Inner City Press' Community Reinvestment Reporter

  

     Welcome to Inner City Press’ CRA Report.  Our other Reporters cover the financial services industry, human rights, the Federal Reserve, and other beats.  ICP has published a book about the CRA-relevant topic of predatory lending - click here for sample chapters, a map, and ordering informationCBS MarketWatch of April 23, 2004, says the the novel has "some very funny moments," and that the non-fiction mixes "global statistics and first-person accounts."  The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters."  See also, "City Lit: Roman a Klepto [Review of 'Predatory Bender']," City Limits, Oct. 2004.  The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site  Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere.

Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere. Click here for a recent BBC piece on Inner City Press' reporting from the United Nations. New: Follow us on TWITTER   BloggingHeads.tv  Click for March 1, 2011 BloggingHeads.tv re Libya, Sri Lanka, UN Corruption by Inner City Press. 2014: MRL on Beacon Reader  For or with more information, contact us.

August 12, 2019

Amid attacks on the U.S. Community Reinvestment Act this month Inner City Press / Fair Finance Watch has filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida.  Here's some of it: "This is a timely first comment opposing and requesting documents about and an extension of the FRB's public comment period on the Application by Banco Bradesco to acquire BAC Florida.       This is a proposal by a bank in Brazil where authorities are reviewing the bank for corruption, to buy a US bank with a disparate lending record in order to use it to serve disproportionately the affluent. There is no public benefit; the application should be denied.       Fair Finance Watch has been reviewing the Home Mortgage Disclosure Act (HMDA) data for 2017 for BAC Florida and finds, troublingly, that for home purchase loans in the New York City MSA it made 13 such loans to Asians, and none to African Americans or Latinos. For Latinos it hada 100% denial rate.       In the Miama MSA in 2017, BAC Florida made 68 home puchase loans to whites and none to African Americans.  Now see, for the record, "Brazil's Bradesco to buy Florida bank to focus on wealthy individuals" - "Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately $500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals.  Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua.  After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida.  Bradesco Chief Executive Officer Octavio de Lazari said on a call with journalists that the Brazilian bank’s private banking clients have increasingly demanded diversification and greater access to global products.   “This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region,” he said. Around 20 percent of BAC Florida’s clients are Brazilian and 9 percent are American.  Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business." Where is the CRA?      

Now see this, on managerial resources, also for the record and the request for an evidentiary hearing: "Brazilian anti-graft prosecutors mull lawsuit against Bradesco"  - " Brazilian prosecutors are considering a civil lawsuit against Banco Bradesco SA , as they believe the country’s second-largest private-sector bank may have failed to prevent corruption schemes, Valor Econômico reported on Thursday.  Earlier this week, prosecutors asked a court to issue an arrest warrant for two Bradesco bank managers, saying they had been part of a complex scheme involving shell companies, fraudulent checks and bank slips that helped launder nearly 1 billion reais ($252 million).  Eduardo El Hage, the prosecutor heading the Rio de Janeiro part of the massive “Car Wash” corruption investigation, told the Brazilian newspaper he believes Bradesco should have caught on to those financial transactions.  Bradesco declined to comment on the matter."       On the current record, Banco Bradesco's applications should be denied." We'll have more on this.

August 5, 2019

Capital One Exposed 140000 Social Security Numbers While Abusing Consumers Regulators Defanged

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, July 30 – Three years after Capital One Bank was sued for its overdraft fees on debit card transactions for which there were sufficient funds available in the customers' accounts, on June 25 the bank's motion for summary judgment was denied by U.S. District Court for the Southern District of New York Judge Lorna G. Schofield.   

  Now on July 29 Capital One belatedly disclosed that it was "compromised," including 140,000 social security numbers, 80,000 linked bank account numbers, and “personal information” from credit card applications from 2005 through early 2019. And where were and are the regulators, who approved Capital One's mergers rebuffing detailed Press comments? We'll have more on this.

   Back on June 25, Judge Schofield after her ruling joked that it felt like the case began in last century. She gave the lawyers for named plaintiff Tawanna M. Roberts two weeks to file a letter presaging their motion for class certification.   

   The case has already seen one appeal to the Second Circuit Court of Appeals, which partially reversed Judge Schofield's granting of Capital One's motion to dismiss Roberts' causes of action for breach of contract and violation of New York General Business Law § 349.     

   The case has attracted interest as an example, consumer advocates say, of predatory practice, citing a Capital One account agreement which states that an overdraft occurs when it “elects to pay” a transaction that exceeds a customer’s available balance. 

  The advocates say that by charging overdraft fees on transactions that the bank elected to pay when the available balance was sufficient, but that later settled against negative funds, Capital One led consumers to believe it would do one thing while doing the opposite, inflicting significant financial hardship - that is, overdraft fees - on affected customers in the process.  

July 29, 2019

Japanese FinTech Rakuten Lines Up For Utah Evasion Of Community Reinvestment Act

By Matthew R. Lee

SOUTH BRONX, July 27 – Amid attacks on the U.S. Community Reinvestment Act this month Inner City Press / Fair Finance Watch has filed comments under the CRA opposing Hancock Whitney Bank's applications to acquire MidSouth Bank, see below. Now comes this news: "A Japanese FinTech company is applying for a banking charter in the United States. The eCommerce firm Rakuten currently runs a shopper rewards program in the States, and said would file the necessary paperwork on Friday (July 26) with Federal Deposit Insurance Corp. (FDIC) and the state of Utah for an industrial loan company (ILC) charter.  Rakuten has about 13 million active users who earn rewards for purchasing products from participating merchants.   The bank would be headquartered in Utah and could handle users’ deposits, according to Lee Carter, Rakuten head of banking and potential ILC CEO. The company also wants to give members a credit card to make purchases in the future and also earn rewards.  Carter said he’s “kept a close eye on Square’s application.”  He also said the company would provide a complete plan for the Community Reinvestment Act with the application, because some groups are worried that FinTechs won’t be held accountable for certain rules.  “We have thought about that very, very carefully,” Carter said. “We’ll have specific goals for community service and investments back into the community."  We'll have about that.

July 22, 2019

Predatory Real Estate Lawyer Maddiwar Gets 5 Years As SDNY Judge Ramos Says He Lied

By Matthew Russell Lee, Patreon

FEDERAL COURTHOUSE, July 19 – Real estate and lending fraud got their day in court on July 19 and it wasn't pretty. Lawyer Rajesh Maddiwar who was convicted for his role in the theft of 30 homes in The Bronx, Brooklyn and Queen where he had his office, was up for sentencing. But he repeated, as he had at trial, that he was the victim and that he never knew that the people he told to just sign on the dotted line were losing their homes.  

In the gallery of Courtroom 618 in the U.S. District Court for the Southern District of New York, a man vigorously shook his head.   

  Inner City Press, which has long covered the bank side of predatory lending, from CitiFinancial to Wells Fargo and beyond, waited to hear the victim impact statements. But they never came.

 After Maddiwar's defiant speech, SDNY Judge Edgardo Ramos sentenced him to 60 months in jail, stating flatly that Maddiwar had lied at trial: "He lied again and again." The case is USA v. Maddiwar, part of USA v. Alvarenga et al., 15-cr-00627 (Ramos).   

  Assistant US Attorneys Sheb Swett and Andrew Thomas said their office would later that day make the referral for Maddiwar to lose his law licence. Maddiwar told Judge Ramos when he gets out he will go to school to take up another profession. Imagine what he could do as a doctor. Wonder which one. More on Patreon here.

July 15, 2019

Melrose Credit Union CEO Bailed For $500000 and Drug Testing As Georgiton Turns In Greek Passport

By Matthew Russell Lee, Video, Alamy photos

SDNY COURTHOUSE, July 11 – The CEO of Melrose Credit Union Alan Kaufman was arrested at 6 am on July 11 and presented on bribery charges before U.S. District Court for the Southern District of New York Magistrate Judge Henry B. Pitman at 4 pm. Wearing a red polo shirt, he pled not guilty.

 He agreed to a bail package of a $500,00 bond to be signed by his wife and his son, flying in on July 23 and, among other things, drug testing and treatment if needed. His co-defendant Tony Georgiton must post a $1 million bond and turn in not only his US but also his Greek passport. The next hearing is not until September 4 before SDNY District Judge Lewis A. Kaufman. It's good to be a banker.

  This was the press release: "Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ALAN KAUFMAN and TONY GEORGITON were arrested today and charged with bribery of a financial institution officer.  KAUFMAN and GEORGITON were charged with participating in a scheme in which KAUFMAN, who was then the chief executive officer of Melrose Credit Union (“Melrose CU”), accepted free housing and financing for the purchase of his personal residence from GEORGITON in exchange for the approval of millions of dollars in loans to GEORGITON’s companies at favorable terms.  KAUFMAN is also charged with accepting lavish vacations, including to Paris and Hawaii, as bribes from a media company, in exchange for Melrose CU purchasing increased advertising with that company. In 2010, GEORGITON purchased a home in Jericho, New York (the “Jericho Residence”), and permitted KAUFMAN to live in that home rent-free for over two years.  While KAUFMAN was living rent-free at the Jericho Residence, KAUFMAN personally approved the refinancing of over $60 million worth of loans at Melrose CU held by a company owned by GEORGITON with favorable terms.  The head of Melrose CU’s loan department refused to sign off on the loans given to GEORGITON because, among other things, he believed that the terms were too favorable and did not comply with Melrose CU’s loan policy.     In 2011, KAUFMAN sought approval from Melrose CU’s board of directors for Melrose CU to purchase the naming rights to a ballroom under construction in Astoria, Queens (the “Melrose Ballroom”).  That ballroom was owned by a company owned by GEORGITON.  KAUFMAN did not disclose to the Melrose board that he was living rent-free in a house owned by GEORGITON at the time he sought board approval for the naming rights acquisition.  Over the next four years, Melrose CU paid approximately $2 million to GEORGITON’s company for the naming rights to the Melrose Ballroom.     In 2013, KAUFMAN purchased the Jericho Residence from GEORGITON, with financing that largely came from GEORGITON.  To purchase the Jericho Residence, KAUFMAN took out a $200,000 loan from Melrose CU co-signed by GEORGITON and secured by GEORGITON’s shares in Melrose CU.  GEORGITON also gave KAUFMAN a $240,000 unsecured personal loan.  GEORGITON has never made a demand for payment on that personal loan and KAUFMAN has never made a payment on that personal loan.     In addition, from in or about 2010 through in or about 2015, KAUFMAN solicited and accepted lavish vacations and other gifts worth tens of thousands of dollars from a media company located in New York, New York (“Media Company-1”), in exchange for KAUFMAN’s approval of increased advertising spending by Melrose CU with Media Company-1.  For example, in 2010, Media Company-1 paid for KAUFMAN and his girlfriend, who also worked at Melrose CU, to fly to Paris, France, and stay at the Four Seasons George V Paris.  In 2012, Media Company-1 paid for KAUFMAN and his girlfriend to fly to Maui, Hawaii, and stay at the Four Seasons in Wailea.  In 2013, Media Company-1 paid for KAUFMAN and his girlfriend to attend the Super Bowl in New Orleans.     KAUFMAN did not seek approval for these vendor-paid trips from the Melrose CU board, nor did he disclose these vendor-paid trips to the Melrose CU board, in violation of Melrose CU’s anti-bribery policy."

  Credit unions should be covered by the U.S. Community Reinvestment Act....

July 8, 2019

Community Reinvestment Act Challenge to Hancock Whitney Bid For MidSouth Bank

By Matthew R. Lee, Exclusive

SOUTH BRONX, July 6 – Amid attacks on the U.S. Community Reinvestment Act this month Inner City Press / Fair Finance Watch has filed comments under the CRA opposing Hancock Whitney Bank's applications to acquire MidSouth Bank. Here's some of it: "This is a timely first comment opposing and requesting documents about and an extension of the FRB's public comment period on the Application by Hancock Whitney to acquire MidSouth.       Fair Finance Watch has been reviewing the Home Mortgage Disclosure Act (HMDA) data for 2017 for Whitney and finds, troublingly, that for home purchase loans in the New Orleans, Louisiana MSA in 2017 Whitney denied the applications of African American 3.35 times more frequently than whites - and denied Latinos a whopping 4.68 times more frequently than whites.       Despite the demographics including of home ownership in the NOLA MSA, Whitney in 2017 made 507 home purchase loans to whites and only 52 to whites (and only 13 to Latinos).       An evidentiary hearing should be held and the 2018 data should immediately be made available, including through the HMDA Explorer site and format, which appears to be being terminated by the CFPB.         In support of the request for an extension and a hearing, "There is no word on whether there will be any layoffs or branch closings. Trisha Voltz Carlson, spokesperson for Hancock Whitney, said it is premature to discuss branches or employees at this time.  “While there is some overlap in our footprint with MidSouth, we are not ready to discuss consolidation of branches or costs at this time,” Carlson said by email." These must be disclosed and comment allowed including at a hearing.       On the current record, Hancock Whitney's applications should be denied." We'll have more on this.

July 1, 2019

Capital One Motion For Summary Judgment In Overdraft Fees Case Denied In SDNY

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, June 25 – Three years after Capital One Bank was sued for its overdraft fees on debit card transactions for which there were sufficient funds available in the customers' accounts, on June 25 the bank's motion for summary judgment was denied by U.S. District Court for the Southern District of New York Judge Lorna G. Schofield.   

   Judge Schofield after her ruling joked that it felt like the case began in last century. She gave the lawyers for named plaintiff Tawanna M. Roberts two weeks to file a letter presaging their motion for class certification.   

   The case has already seen one appeal to the Second Circuit Court of Appeals, which partially reversed Judge Schofield's granting of Capital One's motion to dismiss Roberts' causes of action for breach of contract and violation of New York General Business Law § 349.     

   The case has attracted interest as an example, consumer advocates say, of predatory practice, citing a Capital One account agreement which states that an overdraft occurs when it “elects to pay” a transaction that exceeds a customer’s available balance. 

  The advocates say that by charging overdraft fees on transactions that the bank elected to pay when the available balance was sufficient, but that later settled against negative funds, Capital One led consumers to believe it would do one thing while doing the opposite, inflicting significant financial hardship - that is, overdraft fees - on affected customers in the process.    

  In the run-up to the June 25 oral arguments, Judge Schofield informed the parties that she would only grant argument to lawyers graduating in 2014 or more recently. Capital One's law firm Morrison Foerster proposed a 2013 graduate, Tiffani B. Figueroa. Judge Schofield approved it, and the argument took place with Sophia Goren Gold representing Tawanna Roberts. Now she seeks class certification. The case is Roberts v. Capital One Financial Corporation, 16-cv-4841 (Schofield).

June 24, 2019

OCC Denies Access To Otting Calendar Inner City Press Requested Five Months Ago As Regulator Goes Rogue

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, June 21 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move is to deny access to documents about whom he meets with which Inner City Press requested back in January 2019. After first denying a Freedom of Information Act fee waiver for these documents, and now for all bank merger applications is obvious retaliation, on June 20 the OCC wrote to Inner City Press:

"Dear Mr.Lee: This is in response to your letter dated January 16, 2019, which was received in my office on January 17, 2019 for processing under the Freedom of Information Act (FOIA), 5 U.S.C. 552. You requested copies of records sufficient to show all of Comptroller Otting's scheduled meetings, appointments, and scheduled events from the date he became Comptroller to the date of your response including but not limited to Outlook calendar entries and daily briefing books for Comptroller Otting on those dates. You seek records of any kind, including paper records, electronic records, audiotapes, videotapes, photographs, data, and graphical material. Our determination concerning your request is as follows:

1. Mr. Otting’s Calendar is published on the OCC’s Website in the Electronic Reading Room located at www.occ.gov.  Certain entries have been deleted under the authority of 5 U.S.C. 552(b)(2) and 12 C.F.R. (b)(2), related solely to the internal personnel rules and practices of an agency which covers confirmation numbers, ticket numbers, dialin numbers and PIN codes for telephone conferences; 5 U.S.C. 552(b)(5) and 12 C.F.R. 4.12(b)(5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency which are considered deliberative in nature; 5 U.S.C. 552(b)(6) and 12 C.F.R. 4.12(b)(6), personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy which covers personal, non-government issued telephone cell phone numbers; and, 5 U.S.C. 552 (b)(8) and 12 C.F.R. 4.12(b)(8), contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;.
2. Briefing books or materials submitted to the Comptroller in preparation for meetings appearing on his calendar and are marked “MATERIALS ATTACHED” are withheld under the authority of 5 U.S.C. 552(b)(5) and 12 C.F.R. 4.12(b)(5) inter-agency or intraagency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency, which is consistent with Department of Justice policy.
3. The OCC does not capture audiotapes or videotapes of meetings.
4. Telephone messages made to the Comptroller are also not captured.
5. The OCC does not maintain transcripts.
6. Handwritten notes are not maintained by the Comptroller or the OCC. 7. The OCC does not sweep the personal email accounts of its employees. 
8. A Vaughan index is not required to be produced at the administrative level of processing FOIA requests.

Once you have reviewed the calendars for Mr. Otting and have identified specific topics you you’d like to review, please submit a targeted FOIA request and we will once again search our records. Please note that you requested a fee waiver that I denied.  This was because the basis for your fee waiver did not constitute an official reason as set forth in our regulations to justify a fee waiver.  Upon receive a request for possibly vast amounts of data, you need to adequately justify any such request for a fee waiver.  Due to the volume of requests the OCC is now receiving, each request for a fee waiver is being scrutinized very closely and such waivers are not automatic.    Additionally, keep in mind that the less targeted a FOIA request is, and the possible large amount of data that must be gathered and reviewed, the less likely a request for expedited processing will be granted.  It is just physically impossible."

   Impossible for an ex-banker turned regulator, gone rogue.

June 17, 2019

OCC of Otting Delayed Notice of Mergers Like FOIA Fee Waiver Final Denial to Inner City Press

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, June 15 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move is to deny access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches. Inner City Press requested the records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and as the OCC has until now.

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

  And now, dated June 11 but e-mailed later, a final denial, after putting Inner City Press through three rounds of more and more detailed argumentation - just to waste its time until long after Otting rubber stamped the merger - accusing Inner City Press of not "explaining how the application submitted by WSFS would contribute significantly to the public’s understanding of the operations or activities of the OCC. As such, your request for a fee waiver is denied. Until you contact the OCC Disclosure Services office with assurance that you will pay associated fees, FOIA request # 2019-00206 will not be processed."

  So the OCC thinks it can hinder public review and public comment by changing the law and its own pre-Otting practice.

  On 1 June 2019 the most recent OCC Weekly Bulletin of bank merger applications on which the comment periods are 30 days is from May 4. Inner City Press tweeted photo here. That is to say, the applications are being hidden until the comment period closes.But we'll have more on this, now that Otting's OCC has fully shown itself.

June 10, 2019

OCC Decides No Public Comments On Fifth Third Application For Conversion Lawless Otting Rules

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, June 8 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move has been to deny access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches, see below. Otting's pro-bank capitulation is not lost on the industry: now Fifth Third, a long time state chartered member bank regulated by the Federal Reserve, says it has applied for Otting's rogue-like national charter.

 First Otting left his Weekly Bulletin web page unchanged for week, making it impossible for the public to know of the application in order to comment.

  Now, with Fifth Third's application belatedly noticed on the OCC's website, there's more. Otting has decided to thumb his nose at the public and at the law and refuse to list any public comment period, or to accept comment, on the application by a large bank, Fifth Third, to convert to a national charter and pre-empt a slew of consumer protection laws.

See notice here, with no comment period listed; the OCC has said while it acknowledges such applications have include public comment periods in the past, now under Otting they won't.

Prior to this the Otting's New York OCC office told Inner City Press it simply wouldn't take its comment on the takeover of Chinatown FSB. This is lawless deregulation by a former bad banker mad that he got caught. Any other agency, FDIC or Federal Reserve, that work with him is colluding. We'll have more on this.

   Meanwhile the Consumer Financial Protection Bureau under Kathy Kraninger is thumbing its nose at the US Administrative Procedures Act and proposing to undermine the Home Mortgage Disclosure Act.

CFPB is trying three separate but inter-related attacks. The first is to raise the threshold for reporting HMDA data, to exempt wither 36% or 53% of banks and credit unions, a proposal on which the comment period runs only to June 12, here. (Comments are going in from such banks as Village Bank and Hamilton Bank and even, incongruously, Brenda Muniz OF the CFPB.)

  Second is to weaken the "data points" which will be reported by those still required to under HMDA. The CFPB wants to drop such information as "reason for denial" and "debt to income ratio" - the very information that banks so often cite in response to CRA challenged by Fair Finance Watch and others, as justifying their disparities. Now the CFPB wants to not collect this supposed justification of disparities. Just trust us, is the message. Well, no. This comment period runs to July 8, here.

  Finally, without any comment period at all, the CFPB is eliminating the public's front door to the HMDA data, the HMDA Explorer web site that many community groups such as the hundreds that are members of NCRC use to assess banks in their communities. The CFPB wants to take even this away. They should be sued.  We'll have more on this. And see @SDNYLIVE.

June 3, 2019

OCC of Otting Delays Notice of Mergers Until Comment Period Closes Like FOIA Fee Waiver Sleaze

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, June 1 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move is to deny access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches. Inner City Press requested the records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and as the OCC has until now.

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

  Now on 1 June 2019 the most recent OCC Weekly Bulletin of bank merger applications on which the comment periods are 30 days is from May 4. Inner City Press tweeted photo here. That is to say, the applications are being hidden until the comment period closes. Otting is killing the CRA.

May 27, 2019

After Banker Calk Pled Not Guilty Inner City Press Puts Fraud Q to OCC Where Banker Otting Delays

By Matthew Russell Lee, Video, Alamy photos

SDNY COURTHOUSE, May 24 – Steven M. Calk of FDIC-regulated Federal Savings Bank was presented and arraigned on May 23 for financial institution bribery for corruptly using his position with FSB to issue $16 million in high-risk loans to Paul Manafort in a bid to obtain a senior position with the Trump administration, namely Secretary of the Army.

  Magistrate Judge Debra Freeman in the U.S. District Court for the Southern District of New York accepted the government's proposal of $5 million bond with no co-signer (although that is usually required for moral suasion) and travel allowed throughout the United States (though more defendants are usually confined to the Soutern and Eastern District of NY and one other district). Money talks.

  Afterward in front of the SDNY courthouse Inner City Press asked Calk's lawyers Daniel Stein and Jeremy Margoles about Manafort saying he had misstated his financial situation to get the FSB loans. When did Calk know? They did not answer. Video here, Facebook video here.  Inner City Press' Alamy photos here.

  On May 23, still from the SDNY courthouse covering other cases including one involving the death penalty, Inner City Press reported finding no U.S. Home Mortgage Disclosure Act data for "Federal Savings Bank." But there's more.

The Federal Savings Bank's website, while providing a generic link to the FDIC, and a statement "Member FDIC," has no link for the U.S. Community Reinvestment Act. (Nor does it mention the indictment of Stephen Calk, simply listing his brother John Calk now as CEO and Vice Chairman. Who is the chairman?)

  It lists a loan production office on Avenue J in Brooklyn, and two deposit taking braches in Illinois. Did it see some exemption from the CRA and other consumer protection laws? From fair lending laws?

  Earlier on the morning of May 24 Inner City Press asked the FDIC, "Having covered yesterday's arraignment of the Chairman of The Federal Savings Bank in the SDNY courthouse, including the FDIC's involvement, I checked the bank's website and found "Member FDIC" but no mention of the Community Reinvestment Act."

  The FDIC's spokesperson David Barr, to his credit, responded quickly, writing to Inner City Press: "The Federal Savings Bank, Chicago, is regulated by the Office of the Comptroller of the Currency. They would be responsible for CRA and regulatory oversight. You should contact the OCC for more information."

  Now the OCC under Comptroller Joseph Otting has done everything possible to block the release of information, denying FOIA fees waivers and expedited treatment, refusing comments. But for now online the OCC has said this about The Federal Savings Bank: "While TFSB originated a substantial majority of its loans outside of its AAs; the bank’s business strategy is to operate as a mortgage banking entity with a nationwide presence and market place. Taking the bank’s business strategy into consideration the bank’s performance under this lending criterion is deemed reasonable." Reasonable? Bribery, too, seems to have been part of its business strategy, right under the nose of the OCC of Otting.

  Before 2 pm on May 24 Inner City Press in writing asked Otting's OCC: "This is a Press question for the OCC, from Inner City Press... Please confirm that The Federal Savings Bank is subject to HMDA, and/or if it is below a threshold, as I can find no data in its name on FFIEC.gov. Also, please today provide as an OCC response to the Press this OCC-regulated bank's CRA public file and other information in the OCC's possession concerning the bank's CRA and fair lending performance.   Is it normal for a bank not to mention these things on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC?     Please explain what steps the OCC is taking beyond Stephen Calk no longer being the CEO. What about his brother?"

  More than three hours later, even to the questions at the end, the OCC had only provided this:   "We are reviewing your questions, but we may not be able to respond by your deadline.     Regards,  Stephanie        Stephanie Collins  Manager, Media Relations  Public Affairs Operations  Office of the Comptroller of the Currency." This is the same OCC which has delayed FOR MONTHS providing basic information about a merger it has now already rubber stamped. We'll have more on this.

  Stephen Calk was quoted, at least in 2012, opposing regulation: "As Mr. Stephen Calk writes in the September 7, 2012 edition of Origination News: “Basel III is designed to level the playing field among major banking institutions that operate internationally. Force-feeding these same rules to community banks in the United States is unnecessary and in fact counter-productive, particularly in the current economic environment.” Basel III is one thing. But no Community Reinvestment Act?

The Federal Savings Bank lists locations - and bankers - in       Arizona - Scottsdale California - Irvine Colorado - Fort Collins Delaware - Selbyville Florida - Sarasota Illinois - Chicago Illinois - Lake Forest Illinois - Oak Brook Illinois - Park Ridge Indiana - Bloomington Indiana - Indianapolis Kansas - Overland Park Louisiana - Laplace Maryland - Annapolis Maryland - Timonium CD Massachusetts - Lawrence New Jersey - Hackensack New Jersey - Lakewood New York - Brooklyn New York - Melville New York - New York New York - Queens North Carolina - Raleigh Ohio - Columbus Rhode Island - South Kingstown Tennessee - Nashville Virginia - Alexandria Virginia - Fredericksburg Virginia - Newport News Virginia - Richmond Virginia - Vienna Virginia - Warrenton...  We'll have more on this.

  In the indictment press release, FDIC OIG Special Agent-in-Charge Patricia Tarasca said, “Today’s indictment charges Stephen Calk with misusing his position as Chairman and CEO of a bank for his own personal gain.  The FDIC Office of Inspector General remains committed to investigating cases where bank officials cause multimillion-dollar losses to a financial institution and undermine its integrity.” (The FDIC stands to be the lead regulator of BB&T whose money laundering enforcement action was just terminated by the Federal Reserve to facilitate merger with Suntrust, click here for that and Inner City Press' FOIA request and appeal.)

May 20, 2019

OCC of Otting Told ETRADE It Is Exempt From CRA Inner City Press Finds Under FOIA

By Matthew R. Lee, Exclusive

SOUTH BRONX, May 18 – The US Treasury Department is in a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. Now on October 11, more on Otting's assault on the CRA has become known. In April 2018 his OCC approved an application by E-Trade Saving Bank which Fair Finance Watch had challenged based on the bank having no fewer than six states rare "Needs to Improve" CRA ratings. FFW noted rare Needs to Improve ratings for the entire states of Arizona, Colorado, Florida, Georgia, Michigan and Oregon, and an undeserved “Satisfactory” for New York. Otting's OCC, after the approval, helpfully contacted E-Trade Bank to tell it that upon (Otting's) reflection, it was no longer even subject to the Community Reinvestment Act.

 Back in October 2018 Inner City Press asked the OCC for documents about this under FOIA - while the OCC has sought to evade by accessing fees, to this day. But in May 2019 while withholding 1000 pages the OCC released to Inner City Press, like a needle in a hay stack, its June 16, 2018 letter from Assistant Deputy Comptroller for Midsize Bank Supervision William Russell to E*TRADE's Karl Roessner telling him that E*TRADE's banks are exempt from CRA, here. We'll have more on this.

May 13, 2019

FOIA Fee Waiver Appeal To OCC Otting By Inner City Press For His Secret WSFS Bank Merger Docs

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, May 11 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, his latest move is to deny access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches. Inner City Press requested the records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and as the OCC has until now.

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

  Ironically the grounds cited is that releasing this information about a merger subject to public comment would not increase the public's understanding. This shows Otting contempt for CRA - and for the public. Inner City Press has filed this appeal with Otting, et al.:

"Dear Comptroller Otting:    

Inner City Press traditionally has received fee waivers from the Office of the Comptroller of the Currency under 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17. Waivers were granted on the basis of similar or identical language contained in the instant Freedom of Information Act (FOIA) request, which is now the subject of OCC’s waiver rejection. Outrageously, on Inner City Press' FOIA request for the portions of the WSFS - Beneficial merger application that the applicants unilaterally requested confidential treatment for, your FOIA Manager Frank Vance writes:   

 "Concerning the third consideration, contribution to public understanding, we examined whether or not disclosure of the requested records would contribute to the understanding of the public at large, as opposed to the understanding of the requester or a small number of interested persons.  In other words, we considered whether or not you demonstrated how contribution to public understanding outweighs personal benefit to you.  I find that you did not demonstrate this component; therefore, you did not satisfy the regulatory requirement of 12 C.F.R. 4.17(b)(4)(i).  In light of this, there is no need to analyze your justification with respect to 12 C.F.R. 4.17(b)(4)(ii). "     

So you are claiming that the public is not interested in, and should be constrained in access, the bank merger applications on which the public has a right to comment. You are claiming that to get any OCC review of the often outrageously overbroad requests for confidential treatment of the banks you supervise, the public has to pay untold fees. This is a new low, and Inner City Press is appealing.     Inner City Press Is Eligible for a Fee Waiver     In accordance with 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17, Inner City Press is eligible for, and requests, a waiver of fees associated with processing its request for records. The subject of this request—the review of a merger to close at least 25 bank branches -- concerns the operations of the federal government, and the disclosures will likely contribute to a better understanding of relevant government procedures by the general public in a significant way. Moreover, the request is primarily and fundamentally for non-commercial purposes.     Inner City Press requests a waiver of fees because disclosure of the requested information is “in the public interest because the disclosure . . . [i]s likely to contribute significantly to public understanding” of government operations or activities.

 Specifically, the disclosure of the information sought under this request will document and reveal the activities of the federal government, including how your OCC reviews the CRA and branch closing aspects of the merger.      As discussed below, Inner City Press has both the ability and the intention to effectively convey the information it receives to the public.     Inner City Press does not have a commercial interest in the requested information. This request is primarily and fundamentally for non-commercial purposes. Inner City Press does not have a commercial purpose and the release of the information requested is not in its financial interest. Inner City Press’s mission is to engage in cutting-edge investigative reporting focused, fair lending, development, and government accountability advocacy. Core to its mission is to educate the public about government activities and to ensure the accountability of government officials. Inner City Press uses the information gathered, and its analysis of it, to educate the public through reports, press releases, or other media. It also makes materials it gathers available on its public website and promotes their availability on social media platforms. Inner City Press has demonstrated its commitment to the public disclosure of documents and creation of editorial content. For example, Inner City Press’s website contains dozens of articles describing the operations of the federal government from a unique perspective, including about the OCC:  
 In SDNY FreddieMac Via FHFA of Otting Says Its Negligent Late Objection Is Fine As Otting Lawless

 And this.

   Inner City Press’s website contains many more examples demonstrating its ability and intention to inform the public about government activities, including specifically related to how the subject of the instant FOIA request spent his time at OCC.     Accordingly, Inner City Press qualifies for a fee waiver.    

Significantly, well before this outrageous denial which now longer keeps secret the requested documents, even the OCC wrote "your correspondence of March 8 is more robust and sets forth with reasonable specificity the grounds to justify the OCC's granting of the fee waiver. Therefore, your request for a fee waiver with respect to FOLA request 2019-00104 is granted. The OCC's Disclosure Services office will remove the matter from "Hold" status and proceed to process the request."    

Of course, even in that case [about your / Otting's schedule] in the two month since our letter we have not received a single document from your OCC.          

There can be no doubt that Inner City Press qualifies for a waiver based on the foregoing. Moreover, Inner City Press’s long track record of fee waivers is further evidence of our current eligibility. In particular, we have demonstrated repeatedly our intent and ability to inform the public about government operations and that our requests for information are not primarily in our commercial interest.     

We find your OCC's FOIA and other practices outrageous and demand expeditious ruling on this appeal and release of the already long delayed documents.    Matthew Lee, Esq., Executive Director Inner City Press / Fair Finance Watch." Watch this site.

May 6, 2019

On Money Laundering After Federal Reserve Withholds 133 Pages On BB&T Inner City Press Comments

By Matthew R. Lee, FOIA docs, BB&T denial

NEW YORK CITY, May 4 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, which would close a still undisclosed number of branches and extend BB&T disparate lending patterns, many linked it to deregulatory moves in Washington. Then two days after Federal Reserve Governor Lael Brainard was asked by Inner City Press about the Fed's lax review of previous mergers, including WSFS on which the Fed still hasn't ruled on the bank's withholding of information after rubber stamping the deal, the Fed announced public hearings. But the fix it seems it still in. On April 18, conveniently, the Fed "announce[d] termination of enforcement action with BB&T Corporation" for money laundering. So there's a public comment period on the merger, but none on the Fed's dubious move while the application is pending. Meanwhile as Inner City Press has exclusively reported, BB&T has been named in connection with sleazy debt collections in a case in the SDNY - more on all this to come. On April 29, Inner City Press submitted a FOIA request about the dubious termination of enforcement action, and a comment to the Fed and FDIC, below.

  On the afternoon of May 2, before seeking to close the comment period on BB&T - Suntrust on May 3, the Federal Reserve wrote to Inner City Press that only ONE PAGE about its BB&T money laundering enforcement termination would be provided, and 133 pages withheld in full, no even subject to the type of partial redaction that is required under FOIA. FRB 99% denial letter here.

  The one page is not even from the Federal Reserve: it is from the North Carolina regulator. And there is a request to the FDIC about three pages. Just after the Federal Reserve's FOIA "response," the FDIC wrote to Inner City Press to say its comment period would closed on May 3, and has not responded how it and the Fed's May 3 public meeting, replete with singing for supper, can be viewed. On May 3 before 5 pm Inner City Press raised the bogus FOIA response to the Fed governors and FDIC: "Dear Chair Powell, Secretary Misback and others in the FRS:      This is a timely second comment opposing and requesting an extension of the FRB's public comment period on the Application by BB&T Corporation to merge with SunTrust Banks, Inc. and indirectly acquire SunTrust Bank Holding Company, Orlando, FL, and SunTrust Bank.       As Fair Finance Watch was reviewing the Home Mortgage Disclosure Act (HMDA) and other data of the banks with an eye toward commenting or not commenting by the current May 3 expiration of comment period on this proposed mega-merger, it and Inner City Press were shocked to see the Federal Reserve Board's cynical April 18 termination of the enforcement action against BB&T for money laundering.       Money laundering is, along with redlining, one of the most serious crimes a bank can engage in. For example currently in the SDNY there are numerous AML prosecutions, resulting for example in the conviction of CEFC's Ho for UN-related bribery. Even the Fed had historically acknowledged the primacy of full AML compliance over the rush toward corporate combination, for example in connection with M&T Bank.       Yet here, for the convenience of and in collusion with a proposed mega merger, the Fed without transparency has terminated the BB&T AML enforcement action during the public comment period on the merger, without taking any public comment on it.     Inner City Press has submitted a Freedom of Information Act request to the Federal Reserve for records related to this troubling de-regulatory action. It requested expedited treatment and formally requests that the comment period be kept open until the FRB has made these records available.        Cynically, the Fed responded just before deadline with one page, withholding 133 pages in full in contravention of FOIA. Inner City Press has timely appealed:  an mmediate FOIA appeal of FRB absurd denial by providing only one page and withhold 133 pages in full - in response to Inner City Press' FOIA request regarding the FRB's decision to terminate the money laundering enforcement action against BB&T during the pendency of its application to acquire Suntrust.      As you must know, agencies are request to provided all reasonably segregable information and are not allow mass withhold, as here, over 99% of responsive pages, in full.      Troublingly, just as the Fed acquiesced to BB&T and lifted the enforcement action to facilitate this merger, now it provide a shameful FOIA (non response), to claim it is legitimate to close its comment period on this, the largest merger proposal since 2008.        This is a demand that on this record the comment period must be extended. Inner City Press also timely notes that it asked the FDIC how to view today's public meeting and was told it is only live streamed INSIDE the Federal Reserve Bank. This should be explained - it is far from the best practice, of smaller regulators, on smaller proposed mergers.

April 29, 2019

In SDNY Predatory Lending Defendants Get Free Lawyers Sullivan and Cromwell $2000 a Week

By Matthew Russell Lee, Exclusive, Periscope

SDNY COURTHOUSE, April 23 – Two defendants arrested at Newark International Airport for an advance fee scheme, essentially predatory lending, were presented late on April 23 in the U.S. District Court for the Southern District of New York arraignments courtroom, presided over by this week by retiring Magistrate Judge Henry Pitman. One of them, Omar Young of 107 West Fourth Street, Granton, Wisconsin, was given a free / publicly funded lawyer despite having $215,000 in a business checking account. The other, a Mister Perlman of northern Georgia, has $161,000 in the bank but his counsel, from the white shoe firm of Sullivan & Cromwell, argued that he should be given a free lawyer - and that the whole proceeding should be sealed. But it was held in open court, and Inner City Press was there, albeit the only media present. Why is a corporate law firm like Sullivan & Cromwell representing a predatory lender -- alleged, of course -- and arguing they should be paid, and it should be sealed? Inner City Press aims to have more on this case. For now we note that in the open court proceeding it was said that no hotel can be found in or around New York City for less than $250 to $300 a night, and each defendant was allowed while getting publicly funded counsel to spend $2000 a week while in New York. That's $102,000 a week, deemed reasonable by the court and Sullivan & Cromwell, in a District where many families don't make that in a decade. Inner City Press will have more on this.

April 22, 2019

As Otting Targets CRA He Changed FOIA Fee Policy To Hinder Coverage Reversed on Appeal Still No Docs

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

NEW YORK CITY, April 19 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is the Office of the Comptroller of the Currency's (OCC's) Joseph Otting. This Spring Otting, in order to hinder Press coverage of how many banks he meets with by changing the OCC's long standing FOIA fee waiver policy, is saying he will make it harder to get CRA information too. This is the "new" OCC - see its letter on new policies, below.  After Inner City Press appealed, twice, this has been reversed as to Otting's scheduled - but still as of the end of the week on Friday, April 19 not a single one of the long ago requested documents has been received. For the record, "Matthew Lee, Esq. Executive Director, Inner City Press/ Fair Finance Watch P.O. Box 20047 New York, NY 10017  Subject: Freedom of Information Act Appeal No. 2019-00004  Dear Mr. Lee:  I am writing in response to your correspondence of February 11, 2019, and March 8, 2019. In your correspondence, you sought to appeal the OCC's denial of your request for a fee waiver in connection with your request or information pursuant to the Freedom of Information Act, 5 U.S.C. 552, as amended (FOIA)(numbered 2019-00104).  The FOIA does not provide an explicit right to appeal the denial of a fee waiver, The OCC's FOIA regulations also do not provide such a right. See 12 C.F.R. 4.15(d)(1). Moreover, I am not aware of any legal precedent holding that a denial of a fee waiver is an appealable "adverse determination” pursuant to the FOLA or otherwise requiring any federal agency to consider an appeal of a fee waiver denial.  Nonetheless, the OCC, in its discretion, has considered your appeal. While you did not meet the legal standard in section 552(a)(4)(A)(iii) of the FOIA to justify the granting of a fee waiver in your initial FOIA request or in your February 11 correspondence, your correspondence of March 8 is more robust and sets forth with reasonable specificity the grounds to justify the OCC's granting of the fee waiver. Therefore, your request for a fee waiver with respect to FOLA request 2019-00104 is granted. The OCC's Disclosure Services office will remove the matter from "Hold" status and proceed to process the request.  Sincerely,  Rao  Bao Nguyen Principal Deputy Chief Counsel Office of the Comptroller of the Currency." Otting's OCC still says it will not consider public comments on "Business Combination" applications on which public comments have always in the past been considered, for example this one on a Long Island bank trying to take over Chinatown FSB, here. Now they write again, to pretend that it is not a new policy, and that the US Administrative Procedure Act does not apply to changes of agency policy, particularly to protect and censor for a new head of agency.

April 15, 2019

As Otting Targets CRA He Refused Inner City Press Chinatown Comment Now Rep Katie Porter Letter

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

NEW YORK CITY, April 10 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is the Office of the Comptroller of the Currency's (OCC's) Joseph Otting. He has gone beyond overall attempts to underling the CRA to refusing public comment on the type of business combination applications on which comment has in the past been accepted and considered. Photo here. In fact, his OCC's refusal comes on application for which a public comment period was specifically listed on the agency's website.

So Inner City Press / Fair Finance Watch wrote to the OCC, including Stephen Lybarger, as follows:  "Thanks for emailing this letter but I must say, Inner City Press / Fair Finance Watch it deeply concerned by, and hereby opposes it.  Heretofore our comment on just such Business Combination proposals HAVE been considered by the OCC. If under Comptroller Otting the OCC is changing its longtime practice it needs to do a notice and comment process under the APA. This is lawless.  In this case, the proposal we commented on specifically provides for a comment period: Please retract your letter and consider appropriately our comment, or explain in writing why.  Please confirm receipt of these requests."

  The OCC has not responded or reversed itself to consider the comments, even as Inner City Press pursues Chinatown FSB documents at agencies which don't problematize such requests for bogus FOIA fee waiver issues. Now Rep. Katie Porter has written to Otting, including "If the OCC fails to consider community group comments during a merger-approval process, that would directly contradict the law. 12 CFR 8 5.33 also states: “When the OCC evaluates an application for a business combination under the Community Reinvestment Act, the OCC also considers the performance of the applicant and the other depository institutions involved in the business combination in helping to meet the credit needs of the relevant communities, including low- and moderate-income neighborhoods, consistent with safe and sound banking practices." 2. How are your proposed changes to community group comment consideration during the  merger-approval process consistent with 12 CFR § 5.33?  ... See,David Dayen, "The Fake Public Comments Supporting A Bank Merger Are Coming From Inside the House," The Intercept (September 2018), here. 3. Do you intend to recuse yourself from the new rule-making, given the irregularities  confirmed in One West's CRA review process while you were CEO? If not, how will you engage in this rule-making without prejudice extending from your experience with the One West/CIT merger? Community groups submit their comments during the merger-approval process with the specific i Please respond to these inquiries in writing by April 15th." Watch this site.

April 8, 2019

After Fair Finance Watch Protest to Ameris Bank Takeover Of Fidelity Fed Has Questions

By Matthew R. Lee, Patreon

NEW YORK, April 4 – The bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, has applied to the Federal Reserve to buy Fidelity Southern Corporation and its Fidelity Bank, both in Atlanta. On March 2, Fair Finance Watch filed formal opposition with the Federal Reserve Board, whose chairman Jerome Powell has insisted that the Fed is not just a rubber stamper of all mergers, citing the gouging, Ameris' disparate mortgage lending record in Atlanta, Georgia and Florida, and the Community Reinvestment Act. See below. Now the Fed has asked Ameris questions, including: "5)    The Community Reinvestment Act performance evaluation for Ameris Bank as of October 2016 stated that Ameris Bank “demonstrated poor responsiveness in meeting the community development investment needs in the Atlanta MSA.”  Please discuss any subsequent efforts to improve this performance, and please discuss any community development investment plans for the combined bank." Why should a bank already demonstrably poor in Atlanta be allowed to buy another bank there? Without even an evidentiary hearing? The Fed's question letter also zeroes in on some of the inconsistencies that have characterized Ameris' recent interactions with regulator, for example asking: "1)    The Application indicates that immediately prior to the effective time of the merger of FSC with and into Applicant (“Merger”), FSC’s outstanding common stock will be converted into the right to receive 0.80 shares of Applicant’s common stock.  However, for question 10c of the Application, which requests a current and pro forma shareholder list if the proposed transaction will result in a change in ownership, Applicant answered “not applicable.”    a.    Please address this discrepancy.    b.    If yes, provide a current and, if different, pro forma list of Applicant’s shareholders that will hold a 5 percent or more ownership interest, identifying the percentage of voting interests and total equity of Applicant held by each shareholder or group of shareholders.   2)    The Application indicates the Merger will be funded through the issuance of approximately 22 million shares of Applicant’s common stock.  Please revise the response to question 10d of the Application to address this statement.    3)    The Application indicates Fidelity Bank has branches in states other than Applicant’s home state of Georgia.  Accordingly, please revise the response to question 21 of the Application." This is not the first time Ameris' applications to the Fed have contained falsehoods.  As Inner City Press previously exclusively reported it turned out, from Ameris' response, that its application was false when it said it would continue the CRA policies of Atlantic - see full response on Patreon, here, question 3. Inner City Press requested records under the Freedom of Information Act - a process on which the Fed is increasingly slow, perhaps taking its lead from Comptroller Joe Otting who is now trying to hinder even getting copies of merger applications from the OCC. We'll have more on this.

April 1, 2019

Wells Fargo Now Goes On Without Tim Sloan After Dropping CRA 2 Levels by OCC Whose Otting Apologized

By Matthew R. Lee

NEW YORK, March 28 – Seven months after Wells Fargo Bank's Community Reinvestment Act rating was dropped two levels to "Needs to Improve," barring it from acquisitions, the Office of the Comptroller of the Currency of Joseph Otting quietly said, in a footnote to a Bulletin issued on 12 October 2017, that "The OCC’s policy is not to lower a bank’s CRA composite or component rating by more than one rating level." See here, footnote 8. So when did this become the OCC's policy, after it dropped Wells by two levels? Call it a stealth sop to Wells Fargo - and seemingly a violation of the Administrative Procedures Act, one in what has become a series by Otting at the OCC. Now on 28 March 2018, Tim Sloan is abuptly out at Wells Fargo, leaving general counsel Allen Parker as interim CEO pending a search. Could Otting's obsequiousness be a try-out? Would communities be worse off with him as head of a bank, again, or as regulators of most of the largest banks? We'll have more on this. In July it emerged that over 800,000 people who took car loans from Wells were charged for needless auto insurance, pushing 274,000 Wells Fargo customers into delinquency and triggering nearly 25,000 wrongful vehicle repossessions. So much for the industry having cleaned itself up after the predatory lending meltdown. New York City announced it will not enter any new relationships with the bank, also suspending Wells Fargo's role as a senior book-running manager for NYC General Obligation and Transactional Finance Authority bond sales. A statement by Mayor Bill de Blasio and Controller Scott Stringer noted that "Currently, Wells Fargo holds contracts with the City to provide banking services, including to operate 'Lock Box' services that hold taxes and fees collected by the City. There is approximately $227 million of City dollars held in Wells Fargo accounts." Bu will they get involved in opposing Sterling National Bank, which Inner City Press and Fair Finance Watch have exposed as having "unreliable" CRA data, notwithstanding the OCC's scam "Satisfactory" rating on May 30? Click here. We'll have more on this.

March 25, 2019

Federal Reserve Board Is Already Rubber Stamping Mergers Now Anti CRA Stephen Moore Nominated

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

SOUTH BRONX, March 23 – Federal Reserve Board chairman Jay Powell told Congress he will run transparent reviews of mergers like BB&T - Suntrust, and announced two public hearings as if to prove it. But on February 27 while still not acting on Inner City Press' Freedom of Information Act request for withheld information, his Fed Board rubber stamped the application by WSFS to buy Beneficial and close at least 25 branches. Now the Fed portends to become even more of a rubber stamp, even more dismissive of the Community Reinvestment Act, now that Stephen Moore has been nominated. Beyond his article trashing the CRA, here, Moore has been outed for using false data such that even the Kansas City Star said they won't publish him any more. But he'll be in FRB merger approval orders? The Fed's WSFS order said, "A commenter objected to the proposal alleging, based on data reported under the Home Mortgage Disclosure Act (“HMDA”)25 for 2017, that WSFS Bank denied home purchase mortgage loans to African American and Latino applicants at significantly higher rates than to white applicants in the Wilmington, DelawareMaryland-New Jersey Metropolitan Division (“MD”) and the Salisbury, MarylandDelaware Metropolitan Statistical Area (“MSA”). The commenter also raised concerns regarding branch closures anticipated in connection with the proposed mergers." The comment, which the Fed seems not to want to name in order to try to deny legal standing, is Fair Finance Watch / Inner City Press.

March 18, 2019

As BB&T Tries Taking Over Suntrust Fed Sets Public Hearings After Brainard Quizzed on FOIA By Inner City Press

By Matthew R. Lee, FOIA docs

NEW YORK CITY, March 14 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, which would close a still undisclosed number of branches and extend BB&T disparate lending patterns, many linked it to deregulatory moves in Washington. Now two days after Federal Reserve Governor Lael Brainard was asked by Inner City Press about the Fed's lax review of previous mergers, including WSFS on which the Fed still hasn't ruled on the bank's withholding of information after rubber stamping the deal, the Fed has announced this: "The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on Thursday announced that they will jointly hold two public meetings on the proposed merger of BB&T Corporation, Winston-Salem, North Carolina, with SunTrust Banks, Inc., Atlanta, Georgia. As part of the proposal, BB&T would merge SunTrust Bank with and into its subsidiary state non-member bank, Branch Banking and Trust Company, Winston-Salem, North Carolina.  The purpose of the meetings is to collect information relating to the convenience and needs of the communities to be served, including a review of the insured depository institutions' performance under the Community Reinvestment Act. The agencies also will consider and collect information on other factors relevant to making a decision on the application, including the effects of the proposal on the stability of the U.S. banking or financial system, the financial and managerial resources and future prospects of the companies, and competition in the relevant markets.  The first public meeting will be held:  Thursday, April 25 at 8:30 a.m., EDT Charlotte Branch of the Federal Reserve Bank of Richmond 530 East Trade Street, Charlotte, North Carolina The second public meeting will be held:  Friday, May 3, at 8:30 a.m., EDT Federal Reserve Bank of Atlanta 1000 Peachtree Street N.E., Atlanta, Georgia. All persons wishing to testify at the public meeting in Charlotte should submit a written request no later than 5:00 p.m. EDT on Monday, April 15, 2019. A request to testify at the Charlotte public meeting may be sent by mail to: Matthew Martin, Vice President, Research Department, Microeconomics and Research Communications, Federal Reserve Bank of Richmond, 530 East Trade Street, Charlotte, North Carolina, 28202; by online form at: the Charlotte Public Meeting Request Form; by e-mail to: publicmeeting.charlotte@rich.frb.org; or by facsimile: 704-358-2300.  All persons wishing to testify at the public meeting in Atlanta should submit a written request no later than 5:00 p.m. EDT on Tuesday, April 23, 2019. A request to testify at the Atlanta public meeting may be sent by mail to: Karen Leone de Nie, Vice President Community and Economic Development, Federal Reserve Bank of Atlanta, 1000 Peachtree Street N.E., Atlanta, Georgia, 30309; by online form at: Atlanta Public Meeting Request Form; by e-mail to: atlfedcomdev@atl.frb.org." Game on. The deregulatory moves  include an assault on the Community Reinvestment Act, being led by Comptroller of the Currency Joseph Otting, who while at OneWest Bank led a false commenting process to push through a merger with CIT Group. (Otting is trying to change the OCC's practices on FOIA fee waivers and is even refusing to consider comments on some Business Combinations. But this BB&T proposal will go to the Fed whose Jerome Powell has vowed, credibly or not, to conduct a full review. And so consider this:  BB&T has been ordered to return $5.2 million to investors, according to the Securities and Exchange Commission, over charges it it acquired misled clients about the cost of advisory services.  The SEC said the firm that BB&T acquired with Susquehanna Bancshares, known then as Valley Forge Asset Management, misled about 1,200 clients into believing they were receiving full service brokerage services at a discount. We'll have more on this.

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