Inner City Press Community Reinvestment Reporter Archive 2005-2006

We note that last week's Inner City Press exclusive, concerning Merrill Lynch driving subprime lender Own It out of business, was picked up without attribution by other papers last week. One of them reported a new fact, that JPMorgan Chase was also an enabler of OwnIt: "JPMorgan Chase & Co., the disbursement agent for Ownit's "wet line." (This was a small warehouse line Ownit used to finance loans temporarily before transferring them to its main warehouser, Merrill)."

And now for more on Chase, this: an Inner City Press source in Ohio informs us, of the Ohio Bureau of Motor Vehicles, about "a mailing I got from the agency today. Enclosed with vehicle registration renewal is coupon from Chase Bank worth $75 upon opening a Chase bank account. Cute. This is nothing more than state agency acting as 'bird-dog' for a major bank that finances automobile loans. As you know, this bank has a blemished history here in Cleveland and Ohio." Predatory...

The battle in Philadelphia against Wachovia's branch closings and under-performance has continued. Last week the Office of the Comptroller of the Currency agreed to hold public hearings about the branch closings. Wachovia has told locals that it will not, and does not, commit to anything in writing. Was this the experience of West Coast advocates in connection with Wachovia's acquisition of Golden West / World Savings? Or does it just prove that without the leverage provided by a merger deal important to the bank, the mind wanders and the community's ill-served?

In subprime fall-out, HSBC has seen a deterioration across its American mortgage operations. Combined third-quarter profits for the country's nine largest mortgage lenders were $991m, less than half the level for the same period last year. So says The Economist.

Meanwhile Royal Bank of Scotland now says it might get directly into subprime. An RBS spokeswoman last week said: "Currently, we do not participate in the sub- prime mortgage market. Like all areas of the market, the strategy is reviewed on a regular basis to determine whether the current offering meets our customers' needs." Of course, RBS is already indirectly profiting from standardless subprime lending through RBS Greenwich Capital Markets, which lends to and securitizes for other subprime lenders...

From Singapore, consider the recent case of helpless car buyers caught between dealers and financiers. A company repossessed five cars from people who did not buy the vehicles from the company and had not defaulted on repayments. GE Money financed two car buyers, who found - to their horror - that their cars had been towed away by Kenso Leasing in October. These buyers thought they had no relationship with Kenso. But as elsewhere with GE Money, the consumer is left in the dark until they get foreclosed on...

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...

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?

To: Inner City Press
Sent: Wed, 6 Dec 2006 1:29 PM

This is my first time contacting somebody about extremely unfair business practices. Own it Mortgage shut down yesterday. One of my best friends worked there. They were told Merrill Lynch called in their note. Approximately $100+ million. Ownit only had about $50 million in reserve. It seems when Merrill Lynch bought First Franklin they decided to get rid of one of its chief competitors. You guessed it -- Own it Mortgage! ML called due their note last week effectively shutting down their wharehouse line which was close to $250 million. Own it threatened to file bankruptcy and ML said go ahead we'll buy you for pennies on the dollar then... I have also gotten word this same thing is happening to Sebring Financial... I would think Institutions who call in notes of companies competing against one of their newly acquired subsidiaries would be highly unethical and illegal in some way. Even if its in the subprime markets.

HSBC continues to grow in predatory lending. On December 1 it announced a plan to acquire 30,000 customers from KeyCorp's Champion Mortgage division. Some may remember that Champion kept making super high-cost HOEPA loans even after Key said it would stop. This is the type of business that HSBC is looking for -- including to take overseas.

A scandal is growing in Ireland, leading to the introduction of legislation to close off a loophole in Irish law that allows subprime financial service companies to operate without being regulated by the Irish the Consumer Protection Code. Unregulated firms can avoid supervision for solvency purposes and are not subject to 'conduct of business' checks by the regulator. Among the companies named as not regulated is Citigroup's CitiFinancial, which makes "personal loans at rates as high as 26 percent, according to a recent survey from the Financial Regulator." GE's subprime motor loan provider GE Capital Woodchester Ltd has admitted it was not regulated, saying in a statement that "The company is supportive of regulation and consumer protection and has chosen to comply with the Consumer Protection Code, although it's not obliged to do so for its loan products."

Meanwhile, AIG's subprime lender American General Finance is expanding overseas. 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...

"In the fall of 2005, the FDIC targeted special examinations of 47 banks with HMDA data that showed the largest loan pricing disparities, according to April Breslaw, FDIC acting associate director in the Supervision and Consumer Protection division. So far, the agency has completed 33 examinations of HMDA "outliers" and two other institutions face possible referrals to the DOJ. A DOJ official recently told a fair lending conference that the Civil Rights division has received HMDA-related referrals from federal banking regulators. But he declined to say how many or what agencies made the referrals... The Office of Thrift Supervision has examined 20 HMDA outliers and the pricing practices of one thrift raised serious questions. On future examination, OTS concluded the disparities were based on underwriting criteria, mainly credit scores. OTS did not make a referral, a spokesman said. The Federal Reserve Board made one fair lending referral in 2005, but it is unclear if it was related to the HMDA pricing data. The Office of the Comptroller of the Currency did not respond to an inquiry about its HMDA referrals."

So let's get this straight -- the OTS explained away the problem, while the OCC refused to answer. So Treasury Department, oh-for-twenty-plus. FDIC, two for 47. And the Fed, one (at most) for unknowable. It's pretty pathetic...

Last week we said we'd have move on Wachovia's Philly abuse. When Corestates was bought by First Union, many promises were made. Now, as Inner City Press foreshadowed, the Philly Inquirer now reports that Wachovia

"expects to shut its Coatesville, Clifton Heights, Five Points (Levittown), Lower Chichester, and Township Line (Drexel Hill) branches Dec. 6. It has previously said it planned to close two Philadelphia branches, at Front Street and Allegheny Avenue and at Germantown and Lehigh Avenues, that day; two branches in Allentown will also be shut. The protesters say... Wachovia failed to consult community groups in advance of the closures, or to develop specialized loan programs targeting neighborhood residents, as the bank's predecessor, First Union, promised in 1998 agreements with the groups. The Coatesville branch is more than three miles from the nearest surviving Wachovia branch, making it tough on lower-income customers."

So where now is the Federal Reserve, which recited the Corestates merger pledge? Where is the OCC, Wachovia Bank's main regulator? We forgot - the OCC is too busy taking no action on HMDA disparities...

From the November 18 Cleveland Plain Dealer: "National City is the only bank that didn't sign a formal agreement with the city laying out specific lending goals by loan type. The report ranked National City Bank next to last, and said the bank made no consumer loans in Cleveland in 2004. But National City's profit from holding city deposits and charging fees was the second-highest of the nine banks in recent years, an analysis of city records obtained by The Plain Dealer shows.

For its part, JP Morgan Chase "has removed all of its loan officers from the city and region," the report notes. "The bank has also significantly reduced its office presence in the city." It ranked JP Morgan Chase third from the bottom. However, it profited more than most of the other banks in recent years from its business with the city. And JP Morgan Chase held more than $13 million of Cleveland's money, according to the city's bank statements." This is the kind of detailed reinvestment reporting of which we want to see more...

More on Chase: In auto finance, three years ago, Chase Auto Finance was nearly neck and neck with DaimlerChrysler Financial Services, which was then the No. 3 lender behind General Motors Acceptance Corp. and Ford Credit. "We were booking $2 billion to $2.3 billion a month,'' says Joseph Scimone, president of Chase Auto Finance. "We had the best rate in town.'' According to Crain's, "as interest rates climbed, Chase shifted its strategy. It increased its loan rates to boost profitability and it reached out to a broader spectrum of customers. Chase used to target only superprime and prime customers. Now it also goes after near prime and subprime customers." Chase goes more and more subprime all the time, including by putting a predatory CitiFinancial official in charge of all of Chase's mortgages.

Wells Fargo Auto Finance brags that its "Full Spectrum Pricing'' program enables the bank to serve prime and nonprime customers -- more predatory lending...

On the subprime tip, Wachovia now brags that its merger this year with WFS Financial enables it to serve nonprime vehicle customers. Wachovia also pitches financing for used vehicles, which don't qualify for captives' promotional rates, gushes Tom Wolfe, who heads dealer services for the merged company.

In Philadelphia, Wachovia branch closings, and community fight-back, are brewing. We'll have more on this as more next comes in.

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.

In Washington, the (CRA) talk is of oversight hearings, more likely in the House than Senate, on the agencies' non-enforcement of the Community Reinvestment Act and consumer protections. Examples given include last week's Federal Reserve approval of Capital One buying North Fork, in which the Fed's order ignores the Cap One predatory lending issues including not only in timely comments to the Fed, but even Business Week, in its November 6 expose. The Fed's rubber-stamp approval of the Regions - AmSouth merger, despite the banks' records in the Katrina Zone, is exhibit number two.

The FDIC, as has now been noted to the highest level of the agency, doesn't even issue orders explain its approvals. Supposedly the FDIC will increase its grassroots outreach. But why aren't the large Industrial Loan Companies reviewed for CRA and fair lending in more than just Salt Lake City? Especially with many of their parents now owning subprime lenders?

For the OCC, hearing-fodder includes the agency's recent blessing of JPMorgan Chase buying more than 300 branches from Bank of New York, and closing an untold number of them. On the OTS, things might be more forward-looking: why is Countrywide interested in a thrift charter? And what are conglomerates' thrifts, like AIG FSB, being allowed to get away with?

There is also the question of Dodd, Chris Dodd, and where he stands on consumer protection. He has spoken of credit cards, but less of insurance. In anti-predatory lending he has largest been unseen. Will Capital One, and the Fed's velvet glove treatment of Cap One's gouging of consumers, trigger some Dodd deeds? We'll see.

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.

This week, the spread of predatory lending by GE and Citigroup. Is GE angering the wrong people? In the UK, "Jack Straw last week pledged to report GE Money's CEO Brad Cooper to trade and industry secretary Alistair Darling after a fellow MP claimed the company had taken advantage of one couple with an astonishing 21.9% interest loan. Siobhain McDonagh, Labour MP for Mitcham and Morden in London, complained to Straw that two of her constituents, Mr and Mrs Webster, face the prospect of being evicted from their home because they have fallen behind on a loan provided by GE.... Straw told MPs that he would seek to open up a debate on the issue and would pass on his concerns to Darling. And he told McDonagh: 'My honorable friend might wish to invite the company's chief executive to the House to explain its policies because GE claims to be a company of high status and high standing.' GE has since arranged a meeting with McDonagh on November 9 to discuss the Websters' case."

As they do in the U.S., maybe GE will try to buy silence, without changing its practices...

Citigroup, which was blocked for more than a year from making any big U.S. acquisitions, now seeks to buy the largest credit card issuer in Central America, Grupo Financiero Uno, which has 1.1 card customers and over 100 branches throughout Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. The proposal will require at least some regulatory review in each of these countries. In the United States, while Citigroup will file a "notice," it appears there will be no public notice or comment period. In announcing the deal, Citigroup bragged of its " more than 1,600 retail bank branches and 500 consumer finance branches in Mexico and Latin America."

The consumer finance offices are CitiFinancial, which in 2004 settled predatory lending charges with the U.S. Federal Reserve Board.

It was also reported last week that Citigroup has won the right to buy a stake in China's Guangdong Development Bank after a competition with French bank Societe Generale and China's second largest insurer Ping An Group. Citigroup and GDB are expected to sign an agreement to finalize the acquisition, which has been approved by the China Banking Regulatory Commission. On December 28, Citigroup submitted an offer of 24.1 billion yuan (US$3.01 US), while Societe Generale bid 23.5 billion yuan and and Ping An 22.6 billion yuan for an 85-percent stake in GDB. But they had to revise their bids after banking rules issued in May imposed the foreign ownership restrictions. Citigroup, "together with its wholly-owned subsidiary Associates First Capital," would secure a share of no more than 25 percent in GDB.

Who knew that Citigroup continued with the brand and corporate identity of Associates First Capital, sued for predatory lending by the Federal Trade Commission...

Citigroup has "opened 574 bank and consumer-finance branches so far this year, mostly in faster-growing places like India" -- and mostly subprime finance offices, not bank branches...

From last week's Philly News: "Weill said Citigroup had improved its lending practices after criticism by regulators and consumer advocates. And, after all, he asks, didn't Bangladesh's Grameen Bank win a Nobel Peace Prize for lending money to poor people -- albeit at lower rates of interest?"

From a press release last week: "Cash Now, a public company engaged in the design, manufacturing, marketing and distribution of customized payday loan and check cashing software and systems, internet based payday loans, and other sub prime financial utility tools, today announced that its Chief Executive Officer Kevin Price will begin a three-week trip to Australia and South East Asia early next week, in support of the company's planned expansion into the Asian region." Just what they need there...

" In the past two years, GE Money Asia has spent about $3bn on a string of small and medium-sized acquisitions in Taiwan, China, the Philippines and South Korea, including the $1.7bn purchase of minority stakes in two South Korean companies: leading car-financing group Hyundai Capital Services, and Hyundai Cards, the country's third biggest credit card issuer. GE Money's latest deal a $600m investment in the Bank of Ayudhya, Thailand's sixth largest lender has been delayed because of the uncertainty surrounding the recent military coup." FT. Yeah, a military coup will temporarily slow down the expansion of predatory lending by purchase...

This week, predatory lending in Japan, by Citigroup and GE Money, and in Hungary by Provident. The Japanese Financial Services Agency has told GE that it is considering penalties against the group for violating Japan's money lending law by calling a borrower at his workplace, even after the borrower had asked GE not to contact him there. GE has admitted the violation, issuing a statement last Wednesday that "We apologize deeply for the trouble we have caused." The company faces penalties ranging from a few days' suspension of business at the offending branch office to a wider suspension involving offices throughout Japan. In April, Aiful, one of Japan's leading moneylenders, was ordered to suspend all lending operations for up to 25 days after a borrower complained it had allegedly used illegal debt collection tactics. FT.

This might be a lesson to U.S. regulators, that rather than set monetary fines (which mean little to companies the size of GE), stopping all business for a period of time is a fairer punishment...

More generally, in Japan consumer finance companies are allowed to charge annual rates of up to 29.2 per cent. Now, the government plans to reduce that rate to 20 per cent. CitiFinancial has lobbied against the lowering of the country's interest rate cap, saying it would lead to a credit crunch and force weak borrowers to use loan sharks. Not unlike Citi's lobbying against anti-predatory lending laws in the U.S....

Meanwhile 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.

In Hungary, Provident Financial said it is temporarily suspending operations while it introduces new procedures requested by local regulators. Hungarian financial market regulator PSZAF said it had prohibited Provident's Hungarian unit, Provident Penzugyi, from signing new loan contracts until it restores appropriate operations. PSZAF said it would carry out an on-site audit of the company. It also levied a fine of HUF 2m on Provident Penzugyi, the maximum amount for financial businesses. PSZAF said it had found in an investigation that Provident Penzugyi had seriously breached regulations regarding accounting and registration, outsourcing and the use of agents, among others. The regulator will allow Provident Penzugyi to make new loan contracts again if it finds that the credit provider fully conforms with measures prescribed to it by PSZAF. Another precedent the U.S. regulators could learn from...

In the U.S., 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....

Telling news from Investor's Business Daily of Oct. 16: "Ezcorp broke out of a double bottom Friday with a buy point of 41.85 after the subprime lender upped its fourth-quarter earnings guidance by about 40%... After Thursday's close, the Austin, Texas-based operator of pawn-shops and payday loan centers announced its sharply revised outlook. Ezcorp's earnings were already on the upswing. Gains of 23%, 52%, 93% and 150% were put up the last four quarters. Sales rose in the last five periods, from 8% to 31%." Big growth in payday and pawnshop and other high-cost loans... Perhaps that's why Bear Stearns on Oct. 10 announced that it had agreed to buy the subprime mortgage origination assets of ECC Capital Corp. and its Encore Credit Corp for $26 million. Or this rumored deal, in the subprime auto field:

Commerce Group has acquired an 8.2 percent stake in National Atlantic Holdings Corp. (NAH), a "sub-prime auto insurance company. NAH shares shot up more than $1 to $11.48 on the news of the 13D and closed at $11.33 at press time. NAH has hired Citigroup to advise it on the situation."

Ah, Citigroup and subprime. Consider this, from the New York Banking Department's Weekly Bulletin:

"September 27, 2006 (LL-LFS)
CITIFINANCIAL, INC.
300 St. Paul Place, Baltimore, MD 21202

Notification requesting authorization to solicit credit card application on behalf of a bank from licensed location, received."

So now, beyond the move to use the predatory lending outlets of CitiFinancial to collect deposits (without, it seems, being covered by the Community Reinvestment Act, a matter on which Citigroup has provided closed-door briefings to the Office of the Comptroller of the Currency without sufficient public disclosure), CitFinancial would be "soliciting credit card application" too -- at a low interest rate, we're sure...

I have a question regarding the upper level management of Ameriquest and this large penalty they paid. Will any of them do time in prison? How about civil law suits against them to take all their assets and give it to the people who were defrauded. My neighbor is Mary Jo Shelton and I know she was the National VP of Sales. Will she be doing any time? We have not seen her at this house here in Eagan for 5 years (they own several properties in MN), now all of a sudden she’s home every day and volunteering at school. So I did a little research on the internet and “discovered” her involvement with Ameriquest. I knew she worked with them, but I didn’t realize her position, etc. Well she looks great driving around town in her brand new Land Rover...

Becoming evermore perfunctory, the Federal Reserve on September 19 asked Wachovia to "discuss the extent of any subprime loans in the World Savings Bank loan portfolio." Wachovia's Courtney D. Allison's misleading answer, dated September 25 but mailed only days later to Inner City Press, was received after the Fed had approved the merger, and it had been consummated...

Similarly, in an email of September 26 to National City that was not cc-ed to Fair Finance Watch, the Fed has apparently asked questions about Harbor Florida Bankshares' appraisal company, with an eye toward allowing National City to continue in the business. Since the Fed in violation of its own rules on ex parte communications didn't send Inner City Press a copy of the questions it posed to National City, and Nat City's curt answer didn't repeat the questions, there's no way to know...

From ;[ ]
To: MLee [at] InnerCityPress.org
Sent: Fri, 6 Oct 2006 8:40 PM
My name is Dr. Randal Christensen, I reside in the state of Utah. I would like to relay an experience I am currently having with AIG's American General Financial. The Office I am referring to is located in the city of Riverdale, Utah. I have a loan through that office. I had to declare bankruptcy back in 2003 due to a accident I had which put me nearly $500,000.00 in debt with medical bills. I was not able to return to my work for over a year. Needless to say it has been a struggle to pay my bills. American General to the rescue NOT Another victim of this companies predatory lending practices. They provided a loan, "To catch-up my past due bills," as they called it however they needed collateral for the loan. Now after chapter 7 bankruptcy, losing my house, plus everything else I owned, except for a 1994 Pickup which I had the title to. I used that as collateral. pretty scary because that was my only transportation. I had no choice, so I signed the contract with the unbelievable interest rate of 32% this made the payment $372.00 per month. They again tied insurance premiums to the loan with no disclosure. Which I thought was outrageous, I had fallen one payment behind on that loan and they called and left a message they were going to repo my truck. I found a financial advisor who has help me get my bills in order and paying them off. Now the fun begins, during the 6-7 months that I was behind 1 payment. I have been told by the front desk receptionist of the Riverdale Branch office I Quote " I'm a dead beat, a liar, I don't deserve a chance, just about everything you can imagine. I have been left phone messages with the same language on them. Now I was able to get $3000.00 saved up so I went down to their office to pay on the loan. I called and made arrangements with the manager to get my truck title released. He said " for a payment of $3000.00 he would release the title. I did take the money to him on Oct. 2, 2006 and he released my title. Now today Oct 6 2006 I get a call from them saying I am a month behind on my payment. That the $3000 I paid them was just to release the title of the truck and did not count as a payment. I said no I paid you a payment on 2 Oct and the manager said no that wasn't a payment. and that it was company policy to not record it as a payment but a release of collateral. He said "it was his branch and he would run it how he wanted, so I was still a payment behind " I still owe $2700.00 on the original loan. I have reported the Manager of the Branch and the front desk receptionist to the district manager who is Bill Kishton of South Jordan Utah, he did nothing then I reported the events to Russell Barrett of Westminster Colorado the Division Manager he does no thing so now I am going on up the food chain to a Matt Mitchel of Tempe Arizona who is Western region Manager. I am sure I will get the same results. NOTHING, NADA, just more B S. Just another example of how this company does business and treats people. They need to be stopped. I think the work y'all are doing is great. You have my permission to print all or any of this.

When AIG bought American General, they said it wasn't predatory... And re GE Money Bank, not overseas but in Texas:

From: [ ]
To: MLee [at] innercitypress.org
Sent: Sat, 7 Oct 2006 6:14 PM
Dear Mr. Lee, I am writing to you after reading several online postings about the deceptive business practices of GE Money Bank. Below is a record of discussions that the Cash Office of IKEA Frisco, Texas has had with GE Money Bank (Kate and Dennis in the emails below). We were offered and granted by IKEA a "24 month no interest no payment" purchase plan when we purchased a kitchen from IKEA in July 2006. Since then, GE Money Bank has sent us bills for finance charges, late fees, and minimum payments due on our account in total disregard for the terms of our purchase agreement with IKEA. The IKEA sales rep on the floor of the kitchens department and the after-sales department told us numerous times that we made this purchase on a 24 month no interest no payment plan, and we would not have made this purchase under any other terms. The only way they were able to sell this bill of goods was by their promotional offer. I can tell below that IKEA has contacted GE Money Bank numerous times to tell them to fix the terms of our plan to the "No Interest" plan, and GE Money Bank still has us on a fixed payment plan at 13% interest. Kate below writes that she has taken care of everything, but what she writes is that she put us on a deferred interest plan, which is very different from the No interest plan. Also, I got a call from a GE Money Bank debt collector early this Saturday morning, and she says that there is no evidence that IKEA ever placed us on a promotional plan, and she has no evidence that IKEA has ever contacted GE Money Bank to change our plan! GE Money Bank is either intentionally misapplying these promotions or their data processors are absolutely incompetent. Furthermore, GE Money Bank has entered my wife's name incorrectly on our account: This is alarming because my wife's name will now be reported to credit bureaus incorrectly, and it will be a hassle to correct, and GE Money Bank can use this identity error to its advantage in multiple ways. In addition, I also recently opened a credit card with The GAP, and GE Money Bank apparently owns Gap credit card accounts as well. The disturbing fact about this is that my name was incorrectly entered on my Gap credit card with GE Money Bank as well. I am deeply skeptical that these multiple identity errors are innocent. They appear to be a calculated policy by GE Money Bank. Please consider my experience as you become aware of more complaints about the business practices of GE Money Bank.

Meanwhile, GE Money plans to enter the Colombian financial market, the newspaper Portafolio reported on October 5, 2006. A number of articles in the Colombian press have recently opined that GE Money is interested in the privatization of the public bank Bancafe... In India, GE Money has over 170 offices of its high-cost consumer finance, non-banking finance company. Citigroup in India, as in the U.S., is more focused on high-cost consumer finance (non-banking finance companies, NBFC) than on banking. Citigroup's NBFC has a branch network of over 400 compared to a bank network of 39.

Shameless Citi-spin of the week, from Brownsville, Texas: "CitiFinancial announced it will host an identity theft prevention seminar from 6 to 7 p.m. Oct. 19. The seminar is open to the general public and will be at CitiFinancial's 2921 Boca Chica Blvd. location. The seminar is part of the bank's financial education program. 'We'll give them (attendees) examples of how ID theft occurs and what to do if your ID has been stolen, like contacting the fraud departments of the three major credit bureaus,' said Joseph Babineaux, CitiFinancial's branch manager."

Given that CitiFinancial has released millions of customers private information, the seminar is more than a little ironic...

Predators into predatory lending: the private equity company Lone Star is moving to buy a high-cost lender in Japan, Korakuen Finance, for $430 million. Japan is moving to limit the maximum interest rate to 15%, and to cap the amount of debt that borrowers can take on. Lone Star is embroiled in a scandal in South Korea for its buying and selling of a bank there...

Also, AIG has applied to the Bank of Thailand for a banking licence by the end of this year, after it sent the central bank the information it requested regarding allegations of accounting fraud by AIG. "Last week, we turned in the required information to the central bank. I think at this time we have submitted all [requested] information," AIG Consumer Finance Group country manager Chaiwat Utaiwan told reporters. Sure, let a fraudster into banking...

In terms of stealing consumers' personal information, Florida is suing a "Tampa-area company called Global Information Group Inc., claiming it made thousands of calls impersonating customers of companies including Verizon Communications Inc., tricking them into providing private call records. Earlier this year the company's principals agreed to pay $250,000 to settle the case, and to cease any pretexting activities." Global Information's customers include Wachovia's subprime auto lending WFS, two Citigroup units, Chase Bank and Wells Fargo...

"also alleged that World Savings directs customers to low- or no-documentation loan products as a means to exaggerate the customer’s income and places the customers in loan products that exceed their ability to repay, which ultimately results in foreclosures. According to information provided by Wachovia and Golden West, World Savings requires low- or no-documentation on 90 percent of the loan applications it processes and uses the same underwriting standards for all applications."

But ICP Fair Finance Watch pointed out that this absurd level of no- and low-doc lending results in forced sales of homes, not foreclosures. The Fed recites that ICP Fair Finance Watch

"expressed concern about Wachovia’s relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states in which they operate when so required. Wachovia stated that it makes loans to these types of nontraditional providers under terms, circumstances, and due-diligence procedures that are more stringent than those it applies to other borrowers."

"more than 200 comments supporting the proposed transaction. These commenters stated that Wachovia and Golden West have been responsive to the needs of their communities through innovative mortgage products designed for LMI borrowers and have provided significant financial, technical, and personnel support for community development projects."

None of these were sent to Inner City Press, despite its timely challenge to the deal....

And we're back: former Treasury Secretary John Snow will serve on the board of directors of Marathon Oil Corp., officials with the company announced last week...

This week, OCC punts on JPM Chase's branch closings, and a voice with inside -- or, just leaving -- the industry:

Dear Mr. Lee: I was previously employed by Argent Mortgage for two and a half years and managed, among other areas, the corporation's fraud investigation, borrower complaints and repurchase departments. There are currently over 568 open fraud investigations involving hundreds of brokers and hundreds of millions of dollars in fraudulent loans that are being covered up by top executives in the company. If a broker sustains a certain monthly volume, Argent management looks the other way and, not only does not suspend the bad brokers, but knowingly sells these fraudulent loans on the secondary market to unwitting investors.

I was terminated today and left with just my purse in tow, but I have names of individuals in the company who need to be served with subpoenas to enable them to turn over their spreadsheets and boxes full of documentation and evidence of all the fraud they have found that is being covered up by Argent Mortgage's executive management. The state regulators need to know the truth about the blind eye Argent turns to the fraud perpetrated on innocent consumers by high volume brokers. They also need to be aware that Argent knowingly bundles these fraudulent loans and sells them as mortgage-backed securities on Wall Street, thereby compromising the SEC, as well as our country's economic stability.

At a recent fraud seminar attended by hundreds of mortgage lenders in Washington D.C. a week ago, an attorney who works for Argent's retained law firm, Buchalter Nemer, stood up and told the seminar attendees that the wholesale lenders in the audience had better beware, unless their name is Argent. Argent is safe from investigation because the government got their $325 million settlement from Ameriquest and won't be looking into Argent, per the settlement agreement. I hope this isn't true because Argent Mortgage funded over $50 billion in 2005 and is gearing up to fund well over $80 billion dollars of fraudulent loans in 2007.

Gearing up, indeed. On another front, the closure of bank branches offering normally priced loans, here's from the Office of the Comptroller of the Currency's craven September 15 approval of JPM Chase's application to acquire branches of Bank of New York: Fair Finance Watch

"expressed concerns about the potential closure of certain branches. JPMCB... expects that it may close approximately 50 branches. JPMCB has represented that in NYC, some of the branches under review are located in L[ow or] M[oderate] I[ncome] census tracts. [Footnote: In most cases, the branches being considered for closing or consolidation are less than one-fifth of a mile apart, and none is more than about one-third of a mile apart.]"

First, in New York City "about" a third of a mile can be further than it sounds, particularly with obstructions which must be walked around. The OCC should have required JPM Chase to disclose its branch closing plans, as even the Federal Reserve did in connection with Chase - Chemical. JPM Chase is going backwards here....

A trend is for investment banks to buy up subprime lenders, to have high-cost loans to pack into pools and sell off. Deutsche Bank's being doing it, and last month Morgan Stanley announced a deal to buy the subprime Saxon. Now Merrill Lynch as well. Merrill agreed to buy the San Jose, Calif.-based First Franklin from National City for $1.3 billion. The sale includes National City's loan processor National City Home Loan Services Inc. and online lender NationPoint. Now rumored to be on the block is New Century.

Subj: Employment Practice Abuse: The Travelers, Citigroup Connection
Date: 9/12/2006 10:33:43 PM Eastern Standard Time
From: [Name withheld]

I came across your excellent publication while searching the web. Want to include a story relating to my own experience as an Asset Manager in Commercial Real Estate. After nearly two years appraising commercial properties, I was terminated while recuperating and on paid medical leave resulting from an injury I sustained while inspecting one of their income properties. I missed six weeks of work, and asked to be accommodated through the flex-work initiative propounded by the corporate offices. The HR department told me that my request had been denied due to some late reviews and that I would have to return to the office to complete a conference call. When I came in I was called into a manager's office with my immediate supervisor, and his manager and told that my request was denied, there would be no further discussion and if I wanted to continue working there I had better sign the forms being presented to me. Although I was, and am still under a doctor's care, the forms basically stated that I felt ready to return to work and that a new work-plan was being devised to "accommodate" me. No copies were provided. I was also informed that my previous work load would increase by 100%, that nobody has completed any work of mine during my six week absence and the appraisals had been traded for others in different territories that I was unfamiliar with. Additionally, many of the projects were unusual types such as self-storage, mixed use, and industrial properties that require far more research than a typical apartment building.
Although I made a grand attempt at this Herculean task, and worked late into the evening, and over the memorial day weekend, I was still short of the goal (and working on painkillers, and a heavy dose of Ibuprofen)..Despite hiring a part-time data entry person using my personal funds, the project simply could not be finished in the allotted time. Five weeks after I returned, I was terminated and escorted from the building by 4 vice presidents and the head of building security. I told then that this seemed unnecessary, and was certainly humiliating since it would appear that I was some terrorist being escorted out of the Citigroup tower.
I would not have thought much more of the situation except for the fact the other employees told me of similar occurrences with "mature" workers over the age of fifty. Just one month before me a 20 year veteran returned from hip-replacement surgery and was terminated exactly 4 weeks later.
Interestingly, while I was on leave I applied for a home equity loan, since my disability payments were "administratively" delayed by Met Life, their short term disability carrier. According to Citibank, they were unable to verify my employment and my loan application was denied...but not until the refinance of my current mortgage had already been approved! It seems they were willing to take on a $250,000 loan at 8%, but had no interest in the variable rate, lesser borrowing relating to the equity line. This leads me to think that the management had already determined that my employment would not continue after my medical leave ended. In addition, they did not provide the required Worker's Comp forms, did not respond to verification requests from the disability insurance provider (Met Life) and Travelers (a former fully owned subsidiary) denied my workers comp claim based on the fact that the forms were not filed until after the expiration of the short term disability claim. They also had a myriad of other defenses based on the fact that the medical reports were not received (although the HNO has proof that they were sent on two different occasions)
In summary, for many years Citigroup was providing what looked like a generous employee benefits program, when in fact the employees disability coverage (1/2 paid by the employee) was being provided by their owned subsidiary, and the long term care (Travelers) an optional coverage was entirely paid by the employees. With over 300,000 employees...that's not chump change! Why are the financial back office worker's not organized as under a labor union? Thank you for your in depth reporting.

September 11, 2006 -- Targeting of African Americans For High Cost Mortgages Grew Worse in 2005, While Fed Downplays Its Own Findings

NEW YORK, September 8 -- The targeting of African Americans for higher cost mortgage loans grew more pronounced from 2004 to 2005, data released Friday by the Federal Reserve show.

The disparities between the mortgage industry pricing for African Americans and whites worsened, even controlling as the industry argues for the change in overall interest rate environment. However, given that the Federal Reserve has yet to take any enforcement action on disparities in lenders' 2004 lending, it is unclear if this new even more disparate data set for 2005 will end what many consumer advocates view as the Federal Reserve's laxity in regulation.

The report issued by the Federal Reserve on Friday waits until its 39th page to disclose, in the intentionally opaque style of former Fed chairman Alan Greenspan, that "the fact that both spread-adjusted gaps are lower than the comparable unadjusted figures suggests that to the extent that the yield curve changes affected the measurement of racial and ethnic pricing differences, they widen gaps rather than narrow them." Translation: even using the industry's main defense, the yield curve, the disparities grew worse.

The non-governmental organization Fair Finance Watch, which has raised lending discrimination as a human rights issues, including to United Nations Habitat director Anna Tibaijuka (video of Q&A on U.S. Community Reinvestment Act and discrimination here). Where a nation does not act on known discrimination within its borders, FFW argues, it violates treaties it has signed.

Mortgage lenders were required to release their raw Home Mortgage Disclosure Act data for 2005 on April 1 of this year. 2005 is the second 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. While the Federal Reserve waited six months to compile and analyze the data, a study by Inner City Press of the largest U.S. banks, beginning with Citigroup reached the following findings:

Citigroup in 2005, in its headquarters Metropolitan Statistical Area of New York City, confined African Americans to higher-cost loans above this rate spread over seven times more frequently than whites, worse than in 2004. Nationwide for conventional, first-lien home purchase loans, Citigroup denied the applications of African Americans 2.69 times more frequently than those of whites, and denied the applications of Latinos 2.02 times more frequently than whites, both disparities worse even than in 2004. Bank of America in 2005 was more disparate to Latinos, denying their applications 2.38 times more frequently than whites, and denying African Americans 2.27 times more frequently than whites.

Fair Finance Watch designed a way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at Citigroup for conventional first-lien loans, 37.73% of upper income African Americans were confined to higher cost loans over the rate spread, versus only 11.46% of upper income whites. Income does not explain the disparities at Citigroup. Nor at HSBC, where less than half of upper income white borrowers were confined to rate spread loans, versus 61.87% of upper income African Americans and an even higher percentage of Latinos, 62.82%. HSBC, which bought Household International in 2002 just after its predatory lending settlement, has increased the interest rates changed by its former Household units. Over eighty percent of HSBC's home purchase loans to African Americans and Latinos were higher-cost loans over the rate spread, much higher than in 2004 at these ex-Household units. In Buffalo, HSBC's long-time headquarters, HSBC in 2005 confined African Americans to higher cost rate spread loans 2.15 times more frequently than whites.

In 2005, HSBC made over five thousand super high-cost loans subject to the Home Ownership and Equity Protection Act (HOEPA) -- that is, at least eight percent over comparable Treasury securities. Wells Fargo made 795 HOEPA loans in 2005. Keycorp, which has said it had discontinued HOEPA loans, made 755 such loans in 2005.

National City Corporation's First Franklin made 177,526 higher cost loans over the rate spread in 2005. Merrill Lynch has recently announced a proposal to acquire First Franklin, in order to be able to pool and sell its higher cost loans on Wall Street.

Considering all conventional first-lien loans, among the most disparate was Washington Mutual and its higher-cost affiliate, Long Beach Mortgage -- together they confined African Americans to rate spread loans 3.70 times more frequently than whites. Wells Fargo was nearly as disparate, confining African Americans to rate spread loans 3.31 times more frequently than whites. Royal Bank of Scotland and its Citizens Bank units came in at 3.11, and JP Morgan Chase at 2.98. The disparity at Wachovia was 2.58, and at Atlanta-based SunTrust it was 2.40. The disparity at GMAC, a stake in which Citigroup and others are seeking to buy, was 2.92, while at Countrywide it was 2.86.

Countrywide's disparity between pricing to African Americans and whites was even worse when considering conventional first lien home purchase loans: Countrywide confined African Americans to rate spread loans 3.53 times more frequently than whites. Countrywide was topped, however, by Milwaukee-based M&I, with a disparity of 3.78, and by Bank of America's MBNA unit, with a disparity of 4.23.

Bank of America also enabled other subprime lenders in 2005 by securitizing loans through its generically-named Asset-Backed Funding Corporation unit for, among others, Ameriquest, which earlier this year settled predatory lending charges with state attorneys general for $325 million. The settlement only required reforms at Ameriquest Mortgage and two affiliates, but not its largest affiliate, Argent Mortgage. The 2005 data show that Argent made 220,069 higher cost loans over the rate spread, while Ameriquest Mortgage made 122,868 such loans. The reforms announced in support of the predatory lending settlement with the attorneys general cover barely 35% of ACC's high-cost lending.

Like ACC / Ameriquest, Citigroup and HSBC, other large subprime lenders also increased the percentage of their loans that were over the rate spread, from 2004 to 2005. At New Century in 2005, fully 215,579 of the company's 268,101 loans were over the rate spread. Countrywide in 2005 made 190,621 loans over the rate spread. 199,249 of 237,700 loans were over the rate spread at H&R Block, which also in this season offers problematic high-cost tax refund anticipation loans. Further on fringe finance, the study notes that Citigroup helped Dollar Financial to go public, and since continued to lend to and assist this pawn and payday lender.

The nation's largest bank, Citigroup, was disparate in Metropolitan Statistical Areas all over the country in 2005. In Los Angeles, Citigroup confined African Americans to higher cost rate spread loans 2.13 times more frequently than whites; its disparity for Latinos was 2.02. Citigroup's African American to white disparity was 2.27 in the Washington DC MSA, and 2.72 in Chicago. In Philadelphia, Citigroup confined African Americans to higher cost rate spread loans 3.43 times more frequently than whites; its disparity for Latinos was 2.50.

Another of the top four banks which enables predatory lenders is North Carolina-based Wachovia, whose pending application to merge with Golden West has been protested on mortgage discrimination and other grounds. Most recently, the U.S. District Court for the Southern District of New York denied a motion by the Federal Reserve Board to get reconsideration of a decision won by Inner City Press, requiring the disclosure of Wachovia's connections with a range of subprime lenders, including payday as well as mortgage lenders. Inner City Press v. Federal Reserve Board, 380 F. Supp. 2d 211. On the Federal Reserve Board's motion, the Court ruled that:

"The Board made absolutely no showing in its summary judgment submissions, however, that the disclosure of data regarding Wachovia’s aggregate exposure and loan outstandings to the [subprime lending] clients listed in Exhibit 3 would cause competitive harm to Wachovia or that the public disclosure of this information would make it difficult for the Board to elicit similar information in the future... The Board points to portions of a document entitled 'Subprime Lending and Related Activities' that Wachovia submitted in the public portion of the Merger Application as a ‘glimpse into the conclusory statements [regarding due diligence practices] defendant can expect in future filings’ if merger applicants know such information is to be released to the public. This argument was not made in the Board’s original submission. In any event, without more specific testimony from Wachovia’s representative regarding why Wachovia would not wish its due diligence practices with regard to its subprime lending clients to be made public, it cannot be said that this document represents the limits of what Wachovia would willingly reveal at the Board’s request."

On January 5 Inner City Press made a request under the Freedom of Information Act request to determine what the Federal Reserve had done on the previous year's data. More than six months later, the Federal Reserve issued a letter stating that is was withholding five linear feet of documents, and would only provide a garbled portion of a single document, described as "a description of the methodology used in generating the HMDA lenders list." The document states:

"The purpose of the Federal Reserve's matched-pair analysis is to compute lender-specific racial or gender disparities in denial rates, high rate pricing incidences and average APR spreads for loans above the threshold controlling for other factors including, market, income and loan amount. Each minority (or female) is matched to as many non-minority (or male) applicants (or borrowers) as meet the matching criteria. The outcomes of the minority (female) is compared with the average outcome of the non-minority (males) matched to it. The difference is the individual minority's (female's) 'matched pair disparity.' The disparities of all matches minorities (females) are averaged by product area or for sub areas such as MSAs...

"Optionally, the matched pair procedures can be used to test for 'steering' within an organization such as a holding company. The outcome variable is the selection of a particular subsidiary of an organization (say a subprime lender) over another (say a prime lender) and the analysis tests whether this choice is related to the race of gender controlling for other factors including, market, income and loan amount. The user needs to specify how to classify lenders into the 'subprime' and 'prime' groups."

While Inner City Press will have more once it receives the required mailed version of this document, we now we note Citigroup's recent announcement that it will merge its subprime CitiFinancial into its mostly-prime CitiMortgage, thereby evading this "optional" steering analysis.

There is a need for more information, including the credit score information that the lending industry opposed being included in Home Mortgage Disclosure Act data. In fact, some lenders resist providing even the data required by law, at least in an analyzable form.

Fair Finance Watch is demanding action on all of these issues from the relevant regulatory agencies, including the Office of Thrift Supervision (responsible for AIG and Lehman Brothers Bank, among others), the FDIC (still considering giving a bank charter to Wal-Mart), the Office of the Comptroller of the Currency (which since suing to New York last year to block fair lending enforcement has done little to none of its own) and also the Federal Reserve Board.

Fair Finance Watch responded, "Now that a second year of data is out, with worsening disparities at the largest bank in the nation and many of its peers, there is no more time for the Federal Reserve and other regulatory agencies to equivocate. The time for enforcement actions to combat this discriminatory and predatory lending is now."

Beyond its substantive, industry-wide whitewash, the Fed last week spun HMDA for Espiritu Santo Bank, an affiliate of France's Credit Agricole. In an approval order the Fed recited in footnote 30 that ICP Fair Finance Watch

" questioned the veracity of ES Bank’s reporting of no denials of home mortgage applications in 2001 and 2002 and generally alleged that the bank prescreened its home mortgage applications. Specifically, the commenter contended that ES Bank violated HMDA by not accurately reporting its home mortgage applications and violated the Equal Credit Opportunity Act (“ECOA”) (15 U.S.C. § 1691 et seq.) by not providing adverse action notices when required. ES Bank has represented that it reported no denials because it is a wholesale bank engaged primarily in international private banking and that its residential mortgages are generally extended as an accommodation to private banking customers where a mortgage loan approval would be expected. The commenter also questioned ES Bank’s characterization of loans generated by brokers as accommodation loans. Applicants represented that ES Bank began using two licensed mortgage brokers in 2001 in an effort to increase its loan portfolio during a period when internal referrals had slowed. Applicants also represented that ES Bank’s brokers referred a small number of mortgage loans to the bank in 2005."

In footnote 16, the Fed doesn't even bother spelling correctly, writing that FFW

"alleged Credit Agricole and Credit Lyonnais are signatories to international human rights and environmental agreements and that the organizations have exhibited a lack of envirnonmental and human rights standards."

This week, predatory lending domestic and overseas. Regulators in Australia have caught GE Money in a lie. While charging a $25 fee, GE advertised that ''There is no annual fee for your GO MasterCard. That means it costs you nothing to have it - pay nothing and make it your card of choice year after year.'' Australian Securities and Investments Commission charged that the statement was likely to mislead customers. Ya don't say... This follows an ASIC finding in March 2006 that GE Money had advised clients to take out life insurance when they already had coverage. As we've reported, GE is taking predatory lending global.

Ameriquest was hit with a class action lawsuit last week in Baltimore City Circuit Court. According to the complaint, Ameriquest instructed its affiliated title settlement companies to charge borrowers an illegal notary fee, and engaged in a scheme to receive kickbacks on that fee. The real estate settlement statements given to borrowers at closing identified a $250 fee payable to Baltimore-based JM Closing Services Inc. as a notary fee, the suit alleges. JM Closing was "formed solely to facilitate illegal payments and kickbacks to Ameriquest" and, in most cases, "did not actually provide any notary services to Ameriquest mortgage clients who paid for such services," the complaint says. It just goes on and on...

In the run-up to the Federal Reserve's spin of the 2005 Home Mortgage Disclosure Act data, Inner City Press can this week report on the Fed's partial Freedom of Information Act response to its request for all records concerning the Fed's list of lenders with disparate 2004 HMDA data. The Fed withheld "five linear feet of documents," and has so far sent only a fax of parts of a single document, a mailed copy of which Inner City Press is awaiting in order to file its FOIA appeal. This fax, which the Fed's cover letter describes as "a description of the methodology used in generating the HMDA lenders list," is in fact a manual directed at the Fed's examination staff. It states that

On Regions - AmSouth, the sleazing has begun. Regions has provided Fair Finance Watch with a copy of a CRA submission, with the names of all groups it funds blacked out. Meanwhile Regions solicits letters of support from such groups. Separately, Regions writes to thank such groups, starting "Thank you for taking the time to write a letter of support for the application by Regions Financial Corporation to merge with AmSouth Bancorporation... We at Regions very much appreciate your positive attitude toward our organization." But the identity of funded groups must be unmasked to weigh their testimony. Developing...

ICP Fair Finance Watch has just filed a 15-page challenge to the proposed announced on May 24 by Regions Financial Corporation to acquire AmSouth for over $10 billion. Regions' mortgage lending is mostly subprime -- nationwide, over 77% of its 2005 loans to African Americans were higher cost loans over the rate spread (of 3% over Treasuries on first liens, 5% on subordinate liens). Therefore Regions supposed Community Reinvestment Act plan would only produce more high cost lending. In comments filed with the Federal Reserve Board in Washington, Fair Finance Watch demands public hearings on the proposal's potential to raise prices, on AmSouth's and Regions' continuing enabling of title lenders and pawnshops, and on the disparities in Regions' 2005 Home Mortgage Disclosure Act data, including disproportionately confining people of color to higher cost loans. AmSouth refused to provide its HMDA-LAR in computer analyzable form, another ground for hearings

Fair Finance Watch presents in its August 21 challenge an analysis of the 2005 data of Regions' HMDA data-reporting affiliates (referred to as "Regions") and calculating the distribution of loans over the Federally-defined rate spread of 3% over comparable Treasury securities on first lien loans, 5% on subordinate liens (referred to as "high cost loans").

In its home state of Alabama in 2005, Regions confined 51.66% of its African American borrowers to higher cost loans over the rate spread, versus only 23.15% of its white borrowers. That is, Regions confined African Americans to high cost loans 2.23 times more frequently than whites, while denying 30.69% African Americans' applications for loans, versus only 21.29% of whites' applications.

In neighboring Mississippi, Regions in 2005 confined 38% of its African American borrowers to higher cost loans over the rate spread, versus only 18.38% of its white borrowers. That is, Regions confined African Americans to high cost loans 2.07 times more frequently than whites, while denying 35.87% African Americans' applications for loans, versus only 24.68% of whites' applications.

In Louisiana in 2005, Regions confined 54.92% of its African American borrowers to higher cost loans over the rate spread, versus only 27.88% of its white borrowers. That is, Regions confined African Americans to high cost loans 1.97 times more frequently than whites, while denying 30.71% African Americans' applications for loans, versus only 22.27% of whites' applications.

While FFW directs the regulators most specifically to these three Katrina Zone states, note that nationwide in 2005, Regions confined fully 73.55% of its African American borrowers to higher cost loans over the rate spread, versus only 51.78% of its white borrowers. In Florida in 2005, Regions confined fully 66.97% of its African American borrowers to higher cost loans over the rate spread, versus only 45.98% of its white borrowers. And in North Carolina, headquarters of Regions' subprime unit Equifirst, Regions ion 2005 confined a whopping 88.76% of its African American borrowers to higher cost loans over the rate spread, versus 71.66% of its white borrowers. Regions is presumptively a predatory lender. FFW requesting public hearings, and that Regions' applications be denied.

Regions and AmSouth have continued supporting other subprime lenders. The UCC filings attached hereto are evidence of that, to be further explored at the requested public hearings. For example, Regions on July 18, 2005, made a loan secured by all "accounts and proceeds" to Eagle Title Loans, Inc. of Athens, Alabama. Also in Alabama, Regions lends to Twin States Pawn of Butler, AL and Sand Mountain Pawn of Boaz, AL. In Louisiana, Regions lends to LA Pawn Shop of West Monroe, Louisiana. In Arkansas, Regions lends to A-1 Pawn of Russellville, Arkansas. In Florida, Regions lends to Deerfield Pawn Brokers of Deerfield, FL.

AmSouth, which has refused to provide FFW with its HMDA-LAR in computer analyzable form, lends to Rent to Own Pasco of Pasco, FL, and Pasco Jewelry and Pawn in the same city. AmSouth cynically insistence on providing its HMDA-LAR only in paper form, and in refusing to answer questions about its lending to fringe financiers, despite its recent violation of anti-money laundering laws, further militates for the public hearings FFW is requesting. FFW's comments state that while the merger should be denied on all of thee above grounds, FFW is requesting public hearings because any merger of this size in the still-unrepaired and underbanked zone impacted by last year's hurricanes militates for a required Katrina Zone CRA Lending Plan, and for public hearings. Developing...

A federal appeals court ruled on Wednesday that it was unconstitutional for Delaware to deny public documents to nonresidents under a provision of the state’s Freedom of Information Act. The ruling by the United States Court of Appeals for the Third Circuit, in Philadelphia, affirmed an earlier decision by a Federal District Court in Wilmington.
In 2003, Matthew Lee, a consumer advocate and lawyer who lives in New York, sued the State of Delaware for denying him access to documents related to a nationwide settlement with the consumer lender, Household International, after the company was investigated for deceptive lending practices. "We sought the records to be able to show how widespread the problem of predatory lending was within Household," said Mr. Lee, who is also the publisher of Inner City Press, a nonprofit Bronx newsletter about the practices of banking and financial services companies. M. Jane Brady, then the Delaware attorney general, denied Mr. Lee access to records regarding her handling of the settlement. Ms. Brady cited a provision of the state’s Freedom of Information Act law limiting access to records "to any citizen of the state." Mr. Lee then sued... In the 17-page decision, Judge D. Brooks Smith, writing for the three-judge circuit panel, said, "Delaware’s public records law discriminates on its face between citizens and non-citizens. Although the state has a substantial interest in ‘defining its political community,’ the citizens-only provision” of the law bore no “substantial relationship to that interest,” Judge Smith wrote. Delaware’s current attorney general, Carl C. Danberg, said Wednesday that he would not appeal... While he said the state had been processing other freedom of information requests to comply with the earlier ruling, Mr. Danberg said that Mr. Lee would still not receive the Household documents because they were protected under a separate Delaware law by an "investigative file privilege." Mr. Lee was surprised by the news and called the decision "an outrage." He questioned why he could not receive the documents, particularly, he said, "because other states have given us reams of documents about their settlements on predatory lending with Household"

Fair Finance Watch (FFW) has just filed a challenge to the applications by National City Corporation to acquire Florida's Harbor Federal Savings Bank and Fidelity Bankshares. ICP's timely comments, filed under the Community Reinvestment Act with the Federal Reserve Bank in Washington, and with the Federal Reserve Bank of Cleveland, are based on worsening lending disparities at National City. Mortgage (HMDA) data reported for 2005 show that National City disproportionately charges African Americans and Latinos higher prices than whites. ICP also documents National City enabling fringe financial institutions such as pawn shops (sample listed below).

FFW's comments analyze National City's 2005 Home Mortgage Disclosure Act ("HMDA") data which no CRA or fair lending exam has taken into account, considering the distribution of loans over the Federally-defined rate spread of 3% over comparable Treasury securities on first lien loans, 5% on subordinate liens ("high cost loans").

Nationwide in 2005, National City confined fully 60.83% of African American borrowers and 58.74% of Latino borrowers to high cost loans, versus only 37.13% of white borrowers.

In Florida in 2005, National City confined fully 67.36% of African American borrowers and even higher percentage of Latino borrowers, 68.25%, to high cost loans, versus 54.38% of white borrowers.

In its home state of Ohio in 2005, National City confined fully 60.07% of African American borrowers and 44.76% of Latino borrowers to high cost loans, versus only 34.66% of white borrowers.

In New York State in 2005, National City confined fully 73.92% of African American borrowers and 72.11% of Latino borrowers to high cost loans, versus only 60.96% of white borrowers.

National City is systemically predatory. In a previous response to ICP comments, National City Bank acknowledged inter alia its lending to "Advance America (HQ in Spartanburg, SC)." National City also enables such fringe financiers as pawnshops. Attached hereto are sample Uniform Commercial Code filings. Here are some more:

Mr. Pawnshop, Inc.; Ace East Jewelry and Pawnshop, Inc.; Quick Cash Advance, Inc.

Harbor's market is already anticompetitive and becoming more so what with Wachovia-Golden West (the counsel for which cite National City, in a July 14 letter to the FRB only just provided to FFW). Given this record, FFW is requesting public evidentiary hearings, and that, on the current record, National City's applications be denied.

Subject: Ameriquest
Sent: Thu, 10 Aug 2006 3:14 PM
From: [Name withheld in this format]
To: Ameriquest-Watch [at] innercitypress.org

Just found your website on Ameriquest. I guess that explains how they appraised our house at $72,000, and when we contacted another lender to refinance, their appraiser gave an estimate of $46,000.

This hot week, the expansion of subprime -- CitiFinancial in Hong Kong, GE Money in Singapore, and Chase's subprime auto in the suburbs of Atlanta.

Citigroup exports predatory lending, and brags about it. Last week in Hong Kong it issued a press release: "CitiFinancial has opened two branches at Aberdeen and Sheung Shui which offer convenient, speedy and tailor-made products and services to customers in two key hubs in Southern and Northern Hong Kong. This development underscores CitiFinancial's commitment to expand its reach in the territory. The opening of these two new branches together with two others previously opened at Wanchai and Sham Shui Po are important milestones in CitiFinancial's strategic expansion plan to have a total of 20 branches in Hong Kong by the end of 2006." Watch out...

Subprime Singapore -- GE Money runs ezyCash, an unsecured loan scheme for lower-income borrowers through Singapore Post branches...

Chase in a press release last week said it "will expand its presence in the Atlanta area this month by opening a Prime/Near Prime business center to focus even more attention on area auto dealers looking to provide their customers with auto loan solutions. The new office will occupy space with Chase's existing Custom Finance Business Center at 500 Town Park Lane, Suite 100 in Kennesaw." Just what Georgia needs - more subprime lending. It should be noted that when Georgia sought to control subprime mortgage lending, Chase threatened to leave the state...

A recent employee of World Savings has contacted Inner City Press, describing in detail what he calls World Savings' predatory lending. He states that over time, World Savings' no- and low-documentation loan program, initially designed for small business owners who might have difficulty fully documenting their income, grew to account for a larger and larger portion of World Savings' business. He states that applicants' incomes were routinely overstated, on forms the applicants did not themselves fill out. He states that these applicants, whose incomes were overstated, were put in loans that they could not afford, on which they would foreseeably fall into delinquency -- an indicator of predatory lending used by the FRB itself. This does not show up in World Savings' "default" or foreclosure rate, the individual states, because the borrowers sell their homes to avoid losing them.

The individual states that many of these abuses take place under World Savings' "Q Q" or "Quick Qualifying" program. The FRB should forthwith ask World Savings to submit an answer, into the record and to FFW while the comment period is open, information concerning what percentage of World Savings' loans are QQ, Quick Qualifying or otherwise no- or low-documentation. World Savings should be required to explain, into the record with a copy to FFW, why it would accept and encourage no- and low-documentation applications by salaried employees with IRS Form W-2s. World Savings should be required to respond to the two pages attached hereto, supplied to FFW by the recent World Savings employee, who states that they reflect illegal targeting of protected classes. The individual states to FFW that he is willing to speak with regulators (as for example were FFW's similarly proffered CitiFinancial witnesses, leading to an FRB enforcement action) -- but he is concerned with further retaliation. He was already fired, he states, for having pointed out the above-described abuses, and having stated that he would inform Wachovia, during due diligence, of them. Therefore protection against retaliation should be arranged, as a first step.

Additionally regarding Wachovia, see the Philadelphia Inquirer of July 28, 2006, by the ever-intrepid Joe DiStefano:

"Wachovia and PNC Bank, which together handle the majority of city deposits, sharply reduced their mortgage lending in what the government calls low- and moderate-income neighborhoods from 1999 to 2004, while mortgages from other lenders in those same neighborhoods rose, according to federal loan records. That includes census tracts where families typically make less than $40,000 a year. Most of those tracts in Philadelphia and its four surrounding Pennsylvania counties are in the city: North, West and South Philadelphia, Germantown, Frankford, Kensington and Olney, including many African American and immigrant communities, as well as some of the city's oldest predominantly white neighborhoods... What happened to Wachovia? Spokeswoman Barbara Nate blamed a shift in the bank's small-business-lending tactics, from specialized business lenders to branch-based lending, along with changes in the way Wachovia reports business loans.... For this year, the banks have set conservative loan targets for lower-income Philadelphia neighborhoods. For example, Wachovia hopes to make 1,770 home mortgages in low- and moderate-income neighborhoods this year. But Nate, the spokeswoman, pointed out that that included refinancing and home-improvement loans as well as home-purchase loans -- and the total is slightly below what the bank did in 2005. "

See also, the analysis of systemic disparities in Wachovia's 2005 lending submitted as part of FFW's first comment.

Given this record, Fair Finance Watch is requesting public evidentiary hearings, and that, on the current record, Wachovia's applications be denied.

Last week the Wall Street Journal covered Citibank trying to collect deposits through CitiFinancial, but mentioned neither the Community Reinvestment Act (which requires reinvestment in communities in which deposits are taken) much less CitiFinancial's two predatory lending settlements. Or check out the below sample email chain, cc-ed to Inner City Press:

Ms. Lang, I am writing in response to your letter dated 6/29/06. It states you are in receipt of my e-mail and will respond no later than 7/10/06. I assumed since this was put in writing and it was from the Office of the General Counsel, I had finally reached the correct party at CitiFinancial to respond to my request. Unfortunately, this is not the case since it is now almost three weeks after I was supposed to receive a reply and I have heard nothing. Attached are all of my correspondence regarding this matter. Please note this communication began in MAY. It is now almost three months later and my frustration level is at its maximum. Please refer to the last communication to Mr. Schrom. Dated 6/29, I requested the automatic deduction be stopped effective immediately. Since the July payment was deducted anyway, I decided to give you the benefit of the doubt and assumed my request was made too close to the deduction date. There will be no "benefit of the doubt" if the August payment is deducted.

Mr. Schrom,Please let me list several facts for you to ponder: My first email was on 5/5, where I requested the response be via e-mail or regular mail but also included my cell phone number. The response was that my e-mail was FORWARDED to Sharon Ocasio on 5/8 and included her phone number. After receiving NO response, I resent the e-mail on 5/27 and reiterated that I wanted all correspondence in writing. On 5/30 I was advised the e-mail was forwarded to you. Lo and behold, the notification I received about the change in payment was dated 6/1. On 6/12, I resent the e-mail and copied you advising the effective date was incorrect and the new payment amount was not as I calculated it. You asked Toni to "get" the information I requested so we could resolve this issue. Her response was a phone number for ME to call to fix CitiFinancial's error! To add insult

to injury, I received a letter from Sharon Ocasio dated 6/14 asking me to call her as the number she has is disconnected and she has no way to communicate via e-mail. How can an e-mail be forwarded to someone who has no way to communicate via e-mail?

toni, if what the customer states is true we need to adjust her rate for 2 months effective

5/1/06. also, she is requesting an explanation as to new payment calculation. can you help get the information she is requesting so we can resolve this issue? thanks for your help. ron schrom.

Ms. Lawrence, I wanted to let you know that I received a "Notice of Change in Payment

Amount and Interest Rate" form that was dated 6/1/06. However, there is an error in the effective date. My contract states after 24 consecutive payments, the rate would lower. Our first payment was 5/1/04, which means the 24th payment would have been 4/1/06. The lower interest rate should have been effective with the 5/1/06 payment, yet the form indicates it will not be effective until the 7/1/06 payment. It clearly states the current rate is in effect for 26 months and it should be 24 months. Also, I cannot seem to verify the new payment amount and would like an explanation as to how it was calculated.

ICP Fair Finance Watch has just filed a 15-page challenge to the proposed announced on May 8 by Wachovia to acquire Golden West Financial Corp. for $25.5 billion. In comments filed with the Federal Reserve Board in Washington, Fair Finance Watch demands public hearings on the proposal's potential to raise prices, on Wachovia's continuing enabling of payday lenders and pawnshops, and on the disparities in Wachovia's 2005 mortgage data, including disproportionately confining people of color to higher cost loans.

Fair Finance Watch presents in its July 24 challenge an analysis of the 2005 data of Wachovia four HMDA data-reporting affiliates, cumulating these four lenders (referred to as "Wachovia") and calculating the distribution of loans over the Federally-defined rate spread of 3% over comparable Treasury securities on first lien loans, 5% on subordinate liens (referred to as "high cost loans").

In its home state of North Carolina in 2005, Wachovia confined African Americans to high cost loans 2.93 times more frequently than whites, while denying African Americans' applications for loans more than twice as frequently as whites. Specifically, Wachovia confined 12.38% of its African American borrowers to higher cost loans over the rate spread, versus only 4.22% of its white borrowers. Also in North Carolina, Wachovia in 2005 denied the applications of Latinos 1.8 times more often than whites.

In 2005 in Texas, a state in which Wachovia wants to further expand, Wachovia confined African Americans to high cost loans 2.36 times more frequently than whites, while denying African Americans' applications for loans 1.75 times more frequently than whites. Also in Texas, Wachovia in 2005 confined Latinos to high cost loans 1.86 times more frequently than whites, and denied the applications of Latinos 1.54 times more frequently than whites.

In Pennsylvania, a state whose consumers were injured by Wachovia under its previous name First Union, through massive branch closings and otherwise, Wachovia in 2005 confined 14.76% of its African American borrowers to higher cost loans over the rate spread, versus only 3.61% of its white borrowers. That is, Wachovia confined African Americans to high cost loans a whopping 4.09 times more frequently than whites, while denying African Americans' applications for loans 1.54 times more frequently than whites. Also in Pennsylvania, Wachovia in 2005 confined Latinos to high cost loans 1.99 times more frequently than whites, and denied the applications of Latinos fully 2.03 times more frequently than whites.

In California, a state it which Wachovia wants to further expand after buying a subprime auto lender and exotic mortgage originator based in the state, Wachovia in 2005 denied African Americans' applications for mortgages 2.11 times more frequently than whites. In Delaware in 2005, Wachovia denied African Americans' applications for mortgages 2.02 times more frequently than whites. In New Jersey in 2005, Wachovia confined African Americans to high cost loans 2.32 times more often than whites, while denying African Americans' applications for loans 1.85 times more often than whites.

Wachovia's disparities are not limited to African Americans and Latinos. Note for further example that in New York State in 2005, Wachovia denied fully 72.82% of the applications it received from American Indians, 3.79 times its denial rate for whites in NYS in 2005. Also in New York State, Wachovia denied the applications of African Americans 2.03 times more frequently than whites.

While FFW is formally asking the Federal Reserve to investigate and act on these regional disparities, overall in 2005 Wachovia confined African Americans to higher cost loans 2.54 times more frequently that whites. FFW requesting public hearings, and that Wachovia's applications be denied.

Wachovia has continued supporting subprime lenders, after previously misinforming the FRB about support of subprime lenders, then demanding secrecy, giving rise to FOIA litigation, a partial chiding of the FRB by District Court Judge Cote, and the recently-heard appeal in the Second Circuit. An August 6, 2004, letter from Wachovia to the Federal Reserve admitted active credit relationships with ten pawnshops "or related entities," and tried to explain why this is not inconsistent with its earlier claim, in its merger application, about a "policy not to lend to pawn shops, pay day lenders, check cashing companies or other MSBs" [Money Service Businesses]. That statement was made without equivocation, in Exhibit 6 of the merger application, filed July 12, 2004. When that merger was announced, Fair Finance Watch issued a report showing that both SouthTrust and Wachovia fund pawnshops, payday and car title lenders. The banks said they would respond, and included the above-quoted, about SouthTrust's "policy," in their application. FFW submitted to the FRB 45 Uniform Commercial Code filings showing SouthTrust's loans secured by pawnshops, including all of their proceeds.

Wachovia's August 6, 2004, response stated: "Of the 15 SouthTrust relationships cited by FFW, four loans have been paid out and a loan relationship no longer exists. Two other UCC filings reflect loans to parties for which the businesses in question served solely as collateral. Four other entities cited are not pawnshops or money service busineses or provide MSB services only as an incidental service. Five such relationships do exist with pawnshops and were made as exceptions to SouthTrust's policy. In addition to those five relationships, we have identified five other credit relationships with pawnshops or related entities, some of which were acquired through mergers with other institutions. However, the total loan outstandings of these 10 credit totals just $755,056... Moreover, it is standard industry practice to allow exceptions to credit policies based on legitimate reason."
But what are those reasons? Wachovia told the Fed that "It is SouthTrust's policy not to lend to pawn shops, pay day lenders, check cashing companies or other MSBs." There was no footnote, no statement "except for ten pawnshops." The statement was false, and militates for public hearings in this case.
Wachovia itself stated that it "has commercial lending relationships with select check cashing companies, pawnshops and payday lenders. In recognition of the higher risk these businesses present, the Credit Risk policy on lending to them is very restrictive. Any new credit, or the renewal or modification of such a credit, requires the approval of one of the top found Chief Risk Offices of Wachovia... Please see Confidential Exhibit 3 for information concerning these customers." FFW filed a FOIA appeal, and later sued.

FFW's comment also include sample UCC filings. For example, on January 4, 2006, after the above-described, Wachovia made a new loan to Value Pawn Holdings, Inc. of 101 Sunnytown Road, Casselberry, Florida;

--in November 2004, Wachovia made a new loan, secured by "all inventory," to Alvarado Pawn, Inc. of Alvarado, Texas;

--in June 2005, Wachovia formally continued a loan to A 1 Pawn Shop of Goldsboro, North Carolina;

--in March 2005, after the above-described, Wachovia formally continued a loan to Garden State Check Cashing Services, Inc.; and

--on April 10, 2006, Wachovia made a new loan to Atlanta Check Cashers, Inc. of 1000 Hurricane Shoals Road, Lawrenceville, Georgia.

As yet another adverse managerial issue, see Associated Press of July 6, 2006, "Wachovia pays nine states $25M in settlement" --

(AP) - The nation's fourth-largest bank, Wachovia Corp., has agreed to pay nine states, including Utah, $25 million to settle allegations that its stock analysts issued biased research to win investment-banking business. The Charlotte, N.C.-based company agreed Wednesday to pay $20 million for failing to supervise its employees, $1.65 million for not retaining required e-mail records, and $350,000 for costs of the investigation. Investigators said Wachovia employees had conflicts of interest between equity research and investment banking. They said the company did not comply with state securities laws by failing to keep certain electronic records. The probe was led by securities regulators in Nebraska, Virginia and North Carolina, according to the Washington, D.C.-based North American Securities Administrators Association. Alabama, Georgia, Maine, Connecticut and New Jersey were also involved."

FFW is requesting public hearings, including on managerial issues, and that Wachovia's applications be denied. The hearing and denial-request are also on competition and higher-pricing grounds. Even Wachovia's application admits that at least three markets are outside of the antitrust guidelines:

--West Palm Beach, where Wachovia already has an anticompetitive 25% market share (and Golden West has 5.9% -- the application blacks out the percentage of Golden West's deposits in certificates of deposits, which FFW contests);

--the Indian River market, where Wachovia already has an anticompetitive 28% market share, and Golden West has 5% -- the application blacks out the percentage of Golden West's deposits in certificates of deposits, and the entire last paragraph of the argument, which Fair Finance Watch has now contested to the Federal Reserve. So much for transparency.

FFW has formally requested such public hearings on Wachovia's applications, and contends that on the current record, these applications could not legitimately be approved.

With all the hoopla around the FDIC's consideration of applications to get into banking by Wal-Mart and Home Depot, the Office of Thrift Supervision is more quietly reviewing a proposal by the Paris-based investment bank Societe Generale to form a savings bank. The purpose of the proposed savings bank is to "engage in purchasing residential mortgage loans in the secondary market from other financial institutions and licensed mortgage bankers... SG sees the Bank's involvement in this market as a natural extension of its current securitization activities." Given those activities, Inner City Press / Fair Finance Watch submitted a timely challenge to SocGen's application, citing along with troubling reports of money transmission for terrorism other lacks of standards, including environmental. Soc Gen has been identified as having "loaned funds to Transneft in the past and can be expected to be approached for financing on the ESPO project" -- a highly controversial oil pipeline project in Siberia which would destroy habitats including around Lake Baikal.

Other of Soc Gen's oil loans include the $2.8bn Qatargas 3 deal and as Olefins II advisory in Kuwait. See also, Project Finance of March 1, 2006, " Inca cooler: the Peruvian capital markets have become essential sources of funding for mines, pipelines, roads, and even LNG terminals. But can the country's financial sector continue to ignore political instability?" --

"According to Alejandro Valencia, a director in the project financegroup at Societe Generale, adviser to the consortium of Hunt Oil (50%), SK Corp (30%) and Repsol YPF (20%), 'Peru LNG, a Peruvian entity, will be the borrower and we expect the project to be financed at a minimum debt-to-equity ratio of 60/40.'"

Another question about the safety and soundness of Societe Generale's global lending is raised by the $1 billion loan to the Russian energy company Yukos in September 2003. See, e.g., " Russian court upholds ruling to void Yukos' loan guarantee," Tass Newswire, May 16, 2006.

Societe Generale submitted a response to the OTS, bragging among other things that "Societe Generale is one of a limited number of corporations that has signed The Global Compact of the United Nations (July 2000), which encourages the private sector to advance responsible corporate citizenship and universal social and environmental principles to meet the challenges of globalization, the United Nations Environment Program Statement by Financial Institutions on the Environment and Sustainable Development."

But reporting from the United Nations, Inner City Press has uncovered Societe General misusing the United Nations logo, specifically the UNHCR "visibility logo," and improperly presenting itself to the public as having "teamed up" with the UN, in a way that brought rebuke from legal staff in UN Headquarters. Click here for that Inner City Press UN Report. And so in reply: Societe Generale should be asked to make full public disclosure of all communications to it from UNHCR regarding its use of the logo(s) and of such phrases as "teaming up with" the UN. Also, it has emerged that in the program at issue SocGen demonstrated its lack of compliance standards by investing in a fund controlled by an individual on the UN Investment Committee, Ivan Pictet. SocGen should be required to make full public disclosure on this matter as well.

So Soc Gen's defense to the OTS is problematic, as its proposal to start a federal savings bank, with which it could preempt all states laws. Developing...

In predatory lending news from the UK, Royal Bank of Scotland is under investigation after an expose of one of its customers who committed suicide, heavily in debt. Richard Cullen, a 65-year-old mechanic from Wiltshire, killed himself after building up debts of 130,000 pounds on credit cards. Cullen owed the Royal Bank of Scotland (RBS) more than 35,000 pounds through four different cards, despite having an annual income of just 15,000 pounds. In November 2004, two weeks after he was chased for arrears on his Mint card, which is operated by RBS, the credit limit on his Tesco Personal Finance card, also run by RBS, was increased by 1,000 pounds to 7,700 pounds. In January last year he was found dead in his garage after inhaling exhaust fumes...

Seven months ago, Inner City Press submitted to the Federal Reserve Board a Freedom of Information Act request, for records "regarding the Federal Reserve System having compiled a list of lenders with disparate 2004 Home Mortgage Disclosure Act data and transmitting such lists beyond the FRS."

Under the Freedom of Information Act, the Fed is supposed to provide records within twenty business day. But with a single letter six months ago, the Fed unilaterally extended its time to respond. Now, as it prepares its required annual FOIA report to the Department of Justice, the Fed begrudgingly sends a second letter, which states that "approximately five linear feet of documents will be withheld from you... no reasonably segregable nonexempt information was found."

An appeal will follow... Also last week, Synovus' Columbus Bank & Trust along with CompuCredit were forced to pay $11 million in restitution to residents of New York State for failing to disclose activation fees of up to $179 on Aspire Visa cards. Inner City Press has raised Synovus' consumer abuse to the Federal Reserve a number of times in recent years. Now what will the Fed do?

From reading the fine print of regulatory notices: the New York Banking Department on June 14 quietly "authorized" CitiFinancial to "solicit deposits on behalf of a bank" -- Citibank. So, a confessed predatory lender now solicits deposits?

Given the disparities in Citigroup's 2005 HMDA data, the Federal Reserve's wordless lifting of its 2004 cease-and-desist predatory lending order against CitiFinancial is shameful... And what do others agencies do? According to an audit of the FDIC:

"For the period January 1, 2003 through November 7, 2005, CRC identified 23 poss