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 information.  CBS 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. See, in November 2021, Inner City Press' book "Belt and Roadkill," here

by Matthew R. Lee

SOUTH BRONX, July 24 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. After they applied late March 20,  Inner City Press submitted a second Freedom of Information Act request to the Office of the Comptroller of the Currency (and to the Federal Reserve).

On May 14 - still without providing FOIA documents - the OCC and Fed set a July 19 virtual public meeting.

On the eve of it, Capital One announced a vague and less than credible plan - they previously violated their ING Direct pledge - including this time $75 billion in largely subprime auto loans. Fair Finance Watch testified for three minutes.

On June 25 the OCC belatedly responded to Inner City Press' FOIA request - by withholding in full 185 pages. OCC FOIA production on DocumentCloud here. Inner City Press appealed.

  On July 24, the very day on which the OCC and Fed said they were closing the written comment period, the OCC upheld in full its FOIA denials, determination letter on Inner City Press' Document Cloud here. Inner City Press has requested an extension of the comment periods - the Fed hasn't even responded.

Meanwhile Capitol One lobbying continues, for example with a Pennsylvania state legislator extolling Capital One's  subprime, here.

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites.  It grew worse in the just-out 2023 data.

  Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be denied. But will it be? Watch this site. 

***

by Matthew R. Lee

SOUTH BRONX, July 19 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. After they applied late March 20,  Inner City Press submitted a second Freedom of Information Act request to the Office of the Comptroller of the Currency (and to the Federal Reserve).

On May 14 - still without providing FOIA documents - the OCC and Fed set a July 19 virtual public meeting.

On the eve of it, Capital One announced a vague and less than credible plan - they previously violated their ING Direct pledge - including this time $75 billion in largely subprime auto loans.

Fair Finance Watch testified, with Inner City Press on the FOIA:

This proposal is anticompetitive, and Capital One is making a mockery of the Community Reinvestment Act, with an absurdly small CRA assessment area and now, at the 11th hour, a cynical pledge that includes $75 billion in subprime, often predatory car lending. 

   How much of this last minute pledge would in fact be subprime? At what interest rates? The regulators should ask, today - and must extend the comment period.        You have and will hear from colleagues about the ongoing lending disparities. I want to focus in my three minutes on the lack of transparency, and the regulatory agencies' role in it.  

  The day the banks announced the proposed merger, Inner City Press submitted Freedom of Information Act requests to both the Federal Reserve and the Office of the Comptroller of the Currency.   

  The Fed, as has become a pattern, granted Inner City Press' FOIA request expedited treatment - and then did not provide any of the responsive documents, claiming it needed more time.    The OCC did at least respond to the FOIA request - but it withheld, in full, 193 out of 210 responsive pages.  

  From what was released, it shows three meetings with Capital One and the OCC in February and March, right before the start of the public comment period.  An OCC email says "the purpose of this meeting is to get everyone on the same page out of the gate" in response to an email from Capital One's lawyer. This is called regulatory capture. Can you say, What's in your wallet?     

 ...The Philadelphia National Bank case of the Supreme Court, unlike the Chevron deference relied on not yet overrule, stated that "a merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market, is so inherently likely to lessen competition substantially that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects." 374 U.S. 321 at 363.  

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, July 12 – The FDIC on July 12 imposed a fair lending condition on banks Inner City Press / Fair Finance Watch challenged last November:

"Fair Finance Watch has been reviewing Peoples Security Bank and Trust Company and FNCB Bank including their 2022 HMDA data not taken into account in any CRA exam and finds it troubling.  In Pennsylvania in 2022, Peoples Security Bank and Trust Company made 532 HMDA-reported loans to whites - and only FOUR to African Americans, while denying five applications.   FNCB Bank in Pennsylvania in 2022 made 247 HMDA-reported loans to whites - and only ONE to an African Americans, while denying three applications. A referral should be made to the DOJ for fair lending violations."

At that time, the FDIC wrote: "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch P.O. Box 20047 New York, New York 10017 Dear Mr. Lee: We received your e-mail dated November 10, 2023, regarding the application for Peoples Security Bank and Trust Company to merge with FNCB Bank. We reviewed your correspondence in accordance with the guidelines of 12 C.F.R. Section 303.2(c) and 303.2(l), and we consider it a protest... Any future comments should be sent to the applicant and to this office."

 The bank's outside counsel Troutman Pepper responded. But now in July 2024: "Dear Mr. Lee:  We are writing to inform you that the FDIC approved Peoples Security Bank and Trust  Company’s application to merge with FNCB Bank.  As part of the application review process, we  investigated the issues you raised in your e-mail dated November 10, 2023, and after conducting  our own analysis, the FDIC approved the application with conditions... In the course of reviewing public input on the application, the FDIC received an adverse  comment from a protester that was considered a CRA protest.  The CRA protest was critical of  Peoples Security Bank and Trust Company’s and FNCB Bank’s home mortgage lending efforts  to Black applicants in Pennsylvania and asserted that the lack of lending was discriminatory and  should be referred to the Department of Justice... After a careful review of the concerns, the FDIC decided to approve the application with the  following condition.  This condition will help ensure Peoples Security Bank and Trust Company  meets the home mortgage lending needs of the Black population in its assessment areas.  Within 30 days of consummation, adopt a Fair Lending Action Plan deemed acceptable by the FDIC to  address low levels of home mortgage applications from, and lending to, Black applicants and borrowers,  and in majority-minority areas, and provide the New York Regional Office with quarterly, written updates  on its progress under the plan."

Watch this site.

by Matthew R. Lee

SOUTH BRONX, July 5 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. After they applied late March 20,  Inner City Press submitted a second Freedom of Information Act request to the Office of the Comptroller of the Currency (and to the Federal Reserve).

On May 14 - still without providing FOIA documents - the OCC and Fed set a July 19 virtual public meeting.

On June 25 the OCC belatedly responded to Inner City Press' FOIA request - by withholding in full 185 pages. OCC FOIA production on DocumentCloud here. Inner City Press appealed.

Meanwhile Capitol One lobbying continues, for example with a Pennsylvania state legislator extolling Capital One's work with subprime, here. Has he seen their predatory car lending?

  The OCC put part of its application in its reading room. And it is an outrage, Capital One gaming the CRA system. For example "the Proposed Transaction would result in CONA establishing a new assessment area in  Delaware, which will include all census tracts in Sussex County and seven contiguous census  tracts in Kent County."

That for a nationwide card and subprime auto lender...

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites. 

  Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be dead in the water. Watch this site. 

***

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, June 21 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger. Among them was UMB - a bank whose lending Inner City Press and Fair Finance Watch had been scrutinizing, and now challenge.

  UMB is asking its regulators to allow it to expand, buying Denver-based Heartland. The application, Fair Finance Watch on June 21 formally told the Fed, should not be approved.   In 2022, the most recent year for which Federal data is available, UMB Bank, N.A. made over 2000 mortgage loans to whites, and only 117 loans to African Americans.

 For every denial to an African American, it made only 2.02 loans. But for whites, for every denial it made 3.45 loans. It should be referred to DOJ.    

There is litigation, there is also this, reported at the time of Silicon Valley Bank's failure: "UMB Bank, a regional bank headquartered in Kansas City, Missouri, and with branches across the Midwest, Southwest, and Western United States, has total assets of $38 billion and deposits totaling $32 billion, according to the FDIC. However, only 16% of deposits fall under the $250,000 FDIC insurance threshold, leaving 74.11% (equivalent to $28.36 billion) vulnerable to potential losses."   

Why would regulators even consider approving its expansion? On June 21, Fair Finance Watch filed a formal Community Reinvestment Act challenge to UMB's application to the Federal Reserve, adding state by state data:

  UMB Bank in 2022 in Missouri made 842 mortgage loans to whites, and only 76 loans to African Americans. Meanwhile it denied 41 applications from African Americans, and only 257 from whites.

    UMB Bank in Colorado - in which it seeks to expand - in 2022 made 378 mortgage loans to whites, and only 13 loans to African Americans. Meanwhile it denied six applications from African Americans, and only 107 from whites.

   UMB Bank in 2022 in Texas made 78 mortgage loans to whites, and only six loans to African Americans. Meanwhile it denied two applications from African Americans, and only 27 from whites.   

  These disparities cry out for a referral to DOJ, and public hearings on, and denial of, UMB's major expansion application.

Watch this site.

***

by Matthew R. Lee

SOUTH BRONX, June 12 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. While they applied late March 20, as of 1 pm on March 22 there was no notice of the Federal Reserve's or OCC's websites. Inner City Press submitted second FOIA requests to each agency. Public hearings should be held, not only on antitrust but also lending disparities at both companies. 

 On April 24 the Fed extended its comment period to May 31 - without (yet?) granting public hearings, nor providing the FOIA documents.

  Yet on June 12, this: "June 11 (Reuters) - Capital One Financial Corp: * CAPITAL ONE EXEC SAYS IN CONVERSATION WITH U.S. FEDERAL RESERVE AND OFFICE OF COMPTROLLER OF CURRENCY ON DISCOVER DEAL - INVESTOR CONFERENCE." In conversation? With no documents provided to the opposed public? Inner City Press / Fair Finance Watch registered for the public meeting, in opposition.

On May 14 - still without providing FOIA documents - the Fed and OCC set a July 19 virtual public meeting. And already, pro merger lobbying had begun, for example here by a group previously identified in a Trenton NJ political quid pro quo scandal.

 Then an SC Astroturf piece, then going green.

Next a former NH Commissioner, and a "former Democratic campaign strategist in Southern Nevada." Unreal.  We'll have more on this.

  The OCC first put its application in its reading room. And it is an outrage, Capital One gaming the CRA system. For example "the Proposed Transaction would result in CONA establishing a new assessment area in  Delaware, which will include all census tracts in Sussex County and seven contiguous census  tracts in Kent County."

That for a nationwide card and subprime auto lender...

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites. 

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, May 16 –  The Texas Bankers Association and ABA managed to finagle a Federal court ruling allowing its and the ABA's members' non-compliance with the Consumer Financial Protection Bureau's small business data collection rules, pending Supreme Court decision on CFPB's structure and funding. Order here.

Now on May 16, 2024, the Supreme Court has found the CFPB's structure to be Constitutional, by a 7-2 vote. "Congress shielded the Bureau from the influence of the political branches,” Justice Clarence Thomas wrote in the majority opinion for the court.   “Under the Appropriations Clause, an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes. The statute that provides the Bureau’s funding meets these requirements.”

by Matthew Russell Lee

SOUTH BRONX, May 8 – As US bank regulators talk about working to increase the fairness of the financial system, and closely scrutinizing mergers and the spread of bad practices, banks continue to assume they can combine.

  Before the Capital One - Discover proposal, and ABA lawsuit against the Community Reinvestment Act regulation, there was  FirstSun Capital Bancorp of Denver and Dallas saying it will merge with Homestreet, Inc. and Homestreet Bank of Seattle, Washington. 

  On February 23 Fair Finance Watch with Inner City Press on the FOIA filed a protest: "FirstSun's flagship Sunflower Bank, in Texas in 2022, made 694 mortgage loans to whites, and only 41 to African Americans. Meanwhile it denied 12 applications from African Americans, and only 34 from whites.   This is disparate, and more disparate both than the aggregate in Texas. 

    Nationwide in 2022, Sunflower Bank made 3059 mortgage loans to whites, and only 194 to African Americans. Meanwhile it denied 49 applications from African Americans, and only 259 from whites. 

   For the record, on managerial resources and otherwise, note that on September 27, 2023, FirstSun Capital Bancorp, the parent company of Sunflower Bank, Guardian Mortgage and First National 1870 (collectively, “Sunflower”), filed a notice of data breach with the Attorney General of California... an unauthorized party likely took advantage of the flaw in the MOVEit software and downloaded copies of files [containing] personally identifiable information."

  Now FirstSun is simply changing charters to try to get fast approval: FirstSun Capital Bancorp will switch to a Texas state charter rather than a national one as it continues to pursue its acquisition of HomeStreet, the bank announced last week: “In our discussions with the OCC in Washington, it became obvious that we would not gain near-term approval." What a scam.

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, May 1 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger. Among them was UMB - a bank whose lending Inner City Press and Fair Finance Watch had been scrutinizing. 

  Now UMB, paradoxically, is asking its regulators to allow it to expand, buying Denver-based Heartland. The application, Fair Finance Watch says, should not be approved.   In 2022, the most recent year for which Federal data is available, UMB Bank, N.A. made over 2000 mortgage loans to whites, and only 117 loans to African Americans.

 For every denial to an African American, it made only 2.02 loans. But for whites, for every denial it made 3.45 loans. It should be referred to DOJ.    

There is litigation, there is also this, reported at the time of Silicon Valley Bank's failure: "UMB Bank, a regional bank headquartered in Kansas City, Missouri, and with branches across the Midwest, Southwest, and Western United States, has total assets of $38 billion and deposits totaling $32 billion, according to the FDIC. However, only 16% of deposits fall under the $250,000 FDIC insurance threshold, leaving 74.11% (equivalent to $28.36 billion) vulnerable to potential losses."   

Why would regulators even consider approving its expansion? Watch this site.

***

by Matthew R. Lee

SOUTH BRONX, April 24 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. While they applied late March 20, as of 1 pm on March 22 there was no notice of the Federal Reserve's or OCC's websites. Inner City Press submitted second FOIA requests to each agency. Public hearings should be held, not only on antitrust but also lending disparities at both companies. 

 On April 24 the Fed extended its comment period to May 31 - without (yet?) granting public hearings, nor providing the FOIA documents.

On April 19  the Fed wrote to extended its time to respond to Inner City Press' February 19 FOIA to May 3

April 19, 2024

RE: Docket ID OCC–2022–0008 - FOIA

Acting Comptroller Hsu and others at the OCC:

    Inner City Press, as an active FOIA requester to the OCC, timely comments on your pending regulation to demand that the OCC rule on the propriety of all requests for confidential treatment during the comment period on an application - or automatically extend the comment period.

  Too often, applicant national bank over-request confidential treatment, but benefit from it due to the OCC's slow processing of FOIA requests. Case in point is Capital One / Discover - Inner City Press on February 19 submitted a request for communications between the OCC and the banks. Still none of those records as of April 19, as the comment period is set to close. (We expect it to be extended, but this is not the case on most applications).

  Nor even on the application has the OCC ruled on the propriety of the requests for confidential treatment. This must be addressed by the OCC.

   There is other FOIA problems at the OCC - as well as some polite staffers, we note - but we emphasize the above to ensure consideration and action.

  Expectantly,

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX, NY, April 11– When the US Department of Justice sued and immediately settled with Lakeland Bank for fair lending violations, it announced a proposed merger with Provident Bank.

As if to sweep it under the carpet.

And when Fair Finance Watch looked into it, it found that the DOJ settlement did not address in any way the banks' disparities in New York. So on December 1, the FDIC's comment deadline, it filed a protest, with Inner City Press on the FOIA.

Jump cut to March 15, 2023, when Provident's Deputy General Counsel filed a letter with the New York Fed, cc-ing Rodgin Cohen - only on New Jersey, nothing on the disparities in New York.

On January 18 Provident asked two Board questions - by withholding the entire answers. Inner City Press immediately FOIAed: "The entire response is withheld, about fair lending compliance, including public commitments that are unfulfilled. This cannot stand; the information must be provided before the Board acts in any way on the application (other than denial.)"

Jump cut to mid-February: while still not providing the withheld past answer, the Fed asked more questions. Letter here.

On February 27 Provident provided spin, including that "under the consent order that it entered into with the U.S. Department of Justice.  These obligations require Lakeland Bank to, among other things, establish a $12  million loan subsidy fund to increase credit for consumers applying for loans in  majority-Black and Hispanic census tracts in a five-county area in and around  Newark, New Jersey" - but nothing where other disparities. Letter here.

On April 11, 2024, the Fed hauled off and approved, noting Inner City Press / Fair Finance Watch "objected to the proposal, alleging that in 2021, Provident Bank and Lakeland Bank made no home loans to African American individuals in New York State.30 30  The data cited by the commenter corresponds to publicly available 2021 data by Provident Bank and Lakeland Bank under HMDA. Following consummation of the proposed transaction, the combined organization will add to its assessment area Bronx and Kings counties, each of which includes a significant number of majority-minority and LMI communities... The Board also has considered the DOJ Consent Order, including Lakeland Bank’s efforts towards meeting its obligations under the DOJ Consent Order, and that the DOJ Consent Order binds Provident without further action by the Board." We'll see.

Watch this site.

***

by Matthew Russell Lee

SOUTH BRONX, April 1 – As US bank regulators talk about working to increase the fairness of the financial system, and closely scrutinizing mergers and the spread of bad practices, banks continue to assume they can combine.

  Before the Capital One - Discover proposal, and ABA lawsuit against the Community Reinvestment Act regulation, there was  FirstSun Capital Bancorp of Denver and Dallas saying it will merge with Homestreet, Inc. and Homestreet Bank of Seattle, Washington. 

  On February 23, 2024 Fair Finance Watch with Inner City Press on the FOIA filed with the Federal Reserve: "FirstSun's flagship Sunflower Bank, in Texas in 2022, made 694 mortgage loans to whites, and only 41 to African Americans. Meanwhile it denied 12 applications from African Americans, and only 34 from whites.   This is disparate, and more disparate both than the aggregate in Texas. 

    Nationwide in 2022, Sunflower Bank made 3059 mortgage loans to whites, and only 194 to African Americans. Meanwhile it denied 49 applications from African Americans, and only 259 from whites. 

   For the record, on managerial resources and otherwise, note that on September 27, 2023, FirstSun Capital Bancorp, the parent company of Sunflower Bank, Guardian Mortgage and First National 1870 (collectively, “Sunflower”), filed a notice of data breach with the Attorney General of California... an unauthorized party likely took advantage of the flaw in the MOVEit software and downloaded copies of files [containing] personally identifiable information."

   HomeStreet, meanwhile, is politely said to have had a "tough" 2023.

More than a month later, FirstSun emailed Fair Finance Watch and Inner City Press a response, referring to, but not providing copies of, letters of support it says it has procured. Nor has the Federal Reserve forwarded these along, or put them online. We'll have more on this.

     FFW and Inner City Press have been deeply concerned about the rush by the Federal Reserve to rubber-stamp mergers by redliners, money launderers and predatory lenders. This has been killing the Community Reinvestment Act and so a timely request public hearings.

By Matthew Russell Lee, Patreon

FEDERAL COURT / S Bronx, March 29 – Whether or not the U.S. Community Reinvestment Act will be again enforced under this Administration and its regulators including under the incoming divided Congress is an open question.

   On November 25, 2022 Fair Finance Watch with Inner City Press on the FOIA filed comments with the Federal Deposit Insurance Corporation against the applications by Prosperity Bank in Texas. In April 2023, the FDIC imposed conditions on one - and in March 2024, on the other, Lone Star.

November 25, 2022