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

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

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

May 20, 2019

FOIA Fee Waiver Sleaze By OCC Otting Tells Inner City Press Public Does Not Need WSFS Bank Merger Docs

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, May 18 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move is to deny access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches. Inner City Press requested the records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and as the OCC has until now.

But Otting is different. First he denied a fee waiver on Inner City Press' request for his calendar. Then he relented on that, after Inner City Press citing case law and precedent. But seemingly in retaliation, he has denied access to a merger application subject to public comment. Denial here on Scribd.

Ironically the grounds cited is that releasing this information about a merger subject to public comment would not increase the public's understanding. This shows Otting contempt for CRA - and for the public. Now it's ever worse. His claim is that while he might have to wave fees for OCC document, he can withhold / hinder the release of the bank's underlying application. But how can the public access what his OCC does on the application, without seeing the application? In a Friday afternoon dump on May 17 this came in from the OCC: "Mr. Lee, I am writing to follow-up on the FOIA Appeal you submitted regarding the fee waiver denial for request 2019-00206-F. In the denial, Mr. Frank Vance identified his concern about lack of information for the third public interest factor – contribution to public understanding. However, on appeal, I am providing you an opportunity to address the first factor – how the requested records specifically concern identifiable operations or activities of the government and the second factor – how the requested records are likely to contribute to an understanding of specific government operations or activities. In your appeal you assert that disclosure of the information sought will document and reveal the activities of the federal government, including how the OCC reviews CRA and branch closing aspects of the merger between WSFS and Beneficial. However, the records you requested are for the withheld portions of the application filed by WSFS. Your request does not seek any records of OCC action before or after receiving the WSFS application. See Judicial Watch, Inc. v. Reno, No. 00-0723, 2001 WL 1902811, at *10 (D.D.C. Mar. 30, 2001) (upholding agency's assessment of fees, reasoning that while agency's response to citizen letters regarding Cuban emigré Elian Gonzales would likely contribute to understanding of agency actions, incoming citizen letters to agency on that topic do not). Emphasis added to DOJ summary. If you would like to supplement your appeal with additional information that demonstrates how the WSFS application itself contributes significantly to public understanding about the operations or activities of the OCC, please do so." We'll have more on this.

May 13, 2019

Mergers we are looking at:

May 3, Florida credit union buying Iowa bank's Florida assets: MIDFLORIDA credit union has announced its intent to merge with Community Bank & Trust of Florida and acquire the Florida assets of First American Bank of Iowa.. There is another one like this, credit union buying bank, in Washington State, here.

May 2, Kansas: First Bank of Newton will be merged into the INTRUST Financial Corporation according to a releaseput out by First Bank. According to the release, the merger should be complete by Aug. 1...

May 1, Wisconsin: First State Bancshares, Inc., parent company of First State Bank, announced purchase agreementwith Pioneer Bancorp, Inc., parent company of Pioneer Bank...

April 30, MS into LA and TX: Hancock Whitney Bank and Lafayette-based MidSouth Bank announced today they have entered into a proposal for MidSouth to merge into Hancock Whitney in a stock-for-stock transaction...

April 24, NC: First-Citizens Bank & Trust Company (First Citizens Bank) and Entegra Financial Corp. (Entegra)announced today the signing of a definitive merger agreement. Entegra provides deposit and loan services through its subsidiary, Entegra Bank... These was a spurned suitor: "The parent company of SmartBank has terminated what would have been its biggest merger yet. SmartFinancial, Inc. said Wednesday a proposed $158.2 million purchase of Entegra Financial Corp. in North Carolina broke apart after SmartFinancial decided not to match a competing offer for Entegra from First Citizens Bank in North Carolina."

April 24, Alabama: CBS Banc-Corp, Inc. ("CB&S"), headquartered in Russellville, Alabama, and PrimeSouth BancShares, Inc. ("PrimeSouth"), headquartered in Tallassee, Alabama, today jointly announced the signing of a definitive merger agreement whereby PrimeSouth Bank will merge with and into CB&S Bank...

May 6, 2019

On Belt and Road Inner City Press Asks IMF Which Cites Tajik and Kyrgyz Debt But Not Money Laundering

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, April 29 – As China uses its Belt and Road Initiative to take over ports in Sri Lanka and prospectively Kenya, its role in Central Asia was asked about by Inner City Press on April 29. The International Monetary Fund held a press conference about the Caucasus and Central Asia and Inner City Press asked, "On the Belt and Road, what are the specific debt and possible corruption issues for BRI in Central Asia? What can the IMF say, and what is it doing, in Central Asia about water scarcity and disputes, and separately anti money laundering compliance?"

IMF Assistant Director Mark Horton replied that there is mounting debt to China, saying the problem is particularly acute in the Kyrgyz Republic and Tajikistan. He said that any projects should in the IMF's view avoid worsen water disputes as well as debt unsustainability. Money laundering was not addressed - yet. Managing Director Lagarde will be in the region from May 16 to 21...

April 29, 2019

In SDNY Sumitomo Sued For Discrimination Responds With Demand For Attorneys Fees For Proskauer

By Matthew Russell Lee, Follow up to exclusive

FEDERAL COURTHOUSE, April 22 – An on again off again Wall Street employee who sued Sumitomo Mitsui Banking Corporation for discrimination and retaliation had a day in court on April 22, in the U.S. District Court for the Southern District of New York courtroom of Judge J. Paul Oetken. Opposing her, as for Qatari royals in the same courtroom, was the Proskauer Rose law firm, which has moved for her to have to pay attorneys fees. The pro se plaintiff Maureen Ottoson said her prior lawyer sold her out, only wanted to settle on the cheap after Proskauer asked for $160,000 in fees before now deceased Judge Robert Sweet.

Judge Oetken who now has the case said he will consider a motion for attorneys fees ocassioned by Ottoson dropping and then reinstating a discrimination claim. He set a final pre-trial conference for June 19 and a trial, jury or bench, for July 8. The conference, apparently not captured by any official SDNY court reporter and with only Inner City Press as media present, ended with Proskauer again saying they would drop the attorney's fees request only if Ottoson dismisses the discrimination complaint "with prejudice." The index number and more and on Patreon, here. We'll continue to follow that case - and this one: the Qatar ruling family's abuse of employees and laws was exposed in an off the record initial conference at in the SDNY on February 14; Inner City Press was the only media present. Inner City Press wrote an exclusive story that day, February 14, then more in the following few days as more sources contacted us. Now it has learned that the UK's Daily Mail days later on February 21 false claimed an exclusive on the story, here.

April 22, 2019

In SDNY Disputed Seizure of Funds From Comerica By NYC Marshal Beagle For Factoring Company

By Matthew Russell Lee

SDNY COURTHOUSE, April 18 – The systemic scam of marshals seizing money for factoring companies from out of state banks emerged on April 18 with Inner City Press the only media present in the U.S. District Court for the Southern District of New York courtroom of Judge John G. Koeltl. A reciever in from Detroit was contesting a factoring company using NYC Marshal Beagle to seize money from Michigan's Comerica Bank. The factoring company's lawyer, with the same last name, said it was fine since Comerica like BB&T - the example he gave - use the New York courts, so should they turn over money. The marshal's lawyer's argument were less clear, but they are due on June 14. Inner City Press will cover this - and BB&T.

April 15, 2019

On Myanmar IMF Belatedly Issues Report Without The Word Rohingya Worried About Rakhine

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, April 12 – When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. On April 12, the IMF has issued this, from March and without even the word Rohingya, about Myanmar: "April 12, 2019 On March 15, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Myanmar. Myanmar’s economy rebounded in 2017/18 but appears to be losing momentum. Growth rebounded to 6.8 percent in 2017/18 driven by exports and a recovery in agriculture. The fiscal deficit reached about 2.7 percent of GDP in 2017/18, and central bank financing of the deficit continued to decline. Headline inflation was moderate in 2017/18 (4.0 percent on average) but has been rising from increased fuel prices and a depreciating kyat. The current account deficit widened marginally in 2017/18 to a little under 5 percent of GDP and was largely financed by strong FDI inflows keeping international reserves at around three months of imports. Preliminary data in the transition budget year (April–September 2018) point to deceleration of growth due to government underspending, waning investor confidence and moderating global demand. The medium-term macroeconomic outlook remains favorable. Myanmar’s economy is expected to gain steam over the medium term albeit at a somewhat slower pace than previously envisaged and subject to greater downside risks partly related to the humanitarian crisis in Rakhine state. The fiscal deficit for the new fiscal year is projected to increase, providing a modest fiscal stimulus on the back of higher capital spending. A drop in international oil prices and a gradual moderation in inflation over the near term should support consumer spending. Successful implementation of the second wave of reforms in the Myanmar Sustainable Development Plan will help sustain the growth take off and achieve the Sustainable Development Goals. Risks are tilted to the downside. A prolonged humanitarian crisis and any withdrawal of trade preferences could reduce concessional donor financing and investment leading to lower growth. Macrofinancial spillovers from the ongoing banking sector restructuring process may be more severe if banks delay recapitalization. Risks on the global front include trade tensions and related global financial market volatility, high crude oil prices and spillovers from exposure to China. On the upside, a faster resolution of the humanitarian crisis would facilitate higher external financing that allows greater SDG-related spending and rebuilding of international reserves."

April 8, 2019

To Argentina IMF Disburses $10.8B While Calling for Corruption To Be Confronted Amid South South Waste

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, April 5 – When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. On April 5, the IMF has issued this about Argentina: "The Executive Board of the International Monetary Fund (IMF) completed today the third review of Argentina’s economic performance under the 36-month Stand-By Arrangement (SBA) that was approved on June 20, 2018. The completion of the review allows the authorities to draw the equivalent of SDR 7.8 billion (about US$10.8 billion), bringing total purchases since June 2018 to SDR 28.01371 billion (about US$38.9 billion). Following the Executive Board discussion of Argentina’s economic plan, Ms. Christine Lagarde, the IMF’s Managing Director stated: “The authorities’ policies that underly the Fund-supported arrangement are bearing fruit. The high fiscal and current account deficits - two major vulnerabilities that led to the financial crisis last year - are falling. The BCRA reacted to these developments by recalibrating its monetary policy, maintaining zero growth in the monetary base until the end of the year. A new central bank charter has been sent to Congress and, if passed into law, will strengthen the credibility of monetary policy. Priorities include further efforts to designing a less distortionary tax system, encouraging greater competition in domestic product markets, removing barriers to trade and foreign investment, strengthening governance and confronting corruption, and fostering gender equity. “The success of the authorities’ policy plans relies on its continued steadfast implementation. This will require the building of broad-based support for policies that will lessen economic vulnerabilities, raise Argentina’s growth potential, and foster market confidence."Nothing on the recent South South waste. On March 26 the IMF said, "The signing of an agreement between Cabo Verde and the European Union for fish exports is a welcome development in this context. The central bank (BCV) needs to continue monitoring developments in the Euro area closely and stand ready to change the monetary policy stance as needed; and should continue to maintain a high level of reserves to protect the peg and increase the economy’s resilience to adverse shocks. To enhance the efficiency of monetary policy, further actions are needed to strengthen the monetary policy transmission mechanism. “The BCV’s continued efforts to strengthen banking sector supervision are welcome. In 2018, financial stability indicators improved, and banks’ profitability increased. Although non-performing loans (NPLs) declined in 2018, their high level (12.2 percent of total loans at end-December 2018) remains a source of concern, and resolution of legacy loans linked to the 2008 financial crisis should be an important priority.” Cabo Verde is one of the Lusophone countries where UNSG Antonio Guterres' son Pedro Guimarães e Melo De Oliveira Guterres has murky business links undisclosed by Guterres like his own links with UN bribery CEFC China Energy, through the Gulbenkian Foundation. We'll have more on this. Here's the IMF's March 7 transcript: "There is question on Haiti coming from Matthew Lee in New York. I'll take a couple of Matthew's questions as usual. And Matthew is asking about any updates I can give him on Haiti. And I can say that an IMF team is in Port Au-Prince as we speak to complete the Article IV consultation. But more than that, to discuss a possible IMF financial arrangement with Haiti. And we will hear more on that very, very soon. But I can say that the mission will propose that what the mission will propose is highly concessional, on the most concessional terms we can offer for Haiti and it will highlight social protection. It will highlight the fight against corruption while deferring any fuel price adjustments until the government is able to guarantee that the most vulnerable will be protected from any negative effects. Those of you who follow Haiti, you know, will understand the context of what I have just said. And again, the mission will communicate its findings at the end of the visit."

April 1, 2019

On Cyprus IMF Talks Money Laundering As Loans Out of Banks and Impact of Hard Brexit

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, March 28 – When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. On March 28, the IMF has issued this about Cyprus: "An International Monetary Fund (IMF) mission visited Nicosia during March 18–27, 2019, for the third post-program monitoring (PPM) discussions. PPM is part of the IMF’s regular monitoring of countries with significant outstanding IMF credit, which focuses on risks to capacity to repay the IMF. The IMF mission was coordinated with the European Commission, the European Central Bank, and the European Stability Mechanism. Economic growth has been strong, supported by construction, tourism and professional services. Unemployment has declined further. The underlying budget remains in a large surplus. Banks’ balance sheets are being strengthened: non-performing loans (NPLs) have declined sharply following transfers of sizable loan portfolios out of the banks. While this progress is welcome, continued efforts are needed to address challenges that remain from elevated public and private indebtedness, still high level of bank NPLs, large fiscal risks, and increasing headwinds to sustained growth. Growth momentum is expected to slow gradually but remain strong. Real GDP growth is projected to reach a still-robust 3–3½ percent in 2019–20, from 3.9 percent in 2018, led by foreign direct investment. Private consumption growth is expected to remain solid, supported by rising jobs and wage increases, but will gradually decelerate as borrowers step up debt servicing. Domestic credit is expected to remain weak, however, constrained by the NPL overhang in the banking sector. The high import content of investments and lower exports growth, reflecting a slowdown in Europe, will keep the current account deficit elevated. In the medium-term, growth is expected to ease to its potential rate of around 2½ percent. Cyprus’s capacity to repay the Fund is adequate under this baseline. Public debt service—interest plus principal—is expected to remain broadly constant over the coming years. Strong economic growth and a sizable primary fiscal balance are expected to support a durable decline in gross public debt and continued favorable market borrowing terms. However, repayment capacity could be weakened if growth slows significantly or if some specific risks materialize from banks’ still weak asset quality; the realization of fiscal guarantees; or unexpected spending, including from court cases. This could be exacerbated in the event of weaker than expected growth in Europe, or a hard Brexit. Policies can help mitigate these vulnerabilities and strengthen capacity to repay: 1. Facilitating deleveraging, reducing NPLs and strengthening bank profitability: Further efforts are needed to address the troubled legacy assets—which remain among the highest in Europe. Steadfast implementation of the foreclosure framework, including e-auctions, is key to lowering debt. Banks are encouraged to continue maintaining appropriate capital and provisioning levels and reducing NPLs and real estate property holdings to targeted levels. Continuing efforts to mitigate AML/CFT risks remains a priority to reduce risks to growth. Improving corporate governance of commercial state-owned enterprises and reforming local government will help reduce contingent fiscal liabilities and raise productivity. Amendments to the Central Bank of Cyprus legislation should be expedited to strengthen its governance." On March 26 the IMF said, "The signing of an agreement between Cabo Verde and the European Union for fish exports is a welcome development in this context. The central bank (BCV) needs to continue monitoring developments in the Euro area closely and stand ready to change the monetary policy stance as needed; and should continue to maintain a high level of reserves to protect the peg and increase the economy’s resilience to adverse shocks. To enhance the efficiency of monetary policy, further actions are needed to strengthen the monetary policy transmission mechanism. “The BCV’s continued efforts to strengthen banking sector supervision are welcome. In 2018, financial stability indicators improved, and banks’ profitability increased. Although non-performing loans (NPLs) declined in 2018, their high level (12.2 percent of total loans at end-December 2018) remains a source of concern, and resolution of legacy loans linked to the 2008 financial crisis should be an important priority.” Cabo Verde is one of the Lusophone countries where UNSG Antonio Guterres' son Pedro Guimarães e Melo De Oliveira Guterres has murky business links undisclosed by Guterres like his own links with UN bribery CEFC China Energy, through the Gulbenkian Foundation. We'll have more on this.

March 25, 2019

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

By Matthew Russell Lee, CJR PFT NY Post

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

March 18, 2019

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

By Matthew Russell Lee, CJR PFT NY Post

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

March 11, 2019

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

By Matthew Russell Lee, Periscope

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

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

March 4, 2019

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

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

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

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

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

February 25, 2019

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

By Matthew Russell Lee, Exclusive, Periscope

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

February 18, 2019

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

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

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

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

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

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

February 11, 2019

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

By Matthew R. Lee, FOIA docs

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

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

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

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

February 4, 2019

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

By Matthew Russell Lee

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

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

Inner City Press will be following this...

January 28, 2019

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

By Matthew Russell Lee, CJR PFT NY Post

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

January 21, 2019

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

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

NEW YORK CITY, January 14 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. On January 14,