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

February 8, 2010

Missing from New.Citi.com are admission like, "Yes CitiFinancial trained its employees to hard sell unnecessary credit insurance, even on items like fishing rods which weren't collateral for loans. But what of it? We've produced a new video! We're here for you!"

Through the first nine months of 2009, about 54% of donations from Bank of America Corp.'s political action committee and employees went to Republicans, according to campaign-finance data compiled by the nonpartisan Center for Responsive Politics. That was a switch from the 2008 campaign, when 56% of the company's donations went to Democrats..

Click here for InnerCityPress.com's IMF's Strauss-Kahn Coy on Opposing Sarkozy and Intervening in Greece, IMF and Greek Denials, Yemen Deferrals

February 1, 2010

Trends and echoes: Bank of America repurchased nearly $4.5 billion of loans during the first nine months of 2009, according to data compiled by Barclays. That was triple the $1.5 billion repurchased in all of 2008. Along with the Countrywide acquisition, the sleaze is growing.

At J.P. Morgan Chase, total buyback demands from the GSEs surged to $5.3 billion in 2009 from $4 billion in 2008, according to Barclays Along with the WaMu acquisition, the sleaze is growing.

Citigroup jacked up its stake in the controlling shareholder of Banco de Chile, acquiring an additional 8.52% in LQ Inversiones Financieras for $511 million. Banco de Chile, the Andean nation's second largest bank, is controlled by the local Luksic family, which also controls U.K.-listed copper miner Antofagasta PLC (ANTO.LN) and U.S.-listed beverage company Compania Cervecerias Unidas SA (CCU), among other assets. In a 2007 deal Citigroup Inc. took a 10.44% stake in Banco de Chile, through LQ, and the Chilean bank acquired Citibank's local assets. Under the terms of the Banco de Chile-Citigroup deal, the Chilean bank took over all of Citibank's local clientele, while the U.S. bank retained control of Banco de Chile's operations on U.S. soil.

And where are Citigroup's home country regulators?

January 25, 2010

As the financial crisis commission claims to be zeroing in on Citigroup, so far interviewed were Lloyd Blankfein, CEO of Goldman, Brian Moynihan, CEO of Bank of America, James Dimon, CEO of J.P. Morgan, and John Mack, chairman of Morgan Stanley. Who will appear for Citi? And where will it all end?

January 18, 2010

As Obama's Bank Fees Under-Target Citigroup and AIG, Geithner Questioned

By Matthew R. Lee

NEW YORK, January 14 -- The night before President Barack Obama was scheduled to unveil a scheme of fees on the three or four dozen largest financial firms, the Administration held a then embargoed conference call with the press.

Several questions centered around why the auto manufacturers which took TARP funds would not also be fined. Others wondered, if the fee regime yielded more than what the government and taxpayers lost through TARP before it expired in ten years, would the money still be collected and how would it be used?

The Administration representative, who the press was told could only be called a "senior administration official," replied that once the basis of calculating the fee had been decided on, car companies didn't fit it.

Before all questions were answered, the Administration signed off, noting that Obama would be making his announcement at 11:20 the next day. Among the questions not taken or answered was this, from Inner City Press: why assess all of the financial firms under the program at the same rate, fifteen basis points?

Citigroup, for example, received much more TARP and other payouts than other covered banks. And as South Bronx based Fair Finance Watch and others showed at the time, the government tried to help Citigroup scoop up Wachovia, until another less subpsized offer won the day. Why benefit Citigroup again by treating it like other, less subprime heavy banks? The same holds for AIG.

The "senior Administration official" went out of his way to portray the program as a matter of principle for not only Obama but also "his" Treasury Secretary, Tim Geithner.

To some, the timing is meant to blunt renewed bipartisan criticism of Geithner, this time only only for not paying his taxes to the IRS -- which would be collecting the fees from the financial firms -- but for having told AIG not to disclose the preferential basis of the bailouts it was receiving, while he was at the Federal Reserve Bank of New York.

But it was hard to note that his seeming favorite, AIG, and the bank most benefited by his Federal Reserve Bank of New York, Citigroup, are benefited by the structure of this proposed Financial Crisis Responsibility Fee program.

In fact, some say it has an aspect of a Tim Geithner bail out.

And that's... a question that should be asked, and answered. Watch this site.

January 11, 2010

Too little, too late, Citigroup's ex-spook director John M. Deutch last week intoned that "directors that served on Citi's board during this financial crisis should rotate off in an orderly fashion." Mr. Deutch was among the deadwood directors targeted last year by Citigroup shareholders who contended that the directors should be removed. Also needing replacement are former AT&T Corp. Chief Executive Michael Armstrong, Alcoa Inc. Chairman Alain Belda, Dow Chemical Co. CEO Andrew Liveris, Xerox Corp. Chairman Anne Mulcahy, Rockefeller Foundation President Judith Rodin and Robert L. Ryan, retired finance chief of Medtronic.

January 4, 2010

Wells Fargo, already being sued by Baltimore for targeting people of color with high cost loans, has now been hit with a similar law suit in Memphis, Tennessee. "Ghetto loans," they call them.

December 28, 2009

As UN's Ban "Divides and Rules" G-77, Pachauri's Bank Links Unexamined

By Matthew Russell Lee

UNITED NATIONS, December 21 -- While most observers and even participants describe the Copenhagen global warming talks as a disappointment, UN Secretary General Ban Ki-moon on Monday told the Press that they "sealed the deal" and were a success.

Inner City Press asked Mr. Ban about the scandal erupting around the undisclosed business interests of the chairman of the UN's Intergovernmental Panel on Climate Change Rajendra Pachauri, from the Tata Group through Deutsche Bank to Credit Suisse, and about the criticism by the chairman of the Group of 77 and its now 130 member states.

Mr. Ban entirely dodged the first question, paradoxically using it as an opportunity to praise business. On the second, he asserted that the chairman of the Group of 77 was not, in fact, speaking for the Group, since others' of its members spoke more positively.

Moments later, Inner City Press asked Sudan's Ambassador to the UN about Mr. Ban's comments. "Divide and rule," he answered, calling the Copenhagen process "climate apartheid." This phrase steps back from his counterpart in Copenhagen who analogized it to the Holocaust.

Pachauri's conflicts of interest are extensive and emblematic of the UN's lack of transparency and safeguards.

As detailed in the Telegraph

In 2008 he was made an adviser on renewable and sustainable energy to the Credit Suisse bank and the Rockefeller Foundation. He joined the board of the Nordic Glitnir Bank... This year Dr Pachauri joined the New York investment fund Pegasus as a ‘strategic adviser’... He is on the climate change advisory board of Deutsche Bank... One subject the talkative Dr Pachauri remains silent on, however, is how much money he is paid for all these important posts, which must run into millions of dollars.

So, notwithstanding the non-responsive answer Monday morning, does Mr. Ban believe that Pachauri should make public financial disclosure of these interests? Watch this site.

December 21, 2009

IMF Silent on Climate Change Proposal to Use Its Gold and SDR Interest

By Matthew Russell Lee

UNITED NATIONS, December 18 -- While world media reports that the International Monetary Fund might play a role in climate change adaptation funding, as proposed by among others George Soros, IMF spokesperson Caroline Atkinson told the Press on Thursday that how SDRs (special drawing rights) are used is "up to individual countries." Video here.

But the proposal involves the IMF using the gold it holds, already ostensibly directed to less developed countries, for the purpose of adaptation. So shouldn't the IMF have a response?

Sitting "idle" in the IMF's coffers are $150 billion for just 15 countries. But the IMF apparently doesn't have the funding or staff or commitment to prepare a transcript of its mere biweekly press briefing the same day it is held.

Below are portions of the proposal.

Developed countries' governments are laboring under the misapprehension that funding has to come from their national budgets but that is not the case. They have it already. It is lying idle in their reserves accounts and in the vaults of the International Monetary Fund (IMF), available without adding to the national deficits of any one country. All they need to do is to tap into it.

In September 2009, the IMF distributed to its members $283 billion worth of SDRs, or Special Drawing Rights. SDRs are an arcane financial instrument but essentially they constitute additional foreign exchange. They can be used only by converting them into one of four currencies, at which point they begin to carry interest at the combined treasury bill rate of those currencies. At present the interest rate is less than one half of one percent. Of the $283 billion, more than $150 billion went to the 15 largest developed economies. These SDRs will sit largely untouched in the reserve accounts of these countries, which don't really need any additional reserves... The United Kingdom and France each recently lent $2 billion worth of SDRs to a special fund at the IMF to support concessionary lending to the poorest countries. At that point the IMF assumed responsibility for the principal and interest on the SDRs. The same could be done in this case.

The IMF owns a lot of gold, more than a hundred million ounces, and it is on the books at historical cost. At current market prices it is worth more than $100 billion over its book value. It has already been designated to be used for the benefit of the least developed countries. The proposed green fund would meet this requirement...it could make the difference between success and failure in Copenhagen.

So shouldn't the IMF have had something to say about the proposals? Watch this site.

An arbitration claim by the Abu Dhabi Investment Authority against Citigroup, seeking to rescind an agreement to invest a total of $7.5 billion in the U.S. lender or damages of over $4 billion has been filed, alleging that there were "fraudulent misrepresentations" in the investment agreement. Sort of like CitiFinancial's "fraudulent misrepresentations" to its lower income borrowers...

December 14, 2009

IMF Studies Congo Deals by India and China, Quid Pro Quo by Canada at Paris Club on Mining, UN's Kivu Spin

By Matthew Russell Lee

UNITED NATIONS, December 11 -- The Congo battles for and is embattled by its natural resources, the International Monetary Fund made plain on Friday, perhaps inadvertently. During a press conference call explaining the IMF's $550 million facility to the Democratic Republic of the Congo, the IMF's Brian Ames put the DRC's external debt at $13 billion.

Inner City Press asked about new debts to China and prospectively India, about conflict and mining in the East, and Canada's use in the Paris Club of debt relief to strong-arm for two of its mining firm.

Ames, who traveled to Kinshasa to negotiate about what he called the "China deal," described how with IMF pressure the deal decreased in size from $9 billion to $6.2 billion, with "only" $3 billion guaranteed by the Congolese government.

Even this guarantee, he emphasized, could only become due in 25 years. Still, the IMF urged the restructuring of the China deal. Inner City Press asked about a newly reported loan proposal by India to the Congo, for $263 million.

Ames said that was just an announcement, when Congolese officials were in India. To Inner City Press, a connection with the Congo's loud demand that Indian peacekeepers leave the UN Mission in the Congo, MONUC, is inescapable. India is paid by the UN and makes money on these peacekeepers. How does this sum relate to whatever concessional rates India will offer to the Congo?

Inner City Press asked what the IMF thinks of Canada's delay of a Paris Club vote on debt relief to the Congo based on contracts canceled to Canadian mining firms. Ames agreed that this had happened, saying it was really about 1st Quantum. But what about Toronto-based Lundin Mining, whose 24% stake in the Tenke Fungurume mine and its $1.8 billion contract are being "re-negotiated"?

After Ames said that Canada had, after a week's delay in November, agreed on a conference call to go forward with debt relief, Inner City Press him if 1st Quantum's contract was restored. No, he answered, but the Congolese government, which already won a round of litigation in its own courts, has agreed to international arbitration.

Congo's Kabila and China's Hu Jintao, Indian UN peacekeepers and IMF and Canadian pressure not shown

Ames' colleague, whom Ames instructed to "earn his paycheck," added the 1st Quantum has other mines in the Congo, that the dispute involves only one mine. Yes, but that is the $553 million Kolwezi copper and cobalt project.

Inner City Press asked if the IMF has concerns, similar to those evidence on the China deal, about the prospects of an Indian infrastructure loan. It is just a proposal, Ames said, adding that it would be for two hydro electric projects and one water project. Actually, the third would be $50 million towards the rehabilitation of the rail system in Kinshasa.

When Inner City Press asked about reports, including by the UN's Group of Experts, of illegal mining in the Kivus, Ames said that since this revenue stream has yet to go to the government, its diversion does not have an impact and is not considered. Actually, the UN Group's report shows that units of the Congolese army are involved in the illegal mining.

Inner City Press asked the UN about reports its own Office of Legal Affairs advised MONUC not to work with units of the Congolese army involved in these and other crimes. The response:

Subj: your question on the DRC
From: unspokesperson-donotreply [at] un.org
To: Inner City Press
Sent: 12/10/2009 1:33:20 P.M. Eastern Standard Time

I. The tasks carried out by MONUC are determined by the Security Council. The mission has a mandate to provide support to the Congolese Armed Forces (FARDC) in disarming illegal armed groups while protecting the civilian population. MONUC continues to give the highest priority to protection of civilians.

II. In furtherance of this mandate, MONUC and DPKO requested advice from the Office of Legal Affairs regarding the conditions governing their collaboration with the FARDC. In full transparency, the Secretariat and the Mission advised the Security Council of the risks involved and potential consequences of cooperating with the FARDC. The Security Council has repeatedly expressed their unanimous support for MONUC and for the joint operations with the FARDC against the FDLR, with full respect for International Humanitarian, Human Rights and Refugee Law.

III. After extensive consultations between the Secretariat the Mission and OLA, a policy was developed, setting out the conditions under which the Mission would support FARDC. This policy was transmitted to the DRC Government in November. It specifies that all MONUC participation in FARDC operations must be jointly planned and must respect international humanitarian law, human rights and refugee law. The policy also includes measures designed to improve FARDC performance as well as to prevent and sanctioning violations. This 'conditionality' provision is why the Mission suspended support to a specific FARDC unit believed to have been involved in the targeted killing of civilians in the Lukweti area of North Kivu.

Let's remember that the IMF is ostensibly part of the UN system. We will continue to follow this -- watch this site.

Footnote revealed by the WSJ: "More than $2 billion allegedly held on behalf of Iran in Citigroup Inc. accounts were secretly ordered frozen last year by a federal court in Manhattan, in what appears to be the biggest seizure of Iranian assets abroad since the 1979 Islamic revolution. The legal order, executed 18 months ago by the U.S. District Court for the Southern District of New York, is under seal and hasn't been made public." Call it Citi's secret sleaze...

December 7, 2009

IMF Rebuffs Stanford Victims on Antigua Despite Iceland, and Romania, Ukraine and UN

By Matthew Russell Lee

UNITED NATIONS, December 3 -- As the victims of the Stanford scam petition the U.S. Congress to stop the flow of any funds from the International Monetary Fund to Stanford's home base of Antigua and Barbuda, the IMF says such considerations play no role in its decisions.

On December 3, Inner City Press asked the IMF since, "there is a proposal in the U.S. Senate seeking to block IMF funds to Antigua until the victims of the Stanford scandal are compensated. Given the IMF's recent actions on Iceland, does the IMF acknowledge any link in Antigua between IMF funds and the compensation of banks' victims?"

IMF spokesperson Jennifer Beckman responded that "it isn’t part of the IMF’s mandate to help private parties in their claims against our member governments."

But in Iceland, the IMF held back its loan or stand by arrangement until the victims, in the UK and the Netherlands, of Icesave were made whole. The IMF is inconsistent, and refuses to forthrightly explain its policies.

Every two weeks, the IMF is supposed to hold a press briefing including online participation by accredited media like Inner City Press. There are been technical snafus, but those on December 3 reached a new low.

Inner City Press, with three or four questions to ask, logged in to the password protected IMF Media Briefing Center before the 9:30 a.m. start of the briefing. But the screen remained dark. This was no out of the normal, as Spokesperson Caroline Atkinson has several times started late.

At 9:58 a.m.., thinking that the briefing may have been delayed or canceled, Inner City Press called the IMF. The answer was that the briefing would be "rebroadcast" later in the day. But what about online participation by accredited media?

There have been technical issues, Inner City Press was told, and was advised to submit its questions in writing, they would be answered. At 10:04 a.m., Inner City Press submitted its questions, to Ms. Atkinson and the general inbox, with a cover note that

for some reason, the Webcast of this morning's IMF briefing didn't work. I waited, thinking the briefing was delayed as sometimes happens. Just now I called the IMF and was told there was a "technical issue," that the briefing would be re-broadcast. When I said I had questions to ask, I was told to send them here and they will be answered. Here they are, I am writing on these topics today:

There is a proposal in the U.S. Senate seeking to block IMF funds to Antigua until the victims of the Stanford scandal are compensated. Given the IMF's recent actions on Iceland, does the IMF acknowledge any link in Antigua between IMF funds and the compensation of banks' victims?

In Romania, the party of the presidential frontrunner has come out against what it calls IMF imposed layoffs in the public sector. Will the IMF confirm it is urging such layoffs, if so how many, and what ramifications if they are not implemented?

Yesterday 2 UN experts told the Press the IMF's Flexible Credit Line discriminates against poorer countries, & that rather than moving beyond conditionality, IMF simply imposes conditions later. Video here.

What is the IMF's response? And to allegation that health crisis in Ukraine is due to IMF imposed cuts? On deadline.

Even twelve hours after these four questions were submitted, the IMF had answered only one of them.

Subj: On Antigua
From: JBeckman@imf.org
To: Innnr City Press
Sent: 12/3/2009 11:11:00 A.M. Eastern Standard Time

Although we are concerned about the Stanford Victims Coalition, it isn’t part of the IMF’s mandate to help private parties in their claims against our member governments.

What about the other answers? Watch this site.

The Kuwait Investment Authority's exit from Citigroup comes as another Gulf sovereign wealth fund, the Abu Dhabi Investment Authority, may have to overpay on about $7.5 billion worth of the Citi's shares it's committed to buy at $31.83 a piece in a deal struck two years ago. The UAE-based investment fund, also known as ADIA, committed in November 2007 to pump billions into Citi in return for an 11% dividend up to March next year when it has to start buying the bank's common stock.

November 30, 2009

IMF Murky on Angola's Oil, Bond and China Deals, Doles Out $1.4 Billion

By Matthew Russell Lee

UNITED NATIONS, November 25 -- Days after announcing a $1.4 billion arrangement with Angola, the International Monetary Fund held a press conference call to offer explanations. At the end, things were murkier than before. Inner City Press asked if the IMF had been able to fully assess the income and distribution of revenue from the state owned oil company Sonangol.

The IMF's Lamine Leigh, who led the Fund's missions to Angola in August and September, replied that "in the context of our negotiations, Sonangol participated fairly well." Inner City Press asked, since Sonangol has accounts in off shore financial centers and tax havens, if the IMF had gotten to the bottom of these accounts.

After a long pause, Lamine Leigh proffered another answer, that the government has "committed to steps in the more general area of resource revenue transparency." But what about the Sonangol accounts?

Inner City Press asked about the statement by IMF Deputy Managing Director and Acting Chair Takatoshi Kato that in Angola "measures will be taken to strengthen further the regulatory and supervisory framework." The IMF's Senior Advisor on Africa Sean Nolan replied that the IMF analyzed the effect of the exchange rate on borrowers and "on the banks."

In fact, Angola's government has gotten billions in pre-export oil loans from, for example, BNP Paribas, Standard Chartered and Deutsche Bank. The latter has made similar loans in Turkmenistan, assailed by transparency and human rights advocates. How much of the IMF's new arrangement benefits these banks?

In fact, the questioner after Inner City Press, cutting off follow up, was from Standard Bank. Other than Inner City Press, the only other media questioner was from Reuters.

Before the call ended, Inner City Press was able to ask about Angola's reported $4 billion bond sale planned for December. Sean Nolan said that the IMF's "understanding" with Angola does involve a "fundraising effort," but that the timing was not agreed to, the IMF does not "micromanage" to that extent. Nolan added that there is an agreement on an "overall limit."

"Is it four billion dollars?" Inner City Press asked.

Nolan replied that the precise limit will be "clear in the documents," which have yet to be released. Why play hide the ball?

Nolan praised the country for "appointing reputable financial and legal advisers for the transaction" -- JPMorgan Chase will be the manager.

Nolan continued that the actual size of the bond sale will depend on how much "concessionary lending" Angola gets from "countries with a strong record of financial support to Angola."

Inner City Press asked if the size of China's loans to Angola -- China gets 16% of its foreign oil from Angola -- were known by the IMF or considered.

"That hasn't figured in our discussions," the IMF's Nolan responded. Why not? Watch this site.

No honor among thieves: Deutsche Bank AG and a unit of BNP Paribas SA separately sued Bank of America Corp. on Wednesday, alleging that the bank has failed to repay about $1.7 billion in secured notes issued by a special-purpose entity. The breach-of-contract lawsuits, filed in U.S. District Court in Manhattan, allege that Bank of America has failed to redeem $480.7 million in secured notes held by BNP Paribas and $1.2 billion held by Deutsche Bank. The notes were issued by Ocala Funding LLC, a special-purpose entity that provided short-term liquidity funding to Taylor, Bean & Whitaker Mortgage Corp..."

November 23, 2009

Amid Reports of War Crimes, IMF Gives More Funds to Sri Lankan Government and Spins on Human Rights

By Matthew Russell Lee

UNITED NATIONS, November 18 -- The International Monetary Fund's seemingly dismissive attitude toward human rights, including labor rights and protections against ethnic cleansing and even torture, has been on display this month. Managing Director Dominique Strauss Kahn defended the IMF's disbursement of funds to the government of Sri Lanka, without any conditions or safeguards, after detailed reports of presumptive war crimes.

When Inner City Press asked IMF spokesperson Caroline Atkinson if, in light of Mr. Strauss Kahn's logic, the IMF ever considers human rights in disbursing funds or not, she laughed and called the question's "premise... a bit misleading." Video here from Minute 9:07.

From the IMF's sanitized transcript:

Inner City Press: Does the Managing Director’s November the 5th statement ‘regardless of one’s opinion of the human rights situation’ mean that the IMF never considers human rights?”

MS. ATKINSON: That’s another question where the premise is a bit misleading. The point that the Managing Director was making in his response to a letter from Human Rights Watch was—and as you know, the text of that letter talks quite directly about the Managing Director’s own feelings about the importance of human rights. And the point of that quote was that he was saying whatever you think about what rights and wrongs of what’s happening in Sri Lanka now, what is true is that an economic collapse would make lives worse for everybody. And, of course, usually the most vulnerable are most hurt by any economic collapse. So it was in that context he was explaining the reasoning behind the Fund’s economic support for Sri Lanka. Thank you all very much and have a good Thanksgiving.

In fact, even the Europe Commission in considering extending or suspending its GSP Plus favorable tariff treatment to Sri Lanka, has taken into account consideration of human rights and war crimes. By contrast, the IMF has argued against any duty to consider human rights. Even Strauss Kahn's letter refers only to "humanitarian" issues, and uses this as an argument in favor of releasing more funds.

Since March, Inner City Press has asked IMF spokespeople what safeguards if any would be attached to the loan. (Despite Inner City Press' demonstrated interest since then, the IMF did not tell it about its conference calls on disbursements to Sri Lanka, neither in July nor this month).

On July 16, the IMF's Caroline Atkinson said that the views of the international community will be taken into account. Four days later her boss Mr. Strauss Kahn issued a press release with no mention of safeguards. Now a letter, and a laugh. We will continue to follow this issue.

November 23, 2009 -

Citigroup, which used to have five retail banking locations in London, has written to account holders alerting them to the closure of its Monument branch on November 27. It’s the one just east of the monument to the Great Fire of London, the tallest isolated stone tower in the world. Users are being directed to the St. Paul’s branch, which is about a mile west. That’s a 15-minute walkaway. Accounting for the closure, a spokeswoman said: “The St Paul’s branch has better facilities and is located on a bigger site.” They've done this in the USA too...

November 16, 2009

House of cards - HSBC announced last week it had agreed to sell its London headquarters building to the National Pension Service of Korea for $1.3 billion. The move to sell its 8 Canada Square property in Canary Wharf, London's financial area, comes a month after the bank announced the sale of its New York headquarters building to Israeli investment holding company IDB Group for $330 million...

November 9, 2009

So Jaime Dimon's father Theodore or Ted being given a job at JPMorgan Chase, can we call that nepotism?

IMF's Report Buries Its Icesave Conditionality, Enforcer's Duplicity?

By Matthew Russell Lee

UNITED NATIONS, November 3 -- While the IMF has acknowledged that its second round of disbursements to crisis-hit Iceland was delayed for months by the country's failure to placate those in the Netherlands and UK who did business with IceSave, the IMF's just released report on Iceland buries the issue on page 30 of the 98 page report. The IMF states that

"[t]he terms and conditions of Nordic loans, amounting to $2.5 billion, have been finalized. Their disbursement has been linked to resolution of the Icesave dispute with the U.K. and Netherlands over deposit insurance liabilities. After protracted discussions, the three governments have reached an agreement on this"

Once that agreement was reached, on October 18, the IMF then went forward with a letter of intent and memorandum of understanding for the second tranche of financing. But, as with the IMF's moves in Latvia for Swedish banks, some see the Fund operating as an enforcement or collections agent for creditors who even less would like to show their hand.

Since the IMF does not like to admit or reveal its degree of control over the countries it lends to, the de facto conditions for loans, such as paying off on IceSave, are often not explicit in what purport to be full agreements containing all express and implied terms.

In fact, the IMF has claimed that it "no longer" engages in conditionality. But the Iceland report has an entire chart about conditionalities. It's just that the most important one was left unsaid. Is this diplomacy or duplicity?

The IMF's Iceland report continues, about other loan requests including from Russia:

"A loan from the Faroe Islands ($50 million) has already disbursed, and a loan from Poland has been agreed ($200 million), and will disburse alongside the next 3 program reviews. A $500 million loan originally committed by Russia is no longer expected, but the $250 million in over-financing in the original program, an expected macro-stabilization loan from the EU ($150 million), and use of an existing repo facility with the BIS ($700 million, of which $214 million is outstanding) will more than offset this."

Offset may be the right word. Last year, in the midst of Iceland's abortive run for a seat on the UN Security Council, the country announced it had to seek a $4 billion loan from Russia. It was after that that the IMF loan commitment was made -- an "offset," some saw it -- and after talks in Istanbul, on October 15 the already whittled down loan request to Russia was formally rejected.

Then the deal with the UK and Netherlands, and the IMF's releasing. While the IMF calls these types of moves only technical, others call them power politics. Watch this site.

November 2, 2009

One TARP-er hypes the stock of another, per WSJ: The recent selloff in BofA shares creates a good chance to buy into the bank, say Citigroup analysts. Bank of America shares are down some 17% from their most recent closing peak of $18.59 hit on Oct. 14. "Given the ongoing CEO search, fear of a capital raise only adds to the uncertainty hitting the stock, which creates a very attractive entry point."

October 26, 2009

Never-ending sleaze: a Lewis Ranieri-led firm has cut deals with -redatory Taylor Bean & Whitaker for Debtor in Possession financing and the bulk purchase of $331M REO portfolio...

J.P. Morgan Chase & Co. made nearly $50,000 in political donations through its PAC in September, counted by WSJ. The company donated $2,000 to Alabama Sen. Richard Shelby, the senior Republican on the Senate Banking Committee. The company also donated $1,000 to Pennsylvania Rep. Paul Kanjorski, the No. 2 Democrat on the House financial-services panel...

Citigroup canceled a planned $4.5 million renovation of its main office in Brazil that included an area for entertaining clients and a landscaped terrace called a "suspended garden." Can you say, Babylon?

"We need it to compete," a senior executive told the WSJ about about the project last week, describing it as an important way to impress banking clients and use Citigroup's real estate more efficiently. But on Tuesday afternoon, a person familiar with the situation said the renovation had been reviewed by senior executives, who decided to shelve the project. The reversal underscores the sensitivity inside Citigroup about its spending habits, since the bank has gotten $45 billion from the U.S. government, a 34%-owner of the company's common stock.

October 19, 2009

HSBC reportedly "hopes to list its shares in Shanghai next year, becoming one of the first overseas companies to do so, its chief executive said. "I don't see it being a 2009 event, hopefully in 2010. It has a very symbolic element for HSBC. We were established in 1865 in Hong Kong and Shanghai... we would welcome participating in the Chinese market," Michael Geoghegan told Reuters in an interview on Monday. Asked how much he expected the listing to raise, he said: "We haven't got to that stage yet. We are looking at the fundamentals." People familiar with the matter have told Reuters that HSBS could raise $3-$7 billion as part of a Shanghai listing. The bank, which operates in 86 countries, has investments worth about $22 billion in China, including a 19 percent stake in Bank of Communications and a 16.8 percent stake in Ping An Insurance. HSBC announced last month Geoghegan would move to Hong Kong from February, as the bank focused more on Asia."

Watch out for the predatory lending...

October 12, 2009

In the UK, there is talk of breaking up the large banks like Royal Bank of Scotland. In the U.S., shouldn't Citi, Chase, B of A and Wells be broken up?

October 5, 2009

The belated ouster of Ken Lewis from Bank of America, who will now leave at latest by the end of the year, triggers a successor search by three ex-Fleeters, Charles Gifford, Thomas May and Thomas Ryan -- and former Federal Deposit Insurance Corp. Chairman Donald Powell and DuPont Co. Chairman Charles Holliday. A motley crew...

September 28, 2009 --

IMF Disappears Questions on Post-Coup Honduras, Sri Lanka Withholding and Jamaica

By Matthew Russell Lee

UNITED NATIONS, September 24, updated -- Despite the International Monetary Fund's rhetoric about transparency and openness, at its press briefing on Thursday it declined to answer or even acknowledge timely submitted questions about how it will decide whether to allow Honduras' de facto Micheletti regime to use the funds the IMF has allocated, after the coup, about conditions imposed on Jamaica and staff reports withheld about Sri Lanka.

This is happened before with the IMF, when the spokesperson has stood smiling on camera in the Fund's auditorium in Washington claiming that, "There are no more questions."

On Thursday, it was Caroline Atkinson delivering this line, after waiting to take two separate rounds of questions from another media organization. (Ms. Atkinson made a reference to the IMF's question-accepting technology -- could it be filtering?) From among the questions submitted to the IMF online, the IMF picks and chooses which ones to read out loud and acknowledge. There is no transparency in how this censorship is conducted, even that it is taking place at all.

Nevertheless, Inner City Press has respected the IMF's 10:30 a.m. embargo.

The questions submitted:

1) On Honduras, when and by whom will the decision be made on "whether the Fund deal with the [Micheletti] regime" be made? 2) Is the IMF considering granting Jamaica budget support, as the Prime Minister has said? 3) And why has the IMF staff report on the loan to Sri Lanka not been released?

If and when answers are provided by the IMF, they will be reported on this site.

Update: More than four hours after declining to answer or even acknowledge the question on Honduras that Inner City Press timely submitted during the fortnightly briefing, the IMF sent this out:

IMF Statement on Honduras: "In recent weeks, the Fund consulted its membership through its Executive Directors. Based on this consultation, IMF Management has determined that it will recognize the government of President Zelaya as the government of Honduras."

September 21, 2009

HSBC, whose Household International unit told borrowers how to doctor their applications for subprime loans, has now sued New York businessman and prominent Democrat fund-raiser Hassan Nemazee, alleging he fraudulently obtained a $100 million loan from the bank and used the bulk of the money to repay a separate loan he falsely obtained from Citigroup. The funds were used to repay a loan from Citigroup's Citibank unit, according to the lawsuit. The HSBC loan remains outstanding, according to the complaint. Prosecutors have said he used fake documents to borrow money to repay the loan from Citibank on Aug. 24. The government has said Nemazee obtained a line of credit to repay Citibank by using the same type of fake documents - fake account statements and forged signatures - that he used to fraudulently obtain the Citibank loan.

September 14, 2009

IMF Still Murky on Honduras and SDR Use, Critique on Georgia, Serbia, Hungary and Latvia

By Matthew Russell Lee

UNITED NATIONS, September 10 -- The International Monetary Fund through spokesman David Hawley repeated on Thursday that despite its recent allocation to Honduras of $168 million in Special Drawing Rights, "the regime in de facto control is not able to use [the allocation] until a decision is made if the Fund will deal with" the regime as the government of Honduras.

But Hawley also said that he has "no details on how individual countries have used the allocation," and when asked if countries have to disclose if they convert SDRs into hard currency, he said, I'll have to get back to you. So still the IMF's approach to Honduras, as well as other countries with coups and de facto regimes, remains unclear.

At the IMF's regular press briefing on September 10, Inner City Press submitted three questions, including "Please clarify the conditions under which a government of Honduras could access the SDRs voted to the country on August 28? Could the Micheletti government never do so? Or after a new election" without UN observers?

Mr. Hawley read the first part of the question out loud, and then flipped through a binder to repeat a line the IMF e-mailed to the Press on Sunday. Left unanswered is who will make the decision about the Honduran government and its right to the allocated SDRs, when the decision will be made, and in light of Hawley's other answers, how any decision, including the current supposed prohibition, would be policed.

The President the UN General Assembly, which passed a resolution on Honduras after the coup, says that no country or body like the IMF can recognize the Micheletti government, or send observers to an election it organizes. Does the IMF mean that its executive board could decide, tomorrow, to recognize Micheletti? Or that to recognize a government elected in a Micheleti organized election?

Earlier this week, UNCTAD released a report criticizing the IMF at length. Inner City Press submitted this question:

"While the IMF says that "conditionality" is a thing of the past, this week's UNCTAD report criticizes the IMF for imposing "restrictive financial policies" on Latvia, Serbia, Georgia and Hungary. What is the IMF's response?"

While Hawley for some reason declined to even read this question out, during the briefing he said he and the IMF have no response to the UNCTAD report. This is more than a little strange. During the briefing, as simply one example, Hawley described how in connection with an IMF package for Ukraine, gas prices to consumers had to be raised. Labor unions are fighting it, he said, but the authorities are litigating to get the gas price rises in place and the IMF is monitoring it.

On September 8, Inner City Press posed questions about the IMF to Heiner Flassbeck from the UN Conference on Trade and Development, video here. Flassbeck laughed when told of the IMF's denials of conditionality. For this and other reasons, it would seem the IMF would have a response. Watch this site.

Footnote: Caroline Atkinson, who has presided over the IMF's past four or five press briefings, was said to be in Turkey, a country for which the IMF is considering a package. Based on Thursday's briefing by Mr. Hawley, it seems that while Ms. Atkinson is at least willing to extemporize IMF responses to question for which there is no "if-asked" ready in her binder, Mr. Hawley declines live questions for which no written answer is ready, and edits out or censors questions submitted electronically if he does not want to answer them. We'll see.

* * *

Unrelated (?) footnote: Another country in which Citi is going to keep doing subprime and predatory lending is India. “We have a comprehensive revival plan for CitiFinancial, in terms of moving the asset base to more stable sectors,” Citibank’s chief financial officer (CFO), Abhijit Sen, told reporters. "The Citi group is unlikely to sell CitiFinancial"....CitiFinancial India offers personal loans, home loans, home finance and loans against property.

September 7, 2009

In London, the G-20 nations last week preliminarily "agreed to impose sanctions on tax havens from March 2010. Jurisdictions that don't meet international standards for sharing tax information may be deprived of funds from the international financial institutions—such as the International Monetary Fund and the World Bank—and they may also be deprived of aid from G-20 governments." We'll see.

August 31, 2009

B of A is really suffering, or pretending to -- in its lawsuit against the FDIC about the Colonial Bank failure (and re-sale without any CRA comment period to BB&T), B of A has now accused the FDIC of acting "beyond the scope of its statutory powers" as receiver for "by making disbursements without complying with its statutory and regulatory obligations."

Failure to supervise? The Financial Industry Regulatory Authority barred Citigroup employee Tamara Lanz Moon from the securities industry for allegedly taking more than $850,000 from at least 22 especially vulnerable customers, including $55,000 belonging to an American diplomat working overseas...

Seeking IMF Loans, Service Cuts in Jamaica, Serbia, Congo Changes China Deal

By Matthew Russell Lee

UNITED NATIONS, August 27 -- While the IMF states publicly that it no longer engages in conditionality, it is reportedly requesting as a condition for loans significant budget cuts in Jamaica, as well as Serbia, St. Lucia and the Maldives. At the IMF's forthnightly briefing on August 27, Inner City Press asked IMF Spokesperson Caroline Atkinson about "what's seen as the IMF dictating cuts in government spending as a condition for a loan... Please confirm what changes are being requested by the IMF." Video here, from Minute 9:18, IMF's transcript below.

Ms. Atkinson replied that there are "discussion between the IMF and Jamaican authorities" and argued that the "authorities are designing the macro economic program... they are in the lead on." She said "I don't want to go into a discussion of particular issues." Then she ignored Inner City Press' request, in the same question, for answers on the Maldives, and on Serbia at the provincial level.

The requests or "macro economic programs" done which negotiating with the IMF look suspiciously similar, and undercut the argument that each government is really in charge. The governments also try to avoid questions of how they have given in to the IMF. Last week Jamaican Prime Minister Bruce Golding, speaking at the opening of a new financial center for the Scotiabank Group in the Jamaican capital, refused to say "whether the cuts were required by the International Monetary Fund as a condition for borrowing $1.2 billion to stabilize its budget under the multilateral lender's special drawing rights." Is this the new IMF?

Similarly, in a question submitted during the IMF briefing but ignored (or censored), the IMF played a wheeler-dealer role in the Democratic Republic of the Congo and its mining sector. Inner City Press asked, in writing, "did the IMF's suggested changes in the country's mining deal with China result in any offsetting changes in China's commitment to Congolese infrastructure development? Is the IMF involved in or did it consider the DRC's proposed Inga Dam?"

At the IMF's request, the DRC cut its guarantee of income from the mines to China, in connection with which China cut its investment commitment from six to three billion dollars. As one analysis interviewed by Inner City Press put it, DRC will now borrow money from the IMF instead of taking it from China. The analysis describe the IMF as doing European powers' work for them, trying to ween a country away from China. The dam named above will reportedly supply power to southern Europe, from a region where than 30% of the population has electricity. This is the new IMF? Watch this site.

From the IMF's August 27, 2009 transcript:

I have a question online about Jamaica. It's asking, "In Jamaica there are protests about what's seen as the IMF dictating cuts in government spending as a condition for a loan. Please confirm what changes are being requested."

As you know, there are discussions that have been underway with the IMF and the Jamaican authorities. The authorities themselves are designing their macroeconomic program and that is something that they are very much in the lead on. I don't want to go into discussions about particular issues and I think that we've been having good discussions with the authorities. We are impressed by the fact that they are taking measures and considering measures and have committed as it is very important as we've been stressing recently to a program that will be very much their program.

August 24, 2009

Parts of a confidential agreement reveal that U.S. regulators directly pushed Citigroup Inc. to replace then-CFO Edward “Ned” Kelly, which is in sharp contrast to CEO Vikram Pandit’s earlier statement, per SNL. According to the document, the New York-based bank had agreed to review whether Kelly could be “more effectively utilised” by giving him other responsibilities and if so, to replace him. Citing people close to the matter, SNL reported that Kelly resigned from his post on learning about the agreement, which allowed the bailed-out bank to make Kelly the vice chairman and promote then- Controller and Chief Accounting Officer John Gerspach to CFO.

August 17, 2009

Citigroup's sleaze never stops. Now they brag that they "already put to use about a third of the $45 billion it has received from the U.S. Treasury Department's Troubled Asset Relief Program. It said it also has approved another $35.7 billion for future loans and investments, bringing the total to $50.8 billion, above its TARP level. "Our efforts have enabled businesses to keep their doors open, spurred job creation in communities and provided families with access to additional funds at times when they've needed it the most," Pandit said in a statement accompanying the report. News stories were quick to note the more than $50 billion that Citi says it either has or will put to work does not account for leverage."

But as we've reported, some of these loans are just predatory lending. Meanwhile, Citi is trying to exclude trader Andrew Hall from a review by the government’s pay czar, Kenneth Feinberg, per SNL. Hall, the head of the Phibro commodity trading unit, is in line for $100 million in TARP funds for 2009...

In Pittsburgh, the FDIC handed over Dwelling House S&L Association to PNC Bank with no mention of CRA. Next month the finance ministers of the largest economies convene for a meeting of the so-called Group of 20. In a city crippled by foreclosures on predatory loans, and now the site of the U.S.'s waiver of one of its few laws meant to crack down on the mis-service of lower-income borrowers, there will be talk of improving the regulation and supervision of banks. But it will be empty talk, and there will be protests. Watch this site.

August 10, 2009

Bank of America has been asked for emails and documents dealing with losses and loss projections at Merrill Lynch; records covering negotiations with the federal government on bailout funds received by the bank; and the details of any legal advice received by the bank on disclosure of the losses or government aid. - by August 14....

August 3, 2009

Sri Lanka's Ethnic Cleansing Bonds Touted by StanChart and HSBC, IMF Silence on Vote Is "Policy"

By Matthew Russell Lee

UNITED NATIONS, August 2 -- Less than a week after five countries on the International Monetary Fund's executive board cast rare votes of abstention and did not support the IMF's $2.6 billion loan to Sri Lanka, due to the continued detention of 280,000 people in internment camps in the north, Inner City Press on July 30 asked the IMF to finally confirm the five abstentions or to explain why it refuses to disclose the votes of its executive board.

IMF spokesperson Caroline Atkinson replied that "it's just a matter of our policy not to... it may even be a matter of our legal requirements... It's a matter for executive board member to disclose their voting if they wish to. It's not a matter for IMF staff or management, that's always our practice." But why?

Later on July 30, Inner City Press asked the UK's outgoing Ambassador to the UN John Sawers about the IMF loan, on which the UK abstained. Sawers too dodged the question, saying "You'll have to ask my colleagues in Washington about the situation at the IMF board. The loan has been approved, as you say." Video here, from Minute 5:34. After that, Sawers mentioned the displacement -- that is, detentions -- and of the "legitimate concerns of minorities, particularly Tamils."

UK-based banks HSBC and Standard Chartered both gushed about the IMF loan, without any reference to ongoing internments. The IMF loan "is a significant positive for Sri Lanka’s external liquidity position and should further boost sentiment toward the country," Standard Chartered’s Mumbai-based analyst Priyanka Chakravarty wrote in a research report. "It is noteworthy that the final IMF loan amount is appreciably higher than originally discussed."

Nick Nicolaou, chief executive officer of HSBC Sri Lanka, pitched that "the IMF endorsement provides confidence to overseas investors... Sri Lanka has an excellent story to tell." Fellow UK bank Barclays, along with HSBC and JPMorgan Chase, was involved in the Rajapakse administration's October 2007 bond sale in the run-up to the final assault on North Sri Lanka.

Now Sri Lanka says it wants to raise $500 million more from overseas. Some say that these bloodbath bonds are now ethnic cleansing instruments. Watch this site.

July 27, 2009

When UN Secretary General Ban Ki-moon belatedly visited Sri Lanka and the Manik Farm internment camp in late May, the government said it would release 80 percent of those being detained by the end of the year. The July 16 letter to the IMF -- withheld until after the July 24 vote on the loan -- dropped the percentage to seventy.

Some now say that the IMF board on July 24 voted on old and inaccurate information -- which was allowed only because the IMF and Sri Lanka withheld the July 16 letter until after the $2.6 billion had been voted on.

At the UN's July 24 noon briefing, before the IMF executive board vote, Inner City Press asked UN Associate Spokesman Farhan Haq:

Associate Spokesperson Haq: We have always expected the Government to abide by the commitments that have been reached on this particular matter. Beyond anything further, I’d check whether OCHA has new reaction to the latest comments. I don’t know whether we necessarily would react to the very latest comments that you just cited, though.

Those detained by the Sri Lankan government can, some say, legitimately be called political prisoners. The government committed to the UN to release 80% of them by the end of the year. The government committed to the IMF, in a letter withheld until after approval of a $2.6 billion loan, to release 70 to 80% by the end of the year. [A reader points out that per Mahinda Rajapakse, it is not a commitment or promise, only a "target" -- click here.]

Then prior to the IMF vote, but before the letter to the IMF was released, the government gave itself space to continue to detain some additional 30,000 to 60,000 people past the previously committed deadline. The UN has nothing to say, and the IMF is giving $2.6 billion to the government.

Some call it an IMF reward for the extended detention of political prisoners -- apparently the IMF would look favorably on the internment -- and opacity or delayed release -- practices of Myanmar and North Korea. Watch this site.

IMF footnote: the belatedly released Sri Lankan Letter of Intent to the IMF about the loan puts in a different light the IMF Director of Communications' public May 21 response to Inner City Press' questions about IDPs and relocation, that "perhaps it's just helpful to clarify that when the IMF lends, it is not for specific projects. We lend to support a country's finances. We make a loan to the Central Bank to support reserves."

Reconstruction of the North and East and the protection of vulnerable groups adversely affected by the conflict will be an integral part of our program. To this end the government has moved quickly to provide humanitarian assistance to those affected by the conflict and to develop a post-war reconstruction plan. The immediate priority is addressing the humanitarian needs of the estimated 280,000 internally displaced persons (IDPs). The government aims to resettle 70-80 percent of IDPs by the end of the year...In 2009 the government intends to make room within the programmed deficit targets for spending on humanitarian assistance and the resettlement of IDPs using savings in existing budget provisions, redeployment of certain categories of military personnel for demining and for the provision of basic infrastructure, and any external grants from our development partners. About two percent of the projected government spending will be used for the provision of humanitarian assistance and the resettlement of displaced persons. A needs assessment is expected to be completed by end July 2009 to determine additional funds needed for the broader reconstruction strategy.

As CIT teeters on the edge of bankruptcy, Inner City Press has been reminded of its filing to the Federal Reserve opposing CIT's application to become a bank holding company, only to get bailout funds. Should we say, we told you so?

After the financial meltdown exposed the Federal Reserve's inattention to predatory lending and credit default swaps, one would expect the Fed to hold off further loosening the rules on CDS. But you'd be wrong. Last week the Fed granted an exemption to CDS dealer ICE Trust, owned by crisis loser Citigroup and predatory Goldman Sachs, among others, giving them an easier 20 percent capital treatment rather than the 100 percent applicable to uninsured banks like ICE Trust.

Bloomberg News, notably, spun the story the other way, claiming that "the Federal Reserve determined that ICE Trust is as risky as any insured bank, according to a letter posted July 14 on the regulator’s Web site. The Fed is requiring that bank members of ICE Trust, such as Goldman Sachs and New York-based Citigroup Inc., set aside the same amount of capital as parties trading as federally-backed lenders."

But this is a story yet again of the Fed making it easy for the dealer community-- the dealers sought 0% so at least the Fed is imposing 20%. Those who don't learn from the past are condemned to repeat it...

Shares of CIT Group fell by a quarter on July 10 on a report the FDIC is unwilling for now to guarantee the commercial lender's debt due to concerns over its credit quality. The stock fell 45 cents to $1.41. CIT hasn't been given the go-ahead yet to participate in the FDIC's Temporary Liquidity Guarantee Program. This is despite the regulator having bypassed public notice and comment to allow CIT to become a bank holding company to apply for bailout funds and guarantees. CIT's subprime activities were criticized some time ago by Inner City Press / Fair Finance Watch, and more recently by the FDIC, which gave a rare Need to Improve CRA rating to a CIT bank. Hate to say, we told you so -- but we told you so....

On July 2 the Belgian Chamber of Representatives enacted a law prohibiting investment in weapons which use depleted uranium weapons. "The law forbids banks and investment funds operating on the Belgian market from offering credit to producers of armor and munitions that contain depleted uranium. The purchase of shares and bonds issued by these companies is also prohibited. This law implicates that financial institutions in Belgium must bring their investments in large weapon producers such as Alliant Techsystems (US), BAE Systems (UK) and General Dynamics (US) to an end." We'll see.

Japan's financial regulator ordered Citigroup Inc.'s Citibank Japan Ltd. to suspend all promotional sales activities in its retail-banking division for one month as punishment for lax compliance in preventing money laundering.....

While HSBC Gushes About Sri Lanka, IMF "Loan for Ethnic Cleansing" Still Delayed

But while continuance of the EU's GPS Plus favorable tariff treatment of Sri Lankan textiles, proffered after the tsunami, requires a human rights review, the Rajapakse administration has blocked investigators' access.

The focus seems to be on Sri Lanka's ports, which are to be trebled in size. Getting many of the contracts, some have noted, are South Korean firms.

The government's use of funds for what many call ethnic cleansing is increasingly questionable. This does not dissuade HSBC, or reportedly Citigroup and Deutsche Bank, under fire for standardless banking for strongmen in Gabon and Turkmenistan, respectively.

HSBC has a global record of ignoring human rights. It was implicated in money laundering with Riggs Banks, for Agusto Pinochet of Chile and other dictators. It has raised funds for controversial Canadian oil company Talisman, and has been sued for lending discrimination. Many now question its blithe gushing at this time about Sri Lanka. Watch this site.

So while supposedly recused at the Federal Reserve Bank of New York, Tim Geithner was weighing in on Bank of America, in support of the shotgun marriage with Merrill Lynch, it emerged in Congress last week. He denies it. But didn't he initially denied not paying his taxes?

From the WSJ: "Mr. Geithner, then head of the Federal Reserve Bank of New York, had recused himself from individual bank matters in November after being tapped as Treasury Secretary. Treasury officials say Mr. Paulson kept Mr. Geithner apprised of what was happening with the merger. A separate note from Mr. Lewis recounts a conversation with Mr. Bernanke and suggests that Mr. Geithner approved of the agreement to infuse the bank with more money and guarantee its assets. A similar structure had been used to help Citigroup Inc. A Treasury spokesman said Mr. Geithner was informed about what was happening but didn't weigh in on specifics."

Bank of America will be saved by... ex-regulators? Now on the board of directors are former Federal Reserve Governor Susan Bies and former Federal Deposit Insurance Corp. Chairman Donald Powell. That is to say, regulators who failed to stop predatory lending and the meltdown now benefit from it....

So the regulators' idea of change at Citigroup would be to hand the reigns from Pandit to former U.S. Bancorp CEO Jerry Grundhofer, who bought a 25% stake in now-failed predatory lender New Century? Plus ca change, plus c'est la meme chose.

The race for governor in Florida pits bad banker against worse pro-bank blowhard. Bill McCollum, who while in Congress promoted every form of deregulation and promoted predatory lending, now faces off against Alex Sink, the former CFO of NationsBank now Bank of America, who oversaw the former's purchase of Barnett Banks which set negative fair lending precedents. How to choose between them? We don't envy Floridians on this one...

In the UK, according to a new study by the New Local Government Network, "There is evidence that the pernicious trend of illegal unsecured lending at extremely high rates of interest, or 'loan sharking,' is making a comeback At least 165,000 people already use loan sharks in the UK and we can expect the number to rise sharply." An additional 35,000 people, or an even higher number, are likely to use loan sharks during the recession, the report predicts.

High rate, subprime accounts make up one-third of Citigroup's and Bank of America's credit card portfolios...

Airports operator BAA Ltd last week said Citigroup Inc.'s consortium had been eliminated from the auction for Gatwick Airport, leaving just two bidders still in the running. BAA said the Citigroup proposal "was uncompetitive on price and there were no assurances on deliverability." Many are saying that of the current Citigroup...

Now Citi sells its Japanese domestic securities business for 774.5 billion yen ($7.9 billion) in cash. "We will continue to look for additional opportunities to maximize the value of businesses and assets as we rationalize and restructure Citi," Citi Chief Executive Vikram Pandit said. Citi had bought Nikko Cordial for $7.7 billion as the largest foreign bidder in Japan in April 2007. However, it is now being forced to sell its non-core assets after being hit by credit-related losses in wake of the global financial meltdown. Citi is also selling its Nikko Asset Management business in a separate deal. The sell off continues...

So at Bank of America's shareholders' meeting last week in Charlotte, Ken Lewis was ousted as chairman. This same a week after he and his CFO Joe Price fingered the bank's “Community Reinvestment Act porfolio” as having much higher delinquency rates than other loans. Cynically, Lewis arranged for some community groups to lobby for him to remain as chairman. He's still the CEO -- shareholders couldn't vote on that. Yet.

According to the WSJ, “a long procession of grumpy investors took to the microphone to vent about the crippling losses that have decimated Citigroup's share price. Some shareholders lashed out at the New York bank's directors for failing to adequately shield the company from the credit crisis and recession. Still, by the time the meeting adjourned roughly six hours later in the ballroom of a Manhattan hotel, Citigroup's slate of directors had been handily elected, with each director receiving at least 70% of the votes cast. Also, Chief Executive Vikram Pandit managed to dodge much criticism of his 16-month tenure. There was no sign of representatives of Citigroup's soon-to-be-largest shareholder, the U.S. government, which is poised to own as much as 36% of the company.” How about the taxpayers? Or the predatory lending victims Citi previously tried to belatedly buy off?

Subj: My Plight with Wells Fargo Auto Financial
From: [Name withheld in this format]
To: Inner City Press
Sent: 4/17/2009 6:59:57 P.M. Eastern Daylight Time
Hello Matthew, I've been referred to you by a family member to contact you about some trouble I've been having with Wells Fargo Auto Financial. I'd like to share my story with you, in hopes that you will promote awareness regarding Predatory and Discriminatory Lending Practices.

I myself, am a young, black female; have always been a part-time worker, and full-time student (until recently as of 4/06/09); and a single mother. At the time I contracted with WF, these same characteristics applied.

December 2007, I was deceived into a contract for an auto loan that did not state the terms that was initially discussed. Based on my good credit history, I was told that Wells Fargo would pay off all of my credit card debt, and buy out my car loan from Bank of America and I would end up paying a low monthly payment each month. Right before it is time to sign the contract, Wells fargo change the terms, and decided it was best to give me a check in the amount of $2000 to pay off my own debt, and buy out my car loan ($18K). This was a little fishy to my then, but I felt pressured to go ahead with the deal because (1) I spent almost 3 hours in this office, and I had to leave quickly; (2) I needed the money to pay off some debt and bills; (3) Wells Fargo offered an additional line of credit (as an incentive) for $1000, and (4) I didn't have to start paying for another month and a half.

The terms were $505.77 per month, which was far less than what I was paying for the bills separately. He told me where to sign, and I left. Things were fine for the first couple of months.

May 2008, I had a life changing event occur. My daughter had chronic bronchitis due to Chicago's weather and I had to move to Arkansas for a better climate environment. Upon my move I had certain job leads that fell through and was out of work for at least 4 months. During the entire time, Well Fargo called everyday, at least 3 or 4 times a day. My credit score dropped tremendously, and no one was willing to help. Once I did find a job, I paid all I could to Wells Fargo to get things back on track, but all the money was going torward the interest and not the principle of the load, which kept me at a standstill with paying it down.

I now landed a job where I currently make $30K. As I discussed to Wells Fargo, I've worked in the $505.77 in my monthly budget; but I know that I don't have the money to pay a past due balance, late charges, the current monthly payment, and rolocation expenses in preparation for this new job. I've kept them up to date with all of the changes, and yet they continue to threaten me with repossession, despite the fact that I paid out over $1500 within the last month and a half.

I've called numerous times to see if my loan can be restructured, and been given countless run arounds. Finally, Wells Fargo Bank explained that neither them nor Wells Fargo Auto Financial work with customers (new or existing) that live in Arkansas.

Bottom line, there was absolutely nothing they could do to help me. All the while, I owe $505.77 for March payment, $272.99 in late charges, $505.77 for April, and the $505.77 in May. My credit score is shot, so no other bank will loan me anything, and no car dealership is willing to take a trade in for a car only worth $8000 but a loan attached to it for $20,000.

I've contact the CEO, John G. Stumpf, who had someone else send me a letter back explaining that since I signed the contracted there was nothing they could do. I'm seeking justice in that, Well Fargo needs to be stopped. They thought it was best for my financial situation to require a full-time student, part-time worker, single parent, young black lady to pay them $33,380.82 on a car worth $8000. Tack on a 19.24% interest rate to a loan, which would have me pay them $13,035.13 outright.

This is ridiculous, and something must be done. I trusted Wells Fargo in that they were charged to help me. They initially told me that there was something they can do to help, and made me believe that this is what was best for my situation. Now that I am a customer of theirs, there is nothing they can do to assist me. I am enraged!

Subj: Attn: Matthew Lee, Executive Director or appropriate staff
From: [Name withheld in this format]
To: Inner City Press
Sent: 4/17/2009 10:37:28 P.M. Eastern Daylight Time

I'm in a fix with US Bank as they have attempted to keep me in perpetual debt to them by using late fees, or overdraft fees. Lately I've moved my account to a credit union, and closed my account with US Bank. I paid in full the negative amount in doing so, and now they claim I own them $795.50 in a negative balance. Again, "overdraft fees".It has been hard to shake these people off. They almost had me lose my apartment, my electricity was off for a week, my phone was off for 4 months. During that time, I had an auto deposit I could not stop because of a perpetual negative balance they claimed even when the deposit was well over the negative. Is there any law I can use to stop these idiots? I doubt I'm the only one having this problem with there predatory practices. And can't the state pull their charter?

In the run-up to its annual shareholders' meeting, this time in the Hilton and not Carnegie Hall, Citigroup has been criticized for misleadingly offering $5,000 loans and not disclosing in the advertising the interest rate -- 30%. But CitiFinancial has been doing that for a long time...

Bank of America, raising its credit card interest rates and saying that "To continue to offer competitive products and services and responsibly lend in this current environment, we must adjust our pricing."

Job well done? "Citigroup said longtime executive Steve Freiberg plans to retire after nearly three decades with the company. 'Steve has been an extraordinary leader and has made significant contributions to building the great global franchise that Citi is today,' Chief Executive Vikram Pandit said in a statement." What exactly was so well done about the job?

Beyond the closings, "before it collapsed last September, Washington Mutual Inc. spent roughly $1 billion on a branch-building binge that replaced bank-teller windows with free-standing counters and cash-dispensing machines. New owner J.P. Morgan Chase & Co. is now dismantling it all, right down to the signs that promise "free checking, free smiles," and basically dragging the former WaMu branches back to the past. Traditional branches 'are superior in every way,' said Charles Scharf, who runs the Chase unit of J.P. Morgan. 'They might be boring, but they're practical.'" What ever happened to Chemical Bank's promise of five dollars if you're not served in five minutes?

Subprime Survivors Wells, BofA and JPM Chase Were More Disparate By Race in 2008 than Wachovia or Countrywide, Trends Will Worsen Under Current Regulators

NEW YORK, April 2 -- In the first study of the just-released 2008 mortgage lending data, Inner City Press / Fair Finance Watch has found that the seeming survivors of the banking meltdown, Wells Fargo, Bank of America and JPMorgan Chase, had worse disparities by race and ethnicity in denials and higher-cost lending than the banks they acquired, Wachovia and Countrywide. Mortgage lending in the U.S. will become more and not less disparate because of the emergency mergers and bailouts engineered by the regulators, the study predicts.

Fair Finance Watch notes that JPMorgan Chase's massive closing of branches of Washington Mutual will also make credit harder to come by, especially in poor neighborhoods. 2008 is the fifth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of 3 percent over the yield on Treasury securities of comparable duration on first lien loans, 5 percent on subordinate liens.

Wells Fargo Bank in 2008 confined African Americans to higher-cost loans above this rate spread 2.18 times more frequently than whites, according to Fair Finance Watch. Wachovia Mortgage FSB, the largest lender of Wachovia which Wells Fargo acquired, had a lower disparity, at 1.46.

Bank of America NA in 2008 confined Latinos to higher-cost loans above the rate spread 1.51 times more frequently than whites, the data show. Countrywide Bank, which B of A acquired, had a lower disparity, at 1.22.

JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost loans 2.10 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.26. Citigroup, perhaps due to its shrinking, some say dying, business had disparities of 1.90 for African Americans and 1.23 for Latinos. For US Bancorp, the disparity for African Americans was 1.55 and for Latinos, 1.35.

"The banks the regulators favored in 2008, allowing emergency takeovers like JPMorgan Chase's of Washington Mutual, Bank of America's of Countrywide and Merrill Lynch, and Wells Fargo's of Wachovia, were the most racial disparate lenders," states the Fair Finance Watch report. "The regulators did not put any conditions on the mergers or Troubled Assets Relief Program bailouts, for example allowing Chase to close dozens of Washington Mutual branches. As things are going, it will be worse and more disparate in 2009. The new administration has yet to make any substantive change to this."

Several lenders had worse denial rate disparities in 2008 between Latinos and whites then between African American and whites, a change from previous years. Bank of America NA, for example, denied applications by African Americans 1.44 times more frequently than whites, while denying Latinos fully 1.57 times more frequently than whites. Atlanta-based SunTrust in 2008 denied applications by African Americans 1.37 times more frequently than whites, while denying Latinos fully 1.78 times more frequently than whites.

Geithner Promotes Megabanks' Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives

NEW YORK, March 28 -- Seven megabanks' renewed grab for monopoly power in the over the counter derivatives market shows how little Wall Street's real power has changed in the transition from the Bush to Obama administrations.

The banks, including Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank, are paying over $1 million to p.r. firm Prism Public Affairs to "educate" the voters weary of bonus and bailouts that those who caused the crisis should benefit from it.

Already, Congress members hungry for campaign contribution have submitted to closed door briefings by Ed Rosen of the law firm Cleary Gottlieb, who drafted the legislative language for monopoly.

The connector in this story is Timothy Geithner, under Bush the president of the Federal Reserve Bank of New York and now Obama's Treasury Secretary. Geithner in June 2008 convened closed door meetings with 17 banks, essentially allowing them to propose and draft their own rules for the derivatives market.

The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engaged in rule-making, it must provide notice to the public, and allow and weigh public comments. The New York Fed under Geithner tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies these processes. The New York Fed on June 9, 2008 met with a group of the largest banks to discuss, according to the Geithner himself

"Regulatory policy. These are the incentives and constraints designed to affect the level and concentration of risk-taking across the financial system. You can think of these as a financial analog to imposing speed limits and requiring air bags and antilock brakes in cars, or establishing building codes in earthquake zones. Regulatory structure. This is about who is responsible for setting and enforcing those rules. Crisis management. This is about when and how we intervene and about the expectations we create for official intervention in crises."

Press accounts made clear that the financial instruments and regulatory issues discussed behind closed doors are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages.

Bank of America, N.A. - Barclays Capital - BNP Paribas - Citigroup - Credit Suisse - Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. - HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of Scotland Group - Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital Management LLC - Citadel Investment Group, L.L.C.

Fast forward to March 2009, with Geithner despite tax evasion installed as Obama's Secretary of the Treasury, and with Lehman having failed and Wachovia been swallowed by Wells Fargo. Now he is promoting monopoly powers in the market for an even smaller group of banks, just seven: Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank -- which despite European headquarters received billions of dollars in U.S. Troubled Assets Relief Program bailout funds through AIG.

Citigroup's Pandit put out this spin last week, "The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees," Mr. Pandit wrote in a memo distributed to Citi's 300,000 employees.

Bank of America's Ken Lewis claims that B of A is "part of the solution for the financial crisis" through its subsidized acquisitions of Countrywide Financial and Merrill Lynch. Most say, part of the problem...

In DC, "Inevitable" Fraud as Obama Jokes with JPM Chase, Meets Citi and ExxonMobil

WASHINGTON, March 12 -- As President Barack Obama promises to find and "call out" misuses of the stimulus package, and to review the over 7,000 earmarks in the budget bill he signed this week, the chairman of his Recovery Act's Transparency and Accountability Board, Earl Devaney, told the Press of a "naive impression that given the amount of transparency and accountability called for by this Act, no or little fraud will occur... some level of waste and fraud is unfortunately inevitable."

Accordingly, the same is true not only at the United Nations -- despite Obama not mentioning the need for UN reform in his comments Tuesday after meeting Secretary General Ban Ki-moon -- but also with the bank bailout funds of the Troubled Assets Relief Program. Nevertheless, Obama joked with JPMorgan Chase's Jaime Dimon at the Business Roundtable's gabfest Thursday in Washington. As a smaller banker asked the final question of Obama -- no questions were taken after his meeting with the UN's Ban -- Obama said that banking has of late become complex, and that he could ask "Jaime" about it.

Also on the White House's list of Roundtable attendees was Citigroup's longtime board member and now chairman Richard Parsons. Citigroup veered into predatory lending, JPM Chase at a minimum securitized it, while lending to payday lenders and pawnshops. What then is so funny?

On Sri Lanka, IMF Says Its Pending Loan Would "Support Government Policy Goals," To Wait and See

WASHINGTON, March 12 -- As conflict rages in Northern Sri Lanka, with not only the Tamil Tigers but also the government forces killing civilians at a pace that has triggered two calls for a cessation of fighting by UN Secretary-General Ban Ki-moon, the International Monetary Fund is in the final stages of negotiating a $1.9 billion loan to Sri Lanka. Asked Thursday what restrictions the IMF might place on the loan IMF spokesman David Hawley said the loan funds would be used for "the government's policy goals."

Inner City Press asked a follow-up on possible conditions or safeguards, specifically with regard to the military action in Northern Sri Lanka. Mr. Hawley referred to the note he had just read out, saying that the loan is still under negotiation and to wait and see what conditions there might be.

The IMF briefing, held in basement auditorium of the Fund's headquarters a few blocks from the White House where Ban Ki-moon met with U.S. President Barack Obama on March 12, was sparsely attended and lasted less than 20 minutes. After passing through security and waiting for an escort, Inner City Press arrived just as Mr. Hawley was about to close the briefing. He took Sri Lanka as the last question. Some said it must be a busy news day, that few questions were submitted online to the briefing. (Inner City Press has in the past sought to submit questions from the UN in New York via the IMF's web site and has watched online as it was said, "There are no more questions.") The IMF's own lack of funds would seem to trigger at least a half hour of questions and answers.

During the visit of Ban and his entourage to Washington, the word Sri Lanka did not arise even once, chief UN Peacekeeper Alain Le Roy told Inner City Press on Wednesday in the Rayburn House Office Building. This despite Ban Ki-moon have twice called for a cessation of fighting, and his Spokesperson's Office's claim that he has made the humanitarian crisis in Sri Lanka a priority.

Citigroup's stock went below one dollar a share last week -- along with HSBC closing 800 HFC and Beneficial storefronts, a fitting end to an era?

The Journal sings HSBC's praises, that "gains from growth in Asia have helped HSBC offset deep losses from HSBC Finance Corp., the bank's largely subprime U.S. lender." According to the strategy, some of that Asia lending was subprime, too...

The use of the subprime-triggered meltdown to justify anticompetitive mergers toward monopoly is a global phenomenon. Brazil's Central Bank last week approved the merger of the country's second- and third-largest banks, Banco Itau and Unibanco. "This is an initiative which contributes to the stability of the national financial system in the current environment of the international financial market," the Central Bank said in a statement. The authority claimed the merger wouldn't hinder competition in the financial system, although it would increase the market power of the new conglomerate "in some relevant markets for financial products." Ya don't say...

Citigroup's Pandit last week said, "The future of Citi is in emerging markets, is in Latin America, and is in Mexico with Banamex." While the last is dubious, one thing seems true: the future of Citigroup, if it has one, is not in the United States, although it might be WITH the United States (government)...

Citigroup, to defend its plastering of its discredited name on the Mets new stadium in Queens, rounded up the support of Dem Reps Eliot Engel, Joseph Crowley, Yvette Clarke, Gregory Meeks, Anthony Weiner and Steve Israel. Would they write in favor of Citigroup's jet? During the Congressional hearings last week, Nydia Velazquez called Pandit “a convincing person." Convincing to whom?

So BofA's Ken Lewis has claimed he had no authority over Merrill Lynch's final bonuses. We'll see...

Before Congress last week, JPMChase's Jaime Dimon complained, “we have a Byzantine alphabet soup of regulators,” and that banks and lenders have to deal with the OTC, the CFTC, the SEC and so on. He pontificated that it should be a U.S. system and globally regulated, and that no one should try to create a new regulator. He suggested the Federal Reserve -- and why not, since the Fed delivered Bear Stearns to him and Chase, which then got WaMu as well... The Fed's been good to Morgan Chase.

As Royal Bank of Scotland, bailed-out by UK taxpayers, tries to pay bonuses to its second layer of executives, the UK's Gordon Brown says the Government would only support any bonus payments to RBS staff through UKFI if they were consistent with the taxpayers’ interest. Business Secretary Lord Mandelson added that RBS risked alienating the public by offering “exorbitant” bonuses to its traders and senior bankers.

But note that in New York, JPMorgan Chase has just awarded bonuses, on the theory that particular units didn't lose money. Your tax dollars at work...

Too little too late, accountability awaits: Sanford "Sandy" Weill says he will end a 10-year consulting contract with Citigroup that gave him millions of dollars in perks, including an office, car and driver and the use of company jets. Weill, who retired as chairman and started the consulting job three years ago, now wants to opt out. But what about returning ill-gotten gains?

Beyond the branch closing listed last week, JPMorgan Chase plans to axe another 13 in San Antonio -- the countdown will continue.

NEW YORK, January 23 -- JPMorgan Chase is moving to closed down dozens of the Washington Mutual bank branches the government allowed it to acquire last year with no public notice or comment period. In Dallas, Chase has targeted 23 WaMu branches for closure, and another six in Fort Worth. In the Chicago area, Chase says it will shutter 57 WaMu locations. More branch closings will follow across the nation.

JPMorgan Chase has now told groups who have asked if it will continue Washington Mutual's CRA programs and commitments that since there is no more Washington Mutual, there is no more commitment.

This comes in the wake of JPMorgan Chase's Jaime Dimon reversing himself from a stated commitment to mortgages through brokers to abruptly shutting down Chase's wholesale mortgage unit. While groups are told this will give Chase more control over the terms of loans, brokers point out that Chase ultimately had control in the wholesale business, too. Commitments are made to be broken, apparently, particularly those by companies the federal regulators bailed out or merged out of existence. What, the question grows, is Timothy Geithner's position on this Main Street issue?

Update: later on January 23, community groups were told that JPMorgan Chase plans to close over 40 WaMu branches in New York State...

Fed's Geithner Evaded Taxes at IMF, Used Statute of Limitations Later, Mishanded Citigroup

UNITED NATIONS, January 14 -- While working for the UN-affiliated International Monetary Fund earlier this decade, Treasury Secretary-nominee Timothy Geithner did not pay required taxes to the Treasury Department's Internal Revenue Service. This would seem to be problematize, to be diplomatic, Geithner's ability to gain confirmation by the U.S. Senate to oversee the IRS.

This would seem to be problematize, to be diplomatic, Geithner's ability to gain confirmation by the U.S. Senate to oversee the IRS. But Democratic Senators and Barack Obama himself are calling Geithner's an "innocent mistake" which should not impinge on confirmation. Some ask how a financial whiz, head of the Federal Reserve Bank of New York, would claim ignorance of basic tax law as a defense.

Worse, Geithner initially hid behind the statute of limitations to refuse to pay $25,000 in taxes for 2001 and 2002: "A three-year statute of limitations had precluded the [IRS] from auditing the 2001 and 2002 tax returns." But his supporters argue that Geithner's expertise is needed to confront the global financial crisis.

But what of Geithner's role, as the President of the New York Fed, in mis-regulating Citigroup, an institution which has already swallowed $45 billion in Troubled Assets Relief Program funds, and billions more in guarantees for toxic loans still on its books? Said otherwise, how can those who oversaw -- or turned a blind eye to -- the origins of the financial meltdown be presented as the only ones who can now save the day?

Also on Citigroup, sources say that the Feds are pushing Richard Parsons to take over as the embattled company's chairman. He ran Dime Savings Bank, part of the now-collapsed Washington Mutual franchise. At Citigroup's annual meetings, at Inner City Press asked questions about predatory lending from the floor of Carnegie Hall, Parsons never spoke up. What did he think of the questions, of Citigroup's venture into predatory lending with Commercial Credit, Associates First Capital and CitiFinancial? The questions should be answered.

Leaving the Federal Reserve Board is Randy Kroszner, who had served the Fed's point Governor on community and consumer issues. A new Fed advisor on these issues was recently withheld from the press without explanation by the Fed's public relations office. Fed chairman Ben Bernanke hides behind the Federal Open Markets Committee news blackout requirements in order to skip speaking to non-financial audiences, but disagrees with and ignored the requirement of public notice and comment while granting bank holding company status to Morgan Stanley, CIT, Goldman Sachs and GMAC.

So JPMorgan Chase has closed its wholesale mortgage business, after virtually promising not to. They claim this way they can better control the terms of loans. But the ones they made through brokers, they made decisions on. Back on Nov. 6, 2007, David Lowman, CEO of JPMorgan Chase's home lending division, and Patrick Sheehy, business-to-business channel
executive at Chase Home Lending, told mortgage brokers of “an unwavering commitment to our wholesale … lending” business. Jamie Dimon made this type of about-face and close-down before. It's just what he does.

BofA is making layoffs, BofA is getting sued. And yet BofA is getting more and more billions of TARP, including the share that would have been Merrill's. For shame. Bank of America Corp. filed a letter with Charlotte, N.C., Mayor Pat McCrory verifying that it is laying off about 139 employees in the city’s Ballantyne neighborhood. The layoffs are expected to be completed by March 10. The bank is also laying off about 85 workers at a Preferred Services site in Dallas. Meanwhile, a group of Washington state homeowners filed a lawsuit against Bank of America Corp. unit Countrywide Financial Corp., alleging that the company illegally manipulated the appraisal process in a plan to increase profits at the expense of homeowners and independent appraisers. The lawsuit, filed in the U.S. District Court in Seattle under the Racketeering Influenced and Corrupt Practices Act, claims that the company forced homeowners to use its unit, LandSafe, for appraisals, while subcontracting the work to independent appraisers and charging homeowners as much as 200% of the actual cost of the appraisal.

HSBC has significant exposure to toxic assets, including U.S. subprime mortgages that aren't marked to market, either because they are held directly on its loan book or because the U.K. regulator absurdly allows unrealized losses on certain assets to be written back for capital purposes. It is estimated that HSBC's true leverage is closer to 50 times and Tier 1 is 4.6%, making it one of the most highly leveraged banks in the world. How's that Household now?

Here are properties in The Bronx, New York on which Wells Fargo has foreclosed:

More chickens coming home to roost for HSBC -- "European shareholder group Deminor said Friday it may take legal action against ... HSBC Holdings PLC on behalf of investors who bought products from disgraced asset manager Bernard Madoff."

Talk by HSBC and Wells Fargo that they had cleaned up their predatory lending act has been blown out of the water by the example cited by even the Wall Street Journal, of a $103,000 mortgage on a shack in Arizona, purchased by Wells and then HSBC --

"Less than two years ago, Integrity Funding LLC, a local lender, gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. By the time the house went into foreclosure in August, Integrity had sold that loan to Wells Fargo & Co., which had sold it to a U.S. unit of HSBC Holdings PLC"

We'll wait to hear the spinmeisters at Wells and HSBC try to explain this one away...

So HBOS is said to be cutting off Oz Minerals, not extending loans, the extractive party is over...

So Capitol One goes forward to scoop up Chevy Chase in DC... What in your wallet -- a bank with a history of racially-based redlining?

Who knew? Morgan Stanley, which the Federal Reserve let become a bank holding company with no public comment, now applies on an expedited basis for its Greenwich, Connecticut-based subsidiary Frontpoint to own a stake in a start-up bank that says it will serve Manhattan, Brooklyn and parts of Long Island: Heritage Bank. Then, there is a China-related application by Morgan Stanley, on which the comment period is still open. Expect more on this.

.. long standing conflicts between client companies and communities in North Sumatra which have led to the imprisonment of villagers and restrictions being placed on people’s movements, which have in turn prevented children from getting to school and villagers from going to market or their farmland

.. the takeover of community lands in West Kalimantan undermining community food security

.. repeated allegations that client companies in several parts of Indonesia are clearing forests and areas of high conservation value.

Nearly all of the 17 business groups which are HSBC’s clients have announced plans to expand their palm oil operations. Unless their practices change, these operations will inevitably destroy more forest, wildlife and peoples’ homes. Yep, that's HSBC..

In October, Fred H. Langhammer, chairman of global affairs of Estee Lauder quit the board of AIG, as it got a $150 billion government bailout. His resignation letter cited the time demands of the AIG board seat. Between Nov. 10 and Nov. 19, the directors conferred three times. Where -- in Biarritz? San Tropez?

PNC's proxy statement to acquire National City raises the question, why would NCC's regulators rule that TARP funds were unavailable to it, but then turn around and give them to PCC? Some are alleging that the Comptroller's connections to PNC played a role here. Crony capitalism, indeed...

The WSJ of November 18 reported that in February 2007 "to modify loans, HSBC tried a strategy called 're-aging.' If a borrower fell behind on payments by two months or more, HSBC effectively allowed some to catch up by declaring the loan current and adding the delinquent amount to the balance owed." But re-aging began far earlier -- in fact, it was done at Household during the run-up to its sale to HSBC, to make the already dubious predatory business model look better. "Lipstick on the pig," whistleblowers called it them to Inner City Press, who reported it at the time. Plus ca change...

Asked at NCRC's Responsible Lending conference in London on November 14: How will the UK run RBS, which owns subprime lenders in the US, and securitizes subprime loans through its subsidiary Greenwich Capital Markets? What oversight will be given to Deutsche Bank and HSBC and BNP Paribas and their involvement in subprime lending?

Raised at the meeting in September with the Federal Reserve's Bernanke was his decision to allow Morgan Stanley and Goldman Sachs to become Bank Holding Companies with no public comment. Both of these investment banks helped cause the current crisis, in their role as securitizers of subprime loans by now-bankrupt firms like Ameriquest and New Century. Bernanke said CRA could be considered later. But under the law, the only time to consider it is before granting these regulatory approvals.

And, one reason for the crisis was the lack of sufficient oversight of financial institutions and their practices, which the Fed is now making more widespread by overriding the oversight laws.

The same evasion of the law has just be done for American Express, will be done for CIT, while General Electric complains loudly that it will not become a bank holding company, protesting too much, some opine.

So how many WaMu branches is JPMorgan Chase planning to close? The bank refuses to say, but we aim to find out...

HSBC, one of the first banks to have to announced big subprime write-offs, is trying to pull back in some segments of the U.S. consumer finance market. Through their purchase of Household International (and affiliates of its like the secured / subprime card lender Orchard Bank), HSBC became huge in subprime, and then had to pay the price. (They are exporting the business model elsewhere, but cutting back in US at least for now, as evidence by card solicitations down.

Great job, Pandit: in the last year, Citigroup shares have lost 65% of their value, and $68 billion in mortgage-related losses later, the company has so many troubled assets that its days as a leader in U.S. finance appear to be over. “Citi no longer matters,” says Bill Smith, head of Smith Asset Management, a shareholder in and longtime critic of the bank. “It's a black hole.” Even after massive write-downs, the bank still has $138 billion of “problem assets." Crain's says that with $25 billion in federal bailout money safely in its coffers, the company will also get another chance to snap up an even weaker rival or two on the cheap.

In an issue of the Portland Oregonian in late 2001, there was a small 4-5 paragraph article buried in the last pages of the front part of the paper. It spoke of a high level security employee of US Bank that was gathering evidence to present to the FBI regarding US Bank account and Branch managers. Apparently, they were selling names of consumers who had accounts to certain Cincinnati, Ohio Consumer Finance Division’s loan officers. Aggressive sales tactics were employed to recruit potential loan applications in which somehow dummy accounts were established not to the benefit of the person applying for a loan, rather those who were behind the scheme.

The US Bank security person who uncovered this scheme never did submit her documentation to the FBI, because she apparently decided to suddenly retire, and conveniently was unavailable for comment on the story. It never went nowhere. I consider myself as one of the victims of the scheme here 6 years later still have not found any closure nor justice.

It is unfortunate because I had not learned of this article until 3 maybe even 4 years after it had appeared in the Oregonian. Had I known, perhaps the outcome that personally tore this family to shreds may have been avoided. There was an accounts manager at my local Scappoose, Oregon branch that pursued me to refinance to the point of being totally annoying, so much so that I would not even go into the branch, opting to either going to a different branch or banking through the ATM. The most extreme was one morning while at the ATM, this individual saw me and came outside to ATM to once again “sign us up”.

Strange? Perhaps not except for the fact that it was during a torrential downpour.

The owner of the company my wife was consulting for had some issues with a competitor over patent rights or something along those lines, and decided to retire and dissolve the company. My wife, being tired of traveling and being away from home decided to go back to a firm on a salary basis, the consequence being a drastic reduction in income. That is not to mention the coinciding terrorist attacks of 9/11 and consequences that rippled through the economy that affected my business.

Finally, we succumbed to the pressure and gave permission to this accounts manager to forward our name to the Consumer Finance Division. Of course, we were investigating our options with our lenders and such, but none pursued us on a daily basis as did the loan officer from US Bank, promising this and promising that. The heavy handed sales tactics and pressure clouded our better sense, because we lost sight of all the problems we had at the local level branch level. Tellers posting to incorrect accounts resulting in bounced checks and overdrafts, I mean it was constant. If we are guilty of anything it is moving forward with US Bank on a refi, given all the problems we were already having.

It was after one of these “mispostings” that I had gone to see the same accounts manager that doggedly pursued us, to correct the tellers mistakes and set our personal accounts correct. We walked through it, he saw the mistakes made and promised that it would be taken care of and to stop in tomorrow if it was not done yet. The following day nothing was corrected and so I stopped in and to amazement this accounts manager was gone for good. I was told that he transferred to a location closer to his home, which I found very odd because he was from a rural area, more so than Scappoose, and this was a considerable step up for him. Just like that, overnight, he was gone. This “disappearing” act, I would come to learn over the years to come is a tactic used to keep consumers at bay. After discovering the article in the Oregonian, I went back through my records and checked for timeframe. Turns out that the day that the article was published was the same day I had met the accounts manager regarding the mispostings. Coincidence? It is one of those questions that never has been answered.

We were given assurances, verbally, time and again, that we were all approved for this refi and that was holding it up was the appraisal and if it would come in high enough. Once that was done, we would essentially be done in a couple of days. That was nothing more than deceit, lies and simply keeping us on the line of their hook. The appraisal was done and we were well above where it needed to be and we assured it would be wrapped up by Christmas of 2001. Christmas came and went with nothing done.

We were getting very concerned as estimated business taxes on my wife's consulting and my business we rapidly coming due. We were going fall 7800 dollars shy and part of the disbursements from the refi were going to cover that. It became apparent that this was going to drag through past the 15th of January and we were furious that all their promises had been unfulfilled, yet we had come this far and to start all over someplace else was just unthinkable at this point. Our loan officer suggested that we find someone to lend us the 7800 and that she would personally secure a note with that person to the disbursements funds, in essence guaranteeing payment back to this person.

I asked my mother in Cleveland Ohio and she agreed to lend the money, everything else was handled by the loan officer. She contacted my mother and explained that she would have some sort of document that would secure her name to the disbursement funds. As we are in Oregon, the funds needed to transfer via Western Union. This loan officer went as far as walking my mother step by step on how to do so. The note that guaranteed repayment that was promised never did arrive, nor for that matter did the refi.

People look at me when I tell that part of the story as if I am an idiot, a liar or a bad storyteller, and who is to blame them. After all it's totally outlandish. Preposterous, absolutely so, but totally true. Is it in writing? Of course not, US Bank puts none of their promises in writing, only what they can screw you with, not what would screw them.

However, phone records and transference of fund records, and my mother don’t lie. We later came to find out that this scheme was concocted by the loan officers supervisor. I call that fraud.

Finally, on morning in mid February 2002, as we walking out the door to go and sign the paperwork finalizing the refi. We get phone call from our loan officer. She tells us that their has been a stipulation added that simply destroyed the whole deal. We were told that because of my wife's short time at new place of employment and my being unemployed suddenly had caused concern as to whether we should be loaned money to. Never was this even a concern to them prior. We later came to find out that it was a concern long ago and that they had farmed us out to other lenders and they found one in a place call Greenpoint, but never shared that information with us, as a matter of fact it was deliberately held from us. All the while we were being told everything was hunky dory.

The stipulation for approval is again something that people look at me as if I am idiot.

I am in Architecture and I designed and built our home. It sits on a slight downslope because of that there is a basement area that is known as a daylight basement. I designed it as such so that in the future it could be modified into living space. However, that would be under a separate building permit and was for all intensive purposes is deemed as nothing but a crawl area. US Bank and Greenpoint decided in their infinite wisdom that in order to get the refi we would now have to make the daylight basement livable.

In other words, we would have had to obtain a building permit, bring in rock and pour a slab over, and additionally insulate and drywall the walls at a cost of 15,000 – 20,000 dollars. That did it that was the final straw, to which we walked away very, very angry. We felt like we were raped. On top of that our loan officer told us not to pay the mortgage payment to Washington Mutual, that she had it worked out with them with all these prior delays and that it was all taken care of. Naïve our part? Absolutely it was, but this is their business, a consumer should be able to put trust in that. For that we were very very stupid.

In the early part of 2002 the lending practices were still rather strict and we found ourselves not being able to get a refi anywhere. No one would touch us because of a past 30 day on our mortgage that showed up on our credit report. It did not matter what the reason was.

Our intention to adjust our finances to our personal and economic changing times was destroyed. The stocks we held and the savings we had all withered away to keep pace with what had become financial chaos. I was determined to fight back because I believed in justice and truly believed that we mattered. I came to find out that we do not matter. I filed a complaint with the OCC, and they contacted me back asking me to send them all the info I had so they could review it and proceed further. They even told me to fax it as opposed to mailing my docs, as it would find its way quicker into their hands. I did that, on a Sunday evening. I faxed about 150 pages if not more, and the following day I called to ensure that it was received.

I was stunned when the woman on the side of the line admonished me for having the nerve and stupidity to fax that many documents. I asked them if they were going to review and she said that they do not have time to pour through that many pages and that they wrapped it all up with a cover letter and sent it to US Bank. As I understand it in a civil matter I am not obligated to provide the defendant with discovery. Any chance of that happening went right out the door when the agency designed to protect me as a consumer

If you have ever missed a car payment then you know that the calls come daily if not 2 or 3 times, and that’s what my life became. A balancing act, paying the mortgage one month and skipping other ones and then the following month doing the opposite, all the while the credit report overall number divebombing. Being a one person office those calls came to that phone line. Every single I made it a point that I was going to find justice, and I called the 800 number of US Bank, never speaking to the same person twice, and being bounced all over the country to get nowhere. While at the same time I was also receiving phone calls from their collections department looking for the payment on a second that we had with them. I exaggerate not when I say that in a 1-1/2 year period I spoke with over one thousand different US Bank personnel, and the small handful that took an interest in my pleadings for help would disappear……be transferred. To this day, I am still appalled by that.

The day that the refi fell apart, and after we were done screaming at the loan officer she had faxed me a copy of a field review that was commissioned by US Bank, which is common practice, but nonetheless a document that is to be used in house and not privy to us, the loan applicant. Their was so much emotion that day that it did not occur to me until long after a statement that she had made to me, and that was that “you did not get this from me”. In an effort to shorten an already very lengthy letter, what it came down to was that the person who did the field review was not licensed to appraise our particular zone or type of estate property, as we sit on 5 acres.

It took about a week of spouting off about the appraisal when all of a sudden, after months of getting nowhere, I suddenly find myself taking a call from The President of Consumer Finance. Which is just another long story ending in corporate America screwing the common man and getting away with it.

PNC proposing to buy Nat City on the cheap is a deal with many echoes. There was National City's purchase in Pittsburgh of Integra, with the favor now being returned. There's PNC's purchase of Riggs after its money laundering for Chile's Pinochet and Equatorial Guinea came to light. National City's sins have been closer to home and if the past is any guide, PNC wouldn't clean them up either.

HSBC's stock fell 13.5 per cent last week to a five-year low. "We question how long the [HSBC] shares can tread water in the face of falling earnings and increased pressure on capital, and we think the dividend is exposed," Morgan Stanley said. Takes one to know one...

It's telling, in terms of how sloppy the corporate giveaways have been, that neither the Fed nor Treasury thought through how buying warrants in the big banks would put them in the position of reducing book value or recording a loss. They plan to pumps a combined $125 billion in Bank of America Corp. (BAC) - including Merrill Lynch & Co. Inc. (MER) - as well as JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), Wells Fargo Corp. (WFC), Goldman Sachs & Co. (GS), Morgan Stanley (MS), Bank of New York Mellon Corp. (BK) and State Street Corp. (STT).

SOUTH BRONX, October 14 -- If the way the FDIC dealt with the Press on Tuesday is any indication of how they will offer guarantees as part of the bank bail-out process, the corner may not yet be turned. The FDIC emailed the press corps at 9:57 Tuesday morning, announcing a briefing at 10:45 a.m. to "provide details of the FDIC’s plan, what it includes, how it will be funded and who will be eligible to participate." A phone number was provided, but when called the message was that the conference call was full.

Then at 11:22, the same notice of 10:45 press conference was sent out, this time with a new phone number and pass code. But even if one called immediately, the call was ending, with some anonymous participant griping that only JPMorgan Chase, Wells Fargo, Citigroup and Bank of America will benefit.

This was followed at 1:48 on Tuesday afternoon with a notice of a new conference call, at 3:15. Once on, an FDIC official said it would all be not for attribution. Inner City Press asked two questions. First, why are some savings and loan holding companies being excluded from the guarantee program? Because some were grandfathered in and engage in commercial activity was the answer. No list of excluded S&L holding companies was provided.

Inner City Press then asked if the FDIC believes that the proposal to acquire Wachovia by Wells Fargo is an emergency transaction, or that requirements of public notice and comment should be adhered to. The official said the FDIC is "not prepared to comment on particular institutions." Inner City Press asked, Why will you be? But the phone line had been cut off. The masters of the universe moved on, corporate welfare in their wake.

The WSJ transcribes for Citigroup that "Citi will mainly seek to expand overseas, particular in Asia and Eastern Europe, which has long been a major focus of Citi's growth strategy. Retail banking and consumer lending returns there by far outweigh the returns in the U.S., Citi has long argued. Citi has 'exactly the same strategy as before,' the source said." And that strategy includes predatory lending -- now in Asia and Eastern Europe...

Tales for a time of lawless regulators giving rubber stamp bank merger approvals without any public notice or comment, Chase and now Wachovia --

On October 10, the Federal Reserve Board sent Inner City Press a partial response to a Freedom of Information Act request made back in March, about the Fed voting without public notice or comment to bail out JPMorgan Chase's acquisition of Bear Stearns without even following the law requiring the involvement of Fed governors. Six months after the fact, the Fed releases an April letter to Congress saying the Governor Mishkin, who has since left the Board, was in the air on a flight from Finland to the U.S. and therefore couldn't be involved. Click here to view. And now he's gone...

Meanwhile, while Inner City Press / Fair Finance Watch has already commented to the Fed demanding they hold a comment period on Wells Fargo's proposal to buy Wachovia, now Wachovia says it will bypass its own shareholders -- with the NYSE's rubber stamp. Note to Fed: this doesn't make it an emergency to bypass the public too. But the Fed on Friday said, vaguely, that it will begin "immediate consideration" of Wells Fargo's application. But no FDIC involvement = no emergency.

RBS is pleading for a bailout from the UK... When Inner City Press / Fair Finance Watch commented, at length and over years, about RBS' involvement in and exposure to predatory subprime lending, RBS always said it wasn't true...

October 6, 2008 -- So why not let Germany's Hypo Real Estate fail? For an angry debate to this effect by Inner City Press on the bailout, click here

In Wachovia War, Wells Fargo Would Require Public Notice and Comment, No Emergency

NEW YORK, October 3, 5 -- With Wells Fargo's announcement that is it outbidding Citigroup for Wachovia, and would consummate its proposal, without FDIC assistance, by the end of the year the question arises: how could the regulators bypass public notice and comment on a transaction that has no FDIC involvement? Since this still hasn't been answered as of October 5, Citigroup's announcement that it's gotten a judge to restrain the deal is much more sizzle than steak.

When Inner City Press / Fair Finance Watch complained to the Office of Thrift Supervision about the subprime practices of Washington Mutual's affiliate Long Beach Mortgage, the OTS responded that is was only concerned with WaMu's savings bank, not its finance company. WaMu never got CRA credit for Long Beach's loans, but now WaMu has failed and been bought at fire sale prices by bottom-feeder JPMorgan Chase...

-- First on the fringes and now on Fox News, the Community Reinvestment Act is being blamed by some for today's financial crisis. The argument is that by encouraging FDIC-insured banks to lend in lower income neighborhoods, the government -- read, Democrats, from Jimmy Carter to Bill Clinton -- created the explosion in high interest rate subprime loans.

In fact, community advocates had been telling the Federal Reserve about the dangers of subprime lending since the 1990s. For example, Bronx-based Fair Finance Watch commented to the Federal Reserve about the practices of now-defunct non-bank subprime lender New Century, when U.S. Bancorp bought warrants for 24% of New Century's stock. The Fed, rather than take any action on New Century, merely waited until U.S. Bancorp sold off some of the warrants, and then said the issue was moot...

On the rumors of Wachovia looking to buy Morgan Stanley, just as its bigger sibling Bank of America bought Merrill Lynch (click here for Inner City Press' 10% deposit cap analysis), consider that both deals involve Utah-based industrial loans companies, which are covered by the Community Reinvestment Act, but whose acquisition, it is argued, is not subject to CRA scrutiny and public comment. This is something that should be fixed, clearly, in the pending bail-out legislation...

How did Citigroup slip the bit? Now they're listed as a possible bidder for WaMu... HSBC finally ended its pact for Korea Exchange Bank, denied rumors of interest in Morgan Stanley and Halifax...

Alan Fishman, who shepherded Independence Savings Bank in Brooklyn toward its ill-fated sale to Sovereign, has now brought another Independentista over to the fast-collapsing WaMu, Frank Baier...

Citigroup said last week that it expects a $450 million quarter-to-date pretax impact on revenue from trading losses and write-downs of Fannie Mae and Freddie Mac securities...

When asked on September 12 if it was making an offer for Lehman Brothers, HSBC through a spokesperson said, " "We have made it clear that our strategy relies on focusing on emerging markets and businesses with a genuine global connectivity." Yeah, like Household International and predatory lending...

GE said it received a Wells notice that staffers at the Securities and Exchange Commission are considering recommending the SEC file civil charges in a long-running probe of GE's accounting. GE said Friday that the SEC staff is considering civil charges on its accounting for four items over various periods: derivatives; sales of spare parts, particularly in its aviation unit; the timing of revenue recognition on the sales of locomotives; and revenue recognition on several other items.

Merrill under John Thain has reached down into Citigroup's mortgage operation for James De Mare to run its mortgage trading operations. As reported, De Mare has been with Citigroup for 11 years. He most recently was the firm's global head of mortgage trading, overseeing the trading of all securitized products in the firm's fixed-income currencies and commodities group. Great track record...

Commerzbank AG was poised Sunday to announce the purchase of Dresdner Bank AG in a $13.2 billion deal -- to compete with predatory lending enabler Deutsche Bank...

HSBC Holdings brags it has increased its stake in Vietnam Technological and Commercial Joint Stock Bank from 14.4% to 20% for $77.1 million. The transaction follows the granting of special approval from the State Bank of Vietnam and Vietnamese Prime Minister Nguyen Tan Dung in July to increase HSBC's investment in Techcombank beyond the foreign ownership cap of 15%, HSBC said...

Per DJ, "Russian police have raided the offices of four law firms representing Hermitage Capital Management Ltd., once the country's biggest portfolio investor, the fund's chief executive, Bill Browder, said Friday. The raids come after Hermitage, together with HSBC Holdings, turned to Russian courts to recover ownership of three Hermitage investment vehicles that they say were stolen last year with the help of the Interior Ministry."

So HSBC, in most parts of the world a rogue and spreader of predatory lending, is draped in the banner of corporate reform in Russia...

Genpact Ltd., a business process outsourcing provider with its Latin American headquarters in Juarez, has acquired a delivery center in Guatemala City, the company announced this week. Genpact will provide services to GE Money from the facility, which it acquired from GE Money, a division of General Electric. Financial details were not disclosed. The Guatemala facility extends Genpact 's Latin American presence beyond Mexico, the company said in a news release. The delivery center will initially employ more than 700 people, and can grow to 2,000 workers, it said.

This week we note the sale of ABN Amro's private equity business this week to a Goldman Sachs (CS)-led consortium for 600 million Euros, just part of the $95 billion carve-up of the Dutch bank by new owners Banco Santander, Royal Bank of Scotland Group and Dutch-Belgian financial services company Fortis NV. The fall-out continues.

HSBC Auto Finance will lay off about 400 workers in San Diego in the next three months as the giant London-based bank stops making auto loans in the United States. After exiting auto lending, HSBC's consumer finance unit intends to focus on its credit card and home mortgage businesses, said bank spokeswoman Cindy Savio in Chicago. And still much of it is predatory -- now to employees as well.

Per WSJ, "the SEC didn’t want to impose an upfront fine against Citi, say people familiar with the matter, while the states pushed for -- and eventually got — a $100 million fine. Also, as part of the deal, the SEC wants Citi to use its 'best efforts' to help help institutional investors sell roughly $12 billion of auction-rate securities it sold to retirement plans and institutional investors by the end of 2009, or else face possible sanctions from the commission. (In other words, this is the SEC’s version of a deferred-prosecution agreement.)" Another sleazy deal by Citigroup...

In Ireland, "GE Money is to make 85 staff redundant and stop offering personal and commercial loans, in a major restructuring of its operations in Ireland. The lender, which is part of America's largest company General Electric, is to continue offering sub-prime loans, loan protection insurance, and car finance through motor dealers." The subprime continues...

Also per WSJ, "HSBC North America's risk-weighted assets rose 11% to $374 billion in the first half, under the new Basel II banking rules, with most of the rise at HSBC Finance. That is the old subprime-dominated Household International, HSBC's U.S. unit into which it has pumped $2.2 billion in equity this year and which continues to need intensive treatment." Great purchase, that...

GE is getting out of mortgages in Canada, while expanding elsewhere. Apparently Canada is too regulated for GE...

HSBC is playing hard ball in Seoul. DJNS: " HSBC Holdings PLC (HBC) said Thursday that it hadn't received regulatory approval to buy a controlling stake in Korea Exchange Bank (004940.SE) by a July 31 deadline. The bank, recently ranked by Forbes as the world's largest company, has an exclusive agreement to buy the stake from U.S-based Lone Star Funds. HSBC and Lone Star have imposed a deadline on the deal, valued at around $6 billion, of July 31 to coincide with the required regulatory approval. 'The required regulatory approval was not obtained by 31 July so, under the terms of the acquisition agreement, either HSBC or Lone Star may terminate the agreement,' HSBC said in a statement... Earlier Thursday, an official at South Korea's Financial Services Commission said that HSBC hadn't submitted an amended application. " We'll see...

July 28, 2008 -- a week of shenanigans by Citigroup (in London), HSBC (in South Korea) and GE (in Abu Dhabi). And this --

Late Friday, the Treasury's Office of the Comptroller of the Currency took over First Heritage Bank of Newport Beach, California, and First National Bank of Nevada, based in Reno, Nevada, declaring both undercapitalized and facing losses that would wipe out their capital.

"The 28 offices of the two banks will reopen on Monday as branches of Mutual of Omaha Bank," the Federal Deposit Insurance Corporation said in a statement.

"All depositors, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits."

In addition to taking over the deposits, Mutual of Omaha Bank will pay 200 million dollars for assets of the two closed banks, which are now in receivership under FDIC control.

The closures took to 10 the number of banks closed in the country in the past 18 months, as the collapse of real estate prices, the spread of mortgage defaults and the crumbling of the markets for billions of dollars worth of securities tied to mortgages.

Earlier in July, the FDIC seized control of the large IndyMac Bank, which was weakened by heavy exposure to risky subprime mortgages and collapsed after a run by depositors.

So why did Richard Holbrooke resign last week from AIG's board? AIG while announcing the resignation, "effective immediately," did not list a reason...

From the earnings: " At Citigroup, about 8.5% of its subprime mortgage borrowers, which make up about 16% of the bank's total mortgage portfolio, have fallen at least 90 days behind on their loan payments, and therefore are considered at high risk of defaulting."

Slinking out of Slovakia, "in Slovakia Citibank of the US made several redundancies after its consumer finance division CitiFinancial was liquidated. At the beginning of 2008 the bank said that it plans to cut 55 jobs in Slovakia out of almost 230 jobs. In the near future Citibank Slovakia will operate as a branch of Ireland-based Citibank Europe."

After GE's sell-off of Lake to Shinsei in Japan, where will the $5.4 billion be redeployed -- in predatory lending elsewhere? "In an extremely challenging environment, we have completed an agreement that fully meets our core strategic objectives: giving our Japanese business the opportunity to work with a partner committed to investing in Japan, and allowing GE Money and GE to redeploy its capital to areas which will generate strong sustainable long-term growth and returns for our shareowners,'' said GE Money's CEO Bill Carey said-in-a-statement...

Korea Exchange Bank's CEO said Friday that the government should decide soon whether to approve HSBC to purchase of a controlling stake in the bank from U.S.-based Lone Star Fund. "It is very difficult for the bank not to have clarity on when the deal can be closed," Richard Wacker whined at a press conference. If Lone Star has to find a new buyer for KEB as a result of the delayed decision, then the outcome may not be what the Korean government wanted, he said. Is that a threat?

Pandit's pitch about a great turn-around just around the corner is falling on deaf ears. Meanwhile, Threat Level quotes the FBI that Citi's servers were hacked, leading to mass withdrawals from ATMs, the reissuance of cards and, to be sure, some truly sleepless nights from the Citi that never sleeps (except when it comes to consumer privacy)... Ex-Chaser Don Layton, now at E-Trade, has scooped up an old crony, Joe Sclafani....

Hat tip to CR: CapitalOne Healthcare Finance says, "Expert cosmetic surgery and procedures like liposuction, hair restoration, tummy tucks, and more are now within reach." GE Money CareCredit provides this testimonial from Laser Elite, a hair and skin clinic in McLean, Va.: "Having CareCredit has definitely had a positive impact on our business. It helps us attract more patients and has increased our sales by 25 percent." GE's website for its CareCredit card lists endorsements from 31 state medical and veterinary associations and 11 national groups, including the American Dental Association, American College of Eye Surgeons, American Society of Plastic Surgeons, American Society of Bariatric Physicians, and American Animal Hospital Association. Like we've said before, pet loans. But how does GE collect?

As desperate Citigroup looks to sell its German operations, probably to Deutsche Bank, its unions have laid down conditions that "management also emphasizes the need of employees in the talks with the bidders," that working conditions shouldn't deteriorate and the current locations be kept. Citibank's German retail operations, Citibank Privatkunden AG & Co. KGaA, employs around 6,500 people in Germany, at Duesseldorf headquarters and a call center in Duisburg. Can you say fire sale? As noted, Citi's stock is at a 10 year low; it has cut its dividend and been forced to raise, so far, $42 billion...

RBS has finagled approval from China's banking regulator to buy nearly 20% of Suzhou Trust Co., sources say, a follow-up to RBS' stake in Bank of China Ltd. in 2005. Desperate swashbucklers...

In other desperation news, GE is trying to sell off its credit cards, but nobody is interested...

Citigroup has said it's buying a brokerage firm Intra S.A. Corretora de Cambio e Valores in Brazil which has about $745 million in client assets --but would not disclose how much it is paying for the firm. Ah, transparency.... On the spin front, Leah Johnson jumped ship earlier this month after about eight years of spinning, replaced by Kate James, who was Standard Chartered Bank's head of public affairs and strategy for the Americas. James will report to Lisa Caputo, Citigroup's chief marketing officer, whom the company has now put in charge of both marketing and communications operations.

JPMorgan Chase's securities arm sued a former private banker on Monday, alleging he stole confidential and proprietary information about the bank and its clients. The lawsuit, filed in U.S. District Court in Manhattan, is seeking an injunction against Hernan E. Arbizu, a former senior private banker for the Argentina and Chile region at J.P. Morgan Securities' private banking department in Manhattan. Live by the sword...

First, we're glad to see that CompuCredit, and First Bank of Delaware, are getting sued by the government for $200 million. Inner City Press / Fair Finance Watch filed comments opposing CompuCredit as a predatory lender.

This week, Inner City Press / Fair Finance Watch filed comments against the applications by Spain's Caja Madrid, funder of biofuel projects and 23% owner of Iberia airlines, to acquire City National Bank of Florida, and against the Federal Reserve's secret process with banks, in essence a rule-making excluding the public even those the topic, credit derivatives, has come up because of the subprime lending crisis. The financial institutions invited -- and now challenged -- are listed below.

Bank of America, N.A., Barclays Capital - BNP Paribas - Citigroup - Credit Suisse - Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. - HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of Scotland Group - Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital Management LLC - Citadel Investment Group, L.L.C.

The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engages in rule-making, it must provide notice to the public, and allow and weigh public comments. Here, the FRBNY has tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies this FRBNY process. Rather, for example, the FRBNY on June 9 met with a group of the largest banks to discuss, according to the FRBNY's president,

"Regulatory policy. These are the incentives and constraints designed to affect the level and concentration of risk-taking across the financial system. You can think of these as a financial analog to imposing speed limits and requiring air bags and antilock brakes in cars, or establishing building codes in earthquake zones.
"Regulatory structure. This is about who is responsible for setting and enforcing those rules.
"Crisis management. This is about when and how we intervene and about the expectations we create for official intervention in crises."

But when rules are being set, to use Mr. Geithner's own analogies, for air bags, brakes, speed limits or building codes, the agencies at issue are not allowed to and do not only take input from the industry.

Press accounts make clear that the financial instruments and regulatory issues discussed behind closed doors are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages. AFP of June 9 reported that

"those swaps are designed to transfer the credit exposure of fixed income products between parties and often have been linked to US subprime, or high-risk, mortgages... Trading in derivatives, financial securities whose value is derived from other financial securities, was a major factor in the subprime, or high-risk, mortgage crisis that rocked markets last August and has spread through the global markets... Geithner defended the Fed's decision to finance the Bear Stearns - JP Morgan Chase merger in March, saying it was done only with great reluctance and only because there seemed to be no other choice as Bear Stearns reeled from soured mortgage-related investments. 'It was the only feasible option available to avert default,' he said, and 'we did not believe we had the ability to contain the damage that would have been caused by default.' The Fed acted only to 'facilitate an orderly transition,' not 'to preserve the company,' Geithner said."

Here, it appears that the FRBNY is trying to take the closed-door, no public notice Bear Stearns - JPM Chase process several troubling steps further, providing access to 17 mega-banks but still not the public.

This closed-door, industry top-heavy process is unacceptable and, Inner City Press has now timely contended, is contrary to law, under 5 USC 553 and otherwise. Watch this site.

Polish financial regulatory body KNF has rubber-stamped GE Money's takeover of Bank BPH. 'KNF has approved for GE to use their rights from over 66 percent of votes but not more than 75 percent of votes in BPH,' said Lukasz Dajnowicz. BPH was Poland's third largest bank until the bulk of its assets were absorbed by peer Bank Pekao as part of a merger of UniCredit's local units. Italy's UniCredit last November agreed to spin off and sell 200 branches of BPH to GE Money to gain Polish authorities' approval for a merger of its local units...

GE Money's head of global communications Robert Rendine says that GE Money, which provided about $25 billion of the parent's company's $172.7 billion in sales last year, is an active player in the global financial services sector. While the economy in the United States has struggled, GE has turned to developing markets like Poland, Turkey and India, Rendine says. GE Money has invested nearly a half-a-billion dollars in some of these emerging markets, "and they have become a great growth vehicle for us," he adds.

GE, advised by JP Morgan Chase, beat out Natixis and others to buy Interbanca from Santander -- what GE is doing is trading other businesses with Santander, giving it GE Money's businesses in Germany, Finland, and Austria, and its card and auto businesses in the UK.

GE Money's predatory lending, insurance sales and debt collection practice have hit a new low in Australia. Beyond called debtors up to 100 times a month, GE violated previous commitments. According to the Australian Securities and Investments Commission (ASIC), it "has taken action over the sales and debt collection practices of companies in the GE Money group. ASIC has imposed conditions on the Australian financial services license (AFSL) of GE Money's Hallmark General Insurance Company Ltd and Hallmark Life Insurance Company Ltd after those companies failed to comply with commitments each made in a 2006 Enforceable Undertaking (EU) to ASIC. ASIC found that parts of the insurance advice and sales business were often poorly managed and not meeting the legal obligation requiring there be a 'reasonable basis' for personal advice given to customers. Specifically, ASIC was concerned that staff were selling insurance to customers whose needs had not been identified or understood. Given that the Hallmark companies did not comply with a number of key undertakings given to ASIC in 2006, the regulator has decided the best way to protect consumers is to impose conditions on the AFSLs of GE Money's Hallmark companies.

The more stringent conditions now included in the AFSLs of the GE Money's Hallmark companies replace the 2006 EU. These additional license conditions require the Hallmark companies;- to engage an independent expert, over a period of up to 15 months, to review and assess the advice, sales, training, management and corporate governance processes in its branch network and make recommendations to correct any deficiencies to ensure these processes are at an industry best practice level;- to engage the same expert to assess the steps already taken by the Hallmark companies to compensate their customers and make recommendations as to any additional compensation steps that may be necessary;- if the expert makes recommendations, to provide ASIC with an Action Plan to implement those recommendations; and- to provide ASIC with full details of the compensation already paid to customers by means of a director's statutory declaration, by 18 July 2008.

Furthermore, the Hallmark companies are now required to limit the insurance advice their staff provide to 'general advice' only and not 'personal advice'.

Separate to the imposition of additional license conditions on the Hallmark companies, GE Money has entered into an EU to address ASIC's concerns about the debt collection practices of its consumer credit business. This is in response to consumer complaints about harassment from the debt collection practices of that business. Those practices included excessive or inappropriate contact with customers, contact at unreasonable hours and an inflexible approach to repayment arrangements.

As part of this EU, the GE Money consumer credit business is required:- to engage an independent expert, over a period of two years, to review and assess its debt collection processes to ensure that it complies with the ASIC/ACCC Debt Collection Guidelines and make recommendations to correct any deficiencies;- if the expert makes recommendations for improvements, to provide ASIC with an Action Plan to implement those recommendations;- to pay compensation to affected customers in accordance with guidelines prepared by the Banking and Financial Services Ombudsman; and- to arrange and pay for an industry workshop to promote best practice in the debt collection industry.

Sometimes the attempt to crack-down just keeps a story alive. It is not clear if that's the case regarding the barring from Russia of Moldovan journalist Natalya Morar for her reporting on the covering up of murder links to money laundering through Russian bank Diskont and Austrian bank Raiffeisen (see, "Strange Games", The New Times, August 20, 2007). Morar has been fighting the expulsion in court, without success. We aim to continue to follow this story.

We bring good things to life? The several thousand people working at General Electric's Appliance Park in Kentucky were blind-sided by the company's plans to sell or spin off its appliance business. Larry Hayes, secretary of Kentucky Gov. Steve Beshear's executive cabinet said, "It's the hand we've been dealt, and now we need to play that hand as best we can."

"We don't have any idea who's coming in, what kind of salaries, how much of our benefits we're going to lose," said Ann Davidson, a production worker with 35 years at GE plants.

HSBC has it will acquire a 73.21% stake in Indian brokerage firm IL&FS Investsmart Ltd. for $241.6 million, half of it from an entity known as E*Trade Mauritius Ltd. -- who knew?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2007 is the fourth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of 3 percent over the yield on Treasury securities of comparable duration on first lien loans, 5 percent on subordinate liens.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

GE Money last week announced that it would acquire a minority position in Banco Colpatria - Red Multibanca Colpatria S.A., a consumer and commercial bank based in Bogota, Colombia. GE Money said it will acquire a 39.3 pct stake in Red Multibanca Colpatria in two installments, with options to acquire up to an additional 25 pct stake from Mercantil Colpatria S.A....

And from the NYT's pre-obituary of New Century, this: " Morgan Stanley, Goldman Sachs, Barclays Capital and Deutsche Bank own about 16 percent of the company, according to securities filings. Citigroup recently bought a 5.1 percent stake in the company and Greenlight Capital, a prominent hedge fund, owns 6.3 percent. Its president and co-founder, David Einhorn, sits on the board of New Century." Ah, Citigroup and Deutsche Bank, et al... And there's an investigation into Robert Cole, who threw up smoke screens when Inner City Press previously inquired into U.S. Bank's stake in New Century...

JPM Chase continues its stealth expansion in subprime, this week in the UK, raising its stake in Cattles PLC, which is in takeover talks with its smaller rival London Scottish Bank PLC...

In the U.S., subprime's going down: on Feb. 23, stock prices of mortgage lenders fell after H&R Block disclosed it will set aside $111 million to cover losses by Option One. Countrywide Financial Corp. fell 81 cents to $39.33. New Century Financial Corp. lost $1.02 to $15.52. The stock is down 47.8 percent since Jan. 1. On Feb. 22, Accredited Home Lenders's stock dropped $1, or 4.1 percent, to $23.59. Delta Financial Corp. ended down 45 cents, or 4.2 percent, to $10.32 on Amex. Shares of Impac Mortgage Holdings Inc. fell 28 cents, or 3.6 percent, to $7.58. Shares of Fremont General Corp. dropped 45 cents, or 3.4 percent, to $12.86. And Wells Fargo last week gave WARN Act notices to 250 subprime lending workers in South Carolina...

The arrogance of Bank of America never ceases to amaze. While evading Congress' 10% deposit cap, including pursuant to an analysis of data from SNL, BofA claims that any questioning of its number-game are unsubstantiated, and shouldn't even be considered by regulators. Money laundering and muni-bond scams, too -- none of it, BofA says, should be taken seriously. We'll see.

From a February 8 letter from Bank of America to the Federal Reserve: "ICP notes accounts of anti-money laundering investigations related to South American money service businesses. Bank of America provided to the Board information about its anti-money laundering policies and practices [and] has routinely demonstrated its strong commitment to anti-money laundering compliance." Oh, really?

In the Philippines, GE Money Servicing Co., is looking at the Subic free port zone as prospective site for the expansion of call center operations. GE Philippines country manager Renato Romero and GE consumer finance servicing head Sanjeev Jain with local partner Genpact vice president Cecilia Ampeloquio visited the free port and expressed guarded interest to set up its call center operations there. GE Consumer Finance acquired Keppel Bank, its entry into the Philippine market...

So Citigroup's Chuck Prince last week went hat in hand into the desert, to the camp of Prince Alwaleed bin Talal. Those who travel to the camp invariably ask favors. As to what Chuck's was, the coming time will tell.

Bank of America last week announced it's paying a $14 million fine to the IRS, and cutting a lenient side deal with the Department of Justice on bid-rigging in the municipal bond market. So will the Federal Reserve inquire into this adverse managerial issue, as it considers BofA expanding its practices to US Trust? We'll see.

It's still happening. I was amazed to find your website... Some of your contributors wrote about the exact same problem that we have run up against. My wife was having some extensive necessary dental work done when the dentist suggested that she use the GE payment process for the work. It was explained that it is non interest loan as long as payments are made on time each month. She agreed, the dental office called GE, GE called me at work and I gave them my information. Never was it mentioned that payment would be due in a year.

In an effort to maintain our good credit, when I received the first bill, I went to their online web site and set up automatic monthly payments to insure payment was sent and received on time each month. Never did I notice (if it was there) any reference to the fact that the balance needed to be paid off in one year. Towards the end of 2006, I reviewed the current mailed statement to see if there was an interest statement and was shocked to see the balance was about $1,100 higher than the original $4,000 borrowed. I called the office and was told rudely that we owed that amount and nothing could be done. I asked for a supervisor or manager and, the only thing that did was escalate the level of rudeness with the supervisor yelling at me that we should have paid it off and that was the way it is, no discussion. I even offered to pay off the whole amount that day and was told that didn't matter as I owed the whole amount whether paid that day or not. The adding back of the interest was not the final straw, they also begin charging interest at 22.98%. I have excellent credit, credit cards with less than 9% rates (paid in full each month), a home equity line of credit at less than 8% (yes, below prime) and I have no reason to accept credit at loan shark rates.

I will be writing the California Department of Financial Institutions, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision to let them know about these predatory practices. I have also prepared a letter to the Chairman of the Board of GE, Jeffrey R. Immelt and the President and CEO of GE Money, David Nissen. Now that I know that I was not the only one caught in their trap, I will continue to fight this. $1,100 may not be much to GE but it is very much to me.

Last week HSBC issued a profit warning heard 'round the world. Its purchase of the predatory lender Household International is now bringing the whole company down. The Times of London called Inner City Press to say, "Guess you guys were right, when you wrote to the HSBC board of director that Household was unsafe and unsound." Yep... See, e.g., "Sub-prime lenders fear defaults after costly HSBC fallout," Times of London, Feb. 10, 2007.

Sleazy is as sleazy does. Bank of America's offshore tax shelter scheme has led to a too-small $3 million fine for money-laundering. The National Association of Securities Dealers found that Banc of America Investment Services failed to obtain customer information about 34 accounts involving trust and private investment corporations based in the Isle of Man. BofA "fundamentally failed to meet its obligations with these high risk accounts by failing to adequately investigate and pursue red flags," James Shorris, the NASD's head of enforcement, said-in-a-statement. The Senate's Permanent Subcommittee on Investigations said it thought the accounts were controlled by two billionaire Texas brothers, Sam and Charles Wyly. As part of a 375-page report on offshore tax havens, the committee said the brothers, who helped build craft retailer Michael Stores Inc., used the accounts to shield stock option gains from taxes. Sen. Carl Levin, D-Mich, the chairman of the subcommittee, said that the fine "sends a strong message to U.S. securities firms that when they open accounts for offshore entities and transfer offshore dollars across U.S. lines, they have a legal obligation to know who is behind those accounts or risk millions of dollars in fines and other enforcement action." And now BofA wants to buy another secretive private bank? See, "Protest filed against BofA's deal for U.S. Trust," by Rick Rothacker, Charlotte Observer, Jan. 27, 2007

Highway robbery or lies? Last week, Bank of America's CEO Lewis said that while BofA bought its 9% stake in China Construction for $3 billion in 2007, that investment is now worth almost $9 billion. Hmm.

At the same conference, JPM Chase's CEO Dimon predicted or threatened that Chase could capitalize on falling prices for subprime loans by buying them. "We are an economic animal," he said, right on at least one front...

Inner City Press / Fair Finance Watch has filed a timely challenge to Bank of America's application to acquire U.S. Trust, click here for Charlotte Observer article. Meanwhile rumors circulate of BofA trying to acquire Countrywide Mortgage, and getting further back into subprime. We'll see.

Last week Barclays said, "All the loans originated by EquiFirst are expected to be securitized or sold on an ongoing basis after an average hold period of approximately two to three months.'' The bank already buys and securitizes US mortgages in bulk to sell into the investment market, having moved into the business in 2004. Great... We'll have more on this.

While many subprime lenders fail, the British bank Barclays on January 19 announced a plan to buy Regions Bank's large subprime unit, Equifirst, for $225 million dollars. ICP Fair Finance Watch and others have long criticized Equifirst for predatory and discriminatory lending, most recently in the Regions - AmSouth proceeding. Why would Barclays want to buy it?

Earlier in the week, Barclays announced a deal to plaster its name on the Nets' basketball arena being built in Brooklyn. So that's the plan: pay over $100 million to make your name known to the U.S. public, then jam a subprime lender down their throats. We'll see. Click here for a recent BBC piece on Inner City Press' reporting from the United Nations.

GE Money and consumer finance continues foray into Central America. GE's BAC-Credomatic Holding Co. is now proposing to buy privately held Honduran bank Banco Mercantil SA, without disclosing the terms. Banco Mercantil has about $700 million in assets and $500 million in deposits. It has more than 1,000 employees. GE says that the deal is expected to close in the next few months, subject to regulatory approvals...

A company dropped at the last minute from the UN Security Council's Iran resolution showed up in comments about money laundering by a top U.S. Treasury official last week. Stuart Levey, treasury undersecretary for terrorism and financial intelligence, told a news conference that Iran's state-owned Bank Sepah had facilitated business between Iran's Aerospace Industries Organization and North Korea's alleged missile-related exporter, the Korean Mining and Industrial Development Corp. "There's a real concern there...one would have to be concerned about these sorts of links between North Korean proliferators and Iranian proliferators and the financial intermediaries who might be handling that business," Levey said. Click here for Inner City Press' story reported from the UN about the dropping of Aerospace Industries Organization from the Iran resolution...

Corporate welfare to General Electric: The European Bank for Reconstruction and Development trumpeted last week that it is extending a EUR 5 million loan to Budapest Lizing (BL), a subsidiary of GE Money's Hungarian bank Budapest Bank. Balazs Bati, BL's Managing Director bragged that by taking this credit line, BL becomes the largest borrower under the finance facility in Hungary...

From London's Daily Telegraph of January 5: "an ABN Amro banking analyst, has labeled the marriage of HSBC and HFC a 'fatal attraction,' arguing that rising bad debts from the US business will not be offset by revenues. He calculates that HFC could easily charge $8.7bn of bad debts for the financial year to December 2007, up from $5.7bn for the current year... Sanford Bernstein's Antony Broadbent said: 'Our concern is that in 2007 and 2008, the increase in charge-offs will spread from the secured book to the unsecured book, which constitutes around two thirds of HFC's losses.' Broadbent points out that US personal financial services, the bulk of which come from HFC, accounted for 65pc of the group's impairment charge in 2005."

and " Sir Brian Moffatt and Baroness Dunn, neither of whom is viewed as independent, because of their length of service,"

and "there were raised eyebrows over HSBC's recent telephone briefing with analysts over its trading statement. Traditionally the domain of the finance director, on this occasion Mr Flint was interrupted several times by Mr Geoghegan, prompting speculation that there is tension between the two."

Funny ads, predatory lender. GE Money issues private-label cards for Ikea and began piloting kiosks a year ago. Michael Ettlemyer, a spokesman for the unit of General Electric Co., said it has installed three to five kiosks at each of Ikea's 29 stores around the country. At some stores, shoppers can apply for cards by swiping their driver's licenses at manned tables, and GE is trying to incorporate this capability into the kiosks, Mr. Ettlemyer said. They'd like to make you a loan you didn't even know about, at terms you never agreed to....

From the mailbag: In a message dated 12/26/2006 10:16:39 AM Eastern Standard Time, [name withheld] wrote to Inner City Press:

I have been plagued by deceitful practices with HSBC Mortgage. Unexplainable fees and also when I applied for hardship it was never disclosed about the "deferred interest" charges now totaling 10,000! I owe more than when I took out the loan. I am stuck in an arm at 12.6% unable to refinance with them or anyone else from the matter. I feel as though they want me to lose my house, they will not work with me. I'm stressed, tired and I owe more on my house than it is worth. I don't feel this is ethical or legal. They even are still charging me with hazardous insurance even though I've given them proof of insurance policy, but because I lapsed 1 month on insurance they claim I have to continue paying the hazard insurance- so that's double payments I'm making. That's just one example of the many charges that are crippling my financial status. I pray that others will share their nightmare with HSB and we can join together.

Blind item: Which recent JPM Chase hire in Milwaukee, Wisconsin, was ejected from last employment, at Wells Fargo, under charges of race discrimination? And what might this say about, on the one hand, Chase's due diligence and standards, and on the other, Wells Fargo's duty to protect future consumers? Developing.

From a generally pro-Citigroup analysis last week, this: "What has been ailing Citigroup, Bove says, is the legacy of former CEO Sandy Weill and 'a board that I would not want to flatter by describing as third-rate.'"

"one of the City's leading fund managers has expressed considerable concern about the fortunes of HSBC and the merits of its chairman, Stephen Green. Michael Taylor, head of equities at Threadneedle Investments... relayed his views based on a recent investor meeting with the HSBC chairman: "We had Stephen Green in here two weeks ago, and, cor, he was asleep on the job is how I would describe it. He's just not up for it.'' Asked if he thought HSBC has tarnished itself through the purchase of Household, its disappointing US sub-prime business, Mr Taylor said: "Yes, yes it has. It's been dreadful.''

Citigroup announced on Dec. 13 a proposal to acquire Grupo Cuscatlan, with operations in El Salvador, Guatemala, Costa Rica, Honduras and Panama, for $1.51 billion. Citigroup bragged that "this transaction will further expand Citigroup's corporate and retail operations in the region and complement its pending acquisition of Grupo Financiero Uno, the largest credit card issuer in Central America." So now there'll be CitiFinancial predatory lending all along the Pan-American highway...

Chase too is selling subprime. Investment bankers, analysts, and others familiar with predatory lending said last week that Ameriquest's parent ACC has hired JPMorgan Chase & Co as adviser to sell the company and is seeking between $1.5bn and $2bn for the franchise...

GE in China: General Electric Corp of the US is looking at the prospects of exploiting opportunities in China's consumer finance market, Xinhua quoted GE's vice-president Steve Bertamini. Bertamini said GE's consumer finance arm GE Money sees strong growth potential in the Chinese market and that it is now conducting a study on the sector. In October, GE Money teamed up with Shenzhen Development Bank and Wal-Mart (China) Investment Co Ltd for the joint issue of a Visa and China UnionPay dual-labeled credit card, the Wal-Mart Changxiang Card.

Deutsche Bank, which has bought two subprime mortgage lenders, Chapel Funding and MortgageIT, now says it plans to buy a subprime servicer next year, and it projects its subprime securitizations to jump 50% this year, to $21 billion.

Meanwhile ACC, the imploding parent of Ameriquest and Argent, last week announced a plan to sell its subprime auto lender Long Beach Acceptance Corp. for $282.5 million to AmeriCredit. What will they sell next?

With all the turmoil in the subprime lending field, worth noting is that on December 5, HSBC's share price fell around 2.7% following the pre-close announcement of earnings and predictions. HSBC's price is down almost 10% on its year high. This fall was attributed to the bank's comments on both the UK unsecured consumer and US secured consumer bad debt. HSBC said that "The trend of rising personal bankruptcies and IVAs seen since the second half of 2005 looks unlikely to abate in the medium term and continues to be the major influence on loan impairment charges in personal loans and credit cards." HSBC added that "challenges continue" in the US second mortgage market: more stringent underwriting in the high risk mortgage market has led to a fall in new business and that this lower level of generation is likely to continue, while the US unsecured consumer market is said to be performing well.

This last would mean, the high-cost personal loans through Household and Beneficial and also tax refund loans. The self-declared world's local bank is a predator...

Also last week, on Wednesday, Royal Bank of Scotland's Sir Fred (the Shred) Goodwin told reporters that RBS' Citizens does not lend to subprime borrowers. "We don't do sub-prime lending which puts us in an advantageous position,'' Goodwin said. But RBS' Greenwich Capital Markets enables other companies which engage in not only subprime, but also predatory lending...

Last week, AIG announced a plan to purchase Ocean Finance and Mortgages Ltd., a British finance broker for home loans. American General Finance claimed this acquisition marks the first time the company has operations located outside North America. Maybe the first, technically, for American General -- but it's just that American General is now AIG's vehicle for exporting predatory lending...

Who will try to buy Ameriquest and Argent? Some now say "the French." Word to the wise: c'est toxique....

Here's a story that has it all, at least from our point of view. Last week police found that "a Citigroup executive turned his fancy 38th-floor penthouse apartment overlooking the United Nations into a crystal meth lab... [Named] was Michael Knibb, a vice president for information technology for Citigroup. He was tracked ordering 100 grams of meth's component chemical, court papers allege. When the feds checked his penthouse on E. 39th St., they discovered beakers, solvents and heating elements in his living room and bedroom." And no sale scripts for predatory loans?

"The former chief financial officer of Capital One Financial Corp. will pay $1.8 million and accept a five-year ban on serving as an officer or director of a public company to settle insider trading and fraud charges, the Securities and Exchange Commission said on Monday. David Willey, of Great Falls, Va., had been accused of making about $3 million of profits on inside information that the Federal Reserve Board was considering downgrading the lender in May 2002. His wife, Joy Willey, a former Capital One vice president, also had been named in the SEC's lawsuit."

Might this be part of the explanation for the delay on Capital One - North Fork? While Wachovia's CEO Ken Thompson is getting in line to collect $200,000 a year to be on the board of directors of scandal-plagued Hewlett-Packard, Wachovia is moving to close low-income branches in Philadelphia - click here for more.

So far in the 4th quarter of 2006, Citigroup has announced deals in Turkey, Central America and now China. As DJNS notes, Citigroup "has been pouring money into building its international consumer business, with $530 million slated for this year, compared with $150 million for the U.S. franchise." That is what we mean, about Citi's conscious export of its predatory lending. An example is in India, where CitiFinancial is raising money to expand through non-convertible debentures and short-term debt, raising a total of Rs 5,876 crore. According to a report by rating agency Cresil, "CitiFinancial is engaged in retail financing, primarily to finance the sub-prime segment of retail borrowers in personal and consumer durable loans and home mortgage segments"....

Also in India, GE Money Financial Services Ltd, which is raising Rs 3,225 crore. According to a report by rating agency Cresil, "GE Money Financial Services finances consumer durables, automobiles and two-wheelers"... In Thailand, GE Money Retail Bank will transfer its assets and liabilities including all deposits, home mortgages and home equity loans to Bank of Ayudhya on Jan 3, the Bangkok Post reports. The transfer is part of GE Money's decision to acquire a 25.4% interest in BAY. The asset transfers do not include hire-purchase loans and auto-insurance premiums, which will be maintained at GE Money Thailand.

HSBC will apply for a full banking service license in Thailand once the country's second phase of banking liberalization enters the final stages. "In Thailand, we are restricted to one branch which makes doing a retail bank quite difficult," Michael Smith, chief executive of HSBC's Asian banking unit said in a recent interview at the APEC summit in Vietnam. For now, Bank of Thailand regulations restrict foreign banks to having only one local unit in Thailand. "I would very much welcome the deregulation in Thailand," a move that could allow HSBC to operate the same services as domestic Thai banks, Smith said.

And if the past is any guide, HSBC would provide something not yet in Thailand -- systematically predatory consumer finance lending, which it acquired along with Household International...

Last week Inner City Press sat down for an interview with the president of the Nagorno-Karabakh Republic, Arkady Ghoukasyan, and asked him about the fires, about the United Nations and other matters. Click here for the footage, on Google Video.

Regarding Taiwan, "We are not looking at anything right now," Michael Smith, chief executive of HSBC's Asian banking unit, said last week. "At present we have no plans" to buy any Taiwanese bank, he added. "The prices are too high. No doubt there needs to be further consolidation in the banking sector." This as HSBC's foreign policy...

The spread of subprime lending is exemplified by GE Money, this time in Ireland: "Fresh Start Homeloans, which also trades as The Money Group, is based in Cornwall and is not authorized to do business in the Republic. The company operates a brokerage promoting personal loans, mortgages aimed at those whose marriages have broken up and equity release. It also targets people with poor credit histories, known as sub-prime lending. Its loans are provided by GE Money." Good job, GE -- not only predatory, but also illegal.

For those following the mysterious delay on the Capital One - North Fork deal, Business Week of Nov. 6 explains some of the issues, including that "according to Cap One's regulatory filings, 30% of its credit card loans are subprime. Representatives of 32 credit counseling agencies contacted by BusinessWeek say that Cap One has long stood out for the number of cards it's willing to give to subprime borrowers." As Fair Finance Watch raised in its comments to the Fed, " Last year, West Virginia Attorney General Darrell V. McGraw Jr. filed an action in state court seeking documents from Cap One related to its issuance of multiple cards, as well as other credit practices. Other than that, however, Cap One's practices do not appear to have drawn regulatory scrutiny. A spokesman for the Federal Reserve, Cap One's primary federal overseer, declined to comment about Cap One, but said that in general the regulator doesn't object to multiple cards."

"In Poland, for example, where about 77 per cent of banks are foreign owned, Unicredit is dominant after its acquisition of HVB. Others such as Allied Irish Banks, Citigroup and Commerzbank also have a presence. In the Czech Republic the market is dominated by overseas banks: Societe Generale - which owns Komercni Banka - as well as Erste Bank and KBC and Unicredit. KBC is also present in Hungary. What few acquisition opportunities remain are potentially expensive. For example Erste Bank recently won a state-run auction for Romanian bank BCR, paying Euros 3.75bn (Pounds 2.5bn) for a 61.9 per cent stake - or about five to six times price to book, or asset value, compared with about three times for a continental European bank. Robin Evans, banks analyst at Fox, Pitt Kelton, said in a recent report: "Central and eastern Europe is one of the few regions where HSBC has no material presence... In Poland, HSBC has just one branch in Warsaw for commercial and corporate banking and has no current retail banking license."

What they forget is the ex-Household subprime units... And in Poland just last week, Fortis agreed to buy Dominet, a Polish retail bank specializing in consumer finance. The transaction will be subject to full regulatory approval, in particular the approval of the Polish Bank Supervisory Committee, and customary closing conditions. Dominet is a full-service retail bank with 806 employees and a modern nationwide branch network in Poland. It occupies a strong position in the car finance segment and has a fast-growing portfolio of cash loans."

JPMorgan Chase announced last week that it had hired David Lowman, the head of CitiFinancial International since 2004, to run its mortgage business and "help expand it globally in consumer finance." What better way than with a predatory lender...

Gold worth over $1 million extracted by Chilean dictator Augusto Pinochet has reportedly been found in HSBC, whose spokesman Gareth Hewett said, "Al insistírsele sobre el particular, aseguró: "No puedo confirmar ni desmentir. Sin comentario" (no comment). Later HSBC claimed the Chilean documents are forgeries, but another maintained their authenticity. We'll see. And the mysterious limbo of Capital One - North Fork continues...

Wall Street is going subprime. Bear Stearns is buying Encore / ECC. Merrill Lynch has agreed to buy National City's First Franklin. And in the summer Morgan Stanley signed a deal to buy Saxon Capital of Virginia....

On the money laundering beat, on October 13 the G-8's FATF dropped Myanmar from its money laundering blacklist. On October 17 at the UN, Inner City Press asked U.S. Ambassador John Bolton for his reaction to the FATF's decision. Amb. Bolton had cited Myanmar's money laundering as one of the reasons that Myanmar should be put on the agenda of the UN Security Council, as a threat to international peace and security. Amb. Bolton on Oct. 17 said he hadn't heard of the FAFT decision. His staff gestured to call or email him. Inner City Press emailed the staffer press accounts of the FATF decision and was told that a comment will be forthcoming.

Meanwhile the CEO of long-time money-laundering Citigroup Chuck Prince last week said that "buying a big bank in western Europe is not on my agenda." He added that a big acquisition in the U.S. would "re-weight us very significantly to the US - which is not what I want to do." And so, Turkey -- on Tuesday, Citigroup agreed a $3.1 billion deal to buy 20 per cent of Akbank, Turkey's largest privately owned bank. Prince said it was "a great deal and a perfect example of what we want to do more of." We'll see.

Announced Oct. 13: GE Money proposes acquiring a 98 per cent stake in Latvian Baltic Trust Bank from Russian titan Oleg Boiko. It is planned that the deal could be completed in November this year. One hopes that the Latvian bank regulators will be objective in considering GE's record of predatory lending...

Georgia's foreign minister Gela Bezhuashvili said last week, "Branches of Russian banks are continuing to operate in Abkhazia, unlawfully. Money-laundering is still happening there. Counterfeit money is still being printed in South Ossetia." Meanwhile at the UN, a Georgian representative promised Inner City Press to provide information on this alleged money laundering. Inner City Press asked six questions of Georgia's UN ambassador, click here to view.

In Federal court in Brooklyn, NY, Judge Charles P. Sifton in Brooklyn has in the past two week denied motions to dismiss money laundering for terror charges by RBS' NatWest and Credit Agricole. The latter e suit, filed in February under the Anti-Terrorism Act, portrays Credit Agricole of improperly doing business with a French-based charity that has been designated a terrorist organization.

In court papers, the bank claimed it suspected the charity, CBSP, might be involved in money laundering, but not terrorism. The judge said in his ruling that 'it is reasonable to believe that when the bank noticed 'unusual activity' on CBSP's accounts, the bank would have investigated the organizations receiving the large transfers, "including designations of terrorist organizations made by the government whose country was experiencing the terrorism." Ah, RBS and Credit Agricole...

From the Sunday Telegraph of Sept. 24: HSBC "bought Household International, a US consumer finance group, three years ago and Ken Harvey has been plucked from there to become head of IT for the whole bank. As HSBC transfers the technology acquired with Household to its operations round the world, costs should come down, with a resulting increase in profitability." So now all of HSBC's IT is run by predators....

Bank of America admitted last week that its lax operations allowed South American money launderers to illegally move $3 billion through a single Midtown Manhattan branch. BofA said that it ''takes seriously its anti-money laundering obligations'' and that it ''never knowingly does business with persons, organizations or businesses engaged in illegal activities and did not in this case.'' Most of the funds came from Brazil via a licensed money transmitter in Uruguay and then to the Bank of America branch, which allowed funds to reach unlicensed money transfer firms in the area...

From the Toronto Star of September 25: GE Money, the Canadian consumer-lending business of General Electric Co., is applying to become regulated as a trust company so that it can launch new products like home equity lines of credit. The company has been operating in Canada as an unregulated financial institution for 20 years." And GE has been operating in the U.S. for even longer, as an UNREGULATED financial institution...

From Regions' September 21 response to the Federal Reserve's September 11 questions on AmSouth, sent to Fair Finance Watch as a protester of the deal:

"Regions Mortgage's main secondary market investors [include] some servicing-released investors, such as [REDACTED] and [REDACTED]... Regions has engaged outside counsel, which has in turn engaged [REDACTED] to provide advice on ensuring compliance." After that, an entire sentence is blacked-out. Top secret, apparently, the programs of the Regions...

"Equifirst grants rate exception authority to designated EquiFirst employees. Mortgage Loan Processors and Underwriters may use their discretion to vary rates on a mortgage loan up to [REDACTED] basis points. Managers may use their discretion to vary rates on a mortgage loan up to [REDACTED] basis points."

Hardly a best practice... Similarly, on branch closings, Regions plays hide the ball:

"Please see Confidential Exhibit 3 for information related to the branches that have been identified at this time that may be closed, relocated or consolidated in connection with the application."

"There are 139 areas with overlapping Regions Bank and AmSouth Bank branches where closure or consolidation of branches is being contemplated. Thirty-two of these overlapping branches under consideration (or 23% of the total) are located in L[ow or] M[oderate] I[ncome] census tracts."

"Regions Bank continues to have a limited number of credit relationships with subprime lenders... A description of the identified subprime lending arrangements is included as confidential exhibit 5. Regions also has a limited number of credit relationships with unaffiliated payday and car title lenders. A list of these borrowers is included as Confidential Exhibit 6... Regions Mortgage has in place broker relationships with [REDACTED]."

AmSouth similarly plays hide-the-ball on its acknowledged lending to (unnamed) pawnshops. The application states that "The combined institution currently intends to continue to do business selectively with subprime mortgage lenders and pawn shops."

Heard from the Street: there are those who predict that Royal Bank of Scotland will be sold. There are those predicting Citi will move to buy ABN Amro.

To be celebrated for sleaze. Robert Rubin, who has been directly asked about Citigroup's predatory lending and said it is not in or under his "aegis," now sets up a public policy institute which the NYT (Sept. 8) says will be "addressing issues like the costs to the economy of excessive litigation and regulation." Yes, without excessive regulation CitiFinancial could get even more vicious than even the Federal Reserve found it to be. The Times reports that "Mr. Rubin has kept himself at a distant remove at Citigroup" -- that is, still perceived as progressive even as the company that pays him is engaged in one scandal after another, including scandals like CitiFinancial which directly harm the poor. ''This is not a political undertaking,'' Mr. Rubin claims. If you say so...

From the Times of London of September 9: "Leading figures from the banking, advertising and hospitality industries will back a UK festival celebrating contemporary China, to be held in 2008. Stephen Green, the chairman of HSBC, will chair the committee organizing China Now." Uighurs, anyone?

From The Independent of September 5: "Stuart Gulliver, the chief executive of HSBC's investment bank, has been awarded shares worth pounds 29.5m over the past five years. [HSBC] was forced to disclose details of Mr Gulliver's shareholdings after his appointment to the boards of its four main operating subsidiaries." Ah, transparency...

GE Money on the Pampas: Argentine consumer finance unit GE Money Argentina expects to grow loans 45% next year to $117 million, GE Money Argentina marketing director Georgie Consoli said last week. GE Money offers credit cards and consumer loans and also insurance where it sells personal and credit insurance policies. GE Money operates through 29 branches in Argentina. GE's consumer finance business includes operations in Mexico, Brazil and Central America. It also runs commercial finance ventures in Mexico and Chile...

From The Asian Banker Journal of August 31: "Chuck Prince reportedly pooh-poohed the significance of the U.S. Federal Reserve Bank's unofficial ban on large acquisitions. But 18 months of M&A inactivity has clearly cost the bank in several ways, aside from reputational losses resulting from regulatory mishaps. Some time the world's largest financial services institution by market capitalization, it was for some time also the world's largest by assets, but no longer. HSBC has just surged ahead with $1.7 trillion in assets, leading its rival by $111 billion. If Citigroup's stock continues to stagnate, as it did upon its latest results, it may lose its market capitalization crown to Bank of America, which has a much smaller asset base."

In the shadows and interstices of United Nations Security Council resolutions, the U.S. is at work. 'There is sort of a voluntary coalition of financial institutions saying that they don't want to handle this business anymore and that is causing financial isolation for the government of North Korea,' Stuart Levey, the Treasury Department's undersecretary for terrorism and financial intelligence, told AP last week. 'They don't want to be the banker for someone who's engaged in crime, as the North Korean government is,' he said. Banks in Singapore, Vietnam, China, Hong Kong and Mongolia are opting not to do business with North Korea, Levey said. We'll see.

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