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.

May 18, 2015

   So now in the Senate, a proposal to move the definition of Systemically Important Financial Institution from $50 billion up to... $500 billion.

  The Federal Reserve Board has hit a new low on Freedom of Information Act compliance. On May 15, its Governor Jerome Powell, put in charge of FOIA appeals after joining the Fed from Deutsche Bank and the Carlyle Ground, rubber stamped by rote all of the Fed's FOIA withholdings, for example on CIT - OneWest. Previous Governor in that post have most often overturned parts of the underlying denial, but Powell upholds each and every withholding -- like a FISA court, some say, or a court in Egypt. Inner City Press predicted this back in 2011-2012, and noted it on Capital One. But it has gotten worse.

  When New York Fed president William Dudley read a prepared speech to the Bronx Bankers earlier this month, he had a lot of canned advice on how to help the borough. He didn't say what he would do to actually enforce the Community Reinvestment Act and resist regulatory capture by Citi, Chase and Goldman Sachs...

May 11, 2015

Fed Withholds OneWest Branch Closing, CIT Internet Deposit Info, ICP Appeals

By Matthew Russell Lee

NEW YORK, May 9 -- Federal bank regulators remain captured by large and becoming-large banks like the CIT Group, a Freedom of Information Act response to Inner City Press from the Federal Reserve this week shows.

  Like the Fed's previous FOIA response, exclusively published here, that showed its officials met CIT and OneWest before their proposed merger was announced, this time the Fed is withholding information on services and branches to be shuttered by OneWest.

  These include a low income branch at 390 W. Valley Parkway, Escondido, CA 92025 and another at 2245-B Ventura Blvd, Camarillo, CA 93010.

  For another branch to be shuttered, the address is entirely redacted, blacked out. Inner City Press has submitted an appeal under FOIA, also for information withheld about CIT Bank's Internet Deposit Data by County. How can the Community Reinvestment Act be enforced in this way? Even the names of the counties have been withheld.

  Now that the US House Oversight Committee, though spokesperson Melissa Subbotin Sillin, is asking for FOIA horror stories, the Federal Reserve and the other bank regulators -- and the US State Department, on delay -- should and will be looked at.

May 4, 2015

  Last week Inner City Press / Fair Finance Watch filed opposition to the proposed merger of Royal Bank of Canada and City National Bank, which focuses on the most affluent. Click here for that. Now it emerges that others have opposed the deal too, noting that a focus on the affluent is inconsistent with the CRA.

 On this deal, the Federal Reserve has hit a new low - Inner City Press' request under FOIA of April 11, it waited to acknowledge until the stated end of the comment period. More than a week later, still none of the requested documents have been provided. We'll have more on this.

April 27, 2015

CRA Protest to RBC - City National, FFW on Lending Disparities

By Matthew R. Lee

NEW YORK, April 18 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused City National Bank, is the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  This comes after the M&T - Hudson City merger stalled after similar filings by FFW. On Royal Bank of Canada / City National, the April 23 filing with the Federal Reserve says

City National Bank is known as a bank directed at the (most) affluent. RBC is that as well:

In the New York City MSA in 2013, for conventional home purchase loans, RBC made no loans to African Americans or Latinos. It made one loan to a white applicant (for $1.8 million) and six to “race not available” applicants, for a total of over $36 million.

RBC Bank (Georgia), in the Atlanta MSA in 2013 for conventional home purchase loans made one such loan to an African American, six to whites, and none to Hispanics. In the Raleigh NC MSA in 2013, RBC Bank (Georgia) made two loans to whites, none to African Americans or Latinos.

City National Bank, in the NYC MSA in 2013 for home purchase loans, made no loans to African American or Latino borrowers. It made 10 loans to whites - none denied -- and 35 to “race not available.” By income, there were 36 loans to upper income borrowers, and only one to the other income tranches.

City National Bank, in the Los Angeles MSA in 2013 for home purchase loans, made two loans each to African Americans and Latinos. It made fully 45 loans to whites.

City National Bank, in the Nashville MSA in 2013 for home purchase loans, made no loans to African American or Latino borrowers. It made one loan to a white borrower - none denied -- and six to “race not available.” FFW contests City National Bank's compliance with HMDA.

How is this consistent with the CRA? For the record, RBC previously bumbled in the USA with Centura and Alabama BanCorporation. Now it returns, only for the affluent. Hearings are necessary.

 Under the Freedom of Information Act, Inner City Press / FFW has submitted a

"a formal request under FOIA for the exhibits that Royal Bank of Canada has claimed are confidential and that the Federal Reserve has withheld from Inner City Press on its April 8 response to Inner City Press / Fair Finance Watch's April 4 request, including but not limited to the 'RBC Bank (Georgia), N.A. CRA Plan,' the list of subsidiaries, information pertaining to the U.S. structure of Royal Bank."

The withholding of this CRA plan - hearkening to the Federal Reserve rejected CIT's request to withhold such a plan, and extension of the comment period and holding of public hearing(s) - is outrageous; it must be released sufficiently before any closing of the comment period such that ICP can comment on it. We are therefore requesting all of the withheld exhibits (listed below)

AND all Federal Reserve communication with or about Royal Bank of Canada or City National since July 1, 2014.

Beyond the request for communications, including emails and text messages, these exhibits:

City National Corporation Subsidiaries; Information Pertaining to the U.S. Structure of Royal Bank; Integration Framework; Due Diligence Summary; Royal Bank of Canada Organizational Chart; RBC USA Holdco Corporation Organizational Charts; City National Corporation Organizational Chart; Pro Forma Financial and Related Information; Asset Quality Information; Risk Management Information; Royal Bank of Canada BSA/AML Compliance Program; Information pertaining to BSA/AML Integration; Interconnectedness Analysis; RBC Bank (Georgia), N.A. CRA Plan; Source of Funds; City National Corporation Dividend Information; Principal Information Information Pertaining to Item 3(2) and Item 12 of Form FR Y-3F

None of this information has been provided, even the CRA plan. The comment period must be extended and on the current record, the application must be denied.
 
  Inner City Press previously reported that filing by FFW with the Federal Reserve against M&T's application, that Hudson City in the New York City Metropolitan Statistical Area in 2011 made only five home purchase loans to African Americans, compared to hundreds to whites while denying the applications of African Americans 3.21 times more frequently than whites.

  That 2011 data was quoted by Bloomberg News earlier this month reporting that now the Department of Justice and Consumer Financial Protection Bureau are investigating Hudson City, putting the M&T deal, also challenged by NCRC and others, in doubt. Click here for that, here for the NJ Bergen Record, also citing Inner City Press / Fair Finance Watch.

April 20, 2015

After CRA Protest, Hudson City Probed, M&T Slowed, Updated Data Here from Fair Finance Watch

By Matthew Russell Lee, Exclusive

NEW YORK, April 18 -- Federal bank regulators remain captured by large and becoming-large banks like M&T, but less so relatively smaller institutions like M&T's target Hudson City Saving Bank.

  Inner City Press previously reported the filing by Fair Finance Watch with the Federal Reserve against the merger, that Hudson City in the New York City Metropolitan Statistical Area in 2011 made only five home purchase loans to African Americans, compared to hundreds to whites while denying the applications of African Americans 3.21 times more frequently than whites.

  That 2011 data was quoted by Bloomberg News last week, reporting that now the Department of Justice and Consumer Financial Protection Bureau are investigating Hudson City, putting the M&T deal in doubt. Click here for that, here for the NJ Bergen Record, also citing Inner City Press / Fair Finance Watch.

 But there's more, and its worse. FFW has just filed this comparison to 2013 with the Federal Reserve:

"Hudson City's record was even worse in 2013 than in the 2011 data cited above. In the NYC MSA for conventional home purchase loans, while Hudson City made (only) five such loans to African Americans in 2011, this fell to only FOUR such loans to African Americans in 2013, compared in 2013 to 427 such loans to whites: a more than one hundred to one ratio, totally out of step with the demographics and other lenders' records.

"For refinance loans in the NYC MSA, while Hudson City in 2011 made 8 such loans to African Americans in 2011, this fell to only SEVEN such loans to African Americans in 2013, compared in 2013 to 801 such loans to whites: again a more than one hundred to one ratio, totally out of step with the demographics and other lenders' records.

"This is presumptive discrimination and the reported DOJ and CFPB investigations are entirely appropriate and should be deferred to by the FRB. What does this say, as well, about M&T's due diligence and managerial resources?"

  Why has the Federal Reserve not dismissed M&T's application?

  The Office of the Comptroller of the Currency, part of the US Treasury, is scarcely better, releasing to Inner City Press on March 9 a redacted copy of Sterling's CRA presentation, here.

 Now on April 17 the Federal Reserve has asked Sterling questions about inconsistencies in its previous responses, and about Green Campus Partners. We'll have more on this.

  See here on the CIT Group and another belated Freedom of Information Act response to Inner City Press from the Federal Reserve on February 20. Uploaded exclusively here

April 13, 2015

Since 2012 Inner City Press / Fair Finance Watch has opposed M&T's proposal acquisition of Hudson City Bank. On (Good) Friday April 3, M&T announced it would not close by April 30. On April 6, Hudson City CEO Denis J. Salamone issued a statement that “given the unexpected notice of delay over a holiday weekend, the board of Hudson City needs more time to understand the nature and timing of the delay and its potential impact on the transaction before the board can determine its course of action.” Ouch...

April 6, 2015

Here are two comment periods: RBC - City National to April 23 to the New York Fed (Inner City Press / Fair Finance Watch has already commented), and Pac West - 1 Square to May 1 to the San Francisco Fed - watch this site for more on this and other applications...

March 30, 2015

Among community-based groups there's more and more talk about bank branch closing, how to find out about them in advance and try to stop them or reduce the negative impact.

Inner City Press / Fair Finance Watch notes that while the Office of the Comptroller of the Currency includes branch closures in its old-school “Weekly Bulletin” along with pending mergers, the Federal Reserve and FDIC do not include branch closures in their online lists of pending applications. This shield state banks, along with their branch closures, in secrecy. It is something we aim to address.

March 23, 2015

Here's something wrong - M&T Bank, when it submitted CRA answers to the Federal Reserve on March 4 by its Group Vice President Brian R. Yoshida did NOT send copies to Inner City Press / Fair Finance Watch, NCRC and the other commenters. This was only done more than a week later by M&T's outside counsel at Wachtell, Lipton who is Patricia A. Robinson, who used to work in the Fed's Legal Division. Something's wrong here...

March 16, 2015

Fed Belatedly Asks M&T About Discrimination, Sterling on CRA

By Matthew Russell Lee, Exclusive

NEW YORK, March 9 -- Federal bank regulators remain captured by large and becoming-large banks like M&T and even Sterling Bancorp, belated responses to Inner City Press under the Freedom of Information Act show.

  On M&T's pending application to acquire Hudson, on March 9 the Federal Reserve belatedly informed Inner City Press / Fair Finance Watch that it spoke by telephone with M&T on February 19, about a discrimination in lending lawsuit against it. Published by Inner City Press online here.

  The Office of the Comptroller of the Currency, part of the US Treasury, is scarcely better, releasing to Inner City Press on March 9 a redacted copy of Sterling's CRA presentation, here.

  See here on the CIT Group and another belated Freedom of Information Act response to Inner City Press from the Federal Reserve on February 20. Uploaded exclusively here, embedded below.

March 9, 2015

When Citigroup finally dumped its subprime CitiFinancial, renamed OneMain, who was it to? Why, the old predator American General, about which Inner City Press also received many complaints, since renamed Springleaf. Plus ca change...

March 2, 2015

  While there are other challenges going forward, here was Inner City Press / Fair Finance Watch testimony read into the record in Los Angeles by CRC (thanks) on February 26:

Inner City Press / Fair Finance Watch

Testimony in Opposition to CIT / OneWest by Inner City Press / Fair Finance Watch

February 26, 2015

Good afternoon, Presiding Officers and Panelists. This is the testimony of Inner City Press / Fair Finance Watch and its director Matthew Lee, which CRC has been kind enough to read into the record for us.

When this proposed merger was announced Inner City Press asked the Federal Reserve for information about it, due to concerns about CIT and OneWest's roots in the failed IndyMac.

Inner City Press raised to the Fed, and later the OCC, that just for example here in the Los Angeles MSA, OneWest had made 28 home purchase loans to whites and NONE to African Africans; it had made 12 home improvement loans to whites and NONE to African Americans.

There was and is also the question of the agreement the FDIC reached with IndyMac / OneWest, and whether wannabe SIFI CIT would assume it, as a windfall.

But things got worse. First, CIT tried to withhold even its Community Reinvestment Act plan. Inner City Press pursued this and more documents under the Freedom of Information Act.

The CRA Plan was released, but only last Friday did the Federal Reserve finally response to Inner City Press' August 26 FOIA request for CIT's and OneWest's communications with the Federal Reserve System since January 1, 2014.

While many, many pages have been withheld, and Inner City Press has appealed that under, what was released shows an insider process which, we believe, this single belated public meeting cannot cure.

While today John Thain of CIT testified to this public hearing, back on July 1, three full weeks before the merger was publicly announced, Thain met about it with senior Federal Reserve officials in Washington about it. OneWest's Joseph Otting was there too, and M&A lawyers from Sullivan & Cromwell and Wachtel Lipton.

Otting earlier this year solicited colleagues to oppose the holding of this public meeting and now, apparently, to testify at it.

In fact, there are documents inside the Fed as far back as April 24 -- three months before the merger was announced -- the Federal Reserve's Michael Lipman wrote to three others that, quote

Based on details from the most recent CIT April BOD meeting, there is a likelihood CIT may approach FRB in the near term to discuss an acquisition of OneWest NA (Private, ~$23B in assets ). Couple points [REDACTION]. I will keep you updated as discussions develop. [REDACTION].”

Inner City Press has appealed these and all other redactions.

Perhaps worst of all, there appear to be redactions to the Loss Loss Agreements -- all withheld information should be released, and the comment period extended.

Many of the documents provided are STILL being redacted and withheld, even seven months later as this single public hearing is taking place. Inner City Press asked that given the issues, additional public hearings be held, in New York where CIT is based, and elsewhere, where other members of the National Community Reinvestment Coalition, of which Inner City Press, CRC and others here are members, have requested them.

    This was apparently denied. Freedom of Information Act appeals are pending, and more comments will be forthcoming.

This insider merger should not be approved.


February 23, 2015

CIT's Thain Met Fed 3 Weeks Before OneWest Merger, FOIA Shows, Redactions

By Matthew Russell Lee, Exclusive

NEW YORK, February 20 -- Federal bank regulators remain captured by large and becoming-large banks like the CIT Group, a belated Freedom of Information Act response to Inner City Press from the Federal Reserve on February 20 shows. Uploaded exclusively here, embedded below.

   Back on August 26, 2014, Inner City Press submitted a FOIA request to the Federal Reserve Board for CIT's application to acquire OneWest and for the Federal Reserve's communications with or about the companies since January 1, 2014.

  After Inner City Press and Fair Finance Watch repeatedly complained about the withholding even of CIT's Community Reinvestment Act plan, and after the Fed and the Office of the Comptroller of the Currency had agreed to ICP's and others' request for a public hearing, now scheduled for February 26, only on February 20 -- seven months after the request -- did the Fed provide the responsive documents, over one thousands pages.

  Many of the released pages are redacted in full, others have redacts to for example sentences referring to documents about CIT's [REDACTED]. Inner City Press has submitted a Freedom of Information Act appeal and request that the comment period be extended.

  But even as released, and exclusively uploaded today here, the document show the degree of insider treatment CIT, its CEO John Thain and its lawyers including Rodgin Cohen of Sullivan & Cromwell are given by the Federal Reserve.

   While the proposed merger was only announced to the public on July 22, 2014, it appears in Federal Reserve correspondence as far back at April 24, 2014.

  On that day, Michael Lipman of the Federal Reserve Board's Banking Supervision and Regulation (BS&R) department wrote to three others that “Based on details from the most recent CIT April BOD meeting, there is a likelihood CIT may approach FRB in the near term to discuss an acquisition of OneWest NA (Private, ~$23B in assets ). Couple points [REDACTION]. I will keep you updated as discussions develop. [REDACTION].” Page 1 of ICP upload; appealed.

   Then in June, Rodgin Cohen of Sullivan & Cromwell and CIT's John Thain arranged to meet with the Federal Reserve, to some it appears to receive a form of pre-approval of the proposal.

   On June 24 senior Fed staff were asked to hold time to meet with Rodgin Cohen. On June 25, Lipman wrote again:

“CIT is meeting with FRBNY (John Ricketti and others) next Monday at 11am to discuss a potentially large acquisition. CIT has yet to send a discussion deck but will have more details later this week (OneWest continues to be the assumed target: $22B out of CA). John Thain’s secretary has bee guided to me to help set up a meeting in DC and I am expecting to hear from her by Friday. That said, it is also possible that they may reach out to one of you; CPC Cheatham is under the impression they have a different contact in DC as well (he is not sure who).” Page 6 of ICP upload.

  Later that day it was said that “the meeting with be in Scott's office so space will be limited.” Scott is Scott Alvarez, the Fed's longtime general counsel.

  On June 30, the Fed's Richard Naylor wrote to Lipman, “ I wouldn’t worry about any briefing material for Scott. Most likely Rodgin will do all the talking...”

   Scott Alvarez's self-described Gate-keeper told Lipman who would come: “The Chairman and CEO of CIT and 6 other guests; 3 from One West; 1 from Wachtell, Lipton, Rosen & Katz and 2 from Sullivan and Cromwell. Total of 13 outsiders.” Page 163 of ICP upload.

    These “outsiders” sound like insiders.

Exclusive: CIT's Thain Met Fed Staff 3 Weeks Before OneWest Merger, FOIA Response Shows, Loan Loss Redactio... by Matthew Russell Lee


  The next day the attendees were described:

Readout of Meeting on Proposed Merger between CIT and OneWest Tue 7/1/2014 12p-1p, B-4001

Outside Attenders: ~13

Executives from CIT (~7-8) included CEO John Thain, formerly CEO of Merrill Lynch

Executives from OneWest (~3) included CEO

Lawyers (~2-3) included Rodgin Cohen (Sullivan Cromwell) and a Wachtell Lipton lawyer

Board Attenders: ~10-12

  So the “outsiders” from Wall Street had more attendees that the Fed, even insider the Fed.

    The Fed's Alison Thro put it in context: “Rodgin is coming in to preview the proposed acquisition because it will be the first transaction to create a more than $50 billion institution since Dodd-Frank was enacted.”

  Also on June 30, the Fed's Elizabeth Kiser wrote to Fed economist Jacob Gramlich, “I dug a bit and found some materials on CIT’s [REDACTED].” There follow more than 100 pages of redacted material. Page 25 to 149 of ICP upload; appealed.

   By July 9, still before any public announcement by CIT, the project had been code-named Carbon / Oxygen and the Fed was reviewing (and now apparently redacting) the OneWest / Indymac / FDIC Loan Loss Agreements. These will be discussed at the February 26 public hearing, and beyond.

  Once they applied for approval and groups like Inner City Press / Fair Finance Watch, NCRC, CRC and others submitted comments in opposition, the Fed was required to follow its rules against ex parte communications.

  But the extensive communications that took place before then were withheld for seven months, and some are still being withheld.  Today, Inner City Press / Fair Finance Watch exclusively uploads these documents, in preparation for the public hearing, and beyond. Watch this site.

February 16, 2015

Amid the reporting on HSBC's money laundering, too little has been said that at the same time, HSBC was buying and running predatory lender Household Finance / HFC. Abusing consumers is apparently not as newsy -- but it is related.

February 9, 2015

With CIT OneWest Merger Under Fire, Hearing Feb 26 by Fed & OCC

By Matthew Russell Lee

UNITED NATIONS, February 6 -- The US government's ongoing corporate bailout following the 2008 meltdown triggered by predatory lending continues to reverberate in one of the largest proposed mergers of 2014 now into 2015.
 
  Now on February 6, a public hearing has been announced:

"The Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) on Friday announced a joint public meeting on the proposal for CIT Group, Inc., Livingston, New Jersey, to acquire IMB Holdco and its subsidiary, OneWest Bank, National
Association, both of Pasadena, California. The proposal also includes the merger of CIT Bank into OneWest Bank.

"The purpose of the meeting 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 in 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 banks involved in the proposal, and competition in the relevant markets.

The public meeting will be held at the Los Angeles Branch of the Federal Reserve Bank of San Francisco, 950 South Grand Avenue, Los Angeles, California, on Thursday, February 26, 2015, beginning at 8:00 a.m. PST."

February 2, 2015

In New York fair lending news, the State AG has settled with Five Star, for “two new Rochester-area branch offices in neighborhoods with a minority population of at least 30 percent. Five Star also will create a special financing program that will provide $500,000 in discounts or subsidies on loans to residents of majority-minority neighborhoods in the Rochester metro area, as well as a marketing program that will commit $250,000 to advertising aimed at minority communities. Other elements of the agreement call for Five Star to pay $150,000 in costs to the state, provide fair-lending training to employees, and submit to reporting and monitoring for a three-year period.”

The case against Evans Bancorp continues...

January 26, 2015

Ghoulish: OneWest, seeking to be bought by CIT, has in a response to the Federal Reserve sent to Inner City Press admitted that on its reverse mortgages, when the borrower dies and if his or her spouse was not a co-borrower, they get evicted. OneWest is blaming this on HUD. Combined with OneWest's CEO's pitch to Wall Street cronies to oppose any public hearings - now public hearings should absolutely be held. We'll have more on this.

January 19, 2015

This week we note that Antonio Weiss' nomination requiring confirmation has been withdrawn. When he was nominated in November, @InnerCityPress questioned it, here: Fox, Henhouse. The withdrawal shows that, belatedly, there's some questioning of just moving people from Wall Street (at Lazard, he was head of mergers) into the regulatory agencies. That Teasury Secretary Jack Lew was at Citigroup, seems nothing can be done about that for now.

But while his nomination requiring confirmation has been withdrawn, Weiss is still in line to become a senior adviser to Lew. How is that OK? We'll have more on this.

January 12, 2015

With CIT Merger Under Fire, OneWest Asks Wall Street to Lobby Yellen

By Matthew Russell Lee

UNITED NATIONS, January 10 -- The US government's ongoing corporate bailout following the 2008 meltdown triggered by predatory lending continues to reverberate in one of the largest proposed mergers of 2014 now into 2015.

  On December 22, pressing for approval of its application to acquire OneWest, CIT told the Federal Reserve, "CITB and OWB are not yet able to provide specific details about the expanded Community Reinvestment Act portfolio because this will be based, in part, on input from CITBNA’s to-be-formed Community Development Advisory Board following the closing of the Transaction."

  That's basically saying, approve our merger (on which the Fed is required to consider CRA), and THEN we'll tell you about CRA.

 Now it gets worse. Here is an email that OneWest CEO Joseph Otting sent to Wall Street and other financiers, to lobby the Fed, h/t CRC:

From: Otting, Joseph M [at] owb.com
Sent: Wednesday, January 07, 2015 5:00 PM
Cc: Haas, Alesia Jeanne; Tran, Cindy; Kim, Glenn
Subject: Support For OneWest Bank
 
Dear Friends,
 
We were excited to announce on July 21, 2014, that IMB HoldCo LLC, the parent company of OneWest Bank entered into a merger agreement with CIT Group Inc. As part of the applications for regulatory approval of the transaction, our regulators are interested in the perspectives of the public. We are writing you to seek your support of the Bank and pending merger. This merger, if approved, would create the largest bank headquartered in Southern California with a full suite of banking products and services, which will allow us to better serve our customers. We would retain and grow jobs and are committed to continuing and expanding our efforts to serve the economic and development needs of our community. I would like to ask you to take a moment to click on the link below and submit a letter of support adding any of your own words or thoughts.
 
Please submit your letter by clicking here, or by visiting our website at www.OneWestBank.com/merger-support (if the link isn't clickable or part of the link is cut off, please copy and paste the entire URL into your browser's address bar and press Enter)
 
Thank you for your support.  Best wishes for a successful 2015 and please call on me if I can ever be of assistance.
 
Joseph M. Otting
President and CEO
OneWest Bank N.A.
888 East Walnut Street
Pasadena, CA 91101

  Now Inner City Press / Fair Finance Watch, along it's sure with the California Reinvestment Coalition, has submitted this to the Fed demanding that public hearing in fact be held, after what an independent bank consultant told Bloomberg News is "unusual" outreach to Wall Street contacts by OneWest.  What will the Fed do?

* * *

Tellingly, when lawyers leave the Federal Reserve's Legal Division, many go to white shoe law firms that submit bank merger applications to the same people they until recently worked with or supervised.

  Inner City Press, Bronx-based Fair Finance Watch and NCRC have repeatedly raised this to the Fed, without meaningful response.

January 5, 2015

How can it be that the Office of the Comptroller of the Currency, even after the first of the year, has its most recent “Weekly Bulletin” of applications pending dated December 13, even though the comment periods run 30 days or less? Do they want to receive comments?

December 29, 2014

  The Federal Home Loan Bank of Des Moines on December 22 announced, with the and the Federal Home Loan Bank of Seattle that "the Federal Housing Finance Agency (FHFA) has approved their merger application submitted on October 31, 2014, subject to satisfaction of specific closing conditions set forth in the FHFA approval letter, including the receipt of approvals by members of both Banks. Details are included in the Banks’ related Form 8-K filings with the Securities and Exchange Commission. “This is a critical milestone in the merger approval process,” said FHLB Des Moines President and CEO Dick Swanson. “We appreciate the care and attention the FHFA has shown, not only in its review of our merger application, but throughout this entire process" -

 Care including ignoring comments from the public. We'll have more on this.

December 22, 2014

CIT Says Don't Worry About Loss Shares

By Matthew Russell Lee

UNITED NATIONS, December 18 -- The US government's ongoing corporate bailout following the 2008 meltdown triggered by predatory lending continues to reverberate in one of the largest proposed mergers of 2014.

 On December 18 the CIT Group submitted to the Federal Reserve statements from the FDIC, in essence not to worry about the Loss Share Agreements OneWest has won from the FDIC:

"OWB acquired assets from three failed banks — IndyMac Federal Bank, FSB ('IMFB'), First Federal Bank of California, and La Jolla Bank, FSB (the 'Failed Banks'). The FDIC entered into Shared-Loss Agreements with OWB in these acquisitions with respect to certain of the acquired assets."

  Now the regulators say, don't worry as CIT seeks to take these loss-shares over, although their value will not for now be disclosed:

The FDIC's Division of Resolutions and Receiverships does not release shared-loss payment information on individual acquirers or assets because those records often contain material, non-public information, and their release could harm the negotiating posture of the acquirer with respect to a particular borrower or asset, thereby potentially increasing the amount of a covered loss to the FDIC.”

  This is called stonewalling, or a cover-up. We'll have more on this.

December 15, 2014

With FOIA Reforms Blocked by Bank Lobbyists, Silence by NYT, Reuters

By Matthew Russell Lee

UNITED NATIONS, December 10 -- With the window closing on a bill to improve the US Freedom of Information Act, after outgoing Democratic Senator from West Virginia Jay Rockefeller put a block on the bill, S. 2520 (statement here), which he then removed, now bank lobbyists are in the way. 

   And STILL there's been little coverage by media like the New York Times and Reuters.

 Here is the Senate report, providing multiple assurances to banks on FOIA Exemption 8:

"Extreme care should be taken with respect to disclosure under Exemption 8 which protects matters that are '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.' [FN 20: 5 U.S.C. § 552(b)(8)]

  Here is the official summary of the FOIA Improvement Act of 2014:

FOIA Improvement Act of 2014 - Amends the Freedom of Information Act (FOIA) to:

(1) require federal agencies to make agency records that can be disclosed under such Act available for public inspection in an electronic format,

(2) limit the authority of an agency to charge a fee if the agency misses a deadline for complying with a FOIA request,

(3) establish a presumption in favor of disclosure and prohibit the application of exemptions from FOIA based on technicalities,

(4) expand the authority and duties of the Chief FOIA Officer of each agency for promoting compliance with the FOIA disclosure requirements, and

(5) establish a Chief FOIA Officers Council to develop recommendations for increasing compliance with FOIA
requirements. Requires the head of each federal agency to:

(1) review agency regulations and issue regulations for the disclosure of records in accordance with the amendments to FOIA made by this Act, and

(2) include in such regulations procedures for engaging in dispute resolution through the FOIA Public Liaison and the Office of Government Information Services. Expands the program for the efficient management of federal agency records to require agency heads to establish procedures for:

(1) identifying records of general interest or use to the public that are appropriate for public disclosure, and

(2) posting such records in a publicly-accessible electronic format. Prohibits the authorization of additional funds to carry out the requirements of this Act.

 Now, even after Senator Rockefeller under pressure removed his block and then the House is lobbied not to take it up, where is the coverage, for example in the New York Times and Reuters? 

  Back in July, US Voice of America as propaganda was belatedly covered by the Times, but ignoring the role of VOA and its Broadcasting Board of Governors as censors, trying for example to get the investigative Press thrown out of the United Nations (where it and the Free UN Coalition for the Access are pushing for a FOIA for the UN. At the UN, Reuters is in the business of censoring information, such as its "for the record" complaint to the UN trying to get the investigative Press thrown out, via ChillingEffects.org, here.)

December 8, 2014

When the Economic Growth and Regulatory Paperwork Reduction Act hearing was held in Los Angeles in December 2, the Office of the Comptroller of the Currency took a unique approach -- its Tom Curry tried to tell the public commenters what they could comment on. When the CIT - OneWest merger, which the OCC “erroneously” listed as approved then corrected, was brought up, Curry said that should not be a topic of testimony. Why not? We'll have more on this.

December 1, 2014

After regulatory laxity led to a predatory-lending triggered global financial meltdown, what's the move in 2015? Deregulation. It starts this week in Los Angeles, a hearing under the Economic Growth and Regulatory Paperwork Reduction Act of 1996.

It moves on in 2015 to Dallas on February 4, Boston on May 4, Chicago in October (at a date to be determined), and Washington, D.C. on December 2.

We note: anyone can comment, during the comment period(s) http://egrpra.ffiec.gov/submit-comment/submit-comment-index.html

We'll have more on this.

Update: from the OCC: THESE APPLICATIONS APPEARED INCORRECTLY IN A PRIOR WEEKLY BULLETIN

Details APPROVED 11/3/2014 BUSINESS COMBINATIONS 2014-WECOMBINATION-

139872 ONEWEST BANK, N.A. CIT BANK 2180 SOUTH 1300 EAST SUITE 250 SALT LAKE CITY UT SALT LAKE

Whatever...

November 24, 2014

  After our report last week, below, asking "How low at the Office of the Comptroller of the Currency go? On the application by CIT to acquire OneWest Bank, with issues of abuse of the bailout and evasion of CRA raised not only by Fair Finance Watch but also groups across California and NCRC in DC, the OCC quietly approved the application on November 3, providing notice only in its archaic 'Weekly Bulletin.' We'll have more on this," the OCC has responded:

"Matthew, I understand that you identified this entry, below, on the OCC’s Weekly Bulletin. I wanted to let you know that this entry was in error and that this case has NOT been decided. There will be a correction in the next Weekly Bulletin."

 We'll keep any eye out of that - the Bulletin for the week ending November 15 has an approval for Webster - JPM Chase. Does that one stand? Was "send" hit prematurely? Watch this site.

November 17, 2014

How low at the Office of the Comptroller of the Currency go? On the application by CIT to acquire OneWest Bank, with issues of abuse of the bailout and evasion of CRA raised not only by Fair Finance Watch but also groups across California and NCRC in DC, the OCC quietly approved the application on November 3, providing notice only in its archaic “Weekly Bulletin.” We'll have more on this.

November 10, 2014

Submitted on the CRA Q&A:

RE: Proposed Changes to the Interagency Q&A Regarding Community Reinvestment

Fair Finance Watch is writing to respond to the request for comments on the proposed changes to the “Interagency Questions and Answers Regarding Community Reinvestment.” We focus this timely comment on urging the agencies to reconsider the suggestions regarding alternative service delivery methods.

The notice states that “The Agencies propose deleting language that states 'performance standards place primary emphasis on full service branches' and further deleting the statement that provides that alternative systems are considered 'only to the extent' that they are effective alternatives in providing needed services to low- and moderate-income geographies and individuals.”

In many low and moderate income neighborhoods, particularly communities of color, bank branches remain need and too-few. Whereas mergers and acquisitions result in numerous branch closings, the Agencies most often decline to make applicants public disclose which branches they would close. Now the Agencies propose to stop place “primary focus on full service branches.” We oppose this.

For the record, US Bank closed branches; First Niagara is closing 17 branches, Citibank is closing branches: see final section of http://www.occ.gov/topics/licensing/corporate-activities-weekly-bulletin/wb-10122014-10182014.pdf

November 3, 2014

Now CIT says, “In the four comment letters submitted by Matthew Lee/Inner City Press/Fair Finance Watch, dated September 6, 2014, October 9, 2014, October 11, 2014, and October 22, 2014, Mr. Lee, relying on HMDA data, notes that, in 2012, OWB did not originate any single family mortgage purchase loans or home improvement loans to African Americans in the Los Angeles-Long Beach-Glendale MD.” CIT does not dispute that fact. Instead, it submits “letters of support” from, among others, the Los Angeles Police Department, and the Boys & Girls Clubs of Santa Monica and Pasadena, each paid $75,000.

October 27, 2014

So, "First Niagara Financial Group announced it will close 17 branches and two off-premise drive-through locations across its four-state footprint early next year." This is after they were allowed to buy a slew of HSBC branches - this is how it works, or doesn't...

October 20, 2014

After CIT Is Forced To Release CRA Plan, ICP Slams It & "Clawback" Redactions

By Matthew Russell Lee

UNITED NATIONS, October 18 -- The secret recordings of then Federal Reserve examiner Carmen Segarra about Goldman Sachs and regulatory capture have given rise to calls for oversight hearings by at least two US Senators, and to spin from the Federal Reserve Bank of New York.

  On October 10, Inner City Press was sent heavily redacted copies of two letters from the CIT Group concerning its proposed acquisition of OneWest to the Federal Reserve Bank of New York, supposedly in compliance with the Freedom of Information Act - now uploaded to Scribd here and here.

   On October 18, Inner City Press & Fair Finance Watch challenged these redactions under FOIA, and submitted  comments on CIT's mockery of the Community Reinvestment Act to both the Federal Reserve and the Office of the Comptroller of the Currency.

  CIT sought to withhold even its CRA plan. Inner City Press raised the issue to Fed Chair Yellen in Washington - and on October 15, the Federal Reserve called Inner City Press and left a voice mail to say its request for extension of the comment period, because of the incorrectly withheld CIT documents, has been granted until October 22.

   While appreciating the Fed's comment period extension, the context and public policy questions recently raised must be noted.

  For now, on October 18 Inner City Press & Fair Finance Watch submitted a fourth timely comment to the Fed, critiquing the belatedly released CRA Plan, and demanding release of still - withheld information:

   The CIT CRA Plan which CIT improperly withheld states, in Section III, that “the Bank has lending and support operations primarily located in Florida, New York and New Jersey” -- then states its CRA Program is in Salt Lake City, Utah and “the western United States.”

  This is makes a mockery of CRA, explicitly separating the bank's lending operations from its “CRA” operations.

  In Section IV, CIT makes claims about outreach and “public participation” in its CRA Plan - but in outreach and participation excluded the communities in which CIT has its lending operations (FLA, NY and NJ) and from which, on information and belief, it collects insured deposits.  

  This is makes a mockery of CRA, explicitly separating the bank's deposit taking from its “CRA” operations and outreach. See limited list of contacts in Appendix C, and proof of publication in (only) the Salt Lake Tribute and Deseret News.

  Even in its artificial limited assessment area, CIT's “New CRA Assets” are less than 1% of its Assets.

  While still improper, the above provide a motive for CIT's attempt to withhold its CRA Plan from the public...

  As to CIT's October 8 letter, ICP has already timely commented “there is also the question of the agreement the FDIC reached with IndyMac / OneWest, and whether wannabe SIFI CIT would assume it, as a windfall. These are important questions militating for both the required extension of the comment period, and for public hearings.”
 
  In the October 8 letter, CIT begins a sentence on page 3 “Clawback provisions exist for the First Fed and La Jolla portfolios [REDACTED.]” CIT also redacts, on page 6, information related to the OnWest / IndyMac Consent Order; HAMP (Page 7); deposits collected over the Internet (Page 8); Lending (Page 9); Governance and Risk Management (page 10-12); and Resolution Plan (Page 12). CIT also heavily redacts what it calls “confidential questions” (pages 14-16), and exhibits. This information must be released, and the comment period extended.  In an abundance of caution, ICP has submitted a FOIA request to this effect.

October 13, 2014

As Valley National Bank Redlines, OCC Gets Vague Bronx Commitment, Rubber Stamps

By Matthew R. Lee

SOUTH BRONX, NY -- While the US Federal Reserve is subject to high profile accusations of being "captured" by those it regulates in the wake of staffer Carmen Segarra's leaking of Goldman Sachs related audio, the Office of the Comptroller of the Currency, by one measure, is even more captured.

   Since May Inner City Press and others have commented to the OCC about Valley National Bank's proposed acquisition of 1st United Bank in Florida. Valley National in New York City has no branches above 88th Street in Manhattan and none in the Bronx. It is old-school redlining, in its mortgage lending as well.

  After denying Inner City Press access to information responsive to its Freedom of Information Act requests, now the OCC has approved Valley National's application, saying as part of a condition that Valley National will do better in the Bronx, then admitting in a footnote that the bank provided no detail.

  The OCC's Conditional Approval says Valley National "committed to hiring a dedicated lending team to develop
commercial loans in the Bronx, New York (Bronx). Pursuant to this commitment, Valley National represented that it has hired two additional lending officers."

  But then in a footnote, the OCC says, "Valley National did not provide additional detail related to the work of the new dedicated lending team in the Bronx."

  Unlike the Federal Reserve, the OCC says it does not consider if there is any public benefit to mergers. The OCC says:

"the commenters refer to the need for the merger to create a "public benefit." Under 12 CFR 225.24(a)(2)(iii), which applies to proposals submitted to the Board of Governors ofthe Federal Reserve System by bank holding companies seeking to engage in nonbanking activities, the holding company is required to provide a "statement of the public benefits that can reasonably be expected to result from the proposal." In reviewing a financial institution's application to merge with another financial institution, in this instance the application to merge 1st United with and into Valley National, the OCC considers the "convenience and needs of the community to be served" as required under 12 U.S.C. § 1828(c)(5)."

  The OCC gives weight to it own Community Reinvestment Act exams, but consider its record, in data compiled by NCRC:

In the first eight months of 2014, the OCC conducted 266 CRA exams and did not award a single national bank a rate of substantial non-compliance or even "Needs to Improve." The FDIC and the Federal Reserve both awarded grades in each of these categories, albeit the Fed only one of each.

  Perhaps understandably, the OCC's Valley National Conditional Approval says, at footnote 4, "Some of the commenters' concerns were directed at the OCC's CRA performance evaluation process and, as such, are not addressed in this letter."

  So when will these concerns be addressed?

October 6, 2014

Back on August 26, Inner City Press / Fair Finance Watch began challenging the proposed acquisition of OneWest (that's IndyMac) by CIT. Now, the Office of the Comptroller of the Currency has its own comment period, through October 17, and the Federal Reserve's comment period has been extended from September 24 to October 10.

The Fed has asked CIT a series of questions, including “discuss CIT Group's plans to manage OneWest Bank's mortgage servicing assets and nontraditional mortgage loan portfolio, including CIT Group's plans to ensure compliance with relevant federal and state regulations.

As provided to Inner City Press so far, the application withholds the “CRA Plans” of both banks, while making claims about these plans:

Since the 2013 performance evaluation, CITB has implemented its CRA Plan covering 2013-2017, which is included in Confidential Exhibit 9;”

OWB has a strong CRA compliance program and has developed a CRA plan, included in Confidential Exhibit 9;” and

CITBNA will create and operate under a new CRA plan, which it will develop subject to regulatory review.”

This is a mis-reading, even a perversion of the Community Reinvestment Act, that these two documents and the projected third one can be withheld or subject only to “regulatory” review, and not public review. The documents, timely requested, must be released and the comment period must be extended.

For now, consider that OneWest in the Los Angeles MSA in 2012 made 28 home purchase loans to whites and NONE to African Africans; it made 12 home improvement loans to whites and NONE to African Americans.

September 29, 2014

As US Releases 2013 Mortgage Data, Disparities at Citi & Chase, Protests of CIT

By Matthew R. Lee

UNITED NATIONS, September 23 -- This week, after a UN report slammed the US for mortgage discrimation and with the UN General Assembly meeting in New York, the Federal Reserve has released the official 2013 Home Mortgage Disclosure Act data.

   Inner City Press has reviewed the data, finding for example that in the New York City Metropolitan Statistical Area in 2013 JPMorgan Chase made 12 conventional home purchase loans to whites to every loan to an African American borrower.

  2013 is the tenth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

  Back in April releasing the first study of the then-unofficial 2013 data, Inner City Press / Fair Finance Watch found that  Chase was more disparate to Latinos then whites, confined them to higher-cost loans above the rate spread 1.81 times more frequently than whites in 2013, versus a 1.64 disparate for African Americans. Citi had a higher denial rate for Latinos (17.3%) than for African American (17.1%).

 Inner City Press and Bronx-based Fair Finance Watch also found that Wells Fargo confined African Americans to higher-cost loans above this rate spread 2.01 times more frequently than whites in 2013  Bank of America also had a 2.01 disparity between African Americans and whites; Citi was 1.83 and Chase 1.64.

  Looking at the official data on an aggregate basis, NCRC found that "reliance on government-backed Federal Housing Administration (FHA) lending for home purchase lending was reduced; the share of FHA home purchase lending declined from 31 percent in 2012 to 24 percent in 2013."

  This comes after the UN Committee on the Elimination of Racial Discrimination recommended

Undertaking prompt, independent and thorough investigation into all cases of discriminatory practices by private actors, including in relation to discriminatory mortgage lending practices, steering, and redlining; holding those responsible to account; and providing effective remedies, including appropriate compensation, guarantees of non-repetition and changes in relevant laws and practices.

  Private actors means banks.

   At Capital One, now the fifth largest bank after the regulators apparently ignored CERD approved its acquisitions from ING and HSBC, African Americans got denied for HMDA-reported loans 61.5% of the time, and Latinos 63.4% of the time.

  At M&T, whose application to acquire Hudson City Savings Bank Fair Finance Watch and NCRC have opposed since October 2012, African American were confirmed to high cost loans 1.81 times more frequently than whites in 2013, and were denied 1.97 times more frequently than whites.

  And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Challenged by the groups in 2014 and still pending, with FOIA issues, are applications by Valley National Bank, CIT - OneWest and others.

Further studies will follow: watch this site.

September 22, 2014

The new Community Reinvestment Act Q&A would de-emphasize branches - at a time when bank applying for merger try to conceal or withhold which branches they would close until the public comment period expires. Neither is accceptable.

September 15, 2014

We note, for now, BB&T's proposal to buy Bank of Kentucky for $363 million announced last week, and to buy 41 branches Citibank in Texas, announced earlier this month...

And this, on JPMorgan Chase:

At UN, JPMorgan Chase Closed Accounts, Name Dropped from Resolution

By Matthew Russell Lee

UNITED NATIONS, September 10 -- On the same day the banking industry's lawsuit against New York City's responsible banking ordinance was dismissed, at the UN on First Avenue the General Assembly issued muted criticism of JPMorgan Chase. Video here, from Minute 2:59:35.

  Back on March 18 JPMorgan Chase came up as a topic, and target, in a closed door meeting at the UN of the Group of 77 and China on March 18, several Permanent Representative then exclusively told Inner City Press. They marveled that the UN does business with JPM Chase while the bank cuts off many of the member states of the UN.

  In April, a G77-agreed draft resolution emerged, including a review of the UN's relations with JPM Chase -- by name. Inner City Press has publishing the full text of that draft, below.

  But in the months since April, the resolution got watered down, until it was adopted without opposition or debate at the end of a three-hour UN General Assembly session on September 9. (There was debate about Argentina and sovereign debt restructuring, which Inner City Press covered yesterday here.)

   Introducing the resolution was Bolivia, as chair of the Group of 77 and China; their speech said that banks in the City of New York have "humiliated" several nation's UN missions.

  Here is the adopted text of the resolution, seen in advance by IPS, which also quoted Sri Lanka's ambassador Palitha Kohona about it. Kohona was previously, among other things, a UN official, so he should know.

  Still, the idea that asking Ban Ki-moon to press the US to do almost anything is dubious. Will JPMorgan Chase view a UNGA resolution in which it is not directly named, only "sub-tweeted," as a threat to its reputation? After its behavior during the subprime lending meltdown -- the predatory bender -- does that even have to be asked?

September 8, 2014

On August 26, Inner City Press & Fair Finance Watch requesting from the Federal Reserve System the entire application, and the FRS' communications with the companies since January 1, 2014.

As provided so far, the application withholds the “CRA Plans” of both banks, while making claims about these plans:

Since the 2013 performance evaluation, CITB has implemented its CRA Plan covering 2013-2017, which is included in Confidential Exhibit 9;”

OWB has a strong CRA compliance program and has developed a CRA plan, included in Confidential Exhibit 9;” and

CITBNA will create and operate under a new CRA plan, which it will develop subject to regulatory review.”

This is a mis-reading, even a perversion of the Community Reinvestment Act, that these two documents and the projected third one can be withheld or subject only to “regulatory” review, and not public review. The documents, timely requested, must be released and the comment period must be extended.

For now, consider that OneWest in the Los Angeles MSA in 2012 made 28 home purchase loans to whites and NONE to African Africans; it made 12 home improvement loans to whites and NONE to African Americans.

September 1, 2014

UN Review of US on Race Includes Redlining, Foreclosures & Stand Your Ground

By Matthew Russell Lee

UNITED NATIONS, August 30 -- The crackdown in Ferguson, Missouri, after the killing of unarmed African American teenager Michael Brown was the context of the just-concluded UN Committee on the Elimination of Racial Discrimination review of the US, along with unfair lending. Report here.

  After the Trayvon Martin case, the UN CERD said it "is concerned at the high number of gun-related deaths and injuries which disproportionately affect members of racial and ethnic minorities, particularly African Americans. It is also concerned at the proliferation of 'Stand Your Ground' laws, which are used to circumvent the limits of legitimate self-defense in violation of the Stateparty’s duty to protect life, and has a disproportionate and discriminatory impact on members of racial and ethnic minorities."

   As to housing and lending discrimination, the UN CERD's "Concluding observations on the combined seventh to ninth periodic reports of United States of America," published on August 29, 2014, said

"the Committee remains concerned at: (a) the persistence of discrimination in access to housing on the basis of race, colour, ethnicity or national origin; (b) the high degree of racial segregation and concentrated poverty in neighborhoods characterized by sub-standard conditions and services, including poor housing conditions, limited employment opportunities, inadequate access to health-care facilities, under-resourced schools and high exposure to crime and violence; and (c) discriminatory mortgage lending practices and the foreclosure crisis which disproportionately affected and continues to affect racial and ethnic minorities (arts. 3 and 5(e))."

  The UN CERD Committee's Concerns and Recommendations included:

The Committee urges the State party to intensify its efforts to eliminate discrimination in access to housing and residential segregation based on race, colour ethnicity or national origin, including by:

(a) Ensuring the availability of affordable and adequate housing for all, including by effectively implementing the Affirmatively Furthering Fair Housing requirement by the Department of Housing and Urban Development and across all agencies administering housing programmes;

(b) Strengthening the implementation of legislation to combat discrimination in housing, such as the Fair Housing Act and Title VIII of the Civil Rights Act of 1968, including through the provision of adequate resources and increasing the capacity of the Department of Housing and Urban Development; and

(c) Undertaking prompt, independent and thorough investigation into all cases of discriminatory practices by private actors, including in relation to discriminatory mortgage lending practices, steering, and redlining; holding those responsible to account; and providing effective remedies, including appropriate compensation, guarantees of non-repetition and changes in relevant laws and practices.

  Private actors means banks. But why were the bank regulatory agencies and CFPB not included in the US' delegation to the CERD? We - and NCRC - will have more on this.

August 25, 2014

Bad settlement on the cheap, (badly) reported by the Denver Post:

some details emerge in the settlement's fine print, such as donations for community reinvestment and neighborhood stabilization. Specifically, Bank of America agrees to pay demolition and property-remediation costs of abandoned or uninhabitable residential properties, although where and how much are undetermined. Those properties will be donated to local nonprofits to either rehab or reduce blight. Again, location details are scant.”

Note: CRA is *not* donations....

August 18, 2014

On the CRA protested application by Valley National to buy 1st United, the OCC's FOIA games continue. They have written to Inner City Press:

I received your voice message on August 13th regarding the scope of your appeal. I understand that you are appealing the four pages that the OCC withheld from Valley National Bank’s merger application. Additionally, you are seeking communications between the OCC and Valley National Bank regarding the merger application. In the OCC’s July 2, 2014 response to your FOIA request, we provided you 19 pages of correspondence between the OCC and Valley National Bank regarding its merger. In your Appeal, you state that too limited a search was performed and seem to believe that there should be more correspondence documents related to the merger. However, your original FOIA request specified that the date range of the record search should be from 1/1/2013 to 5/24/2014. On Appeal, are you now asking for a different date range to be used? And, if that is the case, perhaps a new FOIA request would be more appropriate... If you are staying with the original date range, we will confirm the adequacy of our search for your responsive records and respond to your Appeal as soon as possible.

But the issue is not (only) the cut-off date. Inner City Press has replied:

As stated in Inner City Press' initial FOIA request, and as I explained by phone when called about the request, it is for OCC communications with either institution since Jan 1, 2013 not only about the merger, but also about “ CRA or fair lending or consumer compliance.”

Despite the wording of the request, which I've just retrieved from the OCC' system, and despite me explaining by phone when called, this seems to still be misunderstood. You state: “we provided you 19 pages of correspondence between the OCC and Valley National Bank regarding its merger. In your Appeal, you state that too limited a search was performed and seem to believe that there should be more correspondence documents related to the merger.”

The request was not just about the merger. As to documents since May 24, they should be provided under the principle against ex parte communications...Awaiting the documents

This is a request for the entirety of the application by Valley National (NJ) to acquire 1st United (FLA), and all records reflecting OCC communications with Valley National or 1st United concerning the proposed merger, or CRA or fair lending or consumer compliance

Watch this site.

August 11, 2014

As Valley National Bank Redlines, OCC's Runaround on FOIA, Captured

By Matthew R. Lee

NEW YORK, August 4 -- Some have wondered how large US national banks were allowed to get into predatory lending, why community groups' warnings were ignored, and the meltdown happened.  Well, here is a partial explanation.

   US bank regulators, then as now, find way to exclude public review. Take for example the US Office of the Comptroller of the Currency, part of the Department of Treasury, and its recent denial of access to bank information under the Freedom of Information Act, and on appeal.

  Beginning in May, Inner City Press began requesting information from the OCC about Valley National Bank and its proposed acquisition of Florida-based 1st United Bank.

  Fair Finance Watch and other NCRC members showed that Valley National's lending was disparate:  In 2012 in the New York City MSA for refinance loans, Valley National made 2152 such loans to whites and only 38 to African Americans -- entirely of keeping with the demographics and demographics of home ownership in the New York City MSA. Valley National denied 67% of such applications from African Americans, versus only 34.5% of such application from white.

  A first Inner City Press FOIA request about Valley National, the OCC's Rosalye Settles said she mis-understand, putting the entire request on hold then threatening to dismiss it.

  On June 8, Fair Finance Watch filed a second comment, including that:

Valley National has branches only below 88th Street in Manhattan (in which, intriguingly, a "Yellowbrick Real Estate Capital" breaks into the top five in pre-foreclosures).

  Valley National has no branches in Harlem, Washington Heights or The Bronx, predominantly African American and Latinos, low and moderate income areas.

  In Queens, it's Middle Village and Kew Gardens. In Brooklyn, Valley National's branches are along Ocean Parkway and in Bay Ridge. What about East New York, Brownsville, Bushwick and Bedford Stuyvesant?

  On July 16, Valley National submitted a response to the OCC, giving the OCC a full copy and a "redacted" or partially blacked out copy, as provided to Inner City Press, here.
  
  Inner City Press submitted a FOIA request to the OCC challenging the redactions. But the OCC's Marilyn Burton denied the FOIA request, saying it did not request any documents.
Click here for the OCC's FOIA denial.

 So Inner City Press submitted an appeal, linking to exactly the redacted documents as Valley National provided to the OCC. But the OCC Frank Vance ruled that this was not an appeal, copy here. All of this while the OCC could haul off and rubber stamp Valley National's merger application any day.

  This is why banks get over. And Fair Finance Watch, and Inner City Press, aim to expose and end these practices. Watch this site.

August 4, 2014

  On the CRA-protested application by Valley National Bank to acquire 1st United, the Office of the Comptroller of the Currency is hitting new lows. Here's from Inner City Press' August 2 Freedom of Information Act appeal:

This is an appeal of the evasive denial in full of Inner City Press' request to the OCC for the many portions of Valley National Bank's July 16 submission to the OCC, which Valley National mailed to Inner City Press in redacted form. Inner City Press submitted its request to the OCC challenging whether the redactions comply with FOIA - and instead of reviewing the redactions, the OCC's Marilyn Burton rules that Inner City Press has not requested any records -- this is evasive and absurd, and is hereby appealed. This delay only benefits the applicant bank; there is no confusion which records Inner City Press is requesting. This has happened before the OCC, and stands at odds with how the Federal Reserve, for example, addresses FOIA requests for information redacted by applicant banks. Given the tight timelines of bank merger applications, it is inappropriate and Inner City Press is appealing it and for all of the withheld information. See, for the record on this appeal: http://innercitypress.org/valleynat1occredacted071614.pdf

The entire unredacted document, in the possession of the OCC, is what Inner City Press requested and is now appealing to get.

Watch this site.

July 28, 2014

When Valley National belatedly answered questions from the Office of the Comptroller of the Currency on July 18, it tried to black-out and withhold parts of its response. Inner City Press has challenged these under the Freedom of Information Act to the Office of the Comptroller of the Currency, including “on pages 19-20, transactions for which Valley National seeks or has obtained CRA credit, for example in connection with Fannie Mae Delegated in New York; ways to apply for mortgages and FHLB of NY and other transactions presented for CRA credit (pages 22-32), etc.”

July 21, 2014

JPMorgan Chase being JPMorgan Chase: last week Jaime Dimon told analysts, “We collected $600 million on [FHA] insurance. They disputed $200 million. The government called that fraud. We reimbursed $600 million to get out of the lawsuit. So the real question to me is, should we be in the FHA business at all?” We'll have more on this.

July 14, 2014

If as reported Citigroup settles yet more predatory lending related charges for $7 billion, the question will be, how does this help the victims of the lending? It's not rocket science here: one could compare by geography with Home Mortgage Disclosure Act data, or with complaint data from the CFPB...

Already settled, but no less outrageous, is GE which excluded from its debt relief programs all customers who speak primarily Spanish, or live in Puerto Rico. That's not disparate impact: that's outright discrimination.

July 7, 2014

  Valley National told the Office of the Comptroller of the Currency that it wanted approval to acquire 1st United by June 30. But the OCC didn't even initially rule on Inner City Press' May 24 Freedom of Information Act request until July 2. Now this has been filed:

On behalf of Inner City Press / Fair Finance Watch (ICP) this is a fourth timely-in-context comment requesting an extension of the OCC's public comment period on the Application by Valley National Bank to acquire 1st United Bank.

The OCC delayed until July 2 to rule on ICP's May 24 FOIA request regarding this proposal - and then, withheld whole pages citing exemptions 4 and 8. ICP has nearly immediately filed a FOIA appeal for improperly withheld information; the comment period should be extended:

This is a FOIA appeal for all of the still withheld / redacted information responsive to Inner City Press' May 24 FOIA request regarding Valley National Bank - 1st United.

Only on July 2 did the OCC rule -- that is, after the stated close of the comment period - and then, it withhold whole pages, citing exemptions 4 and 8. This is an appeal of those withholdings. From the documents provided it also appears that too limited a search was performed, given the documents requested in ICP's FOIA request.

Please provide all wrongfully withheld information as quickly as possible, as Inner City Press / Fair Finance Watch intends to comment on the information before the OCC reaches any determination (other than denial) on Valley National's applications.


June 30, 2014

Some think that Community Reinvestment Act officers are progressive. But here in New York City, where new Mayor Bill De Blasio appointed the CRA Officer of M&T Bank -- apparently without knowing much about him or M&T -- to the Rent Guidelines Board, the banker blocked a rent freeze that his appointer De Blasio favored. Afterward De Blasio said, “From everything I’ve heard of him, he’s a person of integrity.” Heard?

June 23, 2014

U.S. government slapped SunTrust Banks Inc. with $968 million in fines and consumer relief as the Atlanta lender became the latest bank to settle allegations of abusive mortgage practices.

Here now is M&T Bank, laundering money for drug gangs in Baltimore -- CRA, anyone?

U.S. District Judge James Bredar in Baltimore on June 17 accepted the government’s claim in a February complaint that the teller converted proceeds of illegal drug sales from small denominations to $100 bills in at least eight transactions, ranging from $20,000 to $100,000, without notifying regulators. The M&T teller in the case, Sabrina Fitts, 29, was sentenced to a month in prison followed by eight months of home detention for her role in the failure to file the mandatory reports. She worked at the bank’s Perry Hall, Maryland, branch outside of Baltimore. Fitts was paid a 1 percent fee by a member of a drug trafficking organization for each transaction completed without a report, according to prosecutors. “Through the cooperation we provided to law enforcement during an investigation into the illegal activities perpetrated by a former employee, we have assisted the U.S. Attorney’s Office with this prosecution and recovery,” Mike Zabel, a spokesman for M&T, said in an e-mailed statement. “This case shows how banks work closely with law enforcement to prevent and detect money-laundering.”

Yeah, right...

Look who's hiring: Capital One, for CRA compliance. They need help... http://www.simplyhired.com/job/3i6pxeeu3w

June 16, 2014

The protest of Valley National Bank - 1st United continues, with this third comment filed:

On behalf of Inner City Press / Fair Finance Watch (ICP) this is a timely third comment requesting an extension of the OCC's public comment period on the Application by Valley National Bank to acquire 1st United Bank.

On June 11, Inner City Press went to a Valley National Bank in Manhattan to seek its CRA Assessment Area / Statement. At the VNB branch at 350 Park Avenue, Branch Service Manager Daniel Solomon when asked about the CAR Assessment Area at first tried to give Inner City Press a CD-ROM of the bank's 2013 Annual Report. Then after much back and forth he emerged with a binder that did not include the assessment area, directing the public elsewhere -- with the wrong address -- for that.

This is indicative of Valley National Bank's approach and attitude to CRA. There should be public hearings and on the current record, Valley National Bank's application should be denied.


June 9, 2014

Looking at Valley National Bank's pattern of branches in New York City, it is reminiscent of the Chevy Chase FSB case brought by the Justice Department.

Valley National has branches in Manhattan -- but only below 88th Street. It has no branches in The Bronx.

In Brooklyn, Valley National's branches are along Ocean Parkway and in Bay Ridge. In Queens, it's Middle Village and Kew Gardens. This is a redlining bank. And the Office of the Comptroller of the Currency, rather than provide the documents Inner City Press / Fair Finance Watch requested under FOIA, tried to cancel the FOIA request by claiming to mis-understand one part of it. We'll have more on this.

June 2, 2014

On the city of Providence, Rhode Island's case against Santander:

Santander's lending is disparate throughout its footprint. For example, in the New York City Metropolitan Statistical Area in 2012, the most recent year for which data is publicly available, Santander / Sovereign made 361 conventional home purchase loans to whites and only 16 to African Americans: entirely out of keeping with the demographics of homeownership of the community.

Likewise, for refinance loans, Santander / Sovereign made 438 loans to whites and only 28 to African Americans and only 39 to Latinos, again entirely out of keeping with the demographics of homeownership of the community.

While groups like ICP / Fair Finance Watch, raise such disparities under the Community Reinvestment Act when banks apply to their regulators to merge or expand, since the financial meltdown there have been fewer mergers.

It is because regulators are not going their jobs that cities like Providence have to go ahead and sue the banks themselves...

May 26, 2014

  Inner City Press / Fair Finance Watch has filed a timely first comment requesting an extension of the OCC's public comment period on the Application by Valley National Bank to acquire 1st United Bank.

Valley National has an extremely disparate lending record.

Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP is hereby commenting on Valley National's home purchase, refinance and home improvement lending in the New York City and the Nassau - Suffolk (Long Island) MSAs and finds them outrageous.

In 2012 in the New York City MSA for refinance loans, Valley National made 2152 such loans to whites and only 38 to African Americans -- entirely of keeping with the demographics and demographics of home ownership in the New York City MSA. Valley National denied 67% of such applications from African Americans, versus only 34.5% of such application from white.

For home purchase loans in the NYC MSA in 2012, Valley National made 69 such loans to whites, only one to an African American and only two to Latinos, for which it had a denial rate of 62.5% versus only 36.6% for whites.

For home improvement loans in the NYC MSA, Valley National made 26 such loans to whites, only one to an African American and only two to Latinos, for which it had a denial rate of 50% versus only 21.9% for whites.

In 2012 in the Long Island NY MSA for refinance loans, Valley National made 43 such loans to whites and only one to an African American and only two to Latinos. It had a 75% denial rate for African Americans.

For home purchase loans in the Long Island MSA in 2012, Valley National lent only to whites, with a denial rate of 100% for Latinos.

According to a recent SEC filing, 1st United's top three executives would get over $6 million each for selling out to a bank with this record, whose CEO has said the rationale for the proposed acquisition is chasing affluent customers (“'Who’s moved there? It’s the wealthy people,' Lipkin said in a phone interview") - while excluding lower income consumers of color in its existing communities.

Public hearings are needed and an extension of the comment period. On the current record the application should be denied

ICP has submitted a FOIA request for the application and related records, all of which should be provided during the comment period and on which ICP will submit further comments.

May 19, 2014

As US Bank Gets  Rubber-Stamp to Buy & Close RBS Branches, FOIA Pends

By Matthew R. Lee

NEW YORK, May 15 -- When Royal Bank of Scotland proposed to sell its 93 Chicago-area branches to US Bank, Inner City Press asked US Bank's regulator the Office of the Comptroller of the Currency how many and which branches it would close.

  Now in a May 14 letter the OCC only sent to Inner City Press on May 15, the agency has approved US Bank's application, without addressing the impact of the branch closings or Inner City Press' pending Freedom of Information Act appeal.

  Inner City Press is putting the OCC approval letter, which does not seem to have been reported anywhere else at least according to Google News, online here.

  The comment period to the Office of the Comptroller of the Currency was set to expire on February 20. After Inner City Press' request is was extended to April 25.

  US Bank submitted a list but cynically asked for "confidential treatment" for all of it -- that is, to withhold it from the public. Inner City Press submitted a Freedom of Information Act request, as it has done to the Federal Reserve Board (and on other topics, to the US State Department) - and on April 25, the OCC responded.

  From the document Inner City Press has obtained under FOIA, and now exclusively puts online here, along with the OCC FOIA letter to Inner City Press which will be appealed, US Bank would close at least 13 branches. In the until-now confidential filing with the OCC, US Bank says it would close RBS / Charter One's 10200 S. Ewing Street, Chicago branch in a low income tracts and send customers to a "receiving" branches in a non-low income tract.

  US Bank would also close its own branch at 8905 S. Commercial Avenue, Chicago in a low income tract.

This comes after Fair Finance Watch and other community advocacy organizations in NCRC commented to the OCC about lending disparities.

FFW commented, back in January, that

While on this disclosure of branches which would be closed the OCC should extend the comment period, for now, to ensure consideration, US Bank NA (Ohio)'s 2012 HMDA data reflect that in the Chicago MSA for home purchase loans both conventional and subsidized, US Bank made a smaller portion of its loans to Latinos than did even the aggregate, including lenders not subject to the Community Reinvestment Act.

For conventional home purchase loans in the Chicago MSA in 2012, US Bank made 1083 such loans to whites, 78 to African Americans and only 77 to Latinos. That is, US Bank made 14 such loans to whites for each loan to a Latino, a bigger disparity than is the case with the aggregate.

For the home purchase loans in Table 4-1 in the Chicago MSA in 2012, US Bank made 268 such loans to whites, 68 to African Americans and only 60 to Latinos. That is, US Bank made 4.47 such loans to whites for each loan to a Latino, a significantly bigger disparity than is the case with the aggregate.

  US Bank replied that it needn't disclose which branches it would close. Fair Finance Watch reiterated its request in Washington DC in mid-March, along with NCRC, and in supplemental comments. And on March 26, the OCC confirmed that the comment period is extended to April 25, and portions of US Bank's response released.

  The problem is that large portions of US Bank's response are withheld, or simply redacted in black Magic Marker, first Tweeted here by @FinanceWatchOrg, click here to view. Fair Finance Watch and Inner City Press immediately filed with the OCC a Freedom of Information Act request

May 12, 2014

Now that Valley National, based in New Jersey and New York, is trying to expand in Florida, note its 2012 record:

In the New York City MSA for home purchase loans, Valley National made 69 loans to whites, one to an African American applicant, two to Latinos. In the Newark NJ MSA also for home purchase loans, Valley National 48 loans to whites, two to African Americans, one to a Latino applicant. More to follow...

May 5, 2014

After US Bank continued to withhold basic information about its proposed acquisition of 93 branches from Royal Bank of Scotland's Charter One (and plans to close at least 13 of them), Inner City Press / Fair Finance Watch has filed this FOIA appeal:

"for all of the still withheld / redacted information from US Bank's March 21, 2014 submission in connection with its application to acquire branches from RBS Charter One. Inner City Press / Fair Finance Watch commented on the application, and after a March 26 FOIA request received on April 25 a partially unredacted copy of the response, and a partial denial letter dated April 24 on 2014-00277-F.

Fully 53 pages and other information has been withheld or redacted, all purportedly under FOIA exemption 4. This is a timely appeal of all withholdings, submitted on May 3.

From the document you've titled Bank Unredacted Response, still withheld is presumptively public information about US Bank's cited engagements in Chicago [and] its Community Activities in Akron; its cited engagement with the Famicos Founcation in Cleveland; and its fair lending programs on pages 7, 16-19: full paragraphs and even a claim under the heading "Continual Improvement."

Please provide all wrongfully withheld information as quickly as possible, as Inner City Press / Fair Finance Watch intends to comment on the information before the OCC reaches any determination (other than denial) on US Bank's applications.

Meanwhile, here's a blind item: which major foundation not only invests in hedge funds but also in distress debt? Please send guesses -- and any information on these topics -- to Inner City Press. Asking for a friend.

April 28, 2014

On US Bank's proposal to acquire 93 branches from Royal Bank of Scotland / Charter One, Inner City Press by a Freedom of Information Act request has just learned that US Bank would close at least 13 of them, and has put in a fourth comment to the OCC:

On behalf of Inner City Press / Fair Finance Watch (ICP) this is a fourth timely comment on the application of US Bank to acquire 94 branches from RBS Citizens / Charter One and close or consolidate some still unknown number of them.

Since our first comment, ICP has demanded to know how many and which branches US Bank would close or "consolidate." US Bank cynically withheld and requested confidential treatment, resulting in Inner City Press only receiving the information midday on April 25. This comment is submitted the next day, and in context must be considered as timely.

As a first comment on the wrongfully withheld and delayed information, US Bank says it will close 13 of the branches, including in low income census tracts.

For example, US Bank says it would close RBS / Charter One's 10200 S. Ewing Street, Chicago branch in a low income tracts and send customers to a "receiving" branches in a non-low income tract.

US Bank would also close its own branch at 8905 S. Commercial Avenue, Chicago in a low income tract.

This militates for the public hearings ICP has request from its first comment. On the current record, US Bank's application should be denied.

On the current record, hearings should be held and the applications / notices should not be approved.

   Note: as a public service, Inner City Press is putting the US Bank branch closure list it obtained under FOIA online here.

April 21, 2014

HMDA fight in Western Michigan:

GRAND RAPIDS, MI – The head of a New York public interest group that has challenged Mercantile Bank of West Michigan’s plans to merge with Firstbank Corp. of Alma said he is outraged by Mercantile’s response to his request for its latest lending records.

The Grand Rapids-based bank sent its “Lending Application Register” in a paper document that cannot be easily analyzed, said Matthew Lee, executive director of Inner City Press/Fair Finance Watch.

Lee said the reports are generally submitted as CD-ROM-based data files whose numbers can be crunched by a computer. An earlier analysis of Mercantile’s 2012 lending records indicated the bank had written no mortgages, refinancing loans or commercial loans to minorities that year.

There’s something totally arrogant and outrageous when they’re flipping you off like this,” Lee said in a telephone interview on Monday, April 14. “As advocates, we can only conclude that the data will be much worse than the previous year.”

Lee said he has concluded approval of the $151 million merger is in trouble as far as the Federal Reserve is concerned. The group’s appeal is based on the Community Reinvestment Act, passed to encourage diversity in the lending community. The law only carries sanctions when banks seek approvals for bank mergers.

Mike Price, Mercantile’s chairman and CEO, maintained Mercantile complied with the letter of the law when it emailed the documents to Lee’s organization several weeks ago.

Mercantile Bank has complied with everything it’s supposed to have complied with,” Price said. “He may want electronic forms, but that’s the form we delivered it in.”

Price said Mercantile has won “outstanding” ratings for its compliance with the Community Reinvestment Act over the past two years.

Mr. Lee can interpret data anyway he wants,” Price said. “I don’t know what his goals are and I don’t pretend to know."

It's not complicated: stop discriminating, and then hiding it. Watch this site.

April 14, 2014

   Inner City Press / Fair Finance Watch has been challenging BancorpSouth, now this:

April 12, 2014

Board of Governors of the Federal Reserve System
Attn: Chairman Janet Yellen, Secretary Robert deV. Frierson
20th Street and Constitution Avenue, N.W.
Washington, DC 20551

Re: The Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas

Dear Chairman Yellen, Secretary Robert deV. Frierson and others in the FRS:

This concerns the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas.

Back on March 24, ICP submitted comments on BancorpSouth's Ouachita / Louisiana application on March 24, receiving in the two week after only this:

From: Juanetta Price <juanetta.price@frb.gov>

Date: Mon, Mar 24, 2014 at 4:18 PM

Subject: Automatic reply: Request for Full Copy of, & Timely Comments On, Requesting Hearings & an Extension of the Comment Period On the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independ...

To: "Matthew R. Lee" at InnerCityPress.org

I am out of the office until March 31.

As noted in ICP's timely April 7 comments on BancorpSouth's Central Community Corporation proposal, the public portions of applications should be given on a timely basis, and timely comments acknowledged.

Then, on April 8 -- two weeks after ICP's March 24 request -- this arrived:

Subject: Public Portion of Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Tue, Apr 8, 2014 at 5:53 PM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: "Sparks, Yvonne S [at] stls.frb.org,Blase, Dennis [at] stls.frb.org, Goldberg, Amory R (Board) [at] frb.gov

Dear Mr. Lee:

Attached is the public portion of the application by BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank.

There was no explanation of the two week delay. The next day, April 9, this arrived:

Subject: Revised Public Portion of Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Wed, Apr 9, 2014 at 11:48 AM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: Sparks, Yvonne S [at] stls.frb.org

Dear Mr. Lee:

Please disregard the public portion of the application sent to you yesterday for BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation. It appears that pages 1-32 were left out.

Leaving out pages, it happens. But what of the two week gap in providing any of the public portion of the application? Inner City Press asserts and request that the comment periods be extended. ICP also notes that on April 10 BancorpSouth announced yet another proposed acquisition, of Lafayette, La.-based Knox Insurance Group, LLC.

Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi, Baton Rouge, Louisiana and Memphis, Tennessee MSAs and finds them troubling.

In 2012 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 258 loans to whites, only 17 to African Americans and five to Latinos. BancorpSouth's denial rate for whites was 7.4% while for African Americans it was 25.8% -- 3.49 times higher. This is troubling.

In 2012 in the Baton Rouge LA MSA for conventional home purchase loans in 2012, BancorpSouth made 60 such loans to whites; only three to African Americans and one to a Latino.

On March 24 we stated: next time we will analysis next-door Texas. But for now, in 2012 in the Memphis TN MSA for conventional home purchase loans, BancorpSouth made 243 loans to whites, only 14 to African Americans and four to Latinos. BancorpSouth's denial rate for whites was 4.2% while for African Americans it was 22.7% -- 5.4 times higher. This is outrageous.

On April 7 we stated: BancorpSouth in 2012 did not report any data in the Austin, Texas MSA. First State Bank Central Texas, for home purchase loans there, made 13 such loans to whites, NONE to African Americans or Latinos. Likewise, it made no refinance loans to African Americans or Latinos.

Now we note that BancorpSouth in the Lafayette, Louisiana MSA in 2012 for conventional home purchase loans, BancorpSouth made 37 loans to whites, NONE to African Americans or Latinos. In Table 4-1, BancorpSouth made 15 loans to whites and ONE to an African American applicant. That is, ALL of its home purchase loans to people of color were in Table 4-1, none in Table 4-2. This is troubling, and a pattern. The comment periods must be extended.

BancorpSouth should be required to fully disclose all branches it would close, and other changes, before the comment period closed. After for example the precedent of Huntington (and, in the Northeast, of Rockville and United in Connecticut and Massachusetts), both of which disclosed which branches they would close during the comment period, Huntington even re-starting the comment period to do so, to not extend this comment period on these five or more branches would be a major step backward for the Federal Reserve.

ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit.

If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.

Very Truly Yours,

Matthew Lee, Executive Director, Inner City Press/Fair Finance Watch

April 5, 2014

In 2013 Disparities at Citi, Chase, BofA & Wells as Fed Lax on M&T, US Bank

By Matthew R. Lee

SOUTH BRONX NY, April 5, 2014 -- In the first study of the just-released 2013 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that high cost loans and disparities by race and ethnicity in denials and higher-cost lending continued at the Big Four banking behemoths Citigroup, JPMorgan Chase, Bank of America and Wells Fargo - and spread to US Bank, M&T and Capital One.

  2013 is the tenth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

  The just released data show that Wells Fargo confined African Americans to higher-cost loans above this rate spread 2.01 times more frequently than whites in 2013, Fair Finance Watch has found. Bank of America also had a 2.01 disparity between African Americans and whites; Citi was 1.83 and Chase 1.64.

  Wells was even more disparate to Latinos, confined them to higher-cost loans above the rate spread 2.12 times more frequently than whites in 2013, the data show.

  Chase, too, was more disparate to Latinos then whites, confined them to higher-cost loans above the rate spread 1.81 times more frequently than whites in 2013, versus a 1.64 disparate for African Americans. Citi had a higher denial rate for Latinos (17.3%) than for African American (17.1%).

  "Even after the bailouts, lending disparities grew worse and not better," said Fair Finance Watch. "Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by predatory lending. Given the proposed changes to the housing finance system, these disparities must be addressed."

  At Capital One, now the fifth largest bank, African Americans got denied for HMDA-reported loans 61.5% of the time, and Latinos 63.4% of the time.

  At M&T, whose application to acquire Hudson City Savings Bank Fair Finance Watch and NCRC have opposed since October 2012, African American were confirmed to high cost loans 1.81 times more frequently than whites in 2013, and were denied 1.97 times more frequently than whites.

  "The Federal Reserve is becoming more and more bank-friendly, including recently saying it will not re-open its comment period on M&T - Hudson despite this new data," Fair Finance Watch said.

  Another bank FFW has challenged, Mercantile in Michigan, cynically provided its data only in paper form so that it could not be analyzed. "It remains unclear if the Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2013 mortgage data of these banks further militate for aggressively watchdogging and breaking up the big banks."

  And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Challenged by the groups in 2014 and still pending, with FOIA issues, are applications by BancorpSouth, Old National and US Bank to acquire over 90 branches from Royal Bank of Scotland.

On that, Inner City Press has submitted a Freedom of Information Act request for the entirety of a largely redacted / black-out response by US Bank, showing that several RBS products would be dropped.

  Now that US Bank has admitted to the Federal Reserve that it would eliminate Charter One's Credit Builder and energy efficiency loan programs, and make it more difficult for the customers it would acquire to avoid fees, the Fed should schedule public hearings. So far, the comment period was re-opened and extended to April 25, when more analysis will be submitted.

  The Home Mortgage Disclosure Act required that the 2013 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Some banks did not provide their data by the deadline, despite confirming receipt of the request. Further studies will follow: watch this site.

March 31, 2014

RBS Sale of 93 Branches to US Bank Stalled, Info Withheld, CRA Protests

By Matthew R. Lee

SOUTH BRONX, March 26 -- When Royal Bank of Scotland proposed to sell its 93 Chicago-area branches to US Bank, the comment period was set to expire on February 20. Today that was extended to April 25.

The extension or "re-publication of notice" came after Fair Finance Watch and other community advocacy organizations commented to the US Office of the Comptroller of the Currency, about lending disparities and US Bank's refusal to disclose how many and which of the 93 branches it would close.

FFW commented, back in January, that

While on this disclosure of branches which would be closed the OCC should extend the comment period, for now, to ensure consideration, US Bank NA (Ohio)'s 2012 HMDA data reflect that in the Chicago MSA for home purchase loans both conventional and subsidized, US Bank made a smaller portion of its loans to Latinos than did even the aggregate, including lenders not subject to the Community Reinvestment Act.

For conventional home purchase loans in the Chicago MSA in 2012, US Bank made 1083 such loans to whites, 78 to African Americans and only 77 to Latinos. That is, US Bank made 14 such loans to whites for each loan to a Latino, a bigger disparity than is the case with the aggregate.

For the home purchase loans in Table 4-1 in the Chicago MSA in 2012, US Bank made 268 such loans to whites, 68 to African Americans and only 60 to Latinos. That is, US Bank made 4.47 such loans to whites for each loan to a Latino, a significantly bigger disparity than is the case with the aggregate.

  US Bank replied that it needn't disclose which branches it would close. Fair Finance Watch reiterated its request in Washington DC in mid-March, along with NCRC, and in supplemental comments. And on March 26, the OCC confirmed that the comment period is extended to April 25, and portions of US Bank's response released.

  The problem is that large portions of US Bank's response are withheld, or simply redacted in black Magic Marker, first Tweeted here by @FinanceWatchOrg, click here to view. Fair Finance Watch and Inner City Press immediately filed with the OCC a Freedom of Information Act request

"for all withheld / redacted information from US Bank's March 21, 2014 submission in connection with its application to acquire branches from RBS Charter One. ICP / Fair Finance Watch commented on the application, and earlier today the OCC provided a redacted copy of US Bank's submission. Nearly the entire fair lending response is redacted, as is information about US Bank's claimed support to non-profits. Since such information is presumptively public, it must be unredacted and released. We are challenging each redaction, making this FOIA request for the entire, unredacted submission in this application process we timely challenged."

Now whether these withholdings can stand up must be ruled upon.

  In terms of commenting of what was released, ICP says "Now that US Bank has admitted to the Federal Reserve that it would eliminate Charter One's Credit Builder and energy efficiency loan programs, and make it more difficult for the customers it would acquire to avoid fees, the Fed should schedule public hearings."

  Prediction: the document put online yesterday will be reported in the Windy City.
Meanwhile Royal Bank of Scotland is looking to sell off its Citizen Bank unit in the Northeast, to Japan’s Sumitomo Mitsui Financial Group or another. Watch this site.

March 24, 2014

So the CFPB hearing on payday lending on the morning of March 26 in Nashville is being moved to the Country Music Hall of Fame. Lots of sad songs about payday lending...

Meanwhile the Federal Reserve has hit a new low: in its "public record" on M&T's stalled-out application to acquire Hudson City Savings Bank, the Fed has only 2012 HMDA data. So last week Inner City Press / Fair Finance Watch submitted analysis of the just-obtained 2013 data. But the Fed sends back essentially a form letter, you have not shown exceptional circumstances that would warrant providing additional time to comment on the proposal, cc-ing one of its former FRB Staff Counsels now representing M&T. Isn't getting up to date information, instead of data more than a year old, enough of a reason to put the comment in the record?

March 17, 2014

So Umpqua Bank has committed to commit - it has told the Federal Reserve that it will (or would) submit a CRA plan sixty days after it consummates its proposed acquisition of Sterling Bank. But will Umpqua's plan be made public? And will it be able to be enforced?

March 10, 2014

Inner City Press / Fair Finance Watch got M&T's 2013 HMDA LAR and filed supplemental comments:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a supplemental comment opposing, and requesting public hearings on, the applications by M&T to acquire Hudson City Savings Bank.

ICP is a timely commenter on this application. It has assumed that the comment period would be re-opened, based on the substantial adverse issues that have stalled the application. Now, we have begun analyzing the 2013 HMDA-LAR of M&T Bank and find disparities which the FRB must consider, and should inquire into.

In 2013, in data not taken into account in any CRA performance evaluation, M&T Bank made some 1849 loans to African Americans, 100 of them, or 5.41 percent, over the rate spread. It denied 26.26% of applications from African Americans.

To whites, by contrast, M&T Bank made fully 21,660 loans, only 648 of them or 2.99% over the rate spread. It denied only 13.3% of applications from whites.

Thus, M&T Bank was 1.81 times more likely to confine African Americans to loans over the rate spread than whites; M&T Bank denied the applications of African Americans 1.97 times more frequently than those of whites.

Also, M&T Bank has proposed closing 10 branches in New York. Comment should be accepted on these, as they impact the accessibility of banking services to low and moderate income communities.

March 3, 2014

Alongside the proposal(s) to have US Post Offices offer some banking services, in Montana they are exploring setting up a state-owned non-profit bank, based on State Bank of North Dakota...

In the United Kingdom, there are increasing calls for a community reinvestment act -- as Royal Bank of Scotland tries to sell its Chicago-land branches to US Bancorp, and to spin off Citizens Bank...

Under review in New York are Ocwen's affiliates Home Loan Servicing Solutions Ltd., which has bought mortgage-servicing rights from Ocwen, and Altisource Portfolio Solutions SA, which provides IT services to Ocwen...

February 24, 2014

Mercantile in denial: the bank's CFO Chuck Christmas said last week, of the protested and delayed and unresolved FirstBank proposed acquisition, "There's nothing that has come up as far as we know in our communications that could cause us any angst." That's part of the problem, that they don't care or is in denial... But is the Federal Reserve enabling it?

The Fed's Eric Kollig declined to comment when asked about Mercantile Bank of Michigan, whose CFO Chuck Christmas is dismissive of the CRA questions raised not only by Inner City Press / Fair Finance Watch, but also by the Fed (and FDIC)....

From @FinanceWatchOrg: Now responds, sort of, to Qs by on CRA plan, ICP/FFW protested Sterling:
see, https://twitter.com/FinanceWatchOrg

Inner City Press / Fair Finance Watch has put in a third comment on US Bank - RSB / Charter One:

On behalf of Inner City Press / Fair Finance Watch (ICP) this is a third timely comment on the application of US Bank to acquire 94 branches from RBS Citizens / Charter One and close or consolidate some still unknown number of them.

We write at the stated deadline for comments again requesting an extension of the comment period as, having belatedly received the "public" portion of the application, we find therein NO disclosure of the branches that would be closed.

After for example the precedent of Huntington (and, in the Northeast, of Rockville and United in Connecticut and Massachusetts), both of which disclosed which branches they would close during the comment period, Huntington even re-starting the comment period to do so, to not extend this comment period on 93 branches would be a major step backward for the OCC.

ICP submitted a first comment and request for at least the public portions of the application, on January 11. While the comment has been acknowledged, so far ICP has seen no questions put to US Bank by the OCC, nor any portion of the application. This stands in contrast to other Federal regulators processing of, for example, earlier still pending applications by Umpqua and Mercantile in Michigan. (The FDIC has also posed questions to Mercantile, see for the record http://www.innercitypress.org/merc1fdicicp012914.pdf).

The OCC should not be more lax, or less transparent. Information should be provided and the comment period should be extended.

On the current record, hearings should be held and the applications / notices should not be approved.

February 17, 2014

In Michigan, Mercantile Bank's initial response to the critique of its lending record levied by Inner City Press / Fair Finance Watch involved getting individual borrowers of color to submit to the Federal Reserve letter that seemed like the statements of captured pilots or more recently, Kenneth Bae in North Korea.

Now the FDIC has asked Mercantile some questions; click here for some of Mercantile's responses, provided to Inner City Press two weeks after they were submitted to the FDIC. We'll have more on this.

February 10, 2014

With the comment period on US Bank's application to acquire 94 branches from Royal Bank of Scotland set to expire on February 20, Inner City Press / Fair Finance Watch has put in a second comment:

Re: Second timely Comment Opposition and Requesting Hearings and an Extension of the Comment Period On the Applications of US Bank to Acquire 94 Branches from RBS Citizens' Charter One

Dear Director for District Licensing and others in the OCC:

On behalf of Inner City Press / Fair Finance Watch (ICP) this is a second timely comment on the application of US Bank to acquire 94 branches from RBS Citizens / Charter One and close or consolidate some still unknown number of them.

ICP submitted a first comment and request for at least the public portions of the application, on January 11. While the comment has been acknowledged, so far ICP has seen no questions put to US Bank by the OCC, nor any portion of the application...

In its January 11 comment, ICP analyzed the 2102 Chicago MSA HMDA data of US Bank NA (Ohio). In this second submission we look more closely at Ohio.

In the Cincinnati Ohio MSA for conventional home purchase loans in 2012, US Bank made 336 such loans to whites, only 16 to African Americans and only three to Latinos. For the home purchase loans in Table 4-1 in this MSA in 2012, US Bank made 225 such loans to whites, only 21 to African Americans and only three to Latinos. Thus, cumulated for all home purchase loans in this MSA in 2012, US Bank made 561 such loans to whites, only 37 to African Americans and only six to Latinos.

For refinance loans in the Cincinnati Ohio MSA in 2012, US Bank made 1232 such loans to whites, only 44 to African Americans and only six to Latinos. Its denial rate for whites was 18.2% but fully 35.7% to Latinos and 29.6% to African Americans. This is disparate.

In the Akron Ohio MSA for conventional home purchase loans in 2012, US Bank made 34 such loans to whites, only one to an African American and NONE to Latinos. For the home purchase loans in Table 4-1 in this MSA in 2012, US Bank made 13 such loans to whites, only one to anAfrican American and again none to Latinos. Thus, cumulated for all home purchase loans in this MSA in 2012, US Bank made 47 such loans to whites, only two to African Americans and NONE to Latinos.

For refinance loans in the Akron Ohio MSA in 2012, US Bank made 192 such loans to whites, only six to African Americans and again none to Latinos. Its denial rate for whites was 18.5% but fully 36.4% to African Americans. This is disparate.

In the Cleveland Ohio MSA for conventional home purchase loans in 2012, US Bank made 92 such loans to whites, only six to African Americans and NONE to Latinos. For the home purchase loans in Table 4-1 in this MSA in 2012, US Bank made 58 such loans to whites, five to African Americans and five to Latinos. Thus, cumulated for all home purchase loans in this MSA in 2012, US Bank made 150 such loans to whites, only 11 to African Americans and only five to Latinos.

For refinance loans in the Cleveland Ohio MSA in 2012, US Bank made 478 such loans to whites, only 21 to African Americans and only 14 to Latinos. This is disparate. Such disparities exist throughout US Bank's franchise, as we will further present including at the requested public hearings.

We are also timely putting into the record consumer complaint information [attachments]

Again, US Bank has a record of closing branches, and in connection with this proposed acquisition announced on January 7, US Bank spoke of "some overlap" between branches but "said it’s too early to say whether any will be closed." Chicago Tribune, January 7, 2014.

US Bank should have to disclose which branches it would close, during the comment period, as for example Huntington Bank recently had to do in connection with its smaller proposal to acquire Camco's Advance Bank. In that case, Huntington re-applied and gave public notice of which branches it would close -- that should be done here.


February 3, 2014

To those who claim predatory lending is over, note that the founder of First Franklin Andy Pollock is back, with a new subprime lender called WDB Funding. We'll have more on this.

January 27, 2014

In a speech to the ABS Vegas Conference on January 22, Michael Stegman said for the Obama administration, "We support the repeal of GSE affordable housing goals." This is progressive? Where Stegman saied "Owning a home is not right for everyone," it seemed to some that he was saying "Owning a home is not A right for everyone."

Why would Stegman, for the Administration, come out against localities trying to use eminent domain to protect underwater homeowners? Is putting these views in the mouth of an adviser like Stegman the Administration's trial balloon?

Finally, for now, on the continuation of predatory subprime lending, we note that the founder of First Franklin Andy Pollock is back, with a new subprime lender called WDB Funding...

January 20, 2014

Why do we press for disclosure of how many and which bank branches would be closed or consolidated DURING the regulators' comment periods on a proposed merger? Well, here is a recent example:

Simmons First National’s acquisition of Little Rock-based Metropolitan National bank to result in 28 branch closures, 12 in Northwest Arkansas

The anticipated list of branch closures resulting from Simmons First National’s acquisition of Little Rock-based Metropolitan National bank was made public by the Office of the Comptroller of the Currency this week.

Pine Bluff-based Simmons filed applications to close 27 branches with the OCC on Dec. 19.. The 27 branches are slated to cease operations on March 22.

Simmons operated 10 branches in Benton and Washington counties prior to the acquisition, having since opted to shutter five of those locations. Metropolitan operates 12 branches in Northwest Arkansas, fully seven of which will be shuttered. "Analysts have said Metropolitan was a real estate play in Northwest Arkansas given its physical property and inability to grow deposits to sustainable levels in this market." This was public benefit?

January 13, 2014

After US Bank announced on January 7 it would seek to acquire 94 branches from RBS Citizens' Charter One, but that it is "too early" to say which of these it would close, Inner City Press / Fair Finance Watch four days later filed an initial comment with the Office of the Comptroller of the Currency:

Dear Director for District Licensing and others in the OCC:

This is a request in advance for a full copy of, and a timely comment requesting an extension of the OCC's public comment period on the Applications of US Bank to acquire 94 Branches from RBS Citizens' Charter One and close some as yet unknown number of them.

US Bank has a record of closing branches, and in connection with this proposed acquisition announced on January 7, US Bank spoke of "some overlap" between branches but "said it’s too early to say whether any will be closed." Chicago Tribune, January 7, 2014.

US Bank should have to disclose which branches it would close, during the comment period, as for example Huntington Bank recently had to do in connection with its smaller proposal to acquire Camco's Advance Bank. See, e.g., "Huntington plans 9 branch closings in Camco deal," by Evan Weese, Columbus Business First, Dec 23, 2013. http://www.bizjournals.com/columbus/news/2013/12/23/huntington-plans-9-branch-closings-in.html

In that case, Huntington re-applied and gave public notice of which branches it would close -- that should be done here.

While this disclosure of branches which would be closed, the OCC should extend the comment period. For now, to ensure consideration, US Bank NA (Ohio)'s 2012 HMDA data reflect that in the Chicago MSA for home purchase loans both conventional and subsidized, US Bank made a smaller portion of its loans to Latinos than did even the aggregate, including lenders not subject to the Community Reinvestment Act.

For conventional home purchase loans in the Chicago MSA in 2012, US Bank made 1083 such loans to whites, 78 to African Americans and only 77 to Latinos. That is, US Bank made 14 such loans to whites for each loan to a Latino, a bigger disparity than is the case with the aggregate.

For the home purchase loans in Table 4-1 in the Chicago MSA in 2012, US Bank made 268 such loans to whites, 68 to African Americans and only 60 to Latinos. That is, US Bank made 4.47 such loans to whites for each loan to a Latino, a significantly bigger disparity than is the case with the aggregate.

Such disparities exist throughout US Bank's franchise, as we will further present along with RBS issues including at the now-requested public hearings. Also to ensure consideration and action as quickly as possible, we are entering this into the record, from the American Banker newspaper of January 4, three days before this proposal was announced:

Banks Keep Offering Deposit Advances, Six Weeks After Crackdown

U.S. Bank [is] still offering deposit advances six weeks after regulators finalized sweeping guidance that raised doubts about the product's viability. As of Friday afternoon, the two big banks were still offering the product — which bears a strong resemblance to the payday loan — on their websites, with terms that appear out of compliance with the guidance. Judging from public statements, the banks' primary regulator has not blessed the product's continuation, even in the short term. The Office of Comptroller of the Currency, which issued the guidance alongside the Federal Deposit Insurance Corp., says the document became effective in late November, and there is no grace period.

"Banks that fail to comply with the guidance should expect that the OCC will take appropriate supervisory action, and enforcement action if necessary, to prevent harm to consumers, ensure compliance with appliance laws, and address any unsafe or unsound banking practice or violations of law associated with these products," OCC spokesman Bryan Hubbard says in an email...

U.S. Bank declined to say whether they have made any changes to their deposit advance products since the guidance was issued in late November. But a review of their websites suggests that what they're currently offering is not in compliance with the guidance.

The guidance contains a provision stating that banks should allow at least one statement cycle (which is typically a month) to elapse between the repayment of one deposit advance and the offer of a second loan. Yet... U.S. Bank's site says that the bank may limit access to the product if a customer uses it in nine consecutive statement cycles.

So did the OCC mean what it said? This is a timely request for public hearings.

The comment period should be extended to accept further HMDA analysis as well as information on the prospective branch closings.

On the current record, hearings should be held and the applications should not be approved.

January 6, 2014

The Community Reinvestment Act should be enforced throughout the country (and world), and across the full spectrum of banks. On that principle, Inner City Press / Fair Finance Watch's challenge to Mercantile Bank's application to acquire FirstBank in Michigan proceeds. When last we reported, Mercantile tried to rebut FFW's analysis of its lending disparities by submitting self-serving letters, for example one from a borrower of saying, "I am a person of color."

Now we can report, as Mercantile did not, that the bank is being sued for alleged violations of the Fair Housing Act and Equal Credit Opportunity Act. The facts at issue are more relevant to the Federal Reserve, and on the merger, than the letter Mercantile solicited and submitted. Watch this site.

On January 3, the Federal Reserve announced that "the Board has enlisted the services of executive recruiting firm DiversifiedSearch to assemble a broad and diverse pool of candidates, both internal and external, from which to select Ms. [Sandra] Braunstein's successor." Given the financial industry's domination of the rest of the Federal Reserve System including several Governors, we believe that consumers and community groups should play a role in the selection process.

While Inner City Press is also focused on the Trans-Pacific Partnership Agreement's threat to globalize the US Digital Millennium Copyright Act circumvention of freedom of the press, exemplified by a August 14, 2013 bad faith DMCA complaint by Reuters UN bureau chief to get a document leaked to Inner City Press banned from Google's search, TPP would also institutionalize the type of deregulation which led to the 2008 predatory lending meltdown. So it should be opposed - watch this site.

Given "Needs to Improve" CRA ratings by the FDIC:


Bank of the South PENSACOLA FL - NI
Builders Bank CHICAGO IL - NI
Commercial Bank of California COSTA MESA CA - NI

December 30, 2013

There were deserved but too-small enforcement actions against PNC, Ocwen and Ally; on the smaller bank project, an industry consultant hyped it up:

A recent article published in American Banker,

Consumer Advocates force tougher CRA enforcement on smaller banks

demonstrates three important dynamics in the enforcement of the Community Reinvestment Act:

For 3 years GeoDataVision has advised clients that regulatory enforcement of CRA is getting more "robust" (a favorite Washington bureaucratic expression for tougher, more adversarial relations between bankers and their regulators). This more aggressive enforcement of CRA is not only borne out in the numbers of banks failing their CRA exams, it is now being reflected in the regulatory scrutiny of merger and acquisition deals too.

Perhaps even more troubling, is the growing focus of community activists on smaller banks too. Not only do these groups represent a public relations nightmare, they also can exacerbate the attitude of regulators too. Matthew Lee, the author of the American Banker article, is a good case in point. Mr. Lee not only terrorizes big banks, he intimidates regulators too. His fingerprints are on many public objections to bank mergers. He is a voice regulators find hard to ignore. And although he mostly focuses on the major banks, he has been demonstrating a growing interest in smaller banks too.

This makes it all the more imperative that your bank have a formal CRA Risk Management program in place. As the old saying goes, "Forewarned is Fair warned". Neglect your CRA performance at your own peril and the consequences could be very big and very costly.

  We actually agree with that...

December 23, 2013

Inner City Press / Fair Finance Watch commented to the Office of the Comptroller of the Currency on Huntington / Advantage, saying that they must be made to disclose how much branches, with 22 to be acquired, would be closed or consolidated, and now received this (and publishes it) --

Regarding the public comment period for the merger of Advantage Bank, Cambridge, OH with and into The Huntington National Bank, Columbus, OH, please be advised that the bank has republished the merger and therefore, the new public comment period end date is January 8, 2014. As indicated previously, public comments should be submitted to: Director for District Licensing, One Financial Place, Suite 2700, 440 South LaSalle Street, Chicago, IL 60605

What is behind this? 


   Inner City Press / Fair Finance Watch has now received a copy of Huntington's (or its law firm Wachtell Lipton's) December 18 submission disclosing that it would close or consolidate fully NINE of the 22 branches it would acquire along with Camco's Advantage: nearly half of the branches.

We have just put Huntington's filing online here: http://www.innercitypress.org/huntingtonadv1icp121813.pdf

What would be the benefit of this proposed merger to consumers? Some of the planned closures are more than two miles apart.

Inner City Press' initial November 29 filing asked for an extension of the OCC "comment period particularly because there is as yet no Federal Reserve Board comment period. Huntington has said it is acquiring the holding company, Camco, so one expects an FRB application. But so far, none."

Huntington's December 18 submission to the OCC argues that no Federal Reserve application should be required, and states that "Huntington will seek confirmation from the Federal Reserve that no application is required."

Inner City Press has (Dec 21) opposed that, in a filing with the Federal Reserve Board in Washington arguing that "an application should be required, particularly because it is now belatedly disclosed that Huntington would close or consolidate fully 9 over the 22 branches it would acquire along with Camco. There are also holding company issues that ICP intends to raise once the FRB application is filed. As simply one example, managerial issues are raised by embezzlement of elderly customers' funds: http://www.wdtv.com/wdtv.cfm?func=view&section=5-News&item=Former-Bank-Manager-Sentenced-for-Embezzlement13431

Inner City Press has now (Dec 21) told the Fed what it told the OCC on November 29:

Huntington's 2012 HMDA data reflect that in the sample MSA of Toledo, Ohio, for conventional home purchase loans Huntington made 287 such loans to white, and only ONE each to African American and Latino applicants. In Table 4-1, Huntington made 97 such loans to white, and only seven to African Americans and one to a Latino applicant.

Cumulated for all home purchase loans in 2012 in the Toledo MSA, Huntington made 384 loans to whites, only EIGHT loans to African Americans and only TWO loans to Latinos. This is outrageous.

In a second sample MSA of Detroit, Michigan for conventional home purchase loans in 2012 Huntington made 68 such loans to white, and only THREE to African Americans and one to a Latino applicant. In Table 4-1, Huntington made 24 such loans to white, and only one to an African American and NONE to Latino applicants.

Cumulated for all home purchase loans in 2012 in the Detroit MSA, Huntington made 92 loans to whites, only FOUR loans to African Americans and only ONE loan to a Latino applicant. Huntington denied 8 of 12 applicants from African Americans. This is outrageous.

On the current record, the FRS should - must -- require an application from Huntington. And the OCC should hold public hearings, and on the current record deny, Huntington's application to acquire Advantage and close / consolidate fully NINE of its 22 branches. Watch this site.


December 16, 2013

Inner City Press / Fair Finance Watch commented to the Federal Reserve about the lending record of Michigan's Mercantile Bank back in October; in November after begging the Fed to essentially ignore the issues raised, the bank told the SEC it would probably not close the deal by the end of the year.

Now, Mercantile has gone low. Its submissions to the Fed have gotten shrill; it has reached out to individual borrowers of color (and to ostensible civil rights and even religious groupings) asking them for letters to CEO Michael Price to give the Fed about how they never felt discriminated against. Click here for one sample letter: http://www.innercitypress.org/mercbankasia120213.pdf

This approach cannot be allowed to prevail. Watch this site.

December 9, 2013

CRA Shifts to Smaller Banks, With Conditions Imposed on Investors Bancorp, Delay for Mercantile and VCBI: Why?

By Matthew R. Lee

With fewer mergers by big banks, Community Reinvestment Act focus has shifted to mid-sized banks and, on at least three proposed deals, the regulators have taken additional time to review lending disparities identified by CRA commenters.

The Investors Bancorp - Roma Financial Corporation, MHC deal to which the Federal Reserve Board gave conditional approval on December 3 was protested back on March 1 by Inner City Press (Fair Finance Watch), which also commented in October on the proposed Mercantile - FirstBank deal in Michigan.

The Fed's Investors - Roma order says that

"as a condition of its approval, the Board has determined that the audit committee of the board of directors of Investors Bancorp must issue a written report to the board of directors of Investors Bancorp that shall include: an assessment of Investors Bank’s consumer compliance risk systems, processes, and procedures; an assessment of compliance with any reports or recommendations made by any state or federal agency issued in the last five years with respect to consumer compliance; and recommendations for improving the consumer compliance risk program, if necessary."

This is a rare condition for the Federal Reserve to impose, at least on consumer compliance. But as Inner City Press' March 1 comment set forth, in the New York City Metropolitan Statistical Area in 2011, Investors made 220 home purchase loans to whites, and only two such loans to African Americans. That's hard to do in New York.

Likewise, in examining the 2012 Home Mortgage Disclosure Act data of Michigan's Mercantile Bank, Inner City Press found that in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent only to whites. Its mortgage company made 42 such loans to whites, none to African Americans or Latinos.

After Inner City Press put this and other date in an October comment on Mercantile's application to acquire Alma, Michigan-based FirstBank, the Federal Reserve asked Mercantile a round of questions on November 6, and another on November 26. These included:

"Describe any other community outreach efforts (e.g., credit needs ascertainment, marketing / advertising, and product development) by Mercantile to make credit available to residents throughout the bank's assessment areas, including to African America or Hispanic individuals or residents of minority census tracts in those areas, including in the Grand Rapids MSA.

"Mercantile stated (page 11) that, effective in 2013, the monthly reports to the bank's CRA Committee include the number of minority loan applications and originations and that these changes were implemented to bring focus to the bank's efforts to increase the number of minority loan applications. Indicate when this expanded reporting began..."

Could it be too little, too late? On November 26, Mercantile filed with the Securities and Exchange Commission that its plan to close the deal by the end of the year, and for FirstBank to not file a 2013 SEC Form 10-K, no longer held.

Another proposed merger in Virginia, of United Bancshares and Virginia Commerce Bancshares (VCBI) has similarly been delayed by comments by NCRC and members, including Inner City Press. United Bancshares went out and hired the Sullivan & Cromwell law firm, to try to push its application through with the Federal Reserve.

Is this a trend? It would seem so. In discussions between Inner City Press and a pro-industry cynic (that is, an arbitrageur), theories emerged such as that regulators have "excess capacity" or feel some responsibility for the subprime lending triggered meltdown of 2008.

In the alternative, as community and consumer groups turn their attention to smaller banks and find disparities that had heretofore escaped their scrutiny, they bring them to the attention of regulators who, at least for now, seem to take them more seriously.

The lesson for banks might be to clean up and improve their lending records before applying for mergers. Or to not set aggressive closing dates and then have to extend them. On this, we agree with the arbitrageur.

December 2, 2013

Back in October, Inner City Press / Fair Finance Watch commented to the Federal Reserve against Michigan's Mercantile Bank's application to acquire FirstBank, highlighting disparities in Mercantile's lending.

The Federal Reserve asked Mercantile a first round of questions on it; Mercantile told the Fed it really, really needed to close the deal by the end of the year, so FirstBank wouldn't have to file an SEC 10-K for 2013.

Conversing with the media in Michigan, Inner City Press noted that for example in the Warren-Troy MSA, Mercantile in 2012 made 17 refinance loans to whites, none to African Americans.

November 29, 2013: "Mercantile and Firstbank merger will likely be delayed, Consumer protection group alleges Mercantile Bank loaned no money to minorities in 2012," by Eric Young, Ogemaw County Herald


November 25, 2103, "Federal Reserve holds up merger of Mercantile Bank Corp. and FirstBank Corp. over minority lending practices," by Jim Harger, MLive/Grand Rapids Press

The Fed has asked more questions, click here, and Mercantile has now told the SEC:

"Due to the timing of certain regulatory processes and approvals, Mercantile Bank Corporation expects that its previously announced merger with Firstbank Corporation will not be completed on January 1, 2014, as previously disclosed."

Watch this site.

November 25, 2013

Inner City Press / Fair Finance Watch commented on Mercantile Bank's application to the Federal Reserve to acquire First Bank, based on disparate lending in Michigan. Now (November 20) Mercantile argues against the Fed having extended its review, arguing that to go beyond December 31 might mean First Bank would have have file an SEC Form 10-K for 2013. But what would giving in to this kind of argument mean for CRA?

On Michigan-based Talmer's proposal to acquire MICHIGAN COMMERCE BANK, BANK OF LAS VEGAS, INDIANA COMMUNITY BANK and SUNRISE BANK OF ALBUQUERQUE, ICP also commented to the FDIC, thusly:

With a comment period running to November 24, the FDIC has provided notice of this (no mention of Talmer)

Prepared On: Saturday, November 23, 2013

20132291 MICHIGAN COMMERCE BANK 2950 STATE STREET SOUTH

ANN ARBOR , MI Regular Merger 10-28-2013 11-24-2013 Chicago

Merger Information: Institutions Involved in this Merger:

BANK OF LAS VEGAS

1700 WEST HORIZON RIDGE PARKWAY, SUITE 101

HENDERSON , NV


INDIANA COMMUNITY BANK

511 WEST LINCOLN AVENUE

GOSHEN , IN


SUNRISE BANK OF ALBUQUERQUE

219 CENTRAL AVENUE NORTHWEST

ALBUQUERQUE , NM

As an initial matter, this is a request that the FDIC immediately send by email all non-exempt portions of the above-noticed applications / notices for which the Applicants have requested confidential treatment -- as well as any application(s) by Talmer, and if this IS the Talmer application, an explanation why Talmer is not mentioned. If that it the case, new notice (and an extended comment period) must be provided.

Reviewing the 2012 HMDA data just released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Talmer's and Michigan Commerce Bank's home purchase and refinance lending.

In the Warren-Troy MSA for conventional home purchase loans in 2012, Talmer made 401 such loans to whites, and only eight to African Americans, only four to Latinos. In Table 4-1, Talmer made 88 loans to whites, two to African Americans and NONE to Latinos.

In the Detroit MSA for conventional home purchase loans in 2012, Talmer made 38 such loans to whites, and NONE to African Americans or Latinos. to Latinos. In Table 4-1, Talmer made 98 loans to whites and again NONE to African Americans or Latinos. This is outrageous.

In all MSAs, Talmer has a strangely high percentage of "withdrawn" applications, that should be inquired into in the public evidentiary hearing ICP is requesting.

Michigan Commerce Bank was hardly better, make loans essential only to whites in the Holland, Kalamazoo and even Detroit MSAs, with a strangely high percentage of "race not available" applications, that should be inquired into in the public evidentiary hearing ICP is requesting.

Neither BANK OF LAS VEGAS nor SUNRISE BANK OF ALBUQUERQUE show up in the FFIEC's HMDA database.

INDIANA COMMUNITY BANK shows up only in the Elkhart MSA, making conventional home purchase loans only to whites.

For the record, "Law360, New York (November 22, 2013, 5:19 PM ET) -- Capitol Bancorp Ltd. on Friday received a bankruptcy court's approval of its bid to sell off its remaining subsidiary banks for $4 million in cash and a $90 million equity contribution despite creditors' cries that the sale offers them almost no recovery. The bank holding company can sell the banks to Wilbur Ross-controlled Talmer Bancorp Inc. under its proposed plan of liquidation following U.S. Bankruptcy Judge Marci B. McIvor's order greenlighting the transaction. The banks include Michigan Commerce Bank, Indiana Community Bank, Bank of Las Vegas..."

This ignores the need for regulatory approval including CRA review, and the abysmal record sketched above.

On the current record, hearings should be held and the applications / notices should not be approved.

November 18, 2013

So ex-regulator Tim Geithner is cashing out to private equity firm Warburg Pincus -- which has at least a 20% stake in Sterling, the Spokane-based bank that Umpqua has applied to the Federal Reserve to acquire for $2 billion. So $400 million of that would go to Warburg Pincus. This insider deal, Inner City Press / Fair Finance Watch has commented on, including on Home Mortgage Disclosure Act disparities and prospective branch closings.

Meanwhile Michigan's Mercantile, trying to buy FirstBank, has responded to the Federal Reserve but withheld from Inner City Press three exhibits in their entirety, while telling the Fed they want to close the deal so to set up a conference call. Inner City Press contests the withholding, and any "ex parte" call, having now formally asked to be be notified of and allowed to be on any such call. Watch this site.

November 11, 2013

Two weeks after Inner City Press / Fair Finance Watch filed comments on the proposed acquisition by Mercantile or FirstBank, the Federal Reserve on November 6 asked Mercantile some questions, including about CRA and fair lending, here: http://www.innercitypress.org/frb1mercbank110613.pdf

They were given eight business days to answer (and send a copy); their shareholders meet on the proposal on December 12...

Another challenge we're watching is to to application of Midland States Bancorp of Effingham, Illinois, to acquire Heartland Bank, filed from St. Louis, Missouri....

Meanwhile be aware: in one week the comment period will close on Umpqua's application to acquire Sterling Financial Corporation...

Among proposed mergers we're looking at:

In North Carolina, NewBridge Bancorp and CapStone Bank... In Washington State, Heritage Financial Corporation and Washington Banking Company.Also in the Pacific Northwest, Bank of the Cascades outbidding Banner Bancorp to try to buy Idaho's Home Federal Bank. Up in Alaska, Northrim BanCorp announced a proposal to buy Alaska Pacific Bancshares. And Huntington Banchares' proposal to acquire Advantage Bank. The analysis: "Mergers and acquisitions were virtually nonexistent in Ohio following the recession, with only 16 bank deals from 2008-12." But now they're back - and so are we.

November 4, 2013

So Goldman Sachs' bank has been given an "Outstanding" CRA rating, trumpeted in the Wall Street Journal. GS is given CRA credit for lending to the CitiBank program. But since the bike racks are all below 60th Street in Manhattan and in gentrified or gentrifying parts of Brooklyn -- a veritable redlining map -- why does this get CRA credit? It's a scam...

October 28, 2013

So ICP / Fair Finance Watch commented to the Fed on Mercantile Bank Corporation to merge with Firstbank Corporation. Reviewing the 2012 HMDA data recently released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Mercantile's and its mortgage company's home purchase, refinance and home improvement lending in its Grand Rapids, Michigan headquarters MSA and finds them outrageous.

In 2012 in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 42 such loans to whites, NONE to African Americans or Latinos.

In 2012 in the Grand Rapids MSA for refinance loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 159 such loans to whites. It had a 100% denial rate for African American applicants.

In 2012 in the Grand Rapids MSA for home improvement loans, both Mercantile's bank and mortgage company lent only to whites.

This is outrageous.

The day after the proposed merger was announced, Michigan News reported:

"Executives of Mercantile Bank Corp. and Firstbank Corp. of Alma pronounced they have no seductiveness in relocating into Southeast Michigan after they finish a 'merger of equals' they announced Thursday, Aug. 15. 'The brief answer is no,' pronounced Firstbank Chairman Tom Sullivan, when asked if a joined bank would find acquisitions in Southeast Michigan during a discussion call. 'We have no seductiveness in relocating into Southeast Michigan,' pronounced Sullivan, who will offer as chair of a joined bank for a initial year of a merger. 'I don’t trust that in being of any seductiveness."

Really?

October 21, 2013

As JPMorgan Chase tries to buy its way out from what it did with predatory lending, it is troubling that the government would be agreeing that less than one third of what Morgan Chase pays would be for the "struggling homeowners" who got hurt: $4 billion, versus $9 billion in fines. For shame...

October 14, 2013

Of course a Consumer Financial Protection Bureau enforcement under the Home Mortgage Disclosure Act is welcome. But why is the non-bank fine so much more, per violation, than the bank?

On October 9 the CFPB announced that "Mortgage Master, a nonbank headquartered in Walpole, Mass., had significant data errors in the 21,015 mortgage loan application" -- and that "Mortgage Master will pay $425,000."

As to the bank, CFPB said "Washington Federal, a bank headquartered in Seattle, Wash., had significant errors in the 5,785 mortgage loan applications" -- and that "Washington Federal will pay $34,000 in civil penalties."

So on one-fourth of the non-bank's application, the bank Washington Federal paid a miniscule mine less than one-tenth of the non-bank's. What gives?

October 7, 2013

This week, along with the IMF pushing for faster foreclosures in Ireland, we highlight a CRA protest by another group: in California, to PacWest.

IMF in Ireland Wants Faster Repossession, Ignored Fall-Out from Austerity, Qs

By Matthew Russell Lee

UNITED NATIONS, October 4 -- The idea of a kinder and gentler International Monetary Fund under Christine Lagarde was belied again Friday with the release, first under embargo, of the IMF's staff report on Ireland. Among other recommendations, the IMF calls for faster foreclosures or repossession. From Paragraph 24:

"Strengthening Ireland’s repossession framework could further support progress in durable loan modifications... Court proceedings and enforcement of court orders can be lengthy, adding to resolution costs where a change in ownership is the only available solution, and underminingborrowers’ incentives to engage on concluding loan modifications and to adhere to the revised debt service schedule.... Based on a terms of reference agreed with EC, ECB, and IMF staff, they will also appoint an internal expert group to review the length, predictability, and cost of proceedings, including relative to peer jurisdictions, and to propose remedies by end 2013."

  So: faster evictions, reduction in borrowers' leverage. On the embargoed press conference call, on which it was not clear how questions were selected, the IMF's Ireland Mission Chief Craig Beaumont also called for faster fiscal consolidation: that is, merger. Where will it lead?

  In the IMF's biweekly media briefing on September 26, Lagarde spokesperson Gerry Rice answered a question about the depreciation of the rupee in Pakistan by saying not only is it not the IMF's fault, the IMF will solve it.

  A journalist down from the UN asked Rice about the view that the rise of "Golden Dawn" in Greece is related to austerity policies. Oh no. Of course not.

  From New York, Inner City Press has asked the IMF about Sudan (and South Sudan, and Palestine) --

On Sudan and the deadly protests there of the elimination of fuel subsidies, does the IMF have any view if the elimination was implemented too quickly? What is the status between the IMF and Khartoum, including on any debt relief?

On South Sudan, what is the status of discussions on a Rapid Credit Facility and a government program to be monitored by IMF staff?

On Palestine, what is the IMF's view of yesterday's Communique by the Ad Hoc Liaison Committee?

Watch this site.

From the LA Business Journal, CRC "has noted that regulators rate CapitalSource as 'outstanding' in those activities, but PacWest has a “low satisfactory” rating. Kevin Stein, the Reinvestment Coalition’s associate director, said his group, which includes member organizations in Los Angeles, wanted to make sure CRA activities were considered due to the size of the merger. 'It would be in the top 10 in the state,' he said. 'That’s a substantial institution. As institutions grow, we think they have an increasing obligation to serve their communities.' PacWest executives on Friday did not immediately return calls for comment."

Typical. We'll have more on this.

September 30, 2013

Investors Bancorp, trying to buy Gateway Community Financial Corporation MHC in New Jersey despite its disparate record in New York, has been asked to explain disparities. And its response to the Federal Reserve gets personal: like saying an application from "two Black / African American applicats was denied for delinquent Credit History."

Meanwhile, "The deal between the two New Jersey banks, which would see Short Hills-based Investors acquire the smaller Robbinsville-headquartered Roma in a transaction valued at roughly $452 million, had been scheduled to close Monday. But the two bank-holding companies said in a news release today the new deadline will be Nov. 30."

September 23, 2013

Striking down in DC with all the talk on house of Corker Warner is that the bill, if it moves forward, probably won't be that one. Rather the chairmen will take over, with Johnson - Crapo. A new chance to raise money. A new chance to sell input.

Also, despite claims by the Administration they are firming behind Mel Watt, few predict that will move, or even be pushed for.

September 16, 2013

Beyond Umpqua - Sterling, there's the $151 million Michigan merger proposed between Mercantile and Firstbank Corp, trying to become the "third-largest bank headquartered in Michigan." Last week a merger was proposed in Indiana, between Old National Bancorp, "the largest financial services holding company headquartered in Indiana," and Tower Financial Corporation. In North Carolina, there's the August 28 proposed merger of Hendersonville, N.C.-based 1(st) Financial Services Corp. and Mountain 1(st) Bank into First Citizens Bank. Watch this site.

September 9, 2013

Blast from the past: when Adams Bank and Trust applied to open a new branch in Nebraska, the Federal Reserve Board got "public comments received from prospective competing banks in Colby and from residents of the surrounding areas. The commenters assert that their community’s demographic and economic characteristics would not profitably support another branch and that the area’s financial services needs are adequately met by the financial institutions currently operating there." Saying "we don't want more banks" was one of the bases for the "convenience and needs" concept in US banking law... It sure looks innovative:

New York Gov. Andrew M. Cuomo announced proposed Slumlord Prevention Guidelines (SPG). The guidelines include new Community Reinvestment Act (CRA) regulations from the Department of Financial Services (DFS)and Benjamin M. Lawsky, Superintendent of Financial Services that incentivize banks -- but how, without meaningful comment periods and processing on mergers?

This NY Dep't of Financial Services, so far, is LESS open to CRA comments that its predecessor. Watch this site.

September 2, 2013

After Inner City Press / Fair Finance Watch and other NCRC members filed challenges with the FDIC to the application of Renasant Bank to buy F&M Bank in Mississippi, the FDIC has issued a rare "condition approval," in cluding that

"1. The Bank will execute its plan to conduct an assessment of the small business and residential real estate credit needs of the post-merger assessment areas;