, delivery and support of advanced defense, security and aerospace systems announced Monday that it has engaged Wells Fargo and JP Morgan to advise on strategic options with regard to the Platform Solutions business, including a possible sale.” Ah, arms manufacturers...

September 6, 2010

The war over New York's Stuyvesant Town and Peter Cooper Village apartment complex has heated up as lenders including Bank of America and US Bancorp have moved to foreclose and for a public auction for the 56-building complex on Oct. 4...

August 30, 2010

From the Inner City Press department of No Honor Among Thieves: according to a complaint filed July 23 in U.S. District Court for the Southern District of Indiana, Regions Bank and Wells Fargo equally backed a $95 million loan to Corporate Plaza Partners LLC to build the 19-story, 376,000-square-foot NASCAR office building in Charlotte. When Corporate Plaza Partners' parent company filed for bankruptcy, Regions said, Wells Fargo, the designated agent of the loan, failed to aggressively go after the company for the balance of the loan and protect itself and Regions from taking "potentially huge losses."

"Regions expected that Wells Fargo could be trusted to administer the CPP Loan even-handedly and in the best interests of both lenders," Regions said in its complaint. "As alleged herein, however, Wells Fargo repeatedly ignored loan defaults, rebuffed demands by Regions to exercise collection remedies, and allowed the collateral to diminish drastically in value." According to court files reviewed by SNL, a Wells Fargo officer said June 24 that the lenders faced a $30 million to $40 million loss on the loan.

"The loss suffered by Regions is a direct and proximate result of Wells Fargo's breach of express provisions of the CPP Loan agreement as well as the implied covenant of good faith and fair dealing," Regions said in its complaint.

The NASCAR office building is essentially complete today, Regions said, but its market value fell in 2010 as vacancy rates across the Charlotte area increased. In June, Regions said, Wells Fargo proposed to buy Regions' share in the loan at about 42 cents on the dollar.

August 23, 2010

We note the proposed $1.5 billion merger of First Niagara and New Alliance, the Community Reinvestment Act implications of which should be explored in coming weeks....

August 16, 2010

On AIG's sale of 80% of American General to Fortress -- will AIG still have to file American General's HMDA data? Or is that subject to some sort of “control” test? We aim to find out.

August 9, 2010

From DJ: “Colombia's financial institutions posted a combined net profit of 3.08 trillion Colombian pesos ($1.70 billion) during the first half of the year, up 14% from the same period in 2009, the country's banking regulator said Friday. The increase was due to higher revenues from lending, the regulator said...Among foreign-owned banks, the local unit of Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) earned COP232 billion, up from COP204 billion. The local unit of Spain's Banco Santander SA (STD, SAN.MC) reported its net profit rose 17% to COP53 billion from COP45 billion. The local unit of U.K. bank HSBC PLC (HBC, HSBA.LN) posted a net loss of COP20 billion. The loss compares with a net loss of COP7.4 billion in the first half of 2009. The local unit of Citigroup Inc. (C) reported a profit of COP73 billion, 43% lower than in the same period a year ago.”

And what about the FARC? What about Santos?

August 2, 2010

Much too little, much too late: “On Thursday, Citi agreed to pay $75 million to settle SEC civil charges that its officials vastly understated Citi's exposure, saying it had declined to just $13 billion in its second and third-quarter earnings releases of 2007, withholding the full extent of its risky assets. The SEC also charged two executives who played key roles in the preparation of Citi's quarterly earnings statements, former chief financial officer Gary Crittenden and former investor-relations chief Arthur Tildesley Jr., who agreed to pay $100,000 and $80,000 respectively to settle the charges.”

July 26, 2010

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

By Matthew Russell Lee

UNITED NATIONS, July 24 -- The IMF, which positions itself as concerned about lower income countries and people, cut off funding to the central bank for six Central African states, and then went on vacation.

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

   On July 22, Inner City Press submitted a series of questions to the IMF in connection with Spokesperson Caroline Atkinson's online briefing, which we can no longer call fortnightly.

  Of the questions, only one was read out loud, about the Central African bank. The other questions were neither read nor answered. And there will be no next briefing until late August, after the IMF Board's vacation under August 20. (In fairness to the IMF, the World Bank also followed with a cut-off.)

On July 22, Ms. Atkinson read out:

thanks to those of you who participated online. And I’ll get back to any of you that have further questions that we haven’t been able to take. Actually, I just see—sorry, there’s another one [from Inner City Press] that’s flashed up, asking about the status of the Fund’s review of the Bank of Central African States and 'when will the suspension and disbursements to countries—well, to the BEAC, which then on lends to countries be reconsidered?'

And just note that we have been closely engaged with the authorities at the BEAC and with the CEMAC member country authorities to help them to address the underlying issues that allowed it to take place. And we hope very much that we can reach satisfactory understandings that will provide assurance that money disbursed through the BEAC will be properly safeguarded and that, therefore, we can continue with the disbursements. And, of course, we’ll let you know when that happens. Okay, thank you very much.”

She also said, “the Executive Board will be on an informal recess from Monday, August 2, until Friday, August 20. We will also, by the way, be having our next press briefing probably late in August.”

So what will happen with BEAC, the central bank for the six states of the Economic Community of Central African States (CEMAC) -- Gabon, Equatorial Guinea, Cameroon, Chad, Congo Republic and Central African Republic?  CAR for example is in chaos, with elections supposedly upcoming but rebels active in Birao and elsewhere.

In the interim, in Cameroon the Finance Ministry was robbed. The Minister of Finance, Essimi Menye said FCFA 700 million as reported by the media as having been stolen would have required a pickup vehicle to transport. He also said such a sum of money was not kept at the Ministry rather at the Bank of Central African States, BEAC. Hmm...

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

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

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

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

On Ukraine, will the Board on 7/28 be considering both a $3 billion loan & breaches of information disclosure requirements by Ukraine? What's the connection between the two?

Watch this site.

July 19, 2010

A securities arbitration panel ordered J.P. Morgan Securities to pay a customer more than $2 million, including sanctions... A Financial Industry Regulatory Authority arbitration panel in Richmond, Va., awarded $1.8 million, plus interest from May 2008. The Finra panel also made an additional--and rare--award of sanctions in the form of $218,000 in legal fees, $25,000 in expert witness fees, and $9,000 in costs, according to the award, dated July 8. It found that J.P. Morgan and its lawyer, Stephanie Karn of Richmond, Va., allegedly weren't "wholly forthcoming.”

Why are we not surprised?

At Citigroup, "I'm very pleased we have produced solid operating results for the second consecutive quarter," Chief Executive Vikram Pandit said during a conference call with investors. Growth will come from overseas, CFO John Gerspach told reporters during a conference call. The further away from the U.S., the better Citi's prospects are for making new loans, he said. Consumer banking revenue rose 9% in Latin America and gained 10% in Asia, which generated a combined 90% of Citi's second-quarter consumer banking income of $1.2 billion.

And on the conference call, there was no answer to an analyst's request to meet with Pandit or his bandits...

July 12, 2010

Bank of America was the world's largest private bank last year, topping Switzerland's UBS, with $1.74 trillion in assets, ahead of UBS' $1.59 trillion. Morgan Stanley, which jumped four places from last year after buying Citigroup's Smith Barney brokerage, held third place with $1.51 trillion in assets. Wells-Fargo and Credit Suisse rounded out the top five, while Switzerland's family-controlled Pictet & Cie. cracked the top-10 for the first time, with $243.21 billion in assets...

July 5, 2010

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

By Matthew Russell Lee

UNITED NATIONS, July 1 -- Romania's Constitutional Court has struck down the pension cuts connected to the International Monetary Fund's facility to that country. On July 1 Inner City Press asked IMF Spokesperson Caroline Atkinson for the IMF's reaction to the decision, and if the government's move to boost the Value Added Tax from 19% to 24% would be enough for the IMF.

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

I have a question online, which is a bunch of questions, but on Romania: 'The government’s measures are being challenged in the Constitutional Court. What does the IMF think of the suit? What impact might it have on the IMF facility for Romania?' And it’s absolutely right that the fiscal adjustment measures, which are prior actions for our program, have to be approved by the Constitutional Court, and of course we respect that process. That’s an entirely appropriate process. We don’t think that that will lead to any -- I mean, that’s not something that we’re concerned about.”

And so on July 1 Inner City Press asked, “the Constitutional Court has now rejected the pension cuts connected to the IMF facility. What is the IMF's reaction, since two weeks ago it was said that the IMF did not expect this result?”

Ms. Atkinson said, “I'm not sure about that.” But she'd said of the Court review, “That's not something that we're concerned about,” a lack of concern that can be equated with not expecting a negative court decision.

Now on July 1, Ms. Atkinson said “the Romanian authorities have identified other measures... What we look at is an overall package, not specifying one measure or another.”

June 28, 2010

Game on: Inner City Press / Fair Finance Watch has filed a timely challenge with the Federal Reserve to the pending applications of The Toronto-Dominion Bank to acquire The South Financial Group and its Carolina First Bank.

FFW obtained TD's 2009 HMDA-LAR, which has not been reviewed or taken into account in any regulatory review of TD. The data are troubling, showing for example that in 2009 Toronto Dominion denied fully 83% of mortgage loan applications from African Americans, versus only 42% of applications from whites. TD's denial rates for Latinos and Native Americans, both 68%, were also troubling. Public hearings should be held and the applications not approved.

TD in fact makes rate spread or subprime loans, but not in a fair manner. African Americans at TD are 1.93 times more likely to be confined to higher cost loans than whites.

While the FRB, despite the stated purpose of HMDA in helping to identify discrimination, has shifted to a dismissive approach to HMDA, it will be hearing different at its upcoming HMDA hearings, testimony at which should be considered by the FRB in connection with this application.

On a recent investors' conference call, TD bragged about its “FDIC-assisted transactions” -- which , significantly, were not reviewed for CRA, and on which there was no comment period. A public hearing is needed on this one. FFW's request in this letter for a complete copy of the applications includes also any and all information in the possession of the FRS concerning TD's “FDIC assisted transactions.”

Meanwhile, shareholders of South Financial have filed suit against the deal. See, e.g., Greenville (SC) News, June 22, 2010. TD has told its shareholders it will somehow convert fast food restaurants into bank branches. See, e.g., Globe & Mail, June 17, 2010. Before serving up its disparate lending, public hearings should be held. These issues must be explored, under managerial and financial factors, in connection with these applications. FFW has requested public hearings.

June 21, 2010

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

By Matthew Russell Lee

UNITED NATIONS, June 17 -- A day after Romania's opposition filed a challenge to the government's cutbacks of public sector wages by 25%, International Monetary Fund spokesperson Caroline Atkinson said, we don't think it will lead to anything, it's not something we're concerned about. Video here, from Minute 30:04.

Inner City Press had asked, "What does the IMF think of the suit and what impact might it have on the IMF's facility for Romania?" Ms. Atkinson said this was "absolutely right, the fiscal adjustment measures which are prior actions for our program, have to be approved by the Constitutional Court."

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

If Reuters is correct that the pending challenge in the Constitutional Court could result in the austerity -- or "fiscal adjustment" -- measures being revoked, why does the IMF so blithely predict it will lead to nothing, and say they are not concerned about it?

Ms. Atkinson began by saying, there is a question from Inner City Press online, "a bunch of questions, but on Romania." She then never read out or answered any of the other questions, about Hungary, Poland, Zimbabwe and Kyrgyzstan. There was, however, another question about Kyrgyzstan, the IMF's answer to which we will include in a forthcoming wider piece about the bloodshed there. Stay tuned.


From the Taylor Bean indictment -- ""[Farkas] and a TBW co-conspirator had in fact diverted that $25 million from an Ocala Funding bank account," the document said. "Further, [Farkas] and other co-conspirators supplied the 10% down payment on behalf of the two $50 million investors without the investors' knowledge or consent." The 30-page indictment included a forfeiture notice listing assets including a 1963 Rolls Royce, a 1958 Mercedes Benz Cabriolet 220 and a 1961 Porsche." Rev rev.

June 14, 2010

So while Citigroup is looking to sell its $50 billion portfolio of retailers' credit card loans, as with CitiFinancial it says it cannot find a buyer. Is Citigroup trying to become the unwilling but continuing predator? Among those not willing to buy: HSBC and GE Money. Those perhaps looking: Santander. Sears, Citi's "partner," is getting pissed.

June 7, 2010

So JP Morgan Chase was hit with the UK FSA's largest fine ever, for blending its own money with that of clients. Why are we not surprised?

May 31, 2010

Citigroup in cemetery scam: The Financial Industry Regulatory Authority has hit Citigroup Inc. (C) with $1.5 million of sanctions for allegedly failing to supervise millions of dollars in trust funds belonging to cemeteries in Michigan and Tennessee. The agency accused the company of mishandling funds as broker Mark Singer and two of his customers were involved in a scheme to misappropriate more than $60 million in cemetery trust funds in 2004 through 2006. Citi, which neither admitted nor denied the allegations but consented to the entry of Finra's finding, will pay a $750,000 fine and $750,000 in commissions repayment

May 24, 2010

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

By Matthew Russell Lee

UNITED NATIONS, May 20 -- With Romania wracked by the most serious protests since its 1989 revolution, Inner City Press on May 20 asked International Monetary Fund spokesperson Caroline Atkinson if the IMF would consider re-negotiating the 25% pay cut to public sector employees portrayed by the government as a condition for receiving a Greece-like bailout.

   On May 6 when Inner City Press asked about Romania, Ms. Atkinson said there were negotiations going on. On May 20, Ms. Atkinson's lengthy answer denied IMF responsibility for the cuts, saying they were choices of the government.

  Ms. Atkinson of the IMF said:

"This gives me an opportunity to clarify that the IMF did not specify or insist on any wage cuts with Romania... we did agree with the Romanian government that some further fiscal tightening would be needed in order to put their program back on track .. the goal is to have sustainable public finances that will allow for a recovery and there are of course different combinations of expenditure cuts and tax increases..

"The government chose to focus on the expenditure side in particular on wage cuts. That was the government's decision. Of course there are no easy options when there are budget cuts. We have been clear that we want to protect the most vulnerable and to have measures that limit the impact on society and can get the most ownership within society."

Tell that to the tens of thousands protesting in Romania's streets. Watch this site.

Citi costs the public: Citigroup received a $45 billion investment under Treasury's Troubled Asset Relief Program. The bank repaid $20 billion and converted, with Treasury's approval, the remaining $25 billion to common stock giving taxpayers 27% of the New York bank. Treasury hired Morgan Stanley and gave it "discretionary authority" to sell the Citi shares at market prices, according to a prospectus filed in April. Selling the shares at market prices is in contrast to a follow-on offering of shares in which Treasury could have sold substantial blocks at once. That process gives the seller price certainty but often depresses the share price because of a surge in supply. Selling at the market, as Treasury has chosen to do, buffers the shares from a sudden change in volume. However, the recent 21% plunge in Citi's value will probably diminish returns for Treasury and raises the possibility some of the shares could be sold at a loss.

May 17, 2010

J.P. Morgan Chase & Co. and Deutsche Bank have both removed themselves from the running for RBS Sempra's energy-trading and retail-energy-supplier businesses, largely because of expectations of a "Volcker Rule" that would force banks to exit from proprietary-trading businesses. Good.

May 10, 2010

Citigroup said a one-notch downgrade of its long-term debt and short-term commercial paper rating would likely mean the bank has to replace $10.8 billion in commercial paper, $2.5 billion in tender option bonds, and $1.1 billion in margin requirements. However, the bank said it has $82.3 billion in liquidity resources it could use as a contingency for such a downgrade, Citi said in its first-quarter earnings filing with the Securities and Exchange Commission. Congress is debating a financial reform bill that might end the concept of "too-big-to-fail," defining banks that would pose too big a systemic risk to the financial industry and the economy to be allowed to fail. If enacted, such legislation would result in rating downgrades, bond-rating agencies warned they might downgrade big banks.

May 3, 2010

Notable is the lawsuit against Wells Fargo for failure to maintain ten apartment buildings in the Bronx, New York that it is foreclosing on, including 3018 Heath Avenue. The case involves over 500 families, tenants of Millbank Real Estate before it defaulted on its $35 million mortgage. Then Wells Wargo and LNR Partners moved in.

April 26, 2010

FOIA, and Citigroup's cheapskatery, in the news: Citigroup Inc.'s unsuccessful bid for the teetering banking operations of Washington Mutual Inc. proposed that the U.S. government absorb a majority of the thrift's loan losses and limited Citigroup's financial exposure to $10 billion, according to a document released by regulators. Terms of the offer by the New York bank previously were kept secret by the Federal Deposit Insurance Corp., which sold the failed banking units to J.P. Morgan Chase & Co. for $1.88 billion in September 2008. The document was disclosed following a Freedom of Information Act request...

April 19, 2010

Three former JPM Chase executives Denis O'Leary, Stephen Rotella and Harry DiSimone have formed Encore Financial Partners, funds raised by Goldman Sachs, to "target" U.S. based banks...

Large loans from foreign banks, including Citigroup Inc. and Deutsche Bank AG, helped to feed "the buildup of risk" in Iceland's banking system, which collapsed spectacularly in 2008, a comprehensive report from a parliamentary commission concluded.

According to the report, Kjalar hf, an investment company controlled by Ólafur Ólafsson, borrowed from Citigroup's Citibank unit in 2007, using as collateral shares in Iceland's Kaupthing Bank held by a Kjalar subsidiary, Egla Invest. Mr. Ólafsson was a big Kaupthing shareholder.In January 2008, with Kaupthing's share price falling, Citibank made a margin call. So Kjalar turned to Kaupthing. Kaupthing granted a €120 million loan. In March, after Iceland's currency weakened, Kjalar borrowed more. The next month, Glitnir also made a loan to Kjalar.

Björgólfur Thor Björgólfsson, an Icelandic mogul, received a €153 million ($208 million) loan from Landsbanki, in which he and his father had a 41% stake, to satisfy demands from Deutsche Bank. The report said the German bank lent him €800 million in July 2007 to finance the takeover of generic-drug company Actavis Group. Landsbanki's former chief executive described the deal in an interview with the commission: "Then it ends...with us lending Björgólfur Thor our own money so he can honor certain things in Actavis," an apparent reference to satisfying debt covenants. Such transactions between a bank and its major owners are out of step with banking rules elsewhere. "Here, we call it insider dealing," says Cornelius Hurley, director of the banking-law program at Boston University. Prof. Hurley notes that U.S. regulations put "Draconian" restrictions on the amount and terms of loans to insiders.A Deutsche Bank spokeswoman declined to comment.

April 12, 2010

In the first study of the just-released 2009 mortgage lending data, Inner City Press / Fair Finance Watch has found that U.S. Bancorp confined African Americans to higher-cost loans above the Federal defined subprime rate spread 1.72 times more frequently than whites. U.S. Bancorp confined Latinos to higher-cost loans above the rate spread 1.71 times more frequently than whites, the data show. 2009 is the sixth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread.

Regional bank BB&T in 2009 confined African Americans to higher-cost loans above the rate spread 1.90 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread 1.43 times more frequently than whites.

Regions in 2009 confined African Americans to higher-cost loans above the rate spread 1.68 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread 1.33 times more frequently than whites.

Several lenders, including a large credit union, exhibited disparities denial rate beween African and Latinos compared to whit