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

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

May 20, 2013

Talk about absurd: the FDIC writes:

“Your Freedom of Information Act/Privacy Act request dated April 22, 2013 for the entire application of Renasant Bank, Tupelo, MS was received by the FDIC’s FOIA/Privacy Act Group and assigned a Log Number. Please be advised that the FOIA allows 20 business days from date of receipt to process your request.”

Which puts it AFTER the slated May 2 expiration of the comment period...

Takes one to know one: John Kanas of BankUnited claims “regulators should have applauded Chairman and CEO Robert Wilmers and M&T Bank for taking over a 'weakened' institution like Hudson City Bancorp Inc. and 'approved on the spot.' But the delayed deal approval until M&T strengthens its Bank Secrecy Act compliance programs 'poured cold water on [it] and put it off for God knows how long.'” That's per SNL Financial.

We on the other hand would say, why let a bank lax on money laundering take over a very disparate bank?

April 22, 2013

In 2012 Subprime Disparities at Key, US Bank & SunTrust as Fed Lax

The data show that Citigroup confined African Americans to higher-cost loans above this rate spread 2.09 times more frequently than whites in 2012, Fair Finance Watch found.

Citigroup confined Latinos to higher-cost loans above the rate spread 1.83 times more frequently than whites in 2012, the data show.

For JPMorgan Chase, the disparity for African Americans in 2012 was 1.7; for Bank of America it was 1.61; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was up to 2.32.

April 1, 2013

March 25, 2013

Why not Mel? Mel Watt, that is, to replace DeMarco as FHFA director...

So the Securities & Exchange Commission has allowed Citigroup, JPMorgan Chase and Bank of America to block shareholders' proposals that directors explore the break-up of these banks. Strange, after the financial meltdown and bailouts...

March 11, 2013

It's been a while but a showdown may be brewing, with Warren Traiger, now with BuckleySandler, previously defending GreenPoint which is now Capital One. Game on!

March 4, 2013

Inner City Press / Fair Finance Watch has filed a timely to the applications by Investors Bancorp, MHC and Investors Bancorp (collectively, “Investors Bancorp”) to acquire Roma Financial Corporation MHC, Roma Financial Corporation, Roma Bank and RomAsia Bank (collectively, “Roma”).

Reviewing 2011 HMDA data, the most recent data available (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined Investors Bank's home purchase and refinance lending in the New York City MSA and finds it outrageous.

In the NYC MSA in 2011 for conventional home purchase loans, Investors Bank made 220 such loans to whites, and only TWO such loans to African Americans. Its denial rate for Hispanics was FIVE TIMES higher than for whites. (There was no Table 4-1.)

For refinance loans in the NYC MSA in 2011, Investors Bank made 183 such loans to whites, only three to African Americans and only four to Hispanics. Its denial rate for Hispanics was 3.59 times higher than for whites.

In the Long Island MSA in 2011, Investors Bank made 33 home purchase loans to white - and none to African Americans. It made 31 refinance loans to whites and none to either African Americans or Hispanics.

On the current record, Investors Bancorp's applications should not be approved.

February 25, 2013

In American Samoa, Bank of Hawaii plans on March 15 to close its branches, which hold over 50% of the territory's deposits. There has not been enough public outreach; we also note that Bank of Hawaii is run by former FDIC official Donna Tanoue. For shame....

February 18, 2013

Hitting a new low, Customers Bancorp on its application to the Federal Reserve to acquire Acacia Federal Savings Bank has tried to withhold from Inner City Press the entirety of its response to Fed questions. We will be pursuing - the documents, and Customers Bancorp. Watch this site.

February 11, 2013

And now we know: while the Federal Reserve told community groups that the comment period on Live Oak – Government Loan Solutions, published in the Federal Register, had been in error, internally the lawyer for Live Oak asked the Fed on December 21, “Are we close on the Live Oak notice? I know the comment period has not closed quite yet, but I will be out of the office most of next week, so I thought I would check in this morning.”

The comment period still open, but the Fed “close” to deciding and approving anyway. This is shameful. An appeal is being filed with the withheld information, presumably even more shameful.

February 4, 2013

Talk about grading of the curve: last Fall Inner City Press / Fair Finance Watch began challenging Customers Bancorp, then on its proposal to buy Acacia. Now, Customers tells the Federal Reserve that "Fair Lending training is required annually of all employees with customer contact. It is administered via an online, self-paced course through the Edcomm Learning Management System. The employee is required to demonstrate adequate mastery of the course materials by completing a test at the conclusion of the course and obtaining a passing grade (minimum 80% correct).

80% is good enough for fair lending?

January 28, 2013

And now it can be told, or published:

a second timely comment on the applications by Guido Hinojoso to acquire control of Anchor Commercial Bank. On October 21, 2012, Inner City Press / Fair Finance Watch requested that the FRS immediately send by email all portions of the applications / notices for which Guido Hinojosa and his outside counsel have improperly requested confidential treatment.

Some of these arrived some eleven weeks later, but with redactions to basic managerial information such as the answer to "have you ever been dismissed from past employment" including in the banking field. Biographical, 2b. Similarly, the FRB has redacted all answers about past bank merger applications, if they were denied (Biographical 5) including a paragraph answer about Change in Control (5b) and lawsuits (5e). Such information must be released; ICP has filed a timely FOIA appeal and the comment period must be extended in light of these improper withholdings.

Even in what is released, there are reasons to schedule the hearing ICP timely requested. Guido Hinojosa is a shareholder in a bank, Sunrise, subject to a Prompt Corrective Action Directive.

In "Confidential" Exhibit 1D, the Fed still redacts with whom Fortaleza partnered. That must be released.

Still partially redacted Exhibit 1G lists $500,000 purchase of shares in Sunrise Bank in 2011, and $5,500,000 for Anchor Commercial Bank in 2012. But it is now 2013. Was the gun jumped? Has this plan changed? The rest of the page is blacked out and must be released, and the comment period extended.

The "relationship to Notificant" column for both Patricio Hinojosa Jimenez and Jorge Hinojosa Jimenez is redacted - why? A member of CBIFSA's board of directors is redacted in full -- why? These must be released.

The Recitals, Definitions and much of "Subscription" of the Subscription Agreement are redacted - why? This must be released.

In "Turnaround," the "Summary of the Bank's Condition" is redacted - this must be released.

The "Commitments" (Confidential Exhibit 3) are withheld - but must be released. ICP has appealed this and all other redactions and withholdings.

Again, Hinojosa's role in Banco La Paz must be inquired into and considered in this proceeding, under the CIBC Act.

For now, Anchor Commercial Bank in 2011 for conventional home purchase loans in the West Palm Beach MSA made only three loans, all to whites.

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

January 21, 2013

Responding to a Freedom of Information Act request from Inner City Press, the Federal Reserve has released some of its questions to M&T -- but not the answers. The Fed asked "Discuss what measures M&T will take to prepare for a wind down of the Transaction Account Guarantee Program" and "page 9 of Confidential Exhibit Q indicate that M&T plans to sell Hudson City’s investment portfolio and unwind Hudson City’s wholesale funding."

The answer are entirely withheld - we will be appealing. Watch this site.

January 14, 2013

On January 10, President Barack Obama nominated for the post of Treasury Secretaryformer Citigroup-er Jack Lew.

Given Citigroup's role in predatory lending and the global financial meltdown, some are asking how could a senior Citigroup official during the critical time from 2006 through 2008 be Treasury Secretary?

Others counter-argue that Lew worked for Tip O'Neill, the Speaker of the House from Massachusetts, albeit in 1979.

And when Obama made the announcement, he mentioned O'Neill and Bill Clinton, then said Lew had been with "one of our largest investment firms." Say it - Citigroup! Lew didn't mention it either. But we will. Watch this site.

January 7, 2013

The total lack of accountability of the Federal Reserve Board and of those it purports to regulate, for example Capital One which was fined $150 million in July 2012 for predatory practices, is on display in a Freedom of Information Act appeal denial issued on January 2 by Governor Jerome Powell, to Inner City Press.

Upholding in full the withholding of over 2000 pages of records related to Capital One's compliance or non-compliance with commitments it made during its NCRC protested purchases of ING DIRECT and HSBC's subprime credit card operations, Powell ruled that not one page, or even a portion of a page, would be released.

This is at odds, for example, with FOIA appeal responses obtained this year by Inner City Press from other Federal agencies. In other FOIA news, Inner City Press is a media amicus in this just filed brief in McBurney v. Young, No. 12-17 of the US Supreme Court.

But the Federal Reserve, along with Capital One, will have to be addressed in 2013. Watch this site.

December 31, 2012

HSBC is being sued by three counties in Georgia which say its "predatory lending practices include targeting vulnerable borrowers for mortgage loans with unfavorable terms; directing credit-worthy borrowers to more costly loans; putting unreasonable terms, excessive fees or pre-payment penalties into mortgage loans; basing loan values on inflated or fraudulent appraisals; and refinancing a loan without benefit to the borrower." That's what we said when HSBC bought Household, saying it all the way to Hong Kong and Singapore. Now the chickens come home to roost...

December 24, 2012

It started slow and it is still ongoing. Back in August, Inner City Press / Fair Finance Watch wrote to Customers Bancorp for its mortgage data, expressing some concerns. A month later, at the deadline, some data was provided. It was disparate and Inner City Press comments on Customers' Acacia application. There were questions from the Federal Reserve, some FOIA requests. Now, Customer's has passed back the drop-dead date from December 31 to January 31. But how do they know it will be approved by then?

December 17, 2012

Annals of secrecy and mis-regulation: so HSBC settles for money laundering for drug dealers, but there's no criminal sentence, no jail time, nothing. Meanwhile the Federal Reserve responds thusly to a Freedom of Information Act request from Inner City Press:

To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link that

contain instructions for registering with the Zix e-mail system. The web address is

https:// WITHHELD

For shame... Also, from FirstMerit's submission to the Federal Reserve about Citizens Republic, the entire "Environmental Matters" section is blacked out, in response to Inner City Press' FOIA request...

December 10, 2012

Inner City Press has filed this: a formal request under FOIA for the portions of FirstMerit's November 30 response to FRS questions which were not sent to Inner City Press.

To virtually every FRS question about its proposal to acquire Citizens Republic, which ICP timely challenged and made a still pending FOIA request about, FirstMerit states, See Confidential Exhibit. For example, to FRS Question 1, FirstMerit says only, "See Confidential Exhibit 1."

To FRS Question 2, FirstMerit says only, "See Confidential Exhibit 2."

To FRS Question 3, FirstMerit says, "See Confidential Exhibit 3."

To FRS Question 5, FirstMerit says, "See Confidential Exhibit 4."

To FRS Question 6, FirstMerit says, "See Confidential Exhibit 6."

To FRS Question 7, FirstMerit says only, "See Confidential Exhibit 6."

To FRS Question 8 and 9, FirstMerit says only, "See Confidential Exhibit 7."

To FRS Question 10, FirstMerit says only, "See Confidential Exhibit 8."

To FRS Question 11, FirstMerit says only, "See Confidential Exhibit 9."

To FRS Question 12, FirstMerit says only, "See Confidential Exhibit 10."

To FRS Question 14, FirstMerit says only, "See Confidential Exhibit 11."

This is outrageous, and makes a mockery of the FRS' stated Rules against Ex Parte Communications. This is a timely challenge to all of the withholdings.

December 3, 2012

From the big picture to the "small" but telling: in Knoxville, Tennessee, predatory lending victim Dwight Newton sued Bank of America for $25,000 in small claims court. He's $100,000 upside down on his mortgage and trying to work out a modification, as so many promise.

But when Bank of America didn't show up, rather than winning a default judgment, the judge Tony Stansberry "had his assistant call B of A and they hung up on her. Still he gave them a continuance even though they weren't even there. If the roles were reversed and dwight newton was the defendant instead of the plaintiff he would have awarded them judgment without hesitation." So it goes, Bank of America...

November 26, 2012

Hudson City Savings Bank, which M&T is trying to buy, is in New Jersey but not of it. When ICP / Fair Finance Watch challenged the deal, highlighting disparities in Hudson City's record, Hudson City had no response at all. Now it has been challenged from New Jersey as well, and M&T will run there on December 13.

Meanwhile the Fed has had no response to the absurdity of it providing heavily redacted records of its pre-announcement meetings with M&T, an hour before the comment period was set to expire. This is not transparency. Watch this site.

November 19, 2012

Talk about old school -- when the OCC got a Community Reinvestment Act protest by email on October 26 from Inner City Press to BankUnited's application to open branches only in the most affluent parts of New York, for ten days nothing was heard. Then on November 7it acknowledged receipt, even providing another OCC email address -- and sent the acknowledgment by snail mail, posting it November 8 for arrival days later. Ah, regulation...

And still the OCC has yet to improve its website listing of pending merger subject to public comment, even to bring it up to speed with the Federal Reserve...

November 5, 2012

Royal Bank of Scotland has had to settle in Nevada for securitizing predatory loans -- meanwhile, it may have to sell off Citizens and Charter One in the United States. In Nevada:

RBS Financial Products will pay a $42 million settlement to resolve an investigation into the firm’s role in purchasing and securitizing subprime and payment option adjustable rate mortgages in Nevada. The assurance of discontinuance, filed in Eighth Judicial District Court, requires RBSFP to commit to certain changes in its practices to the extent it securitizes Nevada mortgages and to pay the State $42 million to be used for payments to affected borrowers, mortgage fraud enforcement, and foreclosure prevention, and attorney’s fees and costs.

Nevada Attorney General Catherine Cortez Masto specified it's about "misrepresentations by lenders, including Countrywide and Option One, to Nevada consumers who took out subprime loans and payment option ARMs that were bought and securitized by RBS." For shame...

October 29, 2012

Three weeks ago, Inner City Press / Fair Finance Watch made a first timely submission to the Federal Reserve opposing the applications by M&T to acquire Hudson City Savings Bank, highlighting outrageous disparities in Hudson City's lending including that in the NYC Metropolitan Statistical Area in 2011, Hudson City made 765 conventional home purchase loans to whites and only FIVE to African Americans.

This is one of the worst records seen.

But M&T in its purported response only filed late in the comment period on October 24, by outside counsel who worked in the merger review process at the Fed -- ICP is with all due respect questioning whether this is appropriate -- M&T says hardly anything about Hudson, instead merely repeating claims about M&T's CRA record.

Hudson City is a (much) larger mortgage lending in the NYC MSA than M&T. It's record must be answered for.

But even when asked by the media, Hudson City "did not respond to requests for comment." See, http://www.northjersey.com/news/173838811_Fair_lending_advocate_challenging_Hudson_City-M.html?page=all

While wishing to focus the FRB on Hudson City's outrageous (and larger than M&T) record, we also contest M&T's presentation, on the analysis previously submitted and have submitted more, concerning M&T's actions after a previous acquisition, of Provident. Watch this site.

October 22, 2012

Sleaze fest: "Bank of America says it plans to unveil at least a dozen 'flagship' branches across the country that will offer customers more space, more specialized bankers and financial advisers, and the latest gadgets. The flagship banking centers will include videoconference screens, so customers can talk to their favorite banker or financial adviser — even if they are located elsewhere. In addition, the branches will also feature a 'power bar' where customers can plug in their laptop or tablet to do their banking while digital signs display stock quotes, pictures of branch staff, and the latest product promotions."

Meanwhile the OCC considering the "permissibility" of Capital One / ING's beverage service -- then the advisory letter went offline. Drink up!

October 15, 2012

As M&T Protest Proceeds, Trustmark Delayed and Apple in Denial, Lax Regulators and Media Allow

By Matthew R. Lee

SOUTH BRONX, October 13 -- Since the bank-led predatory lending meltdown in 2008, have banks become more responsive, or more fair in their lending? Has reporting on banks become more critical?

As Inner City Press reported on October 7, Fair Finance Watch challenged the application of Buffalo-based M&T to buy Hudson City Savings Bank, the biggest merger proposal in the US in 2012.

Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolital Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 14 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

Picking up on the challenge, the Buffalo News contacted M&T for its comment. M&T spokesman C. Michael Zabel countered that "we support community-based organizations."

But reporting by Inner City Press find this questionable, throughout M&T's footprint down to Virginia. M&T's next move was to reach out to friendlier media and announce that its merger application is proceeding - without mentioning the protest or why it was reaching out.

Similarly, M&T hyped up after the protests it celebration of Hispanic Heritage Month at its Newburg, New York branch, and got it reported without any mention of its lending record, much less the challenge.

But at least on M&T, the word got out in New York and New Jersey, where Hudson is based. The Deep South seems worse, in lending disparities and weak coverage of banks.

On August 11, Inner City Press challenged and reported on Trustmark's application to acquire Banktrust, noting in the most recent mortgage data then available that in the Jackson, Mississippi MSA for conventional home purchase loans TrustMark had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.

On October 5, Trustmark wrote to the Federal Reserve and said is was extending the planned closing date of the merger into 2013, because it has rightfully not obtained regulatory approval. Trustmark's lawyers mailed Inner City Press a copy of their email to the Fed -- we'll put it online here -- and then four days after the email, put out a press release about the extension (but not the protest).

Media reported the extension but not the challenge. How hard is this? On October 11, after its press release and uninformed reports of it, Trustmark answered another round of questions from the Federal Reserve. The regulator may be lax, but the media doesn't help.

This laxity makes banks arrogant, and regulators non responsive. A recent example of each is Apple Bank, which is seeking to acquire nearly all the branches of Emigrant Savings Bank in New York. Despite the location, when comments were submitted to the New York State Financial Services Department as well as the FDIC, only the FDIC has so far responded.

The comment noted that in the NYC Metropolitan Statistical Area, Apple in 2011 made 13 conventional home purchase loans to whites, and NONE to either African Americans or Latinos.

Apple collects deposits in, for example, the South Bronx -- but look at its lending record. It should not on this record be allowed to acquire Emigrant's deposits and similarly redline with them.

For refinance loans in the NYC MSA in 2011, Apple made 27 loans to whites, only one to an African American applicant (while denying another), and NONE to Latinos.

Apple's "Chairman, President and CEO" Alan Shamoon, despite his bank's lack of visibility and weak community lending record, submitted a short response under his own signature, calling the mortgage lending analysis "disparagement" and "devoid of substance," to be "dismissed." Takes one to know one.

Amid too little, too late lawsuits against JPMorgan Chase and Wells Fargo, this tale of three mergers shows an industry, a media and regulatory environment ripe for yet another meltdown. What has been learned? Watch this site.

October 8, 2012

Lending Disparities Shown in Protest to M&T - Hudson City, Biggest Merger of 2011

By Matthew R. Lee

SOUTH BRONX, October 7 -- The largest proposed bank merger in the United States in 2011, M&T Bank's application to acquire Hudson City Savings Bank for $3.7 billion, has been challenged to the Federal Reserve based on both banks' lending disparities. It will be a test of the Federal Reserve's seriousness.

  Inner City Press' Fair Finance Watch has used 2011 Home Mortgage Disclosure Act data to document that although Hudson City Savings Bank is lesser known than M&T, in for example the New York City Metropolitan Statistical Area Hudson City is a much larger home purchase lender.

  But Hudson City disproportionately excludes African Americans and Latinos: for conventional home purchase loans in the NYC MSA in 2011, Hudson City made 765 such loans to whites and only FIVE to African Americans (and only 14 to Latinos).

  Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

  M&T cannot make up for this: in the NYC MSA in 2001, M&T for conventional home purchase loans made 119 such loans to whites, and only 17 to Latinos. It denied Latinos 1.91 times more frequently than whites.

  Hudson City is a much larger home purchase mortgage lender in the NYC MSA than M&T - based on its record, there should be public hearings in New York City under the Community Reinvestment Act and on this record, the merger should not be approved.

  In the Nassau-Suffolk (Long Island) MSA in 2011, Hudson City for conventional home purchase loans made 294 such loans to whites and only TWO to African Americans (and only seven to Latinos).

In this same Long Island MSA in 2011, M&T for conventional home purchase loans made 48 such loans to whites, only three to African Americans and NONE to Latinos: denial rate 100%. It denied African Americans 2.92 times more frequently than whites; it denied Latinos infinitely more than whites

  Hudson City is a much larger home purchase mortgage lender in the Long Island MSA than M&T - based on its record, there should be public hearings on Long Island and on this record, the merger should not be approved.

  In the Bridgeport - Stamford - Norwalk MSA in Connecticut in 2011, Hudson City for conventional home purchase loans made 288 such loans to whites and only ONE to an African American (and only six to Latinos).

  Elsewhere in the 2011 HMDA data, not yet taken into account in any CRA performance evaluation, moving north M&T in the Washington DC MSA for conventional home purchase loans made 34 such loans to whites, and only six to African Americans and NONE to Latinos. On this low volume, it denied African Americans 2.92 times more frequently than whites.

  In the Baltimore MSA in 2011, M&T for conventional home purchase loans made 88 such loans to whites, only 14 to African Americans and only one to a Latino.

  M&T denied African Americans 3.67 times more frequently than whites; it denied Latinos 16.6 times more frequently than whites. It bought AllFirst and Provident in this market; it should not be allowed to buy Hudson City Saving Bank.

  In the Philadelphia MSA in 2011, M&T for conventional home purchase loans made 85 such loans to whites, only ONE to a African American and NONE to Latinos. On this record, M&T should not be allowed to buy Hudson City Saving Bank.

  ICP Fair Finance Watch will be submitting more comments, including once it receives the records responsive to its pending Freedom of Information Act request. If those timely requested documents are not received ten days before the current expiration of the comment period on October 27, the comment period should be extended on that ground. The public comment period should be extended for public hearings in any event.

The Federal Reserve last granted public hearings on the largest merger of 2011, Capital One - ING. But click here to view the Fed's February 3, 2012 FOIA Denial,  and click here to view the heavily redacted 34 page document that the Fed provided to Inner City Press (and Capital One to NCRC and the other protesters from which it had withheld this information). What will happen this time, on M&T - Hudson City? Watch this site.

October 1, 2012

Capital One announces layoffs in Washington State - then says they can re-applying to Capital One's growing fraud unit. Yes, Capital One continues to grow in fraud:

"Capital One said Wednesday that it would cut 217 collections jobs from its Tigard office. It's the second time this year the financial company has announced large-scale layoffs at the former HSBC call center. The cutbacks are set to begin Jan. 2 as Virginia-based Capital One shifts the operations elsewhere, spokeswoman Julie Rakes wrote in an e-mail.

"Capital One earlier this year outlined plans to slash marketing jobs in Tigard after acquiring the site from HSBC. It bought the British banking company's U.S. credit division in a $2.6 billion deal that closed in May. Employees affected by the most recent round of layoffs can interview for jobs in the office's growing fraud division, the company said."

September 24, 2012

The biggest proposed merger of 2012 is M&T's proposal to acquire Hudson City Savings Bank for $3.7 billion. Steps to raise issues on it have begun.

Capital One - ING DIRECT was the biggest merger of 2011 and its problems continue even after the CFPB enforcement action and fine, and on subprime auto lending

Last week Akron, Ohio based FirstMerit announced a proposal to buy Flint, Michigan based Citizens Republic, which is also in Ohio and Wisconsin, for 912 million (or really $1.2 billion, with TARP repayment included) There are doubts about the deal, not only branch closures in Ohio but also whether FirstMerit can handle it. Watch this site.

September 17, 2012

So after the Fed handed out an approval without any mention or consideration of it, now it's reported that BB&T will close 21 branches in South Florida as it swallows BankAtlantic -- nine from BB&T and 12 from BankAtlantic. And, 365 jobs will be cut by Feb. 1, 2013...

Meanwhile Fed Governor Jerome H. Powell, formerly of Deutsche Bank and the Carlyle Group, has belatedly ruled on Inner City Press' June 30 FOIA appeal about Mitsubishi UFJ, largely rubber stamping the withholding but saying that some additional pages mis-withheld under Exemption 8 will be released. But these wrongfully withheld pages weren't included with Powell's letter, and haven't been e-mailed.

The Fed did belatedly send a copy of its August 27 to Trustmark, after it was raised. Better late than never.

September 10, 2012

After Inner City Press / Fair Finance Watch commented on Trustmark's application to acquire BankTrust, its law firm Wachtell Lipton replied, saying that a six to one denial rate disparity was okay. Now the Federal Reserve has asked Trustmark and Wachtell Lipton questions about the reply, including about Somerville Bank & Trust, who reviewed and claimed no discrimination? The responses are not convincing - and one wonders why the Fed didn't send ICP a copy of the questions, when they were asked...

September 3, 2012

In predatory lending news, beyond Advance America and Mexico's Grupo Elektra, there's interest rates over 200% at World Acceptance. There's also this, from Citigroup:

Citi agreed to pay $590 million to settle a lawsuit by shareholders who claims that they took massive losses because the bank failed to take timely writedowns on collaterized debt obligations backed by subprime mortgages. U.S. District Judge Sidney Stein granted the deal preliminary approval last week, and set a Jan. 15, 2013, hearing to consider final approval....

August 27, 2012

  So what does Trustmark's law firm Wachtell, Lipton have to say about its lending disparities? That the Office of the Comptroller found them okay. But here they are, as raised on the pending application to acquire BankTrust:
 
  in its headquarters Metropolitan Statistical Area of Jackson, Mississippli in 2010, Trustmark for conventional home purchase loans had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.

  MEANWHILE, the Federal Reserve in an August 22 FOIA response blacks out even Trustmark's market share of deposits in Jackson -- clearly public information. The Fed has hit a new low.

In the Gulfport - Biloxi MSA in 2010, for conventional home purchase loans Trustmark made 40 loans to whites and only four to African Americans.

In the Memphis MSA in 2010, for conventional home purchase loans Trustmark made 34 loans to whites and only two to African Americans.

In the Houston MSA in 2010, for conventional home purchase loans Trustmark made 35 loans to whites and NONE to African Americans.

   This is NOT okay. Watch this site.

August 20, 2012

While the New York State Department of Financial Services quickly filed and settled charges against Standard Chartered Bank for laundering money for Iran to evade sanctions against that country, the same NYSDFS has been remiss in its more local duties.

  A major New York bank franchise, Emigrant Bank, is up for sale to Apple Bank for Savings, but the NYSDFS appears asleep at the switch. The NYSDFS is rubbing stamping mergers and branch closings, and not responding to comments from the public.

  On August 6, Inner City Press / Fair Finance Watch submitted a timely challenge to the NYSDFS against a pre-merger branch closing by Emigrant. While not responding, the NYSDFS then provided notice of a merger application filed August 8, saying the comment period expired August 6 - click here to view.

 The NYSDFS has not explained this either. Can you say Kafka?

August 13, 2012

Inner City Press / Fair Finance Watch has a timely first comment on the applications by Trustmark to acquire troubled BankTrust, highlighting in its headquarters Metropolitan Statistical Area of Jackson, Mississippli in 2010, Trustmark for conventional home purchase loans had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.

In the Gulfport - Biloxi MSA in 2010, for conventional home purchase loans Trustmark made 40 loans to whites and only four to African Americans.

In the Memphis MSA in 2010, for conventional home purchase loans Trustmark made 34 loans to whites and only two to African Americans.

In the Houston MSA in 2010, for conventional home purchase loans Trustmark made 35 loans to whites and NONE to African Americans.

See also, http://www.mslitigationreview.com/uploads/file/Trustmark%20order.pdf

On the current record, the merger applications should not be approved.

August 6, 2012

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a FOIA request concerning withheld submission related the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust, which ICP timely protested.

Many of the applicants' submissions are being withheld, including directly on issues raised in ICP's timely protest. For example, and this is specifically requesting, a July 31 submission recites an FRB questions about Tax Refund Anticipation Loans (raised by ICP), and says "Please see Confidential Exhibit 1."

ICP is request that and the other withheld exhibits.

Similarly, in a July 24 submission, there is a question about Swiss regulators' inquiring into interest rate manipulation (that is, LIBOR scandal) - and it says "Please see Confidential Exhibit 2."

ICP is request that and the other withheld exhibits.

Still sleazy: Community Bank System Inc. is closing five branches, three of which are former HSBC Bank USA NA branches divested by First Niagara. Among the remaining two, one of the branches is from among the three additional branches that Community Bank is acquiring from First Niagara. Supposedly the consolidation will be effective Sept. 10 and the consolidations will not result in any layoffs.

July 30, 2012

Federal Reserve Seems to Pre-Approve Mergers, BB&T FOIA Release to Inner City Press Shows

By Matthew Russell Lee, Exclusive

SOUTH BRONX, July 29 -- This month the Federal Reserve Board quietly announced a willingness to pre-approve, or to indicate a willingness to approve, bank mergers proposals even before the public is made aware of them.

  To some, this shows how little the regulator has learned from the financial meltdown.

  Inner City Press has also just learned, via a Freedom of Information Act request and appeal, that the Fed has even this year been entertaining bank merger proposals under code names such as "Project Palm," assigned to BB&T's proposal with BankAtlantic.

   Click here for Governer Jerome Powell's response to Inner City Press' FOIA Appeal. Click here for some of the documents released. 

   The deal is still pending.

  When the Fed on July 11 announced the policy by a "Supervisory Letter," its press release provided a telephone number in Washington for media inquiries. Inner City Press called the number and asked among other things how it would impact review under the Community Reinvestment Act, which involves public notice and comment.

  Inner City Press will not here report the name of the person answering, because it was insisted that no name could be given.

  Rather Inner City Press was directed to the FOIA footnote of the Supervisory Letter, that some records about the pre-approvals will be available, after the fact, under FOIA.

  But while the Fed is pre-approving, the public will have no way to know what records to request. This can be called false transparency.

  Even on BB&T's "Project Palm," it is only now that the Fed releases records half-showing its response to Inner City Press' February 2012 comment on and against the proposal.

  The just-released records show that on February 7, Claudia A. VonPervieux of Fed staff was "working on a draft rejection letter for M.Lee" of Inner City Press when the Fed belatedly realized that the Press was right: public notice had disappeared such that one couldn't know what to comment on.

   And so a brief extension of the comment period was granted, but only for Inner City Press, which did not cure the problem of lack of notice to the public at large. See released e-mails, attached. And so it goes at the Fed. Watch this site.

  Two of the vendors that sold the credit card add-ons cited in Capital One's settlement with the CFPB and OCC also do business with Wells Fargo, Citigroup and Bank of America: private equity owned Affinion Group Holdings, and Intersections, for which Bank of America is more than half of the company's income....

July 23, 2012

So the Consumer Financial Protection Bureau finally hauled off and fined a bank, and it couldn't be a more deserving one: Capital One.

The Consumer Financial Protection Bureau and OCC on July 18 initiated action against Capital One Financial Corp. unit Glen Allen, Va.-based Capital One Bank (USA) NA for unfair and deceptive practices relating to payment protection and credit monitoring products and ordered the bank to reimburse $150 million to 2.5 million affected consumers.

The OCC also asked the bank to stop the sales and marketing of any debt suspension product, debt cancellation product, credit and identity monitoring products, or any other similar products and to take other corrective action to ensure compliance with consumer protection laws.

The OCC based its penalty on the bank's failure to develop and implement a comprehensive and effective enterprise risk-management program to detect and prevent unfair and deceptive practices, as well as the duration of and failure to correct those practices

So why did the OCC let Capital One buy the subprime credit card business of HSBC?

So just in the last week there are announcements of a credit union merger proposal in Washington State (Prevail and Harborstone), the buy-up of United Community Bnak in Texas, and of Inland in Ontario, California; there is CRA-challenged WesBanco making a move into Pittsburgh. And there is a proposed deal in New York we will keeping a close, close eye on.

The Fed has done it again: improperly withheld basic information about an application, as admitted even by the pro-bank Governor now in charge of ruling on FOIA appeals. Governor Jay Powell, recently withholding ING - Capital One information, now finds on another application (BB&T) that information was improperly withheld under Exemption 5 and can now be released including records that "describe transaction filings and discuss comment period timings and news articles." The rest -- at least 156 full pages -- he withholds.

Meanwhile one of Governor Powell's ex employers has decided to hold onto its stake in a bank in Taiwan, Ta Chong. How does or will Powell recuse himself? Watch this site.

July 16, 2012

Even without major nationwide news there are a lot of small regional deals, of the type on which CRA could and should be enforced, like

July 2: Montana, 7 branch deal

July 2: Maine deal

July 3: Illinois deal, Heartland and Farmer City

July 5: Kansas deal, Southern Kansas

July 5: Nebraska, Valley Bank

July 6: Texas, LubCo (Lubbock)

July 9: California, Opus Bank buying 10 branches in and around LA

July 10: Maryland, federal savings bank deal

July 10: Texas: Comanche - Texas Savings

And that's just in 10 days. Overseas, HSBC is selling in Monaco and buying in Egypt, GE is selling, so is Santander in Latin America...

Last week, the Federal Reserve put out a letter offering "pre-filing" review of merger applications to banks. Inner City Press decided to call the number on the Fed's press release with a "media inquiry."

At first they said they'd give an on the record answer. Then they offered only "deep background" not attributable to the Fed -- and even then, only directed ICP to the FOIA part of the letter. This... is what lets scandals like LIBOR and predatory lending happen.

July 9, 2012

Guess who the Federal Reserve Board has put in charge of ruling on Freedom of Information Act appeals? It's new Governor (and former official and Deutsche Bank and the Carlyle Group) Jerome Powell. In an 8-page July 3 letter to Inner City Press, Powell upholds multiple withholdings of information about Capital One and ING, while also "determining that certain limited information previously withheld pursuant to exemptions 4, 5, 6 and 8 is releasable."

Limited, indeed. Worst, Powell "affirms the Secretary's decision to withhold certain information as 'Not Responsive' and to refer 212 pages to the OCC for disposition."

This is one of the Fed's new moves, to black out information that is not exempt, but which it claims it "not responsive" to the FOIA request. Why so secretive? We'll have more on this.

July 2, 2012

U.S. consumers paid $2.4 billion in fees for such plans in 2009, according to a March 2011 report from the Government Accountability Office that looked at nine credit-card issuers, including Capital One Discover, American Express, and Bank of America. Fees typically ranged from 85 cents to $1.35 per $100 of outstanding balance each month, the GAO said, noting a "relatively small proportion of the fees consumers pay for debt-protection products is returned to them in tangible financial benefits."

Meanwhile the Federal Reserve's FOIA response to Inner City Press about the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust outright withholds 634 pages, and we have appealed.

But what's provided points to more. For example:

Subject: Unionbancal/Pacific Capital BC transaction - call Wed?
From: Elisa Johnson
To: Kenneth Binning; Cynthia Holbrook; Steven Takizawa Cc: Jose Alonso
Date: 02/21/2012 04:53 PM

Hello everyone -

I just took a call from Mark Gillett of Union Bank wanting to have a preliminary call tomorrow at 11am to discuss the filing requirements for Unionbancal's acquisition of Pacific Capital BC, Santa Barbara. Union is in the midst of conducting their due diligence . This will be an all cash transaction. FYI: the code name for this deal is Pebble Beach. The structure of the deal has "gelled"

But no earlier records are provided. And many records are withheld as "not responsive" -- with "also b(5)" added later in a different font. The Fed continues to abuse FOIA - we have appealed. Watch this site.

June 25, 2012

So after Inner City Press / Fair Finance Watch challenged the applications of Mitsubishi UFJ Financial Group to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust, the applicants decided to withhold basic information about their Community Reinvestment Act programs.

Then Inner City Press filed Freedom of Information Act requests and appeals. Now, Mitsubishi related some information, while blacking out columns and columns, and most of its response on the CRA.

Still, "Corporate Social Responsibility" chief Julius Robinson decided to turn in a "Supplement to the Convenience and Needs Considerations portion of the Application," while arguing that SBBT put its tax Refund Anticipation Loan rip-offs behind it. But why keep withholding information? Watch this site.

June 18, 2012

Of Occupy and the big banks: In Philadelphia, Occupiers are gearing up to oppose Wells Fargo's move to renew its contract with City Hall on June 21, saying Wells "plundered the Philly school system."

In Detroit, the group Moratorium argues that Michigan "Governor Snyder, trying to bully Detroit and stop the lawsuit against the 'consent decree,' is threatening that '100% of the city’s ongoing revenue sharing payments will be U.S. Bank … with no residual payments transferred to the city until the $80 million bond is paid in full' (Deputy Treasurer Thomas Saxton quoted in The Morning Sun). So the state is planning to give U.S. Bank all our revenue sharing money after years of refusing to pay revenue sharing money already owed to the City – the exact reason for the lawsuit in the first place. Who is U.S. Bank? This is one of the banks that criminally targeted Detroit by selling racist, fraudulent, predatory loans to over 80% of the people taking out mortgages or refinancing. This directly led to the foreclosure crisis that destroyed the tax base of Detroit and drove hundreds of thousands of people from the city."

Meanwhile, TIME says "Today, credit bureau Experian announced the debut of a product it calls an Extended View Score. Intended for people without bank accounts and spotty credit histories, the formula uses alternative data sources like rent payment history and public records data to create a score." Scary?

June 11, 2012

The Federal Reserve has issued a flurry of FOIA denials and extensions of time. Then comes a heavily redacted submission TO the Fed from Sullivan & Cromwell, on Mitsubishi UFJ Financial Group's application to buy Pacific Capital Bancorp and long time RALs rogue Santa Barbara Bank & Trust.

Asked about its due diligence on the RALs rogue, Sullivan & Cromwell say "see Confidential Exhibit 1" -- but do not provide it. Well, we DO want to see it.

Last month of Michigan it was reported by SNL Financial that

"Huntington Bancshares Inc.'s 10-year deal to open branches in Meijer grocery stores in Michigan is the bank's next step to increase its Michigan market share... The bank will open 20 branches in Meijer stores from May until the end of the year and will eventually open a total of more than 80 branches in the next three to five years, said Mary Navarro, Huntington's retail and banking director. Huntington has an opportunity to put a branch in every Meijer store in Michigan, of which there are more than 100, but bank executives could not provide a specific number."

But advocates in Detroit say their neighborhoods don't have these Meijer (or other) supermarkets. And so it seems a PROMISE of redlining. Watch this site.

So the FDIC, even after the subprime meltdown, rules that GE Capital Financial Inc, buying the deposits of MetLife Bank, is NOT responsible for the predatory lending of WMC, because it "was a subsidiary of a different financial institution (GE Capital Retail Bank)." This hairsplitting is shameful -- and dangerous. Watch this site.

June 4, 2012

Three and a half months after Inner City Press / Fair Finance Watch complained to the Office of the Comptroller of the Currency about its secret communications with Capital One and HSBC while approving their deal, a response from the OCC's general counsel Julie L. Williams arrived last week.

She states that "direct communications between the OCC and applicants (or their counsel) seeking approval of an acquisition under the Bank Merger Act are not prohibited ex parte communications" -- unless, she writes, "in the context of hearings."

So if the OCC denies hearings, as it did on Capital One - HSBC, it can do anything it wants?

Williams letter is dated May 9 - but was not put in the mail until May 30. Maybe THIS is one of the reasons the OCC didn't stop the subprime meltdown...

May 29, 2012

Months after the Federal Reserve approved the applications of Capital One and ING DIRECT, now the Fed admits it improperly withheld information in response to Freedom of Information Act requests and appeals by Inner City Press / Fair Finance Watch. A little late, isn't it? We need new regulators.

Last week Inner City Press RSVP-ed for and went to cover a speech by the President of the Federal Reserve Bank of New York William Dudley. But from CFR's overflow run to which the media was confined, ICP was not able to ask any questions, whether about bank accounts for UN member states or why it is appropriate for JPMorgan Chase CEO to be on the Federal Reserve Bank of NY board of directors, given that the FRBNY directly regulated JPMC, which has recently gambled and lost $3 billion and counting. This last question, Inner City Press submitted twice by email, but it was not posed. Nor has it been answered since. Watch this site.

May 21, 2012

While the Office of the Comptroller of the Currency months ago told Inner City Press / Fair Finance Watch it would provide information, including when to comment, about First Niagara's proposal to acquire branches from HSBC and close many of them. But the OCC never provided any information, and on Friday First Niagara announced it had consummated the proposal. There is a problem with that.

Inner City Press / Fair Finance Watch was asked by the NYC Responsible Banking act:

The growing movement to local Community Reinvestment ordinances is a response to the Federal regulators' lack of commitment to enforcing the CRA of 1977. Also, that law is enforced if at all only in connection with bank mergers, of which there have been many fewer since the subprime financial meltdown. So activist have had to look elsewhere.

Whether municipal authorities will ever have enough independence from corporate interests to bar a major bank from business with the city remains to be seen.

Cleveland, for example, has been seeking its own agreements with banks for some years. But one of its two major banks was acquired and moved its headquarters away. As with CRA challenges, there will be a need for activists in different cities to work together.

May 14, 2012

So sleazy Deutsche Bank, AFTER de-certifying with the Fed, now pays out a governmental settlement for predatory loans defrauding FHA. Wouldn't it seem like time for the Fed to reconsider that decertification?

May 7, 2012

As Deutsche Bank Evades Fed, Tarullo Alludes to "Some Private Actors," Blurs FOIA & Volcker Rulemaking

By Matthew Russell Lee

UNITED NATIONS, May 2 -- When the Federal Reserve's Daniel Tarullo spoke Wednesday at the Council on Foreign Relations about regulatory reform, he did not mention a single bank or financial institution.

  Inner City Press asked him about Deutsche Bank, which earlier this year split off its investment banking business so as to avoid Fed regulation. Tarullo on March 22 told the Senate the Fed would have to "respond" to this, that it had some impact on this thinking on regulation.

  Tarullo replied, "Matthew, what I said was it effected my thinking, not change, that implies a dramatic shift." Then he answered, six minutes in all, without once mentioning Deutsche Bank. He said that "the kind of changes some private actors are engaged in will have to effect the scope of our regulations."

  These regulations, he said, will be "under 165... to make sure we can implement Congressional concern."

  Inner City Press also asked Tarullo if he claimed the Fed has gotten more transparent since the financial meltdown, noting the Fed's recent denial in full of access to over 2000 pages responses to an Inner City Press FOIA request.

  Here now is an online copy of the Fed's FOIA denial

  Tarullo, which has previously heard of FOIA problems at the Fed, said he didn't know which FOIA request was referred to, then answered about administrative rule making. He said "for rule making, we get comments" and now distinguish "unique comments -- that is, not form letters."

He said there have been "17,000 Volcker Rule submissions... Absorbing all the comments is a substantial undertaking. If it takes longer to give due respect to comments," so be it.

  The FOIA request referred to was about Capital One's compliance, since the Fed's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.

  Amazingly, the Fed found 2200 pages responsive but provided not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations.

Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.

Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:

"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012

Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."

Just because it SOUNDS like the responsive records might include some withholdable information, it is outrageous to withheld each and every responsive record, citing the catch-all Exemption 8. The Fed is increasingly abusing and evading FOIA. Watch this site.

And this was filed:

this is a timely comment opposing and requesting public hearings on the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust.

Santa Barbara Bank & Trust has a long and sordid history of high cost tax Refund Anticipation Loans (RALs), see below.

Mitsubishi UFJ, beyond the Union Bank N.A. lending disparities initially sketched below, is under investigation. As reported on February 3 of this year:

"The Swiss Competition Commission said today that it launched an investigation into alleged collusion among derivative traders of various banks to manipulate LIBOR and TIBOR, as well as the market conditions regarding derivative products based on these reference rates. The banks being investigated are: Mitsubishi UFJ Financial Group Inc. unit Bank of Tokyo-Mitsubishi UFJ Ltd., Citigroup Inc," etc

In the Los Angeles MSA in 2010, the most recent year for which data is publicly available, Union Bank made 354 conventional home purchase loans to whites and only EIGHT such loans to African Americans. To Latinos, Union Bank made only 23 such loans, compared to the 354 to whites.

In the Seattle MSA in 2010, Union Bank made 23 conventional home purchase loans to whites, and NO such loans to African Americans or Latinos.

In the Seattle MSA in 2010, Union Bank made 34 refinance loans to whites and NO such loans to African Americans or Latinos -- both applications from Latinos were "withdrawn."

In the Portland, Oregon MSA in 2010, Union Bank made four conventional home purchase loans to whites, and NO such loans to African Americans or Latinos.

In the Portland, Oregon MSA in 2010, Union Bank made eight refinance loans to whites and NO such loans to African Americans or Latinos.

In the Santa Barbara MSA in 2010, Union Bank made nine conventional home purchase loans to whites, and NO such loans to African Americans or Latinos.

In the Oakland MSA in 2010, Union Bank made 31 conventional home purchase loans to whites, and only TWO such loans to African Americans. To Latinos, Union Bank made NO such loans.

Regarding Santa Barbara Bank & Trust:

"On November 21, $180 million in TARP money wound up in the affluent seaside community of Santa Barbara, California. The tarp dollars flowed mostly into the coffers of a beige, Spanish-style building on Carrillo Street, home to the Santa Barbara Bank & Trust... the bank also operates a little-known and controversial program far from the lush enclaves of Santa Barbara... Outside Santa Barbara, S.B.B.&T. peddles what are known as refund-anticipation loans (rals)... The U.S. Department of Justice and state authorities in California, New Jersey, and New York have taken action against tax preparers with whom S.B.B.&T. works, charging them with deceptive advertising and with preparing fraudulent returns. Santa Barbara later took a $22 million hit on its books because of unpaid refund-anticipation loans.... in a conference call with analysts on November 21, Stephen Masterson, the chief financial officer of Pacific Capital Bancorp, admitted that tarp “obviously helps us .… We didn’t take the tarp money to increase our ral program or to build our ral program, but it certainly helps our capital ratios.” Indeed, the infusion from Treasury may well have been a lifeline for Santa Barbara."

The FRS should require answers, extend the comment period and hold public hearings.

April 30, 2012

The Federal Reserve just continues to hit new lows, leading to this FOIA appeal by ICP:

This is an immediate FOIA appeal to the Federal Reserve Board's denial dated April 26, 2012 of my FOIA request of April 10, 2012 for "all records in the possession of the FRS concerning Capital One's compliance, since the FRB's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.

Amazingly, the Fed provides not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations. This is a new low.

Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.

Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:

"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012

Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."

Just because it SOUNDS like the responsive records might include some withholdable information, it is outrageous to withheld each and every responsive record, citing the catch-all Exemption 8. The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

Meanwhile, ICP has commented to the FDIC, and NYS DFS:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a comment opposing and requesting public hearings on the application by New York Community Bank to acquire substantially all of the assets, and $2.3 billion of deposits of Aurora Bank FSB.

On the FDIC's web site, the comment period on this application runs through May 5, 2012. This comment is timely.

Aurora is a subprime, some say predatory, lending unit of the scandal wracked Lehman Brothers. For the record:

"Aurora had become one of the largest players in that market, originating $25-billion worth of loans in 2006. It was also the biggest supplier of loans to Lehman for securitization. Lehman had acquired a stake in Aurora in 1998 and had taken control in 2003. By May, 2006, some people inside Lehman were becoming worried about Aurora's lending practices."

NYCB is a bank which has sought to fly under the radar -- for example, a recent search of the FFIEC HMDA data back for "New York Community Bank" reveals only one HMDA reporter, 0000016022-3, reporting geography specific data in only three MSAs.

In these MSA, NYCB is decidedly disparate in its marketing and lending.

In the Phoenix MSA in 2010, the most recent year for which data is publicly available, NYCB made 292 conventional home purchase loans to whites and NO such loans to African Americans. Based on its disparate marketing, NYCB received only four such applications from African Americans, and denied three of them. To Latinos, NYCB more only 14 such loans, compared to the 292 to whites.

In the Fort Lauderdale MSA in 2010, NYCB made 38 conventional home purchase loans to whites, and NO such loans to African Americans.

In the West Palm Beach MSA in 2010, NYCB made 83 refinance loans to whites and only ONE such loan to an African American applicant, and only seven to Latinos.

The FDIC should require answers, extend the comment period and hold public hearings.

April 23, 2012

From the department of unintended consequence -- or not -- comes the fact that principal forgiveness on mortgages might, by year's end, be considered taxable income. That is, if a household earning say $56,000 a year and about to be foreclosed on had $80,000 of its mortgage debt forgiven, suddenly it would be in the top tax bracket, and likely lose the house anyway.

April 19 on Capitol Hill the issue was raised to a range of Congress members. Some were receptive, some were not. But nearly all agreed that nothing will be accomplished between now and the election in November. Is this any way to run a country?

Meanwhile in the course of spinning its first quarter earnings numbers, Capital One's CEO let it slip that $75 million are being set aside to deal with fraudulently sold products. "Oops." This has been raised to the OCC and Federal Reserve; watch this site.

April 16, 2012

General Electric is one of the largest corporations in the world, and played a significant role in the subprime lending meltdown that trashed the global economy. Yet its move to grow in retail banking is being done through an obscure Utah-based "industrial loan company." Ever since in late 2011 GE announced it would seek to buy $7.5 billion of deposits from MetLife -- which seeks to escape Federal Reserve regulation -- Inner City Press has been looking for GE's application. To the Office of the Comptroller of the Currency? No, they finally answered - to Utah. And so this:

Utah Department of Financial Institutions
Darryle Rude, Supervisor of Industrial Banks
P O Box 146800
Salt Lake City UT 84114-6800

Re: Comment opposing and requesting public hearings on application by GE Capital Financial to acquire $7.5 billion in deposits from MetLife

Dear Mr. Rude, Paul Allred, Sonja Long and others in the DFI:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a comment opposing and requesting public hearings on the application by GE Capital Financial to acquire $7.5 billion in deposits from MetLife.

MetLife's motive for trying to off-load these deposits is clear. It is to escape regulation, in particular, to deregister as a financial services holding company with the Federal Reserve System.

But what is GE's motive, and what would the proposed acquisition portend for the public? What public benefit would it offer?

When GE decided to get into the mortgage business, as it now seeks to get into the retail deposit business, it injured consumers, punished whistleblowers and hurt the economy and working Americans.

GE acquired the notorious subprime lender WMC, and demoted and silenced those employees who came forward to say that predatory and fraudulent lending was occurring.

See, for the record on this application, "Feds investigating possible fraud at GE’s former subprime unit," http://www.iwatchnews.org/2012/01/20/7908/feds-investigating-possible-fraud-ge-s-former-subprime-unit and see, http://www.iwatchnews.org/2012/01/06/7802/fraud-and-folly-untold-story-general-electric-s-subprime-debacle

With GE as owner, WMC was identified by to Congress by the Comptroller of the Currency as the fourth worst forecloser in the nation, see http://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2010-0408-Dugan.pdf

Now, GE seeks to become a retail deposit collector. At an investor meeting December 6, General Electric Capital Corp. CEO Michael Neal said the firm would launch a direct-to-consumer U.S. deposit program in the first half of 2012. General Electric Co. CEO Jeffrey Immelt has stated that the company hopes to increase alternative funding at GE Capital by $15 billion to about $80 billion, Sterne Agee & Leach analyst Ben Elias said in a note December 27. "The acquisition fits with our plans to launch a U.S. deposit platform," Dan Henson, president and CEO of GE Capital-Americas, said in a Dec. 27 press release. "It accelerates our timing, helps us build a stronger and more cost-efficient funding base.

Given GE's track record of harming consumers, and burying malfeasance by punishing whistleblowers, ICP hereby opposes and requests public hearings on GE's application.

April 9, 2012

In the first study of Bank of America's just-released 2011 mortgage lending data, Bronx-based Fair Finance Watch has found that BofA continued with high cost loans, and disparately. 2011 is the eighth 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 data, late provided by Bank of America, show that BofA confined African Americans to higher-cost loans above this rate spread 2.11 times more frequently than whites in 2011.

For a MarketWatch report on ICP's study last week, see http://articles.marketwatch.com/2012-04-03/commentary/31275917_1_high-cost-loans-liar-loans-cra-banks

April 2, 2012

  In the first study of the just-released 2011 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that banking behemoths Citigroup, JPMorgan Chase and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

2011 is the eighth 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 Citigroup confined African Americans to higher-cost loans above this rate spread 3.38 times more frequently than whites in 2011, worse that its 2.25 disparity in 2009, Fair Finance Watch has found.

Citigroup confined Latinos to higher-cost loans above the rate spread 2.42 times more frequently than whites in 2011, worse that its 1.72 disparity in 2009, the data show.

“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."

For JPMorgan Chase, the disparity for African Americans in 2011 was 2.21; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was 2.28.

"The Federal Reserve is becoming more and more bank-friendly, including with the recent nomination of former hedge funder and Deutsche Bank official Jay Powell for a seat on the Federal Reserve Board. It is still not clear if the new Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2011 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

Regional bank Keycorp in 2011 confined African Americans to higher-cost loans above the rate spread 1.70 times more frequently than whites -- more than a third of Keycorp's loans to African American were rate spread or high-cost loans.

U.S. Bancorp in 2011 confined African Americans to higher-cost loans above the rate spread 2.13 times more frequently than whites, worse than in 2010.

Regions Financial in 2011 denied applications by African Americans 2.44 times more frequently than whites.

Comerica, not yet including its Texas-based purchase Sterling, in 2011 confined African Americans to higher-cost loans above the rate spread 2.81 times more frequently than whites

Growing Southern bank BB&T, even absent its subprime unit Lendmark, in 2011 confined African Americans to higher-cost loans above the rate spread 2.59 times more frequently than whites

Fair Finance Watch has continued its enforcement project in the South, most recently raising issues under the Community Reinvestment Act on BB&T's proposal to acquire BankAtlantic. In response, the Federal Reserve Board extended the comment period. Much of BB&T's application has been blacked out or withheld in full, which Inner City Press is challenging under the Freedom of Information Act.

Another acquisition, that of MetLife's deposits by General Electric, has proceeded stealthly with the Office of the Comptroller of the Currency belatedly stating that it plays no role in the review since GE is using a Utah-based "non-bank bank." These loopholes, like GE, played a role in the subprime meltdown.

Inner City Press & FFW have also joined others concerned with Deutsche Bank's decertification as a financial services holding company to escape Dodd Frank including its capital adequacy rules -- particularly given Deutsche Bank's role in the subprime scandal, as lender, securitizer and now major forecloser.

The law required that the 2011 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline, most notably Capital One and Bank of America, despite confirming receipt of the request. Further studies will follow: watch this site.

March 26, 2012

Deutsche Bank was big into subprime, as lender, securitizing and foreclosing trustee. But now that the Dodd-Frank law is coming into effect, Deutsche Bank is restructuring to avoid the law's requirements. We will have more on this.

Republic Bank & Trust signed an agreement in December to allow itself to keep issuing high cost tax refund anticipation loans this Spring...

March 19, 2012

So on March 12, Japanese-owned UnionBanCal agreed to pay $1.5 billion to acquire Pacific Capital Bancorp, which owns Santa Barbara Bank & Trust -- which was one of the Tax Refund Anticipation (RALs) predatory lenders. While the trend is for non-US, mostly European banks to be SELLING OFF their business in the US, like ING sold ING DIRECT to Capital One, and HSBC is selling its upstate NY branches, this one goes the other way. UnionBanCal is owned by Mitsubishi UFJ Financial Group, one of the 29 "globally significant banks." We'll have more on this.

March 12, 2012

So the OCC approved Capital One - HSBC, and what's surprising is how much the OCC relies on the Fed, including for HMDA analysis that the OCC should be able to do itself. Also, the OCC Letter doesn't even address the due process / ex parte issues, for example of at least one meeting by Capital One outside council Patricia Robinson with OCC staff, that commenters including ICP and NCRC never got a summary of. One is left wondering if the OCC even has rules on banks providing commenters with copies or summaries of what they say to the OCC, on issues raised by commenters. We'll see.
 
  Meanwhile at the UN Inner City Press asked the Mexican head of this G20  if it is true that the G20 is against implementation of the US Volcker Rule, not because it is pro deregulation, but only because it would lower the value of non-US goverment bonds. It hadn't been implemented, Magiro agilely answered. But in fact a Mexico based subprime lending owned by Salinas Pliego, the Grupo Elektra, is now in line to buy controversial US payday lending Advance America. We'll have more on this.

March 5, 2012

Even as requests for reconsideration of Capital One - ING DIRECT pend at the Federal Reserve, in Europe, the terms of ING’s bailout by the Dutch government are being questioned by a European Union court in the first case challenging EU conditions on more than $1.3 trillion of bank rescues throughout the region. ING was ordered by the European Commission to sell units to shrink its balance sheet by 45 percent by the end of 2013 and avoid undercutting rivals on prices for some banking products for three years or until it repaid the aid. The EU must approve large state subsidies and can impose conditions on the aid. There have beeen challenges by ING and the Dutch government to the terms of the EU’s approval, which the bank says punished it too harshly for state help in 2008 and 2009. ING said the regulator miscalculated the amount of aid and imposed excessive restructuring demands. We'll see.

Meanwhile, a community group is getting a speech from Arkadi Kuhlmann, CEO of ING DIRECT. Go figure.

February 27, 2012

ICP has now requested reconsideration, following the Federal Reserve Board's February 14 approval of the proposed acquisition by Capital One Financial Corporation (“Capital One”) to acquire ING Bank, FSB and its affiliates (“ING”), to form what would be the fifth largest bank in the country.

One of the FRB's sleights of hand is in footnote 27, where after reciting ICP's objections the FRB says "the Board has determined in a separate action that ING Groep would not control Capital One as a result of this proposal. See Board letter to Mark Menting, Esq. (February 14, 2012)."

So a major contested issue was confined to a side letter on the same day at the approval. Amazingly, the Board has yet to provide even a copy of this letter to ICP, which commented extensively on this part of the proposal, including on ING being under investigation for violating sanctions.

While the Order says the charges are against ING, not ING Direct, in the side letter the Board was addressing ING owning a substantial percentage of Capital One. This segmentation is the type of legal legeredemain by which the FRB allowed the financial meltdown. This Order should be reconsidered, including in light of Capital One's dramatic drop in mortgage lending and did not adequately explain its findings - for example, the FRB asserts that Capital One’s credit card small business lending is minimal in contrast to findings by NCRC and others.

Footnote 10 of the FRB's approval order says

"One commenter expressed concern about ex parte communications and the opportunity for the public to rebut all information that was provided by Capital One. On review, the Board found that the public had a full opportunity to provide the Board with any information related to the factors that the Board must consider in acting on the notice. The information submitted by Capital One, and the release of that information to the public, was in accordance with the Board’s regulations and policies. The Board confirmed that all contacts between Capital One and staff were in accordance with the Board’s rules on ex parte communications."

The FRB should void and reconsider its Order, inter alia following its now appealed under the Freedom of Information Act denial of February 7, 2011 -- emailed to ICP after 5 pm on Feb 7 -- of ICP's FOIA request of October 29, 2011. This document dump was and is beneath the Federal Reserve.

Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.

As noted in ICP's Feb 7 FOIA appeal, as simply one example, the Fed held ex parte communications with Capital One on November 21, writing a memo ostensibly as a tip of the hat to the rules against ex parte communications. Then the Fed withhold the summary under Exemption 4.

The Fed has even made withholdings from its own August 29, 2011 questions to Capital One. This is an outrage and has been appealed from.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in connection with this request for reconsideration.

February 20, 2012

Fed Approves Capital One - ING After Delay & Data Dump, Reconsideration?

By Matthew R. Lee

SOUTH BRONX, February 14, updated -- Some Valentine: the day after the Federal Reserve for the second time postponed decision on the Capital One - ING bank merger, a Fed legal staffer called Inner City Press at 5:15 pm on Valentine's Day to say the deal was approved, but not in the normal way.

Inner City Press asked for an explanation of the February 8 postponement, and the February 13 deferral of decision, but none was provided. Reconsideration will be requested.

  One of the Fed's sleights of hand is in footnote 27, where after reciting Inner City Press' objections the Fed says "the Board has determined in a separate action that ING Groep would not control Capital One as a result of this proposal. See Board letter to Mark Menting, Esq. (February 14, 2012)."

  So a major contested issue was confined to a side letter on the same day at the approval. Footnote 10 of the Fed's approval order says

"One commenter expressed concern about ex parte communications and the opportunity for the public to rebut all information that was provided by Capital One. On review, the Board found that the public had a full opportunity to provide the Board with any information related to the factors that the Board must consider in acting on the notice. The information submitted by Capital One, and the release of that information to the public, was in accordance with the Board’s regulations and policies. The Board confirmed that all contacts between Capital One and staff were in accordance with the Board’s rules on ex parte communications."

   Consider: on the night of February 7, the Fed issued a document dump of some 1040 pages responding to a Freedom of Information Act request Inner City Press filed in October.

   Among the 1040 pages provided (more than 200 have been withheld in full, from ICP and other commenters, NCRC and others), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7, and which ICP commented on to the Fed in the run-up to its February 13 meeting:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, Patricia A. Robinson at Capital One's law firm – presumably the same Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to Michael Sexton and Stanlyn Clark at the Federal Reserve:

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

As ICP commented, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to ICP's pending appeal.

ICP has just submitted to the OCC a FOIA request, based on information dumped on us by the Federal Reserve just before it ruled on Capital One - ING, which reflects ex parte contacts between the OCC and Capital One regarding Capital One's applications to acquire HSBC's national banks.

According to documents the Federal Reserve gave us under FOIA, on November 7, 2011, Patricia A. Robinson at Capital One's law firm – presumably the same Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to Michael Sexton and Stanlyn Clark at the Federal Reserve:

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

It is troubling that Capital One could hire and use an attorney who personally knows and worked / coordinated with attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting the OCC process as well, we hereby timely contend.

The OCC officials including Michael DeClue, Wai-Fan Chang and Ancris Randhanie.

On November 18, 2011, Ms. Robinson tells the FRB that she was at the OCC, 8:45 to 10:45 AM.

ICP has submitted to the OCC a request for all records concerning these and other contacts between the OCC and Capital One in this proceeding, under FOIA and due process / rules against ex parte contacts. The records should be released, and comment allowed thereon, prior to any OCC ruling on Capital One's applications.

The comment period must be extending, and as argued by NCRC, public hearings like the Fed held should be scheduled.

February 13, 2012

Why did the Federal Reserve postpone its meeting on Capital One - ING from Wednesday afternoon for five days until Monday, February 13? Capital One's spokeswoman said “The board has informed us that the planned meeting for this afternoon has been rescheduled for Monday, February 13th. We understand that the delay is due to a scheduling conflict, and we look forward to their decision early next week."

But there's a problem with this spin, that scheduling made it impossible. At 3:05 pm on Wednesday, Inner City Press got a voice mail from the Federal Reserve's Legal Division, Michael Waldron, about an application that ICP Fair Finance Watch had commented on some time ago: Hawa - Korea Exchange Bank. The Board had just approved the application, Waldron said (without also stating any right to request reconsideration.)

In that Order Inner City Press / Fair Finance Watch is, yes, "the commenter."

So if the Fed could approve applications on Wednesday afternoon but chose not to do so for Capital One, why not?

One can hope that the outrageous "document dump" of hundreds of pages on the eve of the Fed's scheduled February 8 meeting, which Inner City Press immediately raised to the highest levels of the Fed, combined with calls Wednesday from NCRC members to open the meeting, caught the Fed's attention.

Then this should, too: Inner City Press, reviewing the documents dumped, has now commented to the Fed that

Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011...

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

This information must be reviewed, and released and comment allowed thereon, by ICP, NCRC and others, before the Fed considers approving the Capital One - ING proposals.

February 6, 2012

The fight on Capital One - ING continues, as more and more information is withheld. Inner City Press filed this FOIA appeal on February 4:

This is a timely FOIA appeal to the Federal Reserve Board's denial of February 3, 2012 of my FOIA request of January 6, 2012, for all of Capital One's January 3, 2012 submission to the Fed, etc..

The Fed has provide a document with redactions which ICP is hereby appealing. From Capital One's response to the Fed's December 15, 2011 questions, the Fed has blacked out the entirety of Footnote 1, which seemingly explains Capital One's lending in California.

The Fed has blacked out on the top of Page 6 some Capital One argument about how and why it will improve the fairness of its lending.

On Pages 11 and 12, Capital One makes representations to the Fed about with whom it will partner, representations clearly meant to argue for approval of Capital One's applications - but Capital One, and now the Fed, withheld the names and the argument. ICP is appealing.

The bottom of Page 16 is entirely redacted; there is no way to know what type of information it contains, and ICP appeals from the invocation of Exemption 8 (bank supervision) and Exemption 4, including the many redactions from the Exhibits to Capital One's submission.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals, protested by NCRC, ICP and others

January 30, 2012

With Fed Mulling Capital One's ING Deal, 590 Pages Withheld, Blacked Out

By Matthew R. Lee

SOUTH BRONX, January 29 -- Amid questions about the Federal Reserve's transparency as it considers allowing Capital One to buy ING Direct and become the fifth largest bank in the US, the Fed last week responded to a Freedom of Information Act request by Inner City Press by withholding 590 pages in full, and at least half of the single 34 page document it did provide.

  Click here to view the Fed's FOIA Denial, from which Inner City Press has already appealed, and click here to view the heavily redacted 34 page document that the Fed provided to Inner City Press (and Capital One to NCRC and the other protesters from which it had withheld this information).

  As argued in Inner City Press' FOIA appeal, the Fed should re-open its comment period, inter alia following its now appealed under the Freedom of Information Act denial of January 24, 2012 of ICP's FOIA request of December 4, 2011, for "all withheld portions of Capital One's November 15, 2011 submission to the Fed on the pending ING DIRECT application."

  It took 50 days for the Fed to respond. Worse, 590 pages are being withheld in full, and of the single 35 page document subsequently sent to Inner City Press, much has been redacted, including how Capital One would pay for the acquisition,

- weaknesses in ING DIRECT (page 3);

- all information about Capital One's credit card lending to people with FICO scores below 660, and subprime card lending (page 4);

- small business lending (page 5);

- due diligence on HSBC's card platform, previously of the predatory lender Household (page 13);

- forward sale agreements (page 14 - even the Fed's question is withheld, we appeal that);

- mortgage lending (page 16); swaps (page17);

- and the entirety of pages 19 through 34, including the Fed's questions.

  The Fed cites Exemption 5, but it how an "intra-agency" exemption could be cited for what Capital One submitted is unclear. ICP opposes the invocation, too, of exemption 8 without explaining in detail the type of information in the 590 pages withheld in full.

   It is hard or impossible to argue about this black hole of information: the Governor charged with ruling on this appeal should review all of the information in camera, and release all portions that are not strictly exempt.

  The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

 This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.

  For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

January 23, 2012

Slowly, too slowly, some pigeons come home to roost.

General Electric, which engaged in predatory lending through WMC, is now reportedly under investigation -- just as it proposes to acquire $7.5 billion in deposits from Met Life.

Royal Bank of Scotland's former boss, Sir Fred "the Shred" Goodwin, faces the loss of his knighthood, after he helped enable predatory lending by securitizing and trading in the loans through RBS Greenwich Capital Markets. PM Cameron said, "There’s a forfeiture committee in terms of honors that exists and it will now examine this issue. I think it’s right that it does so."

Meanwhile on Capital One: When in September the Federal Reserve held a public meeting on Cap One - ING in Chicago, Fed legal division official Ms. Thro replied, on camera, to Inner City Press / Fair Finance Watch's comments by saying ICP should submit a Freedom of Information Act request. ICP immediately did.

Among other things, ING is reportedly under investigation for violating sanctions, on Sudan, Iran and other elsewhere - topics which deserve a public airing before ING is considered to be allowed to own 9.9% of what would become the fifth largest US financial institution.

Inner City Press returned a telephone call to another Fed Legal Division staffer and voluntarily narrowed its FOIA request, for specific adverse ING information such as the above. The Fed identified responsive information but forwarded the request to the OCC, they say on December 20.

Now, more than three months later, the information is withheld in full by OCC denial on Friday. The OCC's denial does not provide a speck of information, does not give any idea of what is being withheld, and does not even state how many pages are being withheld.

There is no way to assess the propriety of these withholdings in full, ostensibly under Exemption 4. ICP has immediately appealed the withholding(s).

This information about ING must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.

For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

January 16, 2012

   Responding to the Federal Reserve to allegations that Capital One violates bankruptcy laws, COF's law firm Wachtell, Lipton, Rosen & Katz in a January 11 submission wroted that it "was unaware of the debtor's bankruptcy because [REDACTION, Pages 3 - 4]." Inner City Press on January 14 challenged this redaction under the Freedom of Information Act, sating that as before and on the still pending requests, all information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT, protected by ICP, NCRC and others.

As Morgan Keegan Sells Out to Raymond James, Recess Appointment for FRB?

By Matthew R. Lee

SOUTH BRONX, January 11 -- As the biggest bank merger of 2012 so far was announced Wednesday, Morgan Keegan for sale to Raymond James for $930 million, Morgan Keegan's recent settlement of subprime related fraud charges was not lost on community activists. Would it be raised to regulator? Why not?

  But who will the regulators be? President Barack Obama showed himself willing to use a recess appointment to put Richard Cordray atop the Consumer Financial Protection Bureau, which seems to have no merger review role.

  It is argued that Obama "had" to nominate a Deutsche Bank and Carlyle Group hedge fund insider, Jay Powell, to the Federal Reserve as a condition of getting a Democrat also confirmed.

  Meanwhile Democratic representatives are urging Obama to offer a recess appointment for a new head of the Federal Housing Finance Agency. Twenty eight congressmembers from California signed a January 10 letter, which argued that Obama should use the same legal justification for appointing a new director at the agency that he applied to Cordray and the CFPB.

"As the fiduciary of government-backed entities, there are steps that the FHFA can take to help prevent foreclosures while also protecting taxpayers," they wrote. "Installing a permanent Director of the FHFA will allow the FHFA to move forward to make key decisions that will help keep families in their homes and improve our economy."

  Some wonder why this logic isn't applied to the Federal Reserve Board, where Obama supporters argue that he "had" to nominate a hedge fund insider Jay Powell in order to get any confirmation.

  The Fed is reportedly preparing to rubber stamp Capital One's application to acquire ING DIRECT, protested by NCRC, Fair Finance Watch and others, even as Capital One's lawyers try to withhold the most substantial portions of their responses to the Fed, including on Capital One's related application to the Office of the Comptroller of the Currency to buy from HSBC the subprime credit card platform of the former Household International, charged with nationside predatory lending. Why?

January 9, 2012

Capital One put in another submission to the Federal Reserve on its ING DIRECT application -- but then withheld large parts of it as sent to Inner City Press and other commenters. ICP has challenged under the Freedom of Information Act, and submitted the below to the Office of the Comptroller of the Currency on Capital One's HSBC application:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this is a sixth comment opposing Capital One's applications to acquire HSBC's national banks -- that is, HSBC's at least partially subprime credit card business (some of which HSBC acquired, without review, along with the scandal tainted Household International).

The OCC should hold public hearings on this HSBC proposal, as the Federal Reserve did on the ING (but not HSBC) proposal. The OCC should re-open its comment period inter alia following improper withholdings, now challenged under the Freedom of Information Act, from Capital One's (COF's) submissions to the Federal Reserve System dated January 3, 2012, with those improperly redacted by COF's law firm Wachtell, Lipton, Rosen & Katz. We refer most pressingly to the redacted response to the FRS' December 16 questions, sent to us by email on January 6 by WLRK under cover lever dated January 3, 2012. COF is required to send us their submission under the FRS' ex parte rules, but has sent us significantly redacted versions.

Even as provided, the material make clear that the two proposals -- HSBC and ING DIRECT -- are related, with Capital One make representations to the Fed about the HSBC proposal. HSBC put out a press release bragging about accounts renewed that would to go to Capital One: even regarding this, there are issues...

Under the headings “Mortgage Lending," "Community Development Lending," "Other Lending" and the like, COF makes claims about policies and loans made and then redacts line after line. This also takes place when COF is asked in 1d about its lending geographically: contrary to the spirit and letter of CRA, geographical identifiers are redacted, even footnotes. We challenge each and every one of these absurd redactions, as well as the withholding of purported confidential exhibits 1, 2 and 3.

This was submitted through the FRS' FOIA form on January 6 to gain expedited treatment. All information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire HSBC's credit card platform.

ICP submitted a first comment to the OCC on October 18, a second comment on November 6, and a third on November 13. ICP received a copy of (most of) the application, and challenged under FOIA the withholding of Exhibits, particularly but not only "Confidential" Exhibit D. Inner City Press then submitted a timely FOIA appeal for the continued withholding in full of Confidential Exhibit D,which says only that it is "Additional Information Regarding the Acquisition." Nor does the OCC's Denial Letter provide any information about what is being withheld. ICP is appealing the withholding of this and all other information.

The comment period must be extending, and as argued by NCRC, public hearings like the Fed held should be scheduled.

January 2, 2012

 Capital One announced its proposal to acquire ING DIRECT back in June, and the deal still hasn't closed or been approved. Over the holiday, Inner City Press / Fair Finance Watch filed additional comments with both the Federal Reserve and the Office of the Comptroller of the Currency, which is considering Capital One's related proposal to acquire the ex-Household predatory credit card lending platform from HSBC.  The OCC, despite the issues raised, has yet to schedule a public hearing. Watch this site.

December 26, 2011

As the Federal Reserve (and OCC, which will be a separate story) try to shield the Capital One - ING - HSBC deals, Inner City Press / Fair Finance Watch has submitted to the Fed a FOIA appeal of the Fed's FOIA denial the the FOIA request of September 28, which stated:

This is a request under FOIA for the entirety of ING's request for a non-control determination to own up to 9.9% of Capital One, and all records reflecting any FRS communications regarding the request or ING from January 1, 2011 to the date of your final response to this request.

Background: at yesterday's public meeting in Chicago on Capital One - ING DIRECT, Ms. Thro of the Legal Division commented on Inner City Press' testimony, that ICP "can file a FOIA request" for ING's request. This is that request, and for communications, and response should be expedited before October 12, or Capital One - ING DIRECT comment period should be extended. Thank you.

Despite Ms. Thro's public comment about the ability to file a FOIA request and implication what one would thereby receive the requested documents, on a timely basis, it took two and a half months for the Fed to respond. This constructive denial should be explained and acted on in response to this appeal.

Worse, among the documents subsequently sent to Inner City Press -- this appeal is timely -- nearly everything is redacted.

Of the August 15 submission by Sullivan & Cromwel (S&C), the letter requesting confidential treatment is provide: but the entirety of the referenced "Annex A" is withheld.

The denial letter claimed that "the nature and amount of information being withheld will be evident from the face of the documents being provided." This is not true, and should be reversed, explained and acted on in connection with this appeal.

From the September 29 S&C cover letter, the area under Mark Menting's signature is blacked out, with the notation "N/R." Since ICP requested "all" documents, it is absurd to call this portion of the submission, whatever it is, "non responsive." If it is the people who the letter is cc-ed to, the Fed has hit a new low that must be reversed, explained and acted on in connection with this appeal.

Also, the entirely of the September 29 Annex A, including its footnote, is redacted.

Getting even worse, of the November 18 submissions, even a portion of the request for confidential treatment is redacted, as well as the entire annex.

Of the November 23 submission, two and a half paragraphs of S&C's letter to Ms. Thro are redacted - each and every redaction is hereby being appealed, including again the absurd blacking out of the area under Mr. Menting's signature.

From the November 29 submission, the blacked out "N/R" is on a separate page. It is absurd to a claim, in response to the request -- invited by Ms. Thro -- for information related to the any non-control determination that this material, which S&C's letter says is related to the requested non-control determination, is "not responsive." The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

Watch this site.

December 19, 2011

ICP has submitted a timely FOIA appeal and comment to the OCC on Capital One's applications to acquire HSBC's national banks, the Household International predatory lending platform.

ICP submitted a first comment to the OCC on October 18, a second comment on November 6, and a third on November 13. ICP received a copy of (most of) the application, and challenged under FOIA the withholding of Exhibits, particularly but not only "Confidential" Exhibit D.

Now, Inner City Press is submitting a timely FOIA appeal for the continued withholding in full of Confidential Exhibit D,which says only that it is "Additional Information Regarding the Acquisition." Nor does the OCC's Denial Letter provide any information about what is being withheld. ICP is appealing the withholding of this and all other information. The comment period must be extending, and as argued by NCRC, public hearings like the Fed held should be scheduled. In the interim, consider that

Capital One Financial Corp. experienced a significant increase in credit card charge-offs during the month of November. The 30-day delinquency rate for the Capital One Master Trust increased by one basis point to 3.46%, according to a Form 10-D filed Dec. 15. The charge-off rate jumped to 3.86% from 3.39%.

Watch this site.

December 12, 2011

Capital One spent $330,000 in the third quarter to lobby the federal government for "issues [including] bank mergers," according to the report the company filed Oct. 20 with the House of Representatives' clerk's office. That's a 74 percent increase from the $190,000 that the bank spent a year earlier but 23 percent less than the $430,000 it spent in the second quarter of 2010...

Bad karma: Bank of New York Mellon moved to evict Occupy Pittsburgh from "its" park. Will there be repercussions?

In 2010 Subprime Lending Grew More Disparate at Citi, Chase, Wells & BofA

BRONX, NEW YORK, April 3 -- In the first study of the just-released 2010 mortgage lending data, Bronx-based Fair Finance Watch has found that the Big Four survivors of the banking meltdown, Citigroup, JPMorgan Chase, Wells Fargo and Bank of America, continued with high cost loans and had even worse disparities by race and ethnicity in denials and higher-cost lending than in 2009.

   2010 is the seventh 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 Citigroup confined African Americans to higher-cost loans above this rate spread 3.67 times more frequently than whites in 2010, worse that its 2.25 disparity in 2009, Fair Finance Watch has found.

  Citigroup confined Latinos to higher-cost loans above the rate spread 2.92 times more frequently than whites in 2010, worse that its 1.72 disparity in 2009, the data show.

   JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost loans 2.08 times more frequently than whites in 2010, worse than its own 1.98 disparity in 2009 and almost as pronounced as its 2.69 disparity between African-Americans and whites in 2010, worse than its 2.17 disparity in 2009.

  For Bank of America NA, the disparity for African Americans in 2010 was 2.59; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2010 was 2.56.

   “Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by this predatory lending,” said Fair Finance Watch. “When these four banks were allowed to buy up others with very little oversight, the regulators did not put any conditions on the mergers or Troubled Assets Relief Program bailouts.  These worsening disparities are the result.

   "Now it is not clear if the new Consumer Financial Protection Bureau will get to this problem. As things are going, it will be worse and more disparate in 2011. The disparities in the 2010 mortgage data of the Big Four further militate for aggressively watchdogging and breaking up these banks," Fair Finance Watch concluded.

  Regional bank Keycorp in 2010 confined African Americans to higher-cost loans above the rate spread 2.24 times more frequently than whites.

  U.S. Bancorp in 2010 confined African Americans to higher-cost loans above the rate spread 2.12 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread an even worse 2.2 times more frequently than whites.

   Huntington in 2010 confined African Americans to higher-cost loans above the rate spread 2.2 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread an even worse 2.8 times more frequently than whites.

Growing Southern bank Regions in 2010 denied applications by African Americans 2.56 times more frequently than whites. BanCorpSouth in 2010 denied applications by African Americans 2.6 times more frequently than whites.

  Fair Finance Watch has begun an enforcement project in the South, most recently raising issues under the Community Reinvestment Act on Hancock of Mississippi's application to acquire Louisiana-based Whitney, see “Flag raised on merger of Hancock, Whitney banks,” New Orleans Times Picayune, March 13, 2011.

   Fair Finance Watch has also been active in raising issues concerning Bank of Montreal / Harris and their proposal to buy M&I. In response, while the Federal Reserve Board asked some fair lending questions, the majority of the banks' response has been blacked out, which Inner City Press is challenging under the Freedom of Information Act.

   Using the 2010 HMDA data, Fair Finance Watch has commented that Bank of Montreal's Harris confined African Americans to higher cost, rate spread loans 2.35 times more frequently than whites.

  M&I Federal Savings Bank confined African Americans to higher cost, rate spread loans 2.1 times more frequently than whites. Bank of Montreal's Harris denied the applications of African Americans 2.35 times, and Latinos two times more frequently than those of whites. The Fed extended the comment period on the merger once, but now seeks to close it with the fair lending information still outstanding.

   Fair Finance Watch has submitted another timely comment, that Comerica, which is seeking to acquire Houston-based Sterling, in 2010 confined African Americans 6.26 times more frequently than whites to higher cost, rate spread loans. At Comerica, 11.3 percent of loans to African Americans were over the rate spread, versus only 1.9 percent of loans to whites.

   The law required that the 2010 data be provided by April 1, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline. Trustmark provided its data at the deadline but only in paper format, such that it could not yet be computer-analyzed. Further studies will follow: watch this site.

March 28, 2011

On Bank of Montreal's application to buy M&I, the Federal Reserve on March 24 granted a one week extension of the comment period to Inner City Press / Fair Finance Watch (ICP), which has protested the proposed merger under the Community Reinvestment Act since January 2011, including challenging the withholding of documents under the Freedom of Information Act.

CRA challenges have also been filed by the National Community Reinvestment Coalition and various of its members including the Metropolitan Milwaukee Fair Housing Council, Northwest Indiana Reinvestment Alliance, the St. Louis Equal Housing and Community Reinvestment Alliance and others.

Bank of Montreal, though its law firm Sullivan & Cromwell, has sought to withhold large portions of its submissions to the Fed from ICP and the public. On March 20, Inner City Press challenged the “radical redaction” of information by Bank of Montreal under the Freedom of Information Act, and argued that the comment period, set to close on March 22, could not close while this information was being withheld.

On March 24, Inner City Press received a letter from the Federal Reserve Board, stating in part that the “Secretary of the Board has decided to extend the period of time in which to receive your comments on the proposal to the close of business on Thursday, March 31, 2001.” Click here for the letter.

On CRA ratings, Harris has a “Low Satisfactory” rating in lending, investment and service in Wisconsin, M&I's headquarters, and a Low Satisfactory under the service test in adjacent Indiana.

Fair Finance Watch notes that the official whom Bank of Montreal has assigned to merger integration, Cecily Mistarz, was previously in charge of strategy for “Harris Private Bank, a unit that provides wealth management services to affluent individuals and families” -- giving rise to concerns that if run by Bank of Montreal, the resulting bank would turn away from low and moderate income communities.

Fair Finance Watch also notes that despite M&I not having paid its TARP bail out back, the CEO of M&I stands to get a $18 million payout from the proposed acquisition.

ICP has raised to the Fed, for example, that in the Chicago area “Bank of Montreal's Harris Bank in 2009, the most recent year for which Home Mortgage Disclosure Act data is available, denied the conventional home purchase loan applications of Latinos 2.52 times more frequently than those of whites. An even more extreme disparity exists for African Americans in the Gary Indiana MSA.”

The 2010 HMDA data has just been obtained by Fair Finance Watch, and analysis will be submitted to the Federal Reserve during the extended comment period. Watch this site.

March 21, 2011

As Bank of Montreal Hides Reply to M&I Merger Protest Under CRA, Fair Finance Watch Challenges

by Matthew R. Lee

NEW YORK, March 20 -- Faced with Community Reinvestment Act protests to the proposed acquisition of M&I by Bank of Montreal and its Harris Bank, the Federal Reserve earlier this month asked for a description of the banks' “policies, procedures and practices to ensure compliance with the fair lending laws.”

  Inner City Press / Fair Finance Watch had raise to the Fed, for example, that in the Chicago area “Bank of Montreal's Harris Bank in 2009, the most recent year for which Home Mortgage Disclosure Act data is available, denied the conventional home purchase loan applications of Latinos 2.52 times more frequently than those of whites. An even more extreme disparity exists for African Americans in the Gary Indiana MSA.”

  But when Bank of Montreal's law firm Sullivan & Cromwell sent its answer to the Fed to Inner City Press, as required, it blacked out more than half of the response, including the entire section entitled “Self-Assessment and Monitoring,” more than a page long. Click here to see banks' response as provided to Inner City Press.

  Inner City Press has challenged the “radical redaction” of the fair lending and branch closing response of Bank of Montreal under the Freedom of Information Act, and argues that the comment period, set to close on March 22, cannot close while this information is being withheld.

  Applicable banking law requires the Federal Reserve to consider the Community Reinvestment Act (CRA). On CRA ratings, Harris has a “Low Satisfactory” rating in lending, investment and service in Wisconsin, M&I's headquarters, and a Low Satisfactory under the service test in adjacent Indiana.

  Fair Finance Watch notes that the official whom Bank of Montreal has assigned to merger integration, Cecily Mistarz, was previously in charge of strategy for “Harris Private Bank, a unit that provides wealth management services to affluent individuals and families” -- giving rise to concerns that if run by Bank of Montreal, the resulting bank would turn away from low and moderate income communities.

  Harris Bank performed relatively worse than all lenders, as a group, in the Milwaukee MSA in 2009 with respect to lending to African-American borrowers. Harris Bank issued only 0.30 percent of its prime loans to African-American borrowers, compared to 2.69 percent of all lenders' prime loans to the same borrower group. In addition, Harris Bank's market share of loans to African-American borrowers was just 11 percent of its market share to white borrowers. Harris effectively made zero percent (just one loan) of all loans to African-American borrowers and 0.62 percent of all loans to white borrowers in the Milwaukee MSA.

  In small business lending, Harris Bank's performance in 2009 was significantly worse compared to all lenders in the Milwaukee MSA as a group, in providing small business loans less than $100,000. Harris Bank issued 65 percent of its small business loans as loans less than $100,000; in contrast, all lenders in Milwaukee, as a group, issued 85 percent of their small business loans as loans less than $100,000.

  Fair Finance Watch also notes that despite M&I not having paid its TARP bail out back, the CEO of M&I stands to get a $18 million payout from the proposed acquisition.

  The 2010 HMDA data has just been obtained by Fair Finance Watch, and analysis will be submitted to the Federal Reserve and other regulators, in Wisconsin and elsewhere.

  Inner City Press is aware of comments being submitted or prepared in Missouri, Indiana, Wisconsin and beyond, and argues that the comment period, set to close on March 22, cannot close while this information is being withheld. Watch this site.

March 14, 2011

The New Orleans Times Picayune of March 13 reports that

The proposed bank merger between Hancock Holding Co. and Whitney Holding Corp. has been challenged on fair lending grounds, with critics saying that Hancock's record for making home loans to African-American borrowers is worse than Whitney's.

A New York watchdog group, Inner City Press/Fair Finance Watch, declared its opposition to the deal in a March 6 letter to the Federal Reserve, which must sign off on bank combinations, citing gaps in how frequently Hancock makes home loans to African-American customers compared with white customers in lending data reported to federal banking regulators.

"It's worse," Fair Finance executive director Matthew Lee said of Hancock's record compared with Whitney's. "It doesn't look like Hancock has put much energy into diversity of lending."

Hancock spokesman Paul Maxwell said in a statement that the data Fair Finance relied upon "provides a very limited view of covered loans or conditions such as factors related to creditworthiness.”

Regulators also need to sign off on the deal, and as part of that process, the public is given a chance to comment. In this case, Fair Finance Watch's complaints were the only ones filed.

In checking out the merger, Lee's group looked at data that Hancock reported under the Home Mortgage Disclosure Act, a 1975 law that requires banks to report loan data so that the Federal Reserve can monitor whether banks are serving their communities' housing needs and whether they're discriminating.

The protest highlights six Gulf Coast markets where there are racial gaps in Hancock's lending.

In Hancock's hometown of Gulfport, Miss., for example, the bank denied conventional home loans to African-American and Hispanic applicants twice as often as those of white applicants, Fair Finance Watch said.

In New Orleans, Whitney's hometown, Hancock made 55 conventional home purchase loans to white applicants in 2009, the most recent year for which data is available, but only three to African-American applicants and none to Hispanic applicants, the group said.

"To impose this record on Whitney's service area, including New Orleans, would have adverse impacts, which militate for public hearings and the denial of Hancock's applications," Fair Finance Watch wrote in its letter.

The group does not list comparable statistics for Whitney in the six markets. Lee said that Hancock's record is worse than Whitney's, but he didn't want to say that Whitney's record was good.

Because Hancock is the company acquiring Whitney, Lee said, its policies will be the surviving ones, so its lending practices are the ones that bear scrutiny.

After the 2008 bank bailouts, Lee said, it's especially important to make sure that lenders are serving diverse communities appropriately. Lee said mergers are really the only opportunity to enforce the Community Reinvestment Act, a 1977 law designed to discourage credit "red-lining" and encourage banks to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.

"Our hope is that the Fed has hearings," Lee said. "Everyone can't be above average."

March 7, 2011

Sleazefest: Chris Dodd, after taking sweetheart mortgages from predatory lender Countrywide, will now take $1.5 million a year to be the chief lobbyist for the Motion Picture Association of America...

Sleazefest II: not only did Gaddafi's Libyan Investment Authority have a stake in HSBC -- now HSBC makes money from this, by not having to pay out any divident on the frozen stake....

Note that the Connecticut Banking Department is holding hearings on First Niagara's application to acquire NewAlliance, on March 8 and 9 -- while the Federal Reserve closed its comment period with many questions unaswered, and hasn't ruled on any bank merger proposal this year, preferring to rubber stamp at the Reserve Bank level...

Attorney Lee –

Banking Commissioner Howard Pitkin has scheduled a hearing on the proposed merger of NewAlliance Bank and First Niagara Bank. For your information, I have attached a copy of the hearing notice.

Kathleen E. Titsworth
Banking Education Coordinator
Connecticut Department of Banking

February 28, 2011

M&I CEO Mark Furlong would not get paid a $18 million "golden parachute" package that he has written into his contract with M&I if the company changes control (aka, he leaves) while it still has to pay back TARP. The same would happen to these M&I executives: Greg Smith, who has a $5.5 million parachute, president Tom Ellis ($4.1 million), wealth management head Ken Krei ($5.5 million), and senior vice president Thomas O’Neill ($5.1 million)....

Here's an example of why the Federal Reserve trying to separate FOIA requests related to applications from the comment period: the Fed had extended its time to respond to Inner City Press / Fair Finance Watch's January 13 FOIA request about M&T / Wilmington Trust -- until long after the comment period. And when WILL we get the documents?

February 21, 2011

Following Bank of Montreal's announcement of its proposal to acquire M&I Banks, Inner City Press / Fair Finance Watch wrote to Canadian regulators OSFI raising issues and requesting public hearings and a copy of the application.

We noted as simply one example, in its Chicago Metropolitan Statistical Area headquarters, Bank of Montreal's Harris Bank in 2009, the most recent year for which US Home Mortgage Disclosure Act data is available, denied the conventional home purchase loan applications of Latinos 2.52 times more frequently than those of whites.

OSFI's “manager of approvals” Robert Mitchell replied that “for acquisitions of this nature, the Bank Act (Canada) does not provide a legal process for the public to formally object to a proposed transaction nor for the Superintendent of Financial Institutions to initiate a public hearing in this regard under the Act. In addition, all applications for regulatory approval are confidential in nature under the OSFI Act.”

We have just on February 18 received a copy of the portion of Bank of Montreal's application to the US Federal Reserve Board for regulatory approval for which Bank of Montreal has not requested confidential treatment. This public portion states that BoM is seeking OSFI approval -- it is difficult to understand in this context your statement that the OSFI process and application are confidential.

Furthermore, as the comprehensive, consolidated home regulator of Bank of Montreal, we contend that OSFI has responsibility for BoM and its performance, and for the foreseeable impacts of this proposal.

By contrast to M&I, Bank of Montreal's Harris Bank has a Low satisfactory rating in lending, investment and service in Wisconsin, M&I's headquarters, and a Low Satisfactory under the service test in adjacent Indiana.

As so we have just made a second submission to OSFI...

The Federal Reserve Board hasn't ruled on a single bank merger proposal so far in 2011. The pace of mergers slowed, sure -- but also the Fed has tried to confine more and more decisions to the Reserve Banks, which can ONLY approve applications. And on the First Niagara - NewAlliance proposal, now the Connecticut regulator, unlike the Fed, has scheduled public hearings. Will the Fed send anyone? And will it grant the requests for public hearings on Bank of Montreal / Harris - M&I?

February 14, 2011

Now it can be said: Bank of Montreal has now submitted its application to the Federal Reserve Bank of Chicago for its proposed acquisition of M&I. On February 11, Tom Naughton of the Chicago Fed left Inner City Press a message that the application had been received, and would be send out Monday. It can be requested via

Federal Reserve Bank of Chicago, Attn: S&R Applications Unit - 14 C, Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604, Fax 312-322-5894

A 30 day comment period is about to begin...

In other CRA news: when New Jersey's Clifton Savings Bank just got a rare Needs to Improve CRA rating, it had an even rarer business impact: Clifton's application to the Office of Thrift Supervision for a “second step conversion and public offering of stock” (essentially, going public) cannot be approved, Clifton had to tell the SEC and the public. Now if only regulators like the Federal Reserve and OCC would enforce CRA against some of the larger banks...

February 7, 2011

“The Subprime Virus” Omits the Activist Cure, and the CRA: Book Review

By Matthew Lee

SOUTH BRONX NY, February 6 -- Given the role of predatory lending in the financial meltdown that still haunts the global economy, the February 10 publication by Oxford University Press of a book on the topic, “The Subprime Virus” by law professors Kathleen Engel and Patricia McCoy seemed likely to counter revisionism and re-focus on the decade long fight against loan sharks.

Alas, the book makes scant mention of community or even consumer activism, much less the Community Reinvestment Act protests to banks' applications which results in some of the Federal Reserve Board's few enforcement orders and fines.

For example, the authors write about HSBC's seminal and fated acquisition of Household International without mentioning all of the community based challenges to Household and to the deal, and to HSBC afterward.

The book is like writing about the civil rights laws without mentioning how and why they were passed. It is a form of mystification.

Instead of political and social explanation, we have yet another narrative of the economic stations of the cross leading to the seizing up of global markets. At this point, such re-telling is no longer what is needed: it is like another book about the moment to moment flight plans of the 9/11/01 hijackers, and views of airport safety experts. That said, this one is told in some detail.

In the book's lengthy index, the Community Reinvestment Act is not mentioned once. Meanwhile, the “Solutions” chapter of the book has a four paragraph section entitled “Ensuring Access to Affordable Credit,” the purpose of the CRA.

Patricia McCoy has recently been appointed to the Consumer Financial Protection Bureau, from which CRA enforcement powers were stripped. If the book is an indication of awareness of, or respect for, the Community Reinvestment Act and the grassroots groups which use it, perhaps the stripping is a blessing in disguise.

The lack of focus not only on past activism that that needed in the future, including the near future, might be attributable to an inordinate faith in the Obama administration and the CFPB. But even with a President like Barack Obama, it is not law professors who are going to protect consumers and communities. Everything is politics: but “The Subprime Virus” seems to miss this.

By contrast, the 2009 book “Busted” by journalist Edmund Andrews does not purport to be an expert account. In fact, much of Edwards' story is about how he fell into foreclosure on a home he bought for his second wife and their blended family, and how that marriage fell apart. The story shoots lower, but ends of higher. We recommend it, and “The Big Short.”

An update on Bank of Montreal (BMO) and M&I: William Downe, BMO's president and CEO, said Feb. 2 that BMO has a bias toward “contiguous acquisitions” and sees a lot of fill-in opportunities in the states where M&I is operational. "We can grow in St. Louis, we can grow in Kansas City, we can grow in Indianapolis," he said. We'll see.

January 31, 2011

Even with tax Refund Anticipation Loans under fire, they continue to be offered, often misleadingly. Take for example a come-on by Liberty Tax Service, stating that its RAL lender Republic Bank & Trust Co. is “part of Bank of America.” This was said to Inner City Press on January 30 while it was testing a Liberty Tax Service storefront at 37-16 Broadway in Astoria, Queens.

Inner City Press asked the Liberty Tax Service person who presented RALs as legitimated by Bank of America for his business card, which said his name was Freddy Alvatorre, running at least three other Liberty Tax Services office in Queens, in Corona and Jackson Heights, one of the most diverse neighborhoods in the United States.

All of this information has now been turned over to the New York Banking Department and other regulators. Watch this site.

January 24, 2011

Bank of Montreal will be applying to buy M&I, the largest bank in Wisconsin, with 374 branches also in Arizona, Indiana, Florida, Kansas and Minnesota. One predictor of how Bank of Montreal would perform is what its Harris Bank has done. Inquiry has begun, and now some outreach. It has been raised to OSFI in Canada that, as simply one example, in its Chicago Metropolitan Statistical Area headquarters, Bank of Montreal's Harris Bank in 2009, the most recent year for which Home Mortgage Disclosure Act data is available, denied the conventional home purchase loan applications of Latinos 2.52 times more frequently than those of whites. The shareholders who've already come out against the deal are arguing not only that Bank of Montreal should be paying more, but also that there would be layoffs and branch closings. One wonders at what stage Bank of Montreal may try to find buyers for the branches in Kansas or Arizona or the branch listed on M&I's website in Las Vegas. Let the games begin.

January 10, 2011

It's a good thing that Massachusetts' highest court has stuck down the type of shadowy transfer of subprime mortgages that Wells Fargo and US Bancorp engaged in here. The underlying loans were made by predatory lender Option One. With the type of transfers that followed, often borrowers don't even know who owns their loans. As this decision is cited in other states' courts, the process could be made more transparent.

The proposal to merge the New York Banking and Insurance Departments, made by new governor Andrew Cuomo, is not only about the alleged convergence of the industries, but about the marginalization of the NY Banking Department. One after one, large New York based banks switches from state to national regulation as the Office of the Comptroller of the Currency offered preemption of all state laws. Citibank NA -- national association -- was followed by JPMorgan Chase and HSBC all switching to national charters. The result was a Banking Department largely concerned with small mortgage companies and even check cashiers. Now comes Andrew Cuomo, proposing to put behemoths like AIG under the NYBD's jurisdiction. We're ready.

January 3, 2011

Following CRA protests, First Niagara put out a press release announced “more than $1 billion” in what it characterized as CRA lending, the vast majority of its “small business” lending that it would be doing anyway. When asked for details, NewAlliance said “we did issue a press release about that.” Not surprisingly, the calls for public hearings are only mounting, including in light of the 230 announced layoffs which would result. An architect of the sell out, Peyton R. Patterson, now plans to resurface as a director of the Connecticut Business & Industry Association...

December 27, 2010

We take issue with the WSJ story on Christmas Eve entitled “Payday Lenders Go Hunting: Operations Encroach on Banks During Loan Crunch.” It implies that payday lenders are competing WITH JPMorgan Chase. But Chase is in fact lending to, enabling and profiting from the payday lenders. You'd think the WSJ would know.

December 20, 2010

We will begin Watching the proposal by Bank of Montreal to acquire M&I, and probably sell off its branches in Arizona, Florida and Kansas...

December 13, 2010

On First Niagara - New Alliance, the challenge Inner City Press / Fair Finance Watch filed last week has now been joined by the Mayor of New Haven and Connecticut AG. First Niagara continues to be dismissive, as they were when they bulled into Pennsylvania. There, groups say First Niagara is a second rate bank with bad systems and a “bad attitude.” Will the Federal regulators - the OCC and the Fed - ask the right questions, and hold the requested hearings?

December 6, 2010

Inner City Press / Fair Finance Watch last week commented to the OCC (and the FRB) against the applications of First Niagara to acquire and merge with NewAlliance. FFW is opposed to this merger, and is requesting a public hearing.

First Niagara's acquisitions have resulted in a decrease in availability of credit, especially to low and moderate income people and communities of color. It has seemingly been allowed to make acquisitions, for example its still undigested entry into Pennsylvania, due to the financial meltdown (and, we assert, the regulatory agencies' concerns about their own role in allowing the business practices that led to the meltdown).

Now, it is imperative that First Niagara's actual record, including on all recent acquisitions, be fully reviewed including at the requested public hearings, before another set of communities is subjected to First Niagara's practices.

Inner City Press raised some of these concerns when First Niagara went into Pennsylvania. At that time, the target bank was so weak it arranged by stealth a loan from First Niagara before any regulatory approval had been granted: gun-jumping. While the exigencies of the financial meltdown and First Niagara's representation by a highly connected white shoe law firm got it over that hump, in the time since First Niagara has not performed anywhere near adequately in the communities which it was allowed to enter.

To the degree that First Niagara may try to emphasize the alleged performance of NewAlliance rather than its own, we note previous issues regarding NewAlliance, including extensive opposition to its formation from New Haven Savings Bank, the “golden parachute” of its top leadership and CRA issues regarding its performance, to be explored and documented at the requested public hearing.

As regards the OCC, we note both that the OCC's Weekly Bulletin is significantly less useful and public friendly than, for example, the Federal Reserve Board's online Form H2A, which in a comprehensive location (nationwide) lists all applications open for public comment, and that the OCC, unlike the FRB, does not make it easy to submit public comments by e-mail. While the FRBNY provides a dedicated e-mail address for public comment, the OCC's online presence appears directed at banks and not the public. Comments to this email address have been accepted in the past; this comment should immediately be acknowledged by email, and the OCC should fix these problems going forward.

November 29, 2010

The Prospect: the “federal government is not tracking foreclosures. The numbers you hear--that one in 75 houses in Las Vegas is in foreclosure, say--likely come from RealtyTrac, 'the leading online marketplace of foreclosure properties.' It's also the country's main source of foreclosure data. Governmental foreclosure-prevention efforts rely on numbers collected by a company whose mission is to help people 'locate, evaluate, buy and sell properties.' Unsurprisingly, that's not working very well. HAMP was projected to save 3 million to 4 million homes, but as of September, it had permanently modified mortgages for just over 468,000 homeowners. The financial-reform bill included a provision creating a foreclosure database, featuring comprehensive stats on distressed mortgages. The bill, however, didn't specify exactly what the database would track or how it would be paid for. Anecdotal evidence suggests evictions, too, are on the rise. NLIHC estimated in 2009 that 40 percent of foreclosed properties had renters, who were often tossed out by banks when they took ownership. President Obama signed a bill giving such renters certain rights, but without any baseline numbers on pre-crisis evictions and no plan for ongoing measurement, assessing the law's impact is nearly impossible.”

November 22, 2010

We note the retirement at 67 of Bill Brennan in Atlanta, and this from an exit interview:

Q: How would you describe the government's response to the foreclosure crisis?

A: Whereas Congress and the Treasury bailed out the banks --- a crisis that evolved directly from the banks making millions of unaffordable mortgage loans --- the public policy response for homeowners has been totally inadequate.

Q: How would you describe it?

A: The response has been to let most of these homeowners lose their homes and further weaken the economy.

Q: You are critical of the Obama administration's loan-modification program. Why?

A: The program has been described as a failure and rightfully so. It is voluntary --- the lenders don't have to do it if they don't want to. Those lenders that participate often refuse to follow the procedures correctly. They erroneously believe they can make more money foreclosing.

We wish him well.

November 15, 2010

Now First Niagara has applied to the Federal Reserve to buy NewAlliance, with a comment period running through December 3. Both in New Haven, NewAlliance's base, and in the communities ostensibly served by First Niagara, there are concerns. First Niagara has until now been allowed to grow quickly, but has barely integrated or served the areas it has move into. Its systems are weak. In terms of a CRA a single officer, based in Buffalo, runs the show. A request has been made for complete copy of the application. Watch this site.

J.P. Morgan and its Washington Mutual Bank and Chase Home Finance LLC divisions are facing suits in Illinois and California that are seeking class-action status. The lawsuits allege "common law fraud and misrepresentation, as well as violations of state consumer fraud statutes."

November 8, 2010

This week we'll be analyzing the November 2 election results -- for example, who will take over from Barney Frank in the House Banking Committee, Bachus or Royce? -- and fraudulent foreclosures by Deutsche Bank, an institution we'd like to hear more readers' experiences with...

November 1, 2010

Focus in the foreclosure scandal has begun to shift to Deutsche Bank. In Colorado's Douglas County for a foreclosure filed last month, the “Post found a certification on behalf of Deutsche Bank National Trust, based in Santa Ana, Calif. But the holder's address on the certification lists the location of Bank of America Home Loans in Simi Valley, California.” According to Germany's Der Spiegel, Deutsche Bank “manages around a million real estate properties in the United States... Besides, the bank packaged collateralized debt obligations (CDOs) worth $25 billion.” We'll have more on this.

Citigroup's Vikram Pandit last week threatened the closure of branches in lower income and rural areas, blaming it on regulation. He said, “As old revenue streams from overdraft fees and debit interchange shrink, retail banks are going to have to reinvent their business models to remain profitable. Banks may respond by not serving less-profitable communities and customers, or by serving them less. We could see the retail branch footprint of some banks shrink--particularly in lower-income and more rural areas." Is this a threat?

October 25, 2010

Advocacy for a foreclosure moratorium was met by opposition not only from banks but also the Obama administration this month. The administration's argument is that a moratorium will “freeze up” the economy, since as their talking points say over 40% of home sales in Nevada are of foreclosed upon homes. The churn is necessary, they say. Other say: disgusting.

October 18, 2010

The six Federal Reserve Board governors were confronted last week with their failure to inquire into the facts of applications for Fed approval which are subject to protest under the Community Reinvestment Act and otherwise.

Inner City Press / Fair Finance Watch has raised the way the Federal Reserve Bank of New York has bottled up protests about Morgan Stanley and now the Middle East by rubber stamping deals at the local level, with no Board review.

Fed chairman Bernanke for the second time said that it's “perverse” that CRA is enforced on merger applications. But it is the law, and the person charged with following the law shouldn't brush it off.

Also raised was the way that, even when protested applications go to the Board, Fed staff omit from their summaries issues they think are not relevant or can be excluded - including for example involvement in predatory lending by a bank's affiliates. Even wonder why the Fed is blind?

October 11, 2010

Even District Judge Ellen Huvelle sees Citigroup's settlement with the SEC as a sell out of consumers. The SEC said in a letter to this U.S. district judge that Citigroup Inc. will be required to have stringent reforms that would ensure the bank's disclosures are adequate for investors. The judge has had expressed concerns about the $75 million proposed settlement between Citigroup and SEC, saying she needed assurance that the bank would maintain improved disclosure practices. Oh that there had been judicial oversight over CitiFinancial's $75 million settlement on the cheap with the Federal Reserve, whcih reformed near to nothing...

October 4, 2010

Even in Japan, predatory lenders are falling. Takefuji like Acom and Aiful made loans at 29% interest, recently cut back to 20% by legislation. Apparently this level of usury didn't work for Takefuji: they have declared bankruptcy. Good riddance. But what about the other loan sharks?

For now celebrated in Buffalo:

“Leisha Gordon, vice president and community reinvestment officer for First Niagara Bank. She is responsible for regulatory reporting of lending, service and investment test activities in seven market centers under the Community Reinvestment Act for a $20 billion, 255-branch regional network.”

Will this love fest continue? Watch this site.

September 27, 2010

From Federal Reserve Governor Elizabeth Duke's September 24 statement on the Home Mortgage Disclosure Act:

“the recent mortgage crisis has highlighted the potential ramifications of a mortgage market that is not functioning well. HMDA data do not create the market or solve all market problems, but they do help us understand what is happening in the market. The time is certainly ripe for reviewing and revising the data elements, standards, and reporting formats.”

But the Fed was presented, repeatedly, with showings based in significant part of HMDA data, of Citigroup's CitiFinancial, Wachovia, New Century, Ameriquest and the like, that predatory and discriminatory lending was taking off. And the Fed did nothing...

Speaking of Citigroup, now they're getting sued by a government - as investor:

“Norway's central bank has sued Citigroup Inc. over alleged misstatements about the company's financial condition during a two-year period leading up to and during the global financial crisis, and which it claims caused it to buy Citi shares at inflated prices. Norges Bank claims that it lost more than $735 million on its investments in Citigroup common stock and more than $100 million on its investments in Citi bonds and preferred shares. The stocks and bonds were purchased between January 2007 and January 2009, according to the lawsuit. The lawsuit, filed in Manhattan federal court Sept. 17, alleges that Citi made a series of misstatements about its financial health, particularly its exposure to subprime mortgages and other toxic assets.”

The word “exposure” makes it sound passive, like Citigroup was a victim. But Citi TOOK ON this exposure, screwing many, many people in the process...

September 20, 2010

On First Niagara's proposal to acquire New Alliance, questions are being raised in at least three states. First Niagara, it emerges, it lower tech than the banks that it buys and seeks to buy. First Niagara is resistant to even trying to increase diversity. And so there will be opposition.

Meanwhile in Washington there is renewed talk, including from unexpected quarters, of safe harbors to make some banks untouchable. We will have more on this.

September 13, 2010

Regarding the too-small $75 million proposed fine of Citigroup, the SEC's now said "The proposed $75 million penalty represents less than 0.3% of Citigroup's revenue for the most recent quarter, and should not cause an undue negative financial impact on the company's business, or significant harm to current Citigroup shareholders," the SEC said. The agency estimates the impact equals less than one-third of one cent per share. This is a defense of the weak settlement?

We said we would be covering First Niagara - New Alliance, and we will, starting this coming week. New Alliance has always been trying to get over on New Haven, its putative hometown. First Niagara, when it recently bought its way into Pennsylvania, jumped the gun, then used a white shoe law firm with an inside track to the Fed to cover up its tracks. Now they seek to combine, and others seek to keep them apart. Watch this site.

HAMP as scam, JPM Chase and Geithner: J.P. Morgan Chase said last week that the number of mortgage modifications it has offered its customers since the start of 2009 has topped 900,000 as the lending giant looks to stem potential loan losses. One of the nation's largest mortgage servicers, J.P. Morgan has offered modifications on 913,309 mortgages in 19 months ended July 31. But just 270,361 have been approved for permanent modification and 214,529 have completed the process, highlighting the ongoing difficulties in permanently lowering monthly payments for struggling borrowers and taking other steps in efforts to prevent home foreclosures. Nearly one-fourth of J.P. Morgan's modifications have come through the federal government's Home Affordable Modification Program-- regarding which, on a meeting between Geithner et al. an bloggers, see http://www.interfluidity.com/v2/933.html

Who knew - the FDIC has continued to extend “final settlement” of JPMorgan Chase's sweetheart deal to buy Washington Mutual, most recently to August 30, 2010, see document here. While those most interested as seeking a higher price from Morgan Chase, could there be CRA and anti-predatory lending possibilities?

Unintended consequences? From CJ “ fallout from the Dodd-Frank Act, the financial-overhaul legislation passed this summer. Customers rejected by banks for being unprofitable or risky under the weight of new regulations could migrate to consumer lenders, who have more experience underwriting and pricing subprime risks.On a conference call last month, responding to a question about the viability of CitiFinancial, Citigroup Chief Executive Vikram Pandit said, 'My God, you don't want to shut this down.'”

Oh but some DO want to shut it down...

And on AIG's sale of 80% of American General to Fortress -- will AIG still have to file American General's HMDA data? Or is that subject to some sort of “control” test? We aim to find out.

Timothy Geithner, the Treasury Secretary who didn't pay his taxes, is now thumbing his nose at the portions of the Volcker Rule that Sen. Levin and others managed to enact. Hey, if you don't like the laws --- and you don't -- maybe it's time to leave?

Wells Fargo was the target of a governmental charge of predatory lending last week, by the Pennsylvania Human Relations Commission, based on 2004 and 2008 Home Mortgage Disclosure Act data. Inner City Press / Fair Finance Watch has analyzed the 2009 data, which it obtained from Wells Fargo, and has found that in 2009, Wells Fargo Bank NA confined African Americans to high cost mortgages 2.40 more frequently than whites. Its disparatiy for Latinos was 2.09. For its subprime affiliate Wells Fargo Funding, the disparities in 2009 were even worse that the bank, and those cited by the Pennsylvania Human Relations Commission: African Americans were confirmed to high cost loans four times more frequently than whites.

Now the US Government buys into subprime, in a field left unregulated by the financial reform bill: “Government-owned General Motors is acquiring Fort Worth’s AmeriCredit in a $3.5 billion deal. AmeriCredit gives GM something it sorely lacked: a lender that can reached car buyers of all stripes, including subprime borrowers.”

Through the revolving door, in a move that should be illegal, from regulating Citigroup to getting paid to work for them: Citigroup last week bragged “it has hired Irene Fang, a long-time veteran of the U.S. Treasury's bank regulatory agency, as the New York bank's corporate fair lending director. Fang most recently served as a division head in the Economics Department of the Office of the Comptroller of the Currency. The Economics Department contributes to the fair lending reviews that the OCC conducts in banks of all sizes, Citigroup said in a statement. Fang, who has a doctoral degree in economics, will report to Lloyd Brown, Citi's director of community reinvestment, Citi said.”

Isn't it a conflict of interest, to be in charge of reviewing Citigroup, then getting rewarded with a job at the company?

Goldman Sachs' “Tax Evasion” Hit by Rep. Doggett, Citi's and Transocean's Offshoring

SOUTH BRONX, July 20 -- Goldman Sachs, recently let off the hook by the Securities and Exchange Commission with a mere $550 million fine, dropped its tax rate in one recent year from 34% to 1%. On July 20, Inner City Press asked Rep. Lloyd Doggett (D-Tx) what he thought of Goldman's decline in tax rate, and of the SEC deal.

Rep. Doggett replied that this was “outrageous,” that Goldman Sachs' decrease in tax rate “suggests a company among the most profitable on the Street is not paying its fair share” and is using “gimmicks.” But what's going to be done?

Inner City Press asked the question on a media conference call including Senator Carl Levin (D-Mich) and several “responsible investors” including Amy Domini. Ms. Domini recounted how she had to pull funds recently from Chicago-based Shorebank, and that some of her customers then pulled funds from her.

Doggett was asked about Citigroup, with more than 400 offshore subsidiaries. He said this should be investigated, as should Transocean, owner of the leaking Gulf oil platform, which shifted business to the Cayman Islands and then Switzerland to evade U.S. taxes.

   Senator Levin spoke out against companies shifting their patents and other intellectual property offshore to evade taxes. The loopholes should be closed -- but will they? Watch this site.

July 19, 2010

While even in the vaunted financial reform bill, U.S. banks are hardly pushed to lend to small businesses, in the UK they are being summoned. Bosses of the U.K.'s biggest banks last week had to push back against government claims they aren't doing their part to grow the economy by lending more to small businesses, at a meeting held between top executives and Treasury officials to discuss lending and coming regulatory reforms. “It was a very constructive meeting that will help inform the Government's Green Paper on business finance which will be published shortly," said Chancellor of the Exchequer George Osborne and Secretary of State for Business Innovation and Skills Vince Cable in a joint statement following the meeting. Also at the meeting were Financial Secretary of the Treasury Mark Hoban, Lloyds Banking Group CEO Eric Daniels, Barclays PLC boss John Varley, Royal Bank of Scotland Group's post-Shred CEO Stephen Hester and HSBC Holdings' still chairman Stephen Green...

By Toronto Dominion's own admission, in response to Inner City Press / Fair Finance Watch's comments opposing its South Financial application, TD in 2009 denied 74% of mortgage applications from African Americans, and 65% of applications from Latinos. Despite this, and the subprime loans it admits it makes, it says no issues are raised by its attempts to expand, including by converting fast food restaurants into bank branches serving up... 74% denial rates to African Americans and 65% denial rates to Latinos. TD's worse for you than burgers...

On June 30, the Federal Reserve System approved a Morgan Stanley application which Fair Finance Watch had challenged in April, based on Morgan Stanley's subprime Saxon Mortgage subsidiary and Morgan Stanley, among other things, funding makers of cluster bombs.

Amazingly, the day AFTER the Fed sent its conclusory approval letter, it released improperly withheld information to FFW:

Date: Thu, Jul 1, 2010 at 10:08 AM
Subject: Morgan Stanley Application
From: Federal Reserve
To: fairfinancewatch.org

Good morning Mr. Lee:

Previously, you'd requested a copy of Morgan Stanley's Section 3 application.  The business plan was not properly redacted by Morgan Stanley.  I have attached the application below for you.

Best,

Kimberly Hooks

This information should have been released during the comment period, and certainly prior to approval. In fact, “Mortgage” activities are still improperly redacted. On this basis alone, the approval should be rescinded...

Watch this site.

Game on: Inner City Press / Fair Finance Watch has filed a timely challenge with the Federal Reserve to the pending applications of The Toronto-Dominion Bank to acquire The South Financial Group and its Carolina First Bank.

FFW obtained TD's 2009 HMDA-LAR, which has not been reviewed or taken into account in any regulatory review of TD. The data are troubling, showing for example that in 2009 Toronto Dominion denied fully 83% of mortgage loan applications from African Americans, versus only 42% of applications from whites. TD's denial rates for Latinos and Native Americans, both 68%, were also troubling. Public hearings should be held and the applications not approved.

TD in fact makes rate spread or subprime loans, but not in a fair manner. African Americans at TD are 1.93 times more likely to be confined to higher cost loans than whites.

While the FRB, despite the stated purpose of HMDA in helping to identify discrimination, has shifted to a dismissive approach to HMDA, it will be hearing different at its upcoming HMDA hearings, testimony at which should be considered by the FRB in connection with this application.

On a recent investors' conference call, TD bragged about its “FDIC-assisted transactions” -- which , significantly, were not reviewed for CRA, and on which there was no comment period. A public hearing is needed on this one. FFW's request in this letter for a complete copy of the applications includes also any and all information in the possession of the FRS concerning TD's “FDIC assisted transactions.”

Meanwhile, shareholders of South Financial have filed suit against the deal. See, e.g., Greenville (SC) News, June 22, 2010. TD has told its shareholders it will somehow convert fast food restaurants into bank branches. See, e.g., Globe & Mail, June 17, 2010. Before serving up its disparate lending, public hearings should be held. These issues must be explored, under managerial and financial factors, in connection with these applications. FFW has requested public hearings.

Under the shadow of the Volcker Rule, Citigroup is trying to raise $3.5 billion for investment funds. Also fighting Volcker are J.P. Morgan Chase, owner of hedge-fund manager Highbridge Capital Management, and Morgan Stanley, owner of Greenwich, Conn., hedge fund FrontPoint Partners.

Here's a trend: as troubled loans in communities of color are bulk-sold by Wall Street titans, the neighborhoods are more and more undervalued and local wealth destroyed...

Meanwhile, to take the lead on Community Reinvestment Act modernization, Barney Frank has designed Maxine Waters of Los Angeles. We'll see...

Now it's reported that CitiFinancial hopes to expand its subprime lending in at least 45 US states later this year -- while General Electric's GE Money has already picked up subprime lending overseas. We had predicted both. Citigroup claims it only seeks to grow in subprime in order to sell the business off, while GE downplays its subprime growth. Thou dost protest too much?

So Morgan Stanley has purported to respond to comments Fair Finance Watch filed with the Federal Reserve, opposing Morgan Stanley applications subject to the Community Reinvestment Act. It is an arrogant response, largely that FFW's points about predatory mortgage servicing and "other predatory practices, including 'land grabs' and the financing of 'cluster bombs.'"

Its vague response on these last two is that "Morgan Stanley and its subsidiaries engage in corporate underwriting and lending activities for various clients, including those involved in national defense related activities. Morgan Stanley also engages in real estate investment activities on a global basis."

It's Morgan Stanley which put "cluster bombs" in quotation marks. To those impacted, air quotes will not help. Same with the victims of the predatory loans services by Morgan Stanley's Saxon, or of loans enabled by Morgan Stanley as an investment bank.

Morgan Stanley admits to a Saxon settlement in Missouri, and to not timely responding to consumer complaints. Yet it argues that none of this is relevant to the Federal Reserve. Like we said, arrogant. And to be continued.

Protests of JPM Chase on Wall St, of Predatory Loans and Mining, Laissez Faire

WALL STREET, May 18 -- Of the Big Four American bank, JPMorgan Chase has perhaps benefited more than any other from the financial meltdown. While having securitized many and made some of the most predatory mortgage loans, it was given Bear Stearns, and then Washington Mutual on the cheap. It proceeded to close scores of WaMu branches.

Tuesday in lower Manhattan outside JPMorgan Chase annual shareholders meeting, environmentalists sang songs about the bank's support of mountain top removal mining. As Inner City Press has reported, JPMorgan Chase pays former UK prime minister Tony Blair as an environmental consultant.

  The bank's security officers handed out leaflets about less than living wages from Chase's subcontractors Allied Barton and Summit Security. A protest of predatory lending by Chase was right around the corner, including NYRL, CRA-NC and, in from West Coast including wtih wronged borrowers, the California Reinvestment Committee. "What do we want? No redlining! When do we want it? Now!"

  Fair Finance Watch got an early copy of JPM Chase's 2009 mortgage lending on disk. Its analysis, the first in the country, found that in 2009 JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost mortgage loans as defined by the Federal Reserve 1.98 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.17.

Still Chase and its CEO Jaime Dimon lobby against regulatory reform, and call it unfair that they are tarred with the stigma of the bailout they accepted. Dimon's speech last weekend at Syracuse University was protested, although some spun it as a success, with cheers for his commencement speech about free thinking. Laissez faire is more like it. Private profits, socialized risk.

JPMorgan Chase helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, the bankruptcy examiner said last week. “The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in federal court, also in lower Manhattan.

Footnote: Simultaneous with the protest and shareholders' meeting, Chase's previous Community Reinvestment Act officer organized a CRA breakfast talk. At least two activists were asked to skip the protest in order to speak, but declined. Willis is known to oppose any legislation to expand CRA to cover, for example, investment banking including the securitization of subprime mortgages.

  Rather, he is promoting a more limited regulatory fix to CRA, on such matters as expanding the areas in which banks are assessed. Whether legislators like House Banking Committee chair Barney Frank, who argued CRA should not be under the Consumer Financial Protection Agency, will now move forward with the CRA modernization bill is not yet known. Watch this site.

May 17, 2010

Too little, too late: After demanding last year that Citi fill its board with more financially savvy directors and improve its risk management, Fed officials in Washington pressed the New York Fed to follow up with tough oversight, people familiar with the matter said.

"The supervision program for Citigroup has been less-than-effective," the Fed board said in a draft of a review of the New York Fed's performance last year, according to documents released by the bipartisan Financial Crisis Inquiry Commission. The final review said Mr. Dudley's staff "did not take timely and appropriate action" to follow up on the Fed's demands in a memo of understanding with a big bank. A Citi representative declined to comment.

May 10, 2010

The Federal Reserve is advocating for itself:

"Charles Plosser of the Philadelphia Fed, Thomas Hoenig of the Kansas City Fed, Jeffrey Lacker of the Richmond Fed and Narayana Kocherlakota of the Minneapolis Fed have met with the Joint Economic Committee of Congress opposing the proposal under which the Federal Reserve would oversee banks with more than $100 billion in assets, while smaller institutions would be regulated by other agencies. The Fed banks also oppose a provision that would make the president of the New York Fed a presidential appointee, calling it an attempt to politicize the agency appointee, calling it an attempt to politicize the agency."

What -- so it's better to have banks, which own stock in the Federal Reserve Banks, regulate themselves?

May 3, 2010

As Goldman Sachs is belatedly grilled in Congress, so to at the Federal Reserve. Last week Inner City Press ' Fair Finance Watch put in a comment that began this way:

RE: Timely Opposition and Hearing Request on the Applications The Goldman Sachs Group to acquire, inter alia, up to 24.9 percent of SKBHC Holdings LLC, Corona del Mar, California, which is applying to become a bank holding company, & thereby indirectly acquire Starbuck Bancshares, Inc.& The First National Bank of Starbuck

Dear Chairman Bernanke and others in the FRS:

On behalf of Inner City Press' Fair Finance Watch, this is a timely comment opposing and requesting public hearings on Goldman Sachs' above captioned pending applications, which were re-noticed on the Board's H2A.

As you know, Goldman Sachs was allowed to become a bank holding company without any public comment period or consideration of the Community Reinvestment Act, which would otherwise have been required. Since then, and since 2009, Goldman Sachs has been charged with misrepresentation by the SEC. The emails which recently emerged, about the failure of little subprimes and selling toxic bonds to widows and orphans, militate for public hearings on these Goldman applications. See also, since October, the NY Times' ""Testy Conflict With Goldman Helped Push A.I.G. to Edge."

We are requesting, in connection with this application, a full disclosure of any and all assistance Goldman Sachs received from the Federal Reserve System in the past four years.

On the consumer side, Goldman Sachs has been charged with involvement in predatory lending, including for the acts of its subprime servicing subsidiary, Litton Loan Servicing. Even Goldman's settlement left the public in the dark. See, e.g., Bloomberg News, May 17, 2009, "Deal in Goldman probe leaves public in dark."

April 26, 2010

As financial reform comes to a boil in DC, Inner City Press / Fair Finance Watch filed timely comments with the Federal Reserve Board opposing applications by Morgan Stanley, moving its banking around. The grounds are its subprime affiliate Saxon, as well as general sleaze, from land grabs to financing cluster bombs. Will the Fed care? Watch this site.

April 26, 2010 - click here for BloggingHeads.tv debate on Afghanistan cover up, Bhutto, Iran, Sudan and the UN's Love Boat in Haiti, by Inner City Press

April 19, 2010

So Goldman Sachs has finally been accused by the SEC -- not with enabling predatory lending, for which it should be charged, but for setting up for John Paulson to short a pool of dubious subprime securities and then selling it to others as a legitimate and objective investment. Well, just like Al Capone's Achilles Heel was tax evasion, perhaps misrepresentation is Goldman's. But we doubt the SEC's stomach to follow this fight through. We'll see.

We have reported on the banks which left The Bronx, snooping for example around old Chase Manhattan branches turned into churches. But it's time to mention Melrose Credit Union, which runs radio advertisements during Yankee games. Perhaps you've seen their sign, if you drive to or from JFK airport. The institution says, right on its website, that

"since 1922. Melrose was initially established to provide financial resources for individuals and small business owners from the Bronx, NY. Through the Credit Union, community residents were afforded the means to pursue their American Dreams. The success of Melrose Credit Union has not diminished its original mission statement: Empower the community by offering affordable financial products and services. Today that community commitment has helped transform Melrose into an over $1 billion credit union with over 20,000 members residing across the country and around the world."

Melrose is a neighborhood in the South Bronx, which this "successful" credit union left behind. It has no branch in The Bronx; it left the borough but speaks about empowerment of (presumably other) neighborhoods. What was that again, about there being no need for a Community Reinvestment Act on credit unions?

April 12, 2010

Too Big To Be Fair, Citi, Wells, BofA & JPM Chase Disparate in Subprime Loans in 2009

By Matthew R. Lee, Inner City Press

NEW YORK, April 11 -- In the first study of the just-released 2009 mortgage lending data, Bronx-based Fair Finance Watch has found that the Big Four survivors of the banking meltdown, Citigroup, Wells Fargo, Bank of America and JPMorgan Chase, continued with high cost loans and had worse disparities by race and ethnicity in denials and higher-cost lending than before 2009, Fair Finance Watch concluded.

 The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 2.25 times more frequently than whites, according to Fair Finance Watch. Citigroup confined Latinos to higher-cost loans above the rate spread 1.72 times more frequently than whites, the data show. 2009 is the sixth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread.

 JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost loans 1.98 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.17. HSBC, perhaps due to its shrinking, some say dying, business had disparities of 2.57 for African Americans and 1.61 for Latinos.

 For Bank of America's Countrywide Bank FSB, the disparity for African Americans was 2.11 and for Latinos, 1.95.

 For Wells Fargo Bank NA, the disparity for African Americans was 2.40 and for Latinos, 2.09. For its subprime affiliate Wells Fargo Funding, the disparities were even worse: African Americans were confirmed to high cost loans four times more frequently than whites.

"Call them 'too big to be fair' -- the banks the regulators have favored, allowing emergency takeovers like JPMorgan Chase's of Washington Mutual, Bank of America's of Countrywide and Merrill Lynch, and Wells Fargo's of Wachovia, were the most racially disparate lenders," said Fair Finance Watch. "The regulators did not put any conditions on the mergers or Troubled Assets Relief Program bailouts. As things are going, it will be worse and more disparate in 2010.  Global predatory lending seems unlikely to be discussed at the G-20 finance ministers' meeting in Washington later this month. The disparities in the 2009 mortgage data of the big four militate for breaking up these banks."

The weakness of the Federal Reserve as regulator on this was highlighted by the March 24 settlement by CitiFinancial when non-reporting of loans under HMDA was discovered by Massachusetts authorities - and not the Fed, which is putatively regulating CitiFinancial.

 Regional bank BB&T in 2009 confined African Americans to higher-cost loans above the rate spread 1.90 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread 1.43 times more frequently than whites.

U.S. Bancorp in 2009 confined African Americans to higher-cost loans above the rate spread 1.72 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread 1.71 times more frequently than whites.

 Regions in 2009 confined African Americans to higher-cost loans above the rate spread 1.68 times more frequently than whites, and confined Latinos to higher-cost loans above the rate spread 1.33 times more frequently than whites.

  Several lenders, including a large credit union, exhibited disparities denial rate beween African and Latinos compared to whites in 2009. Citigroup, for example, denied applications by African Americans 1.45 times more frequently than whites, while denying Latinos 1.35 times more frequently than whites. JPMorgan Chase denied applications by African Americans 1.54 times more frequently than whites, while denying Latinos 1.41 times more frequently than whites. The Pentagon Federal Credit Union denied applications by African Americans 2.04 times more frequently than whites, while denying Latinos 1.84 times more frequently than whites.

  The law required that the 2009 data be provided by April 1, following March 1 requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline. Trustmark and Bank of Hawaii provided their data at the deadline but only in paper format, such that it could not yet be computer-analyzed. Further studies will follow.

April 5, 2010

This week the Angelides Commission will hear from Alan Greenspan, Robert Rubin and Chuck Prince. This goes back to the Citicorp - Travelers merger, about which Inner City Press was asked this week:

When Travelers met and swallowed Citicorp in 1998, the Federal Reserve didn't just approve an illegal merger -- it illegally pre-approved an illegal merger. Sandy Weill and John Reed and their lawyers got the green light from the Alan Greenspan Fed before even announcing the merger. The group I worked and work with, Inner City Press/Fair Finance Watch, demanded all records of the meetings, but got only two cryptic letters, talking about the marriage of "Red" and "Blue." The Fed approved, and predatory lending took off. And now in the aftermath, even the Chris Dodd bill would house consumer protection inside the same Federal Reserve, a huge mistake. Red and Blue indeed...

March 29, 2010

The Fed is belatedly concerned -- but not too concerned. Following Inner City Press / Fair Finance Watch's comments, the Fed conducted an after the fact inquiry and in an approval order last week included this footnote:

A comment from the public expressed concern that FNF Group acquired control over Harleysville before obtaining Board approval of the application because of an extension of credit FNF Group made to Harleysville. In December 2009, and after FNF Group filed its application with the Board to acquire Harleysville, FNF Group loaned Harleysville $50 million, secured by the shares of Harleysville Bank. Harleysville invested the loan proceeds in Harleysville Bank to increase the bank's capital.

The Board is concerned when a banking organization seeking to acquire . another banking organization makes a loan to the acquiree in advance of the Board's approval of the acquisition. Those types of loanss raise concern thatthe transactionon would ~e, in substance, the acquisitioof af a controlling interest or would provide the acquirer with the ability to exercise a controlling influence over the management and policiof thethe bank holding company before receiving Board approval. The Board has reviewed carefully the loan to Harleysville, including the circumstances and terms of the loan, the merger agreements, the purpose of the loan, and the relationships of the organizations after the loan transaction. Based on all the facts of recordd, the Board does not believe that the loan resulted in FNF Group acquiring voting securities of, or a controlling equity interest in, Harleysville, or in FNF Group exercising, or having the ability to exercise, a controlling influence 'over Harleysville in this case. The Board continues to believe that loans made by an acquirer to a target organization before agency approval of its acquisition proposal raise important issues, and it will review these arrangements critically and carefully.

But the Fed apparently didn't know about the loan until it was raised in comments, and it let the deal go forward, after reams of arguments by banking insider H. Rodgin Cohen. This is another example of Fed lassitude, another reason that consumer protection should not be put under the Fed....

From the WSJ, we annotate in italics: "CitiFinancial, a consumer lender, has a business model that is similar to CIT Group Inc., which suffered as wholesale funding dried up and sought bankruptcy-court protection last year, exiting in December. CitiFinancial used to be known as Commercial Credit Corp. and was the cornerstone of the empire Sanford Weill built into Travelers Group before merging with Citicorp in 1998 to form Citigroup. As a stand-alone firm, CitiFinancial could have trouble getting access to cheap credit, some analysts said."

It's also a widely known predatory lender. Could that have something to do with the difficulty in selling it?

"Another business up for sale: a credit-card portfolio with an estimated $40 billion in receivables and private-label cards pitched through retailers like Sears Holdings Corp."

And that business repeatedly calls people, even those on the Do Not Call list, just as CitiFinancial does...

March 22, 2010

Wal-Mart plans to open 500 more of its MoneyCenters. Asked for comment, Inner City Press opined

"Wal-Mart's proliferation of check cashing and $4.50 for bill payment (same day) into 500 more stores must be seen in the context of the company's recent gender discrimination settlement, use of tainted cotton from Uzbekistan, and standardless sale of the resources of the Democratic Republic of the Congo. We are still monitoring Wal-Mart, as it become more banklike without any of the regulation. We would suggest that the Consumer Financial Protection Agency, wherever housed, also look at Wal-Mart."

The domestic and CFPA portion of the comment appeared in the Charlotte Observer and elsewhere.

"Wal-Mart adding financial sites," by Christina Rexrode, Charlotte Observer, March 16, 2010

March 15, 2010 -- As Congress Dithers for Payday Lenders, CRA Activists Raise Stakes in St. Louis

By Matthew R. Lee

WASHINGTON, March 10 -- As legislators from both political parties dally on Capitol Hill, considering handing consumer protection to the Federal Reserve like Democratic Senator Chris Dodd or leaving enforcement over payday lenders off to the side like Republican Bob Corker, the real work of protecting consumers is done by grassroots groups.

Inner City Press learned on Wednesday of an all too rare Community Reinvestment Act challenge filed recent in Missouri, which has delayed the recalcitrant bank's application for regulatory approval for several months. The Metropolitan St. Louis Equal Housing Opportunity Council, which filed the protest, says that CRA has been largely moribund in St. Louis for the last 20 to 30 years.

Now, in the face of the economic meltdown, it is back. On the sidelines of the NCRC conference, three EHOC staffers spoke of pouring over list of regulatory approvals, commenting on CRA performance evaluation, reaching out for allies to Kansas and Jefferson City.
 
  The applicant is Central Bancompany, based in Jefferson City, to buy Bank of Belton. It is not the biggest deal, but a fresh CRA protest is a big deal. We'll have more on these.

March 12, 2010 -- As HUD Shut Subprime Taylor Bean, What of Its Larger Financiers? Annals of Impunity

By Matthew R. Lee

WASHINGTON, March 12 -- While Congress continues to resist holding the financial institutions responsible for the meltdown accountable, five blocks from the Capitol on March 12, Federal Housing Administrator David Stevens bragged of having "shut down 356 lenders." He focused on Florida-based Taylor, Bean & Whitaker, the third largest FHA lender in the country until it filed bankruptcy in August 2009. At that time, Inner City Press / Fair Finance Watch noted that TBW had given it the run around to obtain its Home Mortgage Disclosure Act data, perhaps a clue to more fundamental illegality.

What Stevens didn't follow up on was the banks which enabled and did business with Taylor Bean and its ilk. There was, of course, Alabama-based Colonial Bank, which have been intertwined with Taylor Bean was seized by the FDIC, its branches sold to BB&T and many of them shut down.

But there were bigger players at the trough. As Inner City Press reported back in November 2009:

"Deutsche Bank AG and a unit of BNP Paribas SA separately sued Bank of America Corp. on Wednesday, alleging that the bank has failed to repay about $1.7 billion in secured notes issued by a special-purpose entity. The breach-of-contract lawsuits, filed in U.S. District Court in Manhattan, allege that Bank of America has failed to redeem $480.7 million in secured notes held by BNP Paribas and $1.2 billion held by Deutsche Bank. The notes were issued by Ocala Funding LLC, a special-purpose entity that provided short-term liquidity funding to Taylor, Bean & Whitaker Mortgage Corp..."

This a a sample of the chicanery behind the global financial crisis, and players who have not been held accountable.

Footnote: Stevens was preceded in the NCRC conference by another HUD official, John D. Trasvina, head of fair housing and fair lending. He was asked about HMDA data, but noted its time lag, that one can't get study disparities in rates of restructuring of mortgages. This publication has requested more recent data: watch this site.

March 11, 2010 -- Dodd's Bumbling Portends More Watering Down for Fed, of Groucho Marx in Reverse

WASHINGTON, March 10 -- After watering down financial reform legislation in weeks of concessions, now Senator Chris Dodd says that while a draft bill will be "unveiled" on Monday, it and he will not have any Republican co-sponsors. Insiders predict then another round of concessions, from a bill that will, they say, place consumer protection in or at the Federal Reserve.

 "Sell out city," said one consumer advocate visiting Washington this week, expressing a lack of surprise that Timothy Geithner so quickly gushed with praise for lame duck Dodd. Some consumer advocacy insiders have been defanged into supporting the Federal Reserve by the threat that if not at the Fed, the financial protection unit could be placed in the Office of the Comptroller of the Currency. Thus they resist going public with their dissatisfaction with the Fed's track record, on the "lesser of two evils" theory.

The Fed itself has placed the Consumer Financial Protection Agency issue on the agenda of the next meeting of its own Consumer Advisory Committee, half made up of bankers. Of the other half, some are in the Fed's sway on a reverse Groucho Marx theory.

Groucho said he didn't want to join any club that would accept the likes of him. The insiders won't oppose any club that has issued them an invitation. It would be funny if it weren't so sad, ill-serving consumers. Those who were previously invited but who've now left may have more freedom to speak. We will have more on this.
March 8, 2010

  While opposing the proposal to put consumer financial protection under the Federal Reserve, it's worth noting that the Treasury Department's OCC also continues to allow predatory lending, including tax refund anticipation loan (RAL) lending.

The two biggest RAL lenders are national banks of JPM Chase and HSBC (which continues "partnering" with H & R Block). Rather than publicly or even privately urging these big banks to stop RALs -- as even the FDIC has done with smaller institutions like Republic -- the OCC issued a vague policy guidance that provides no penalties, http://www.occ.gov/ftp/bulletin/2010-7a.pdf

While JPM Chase claims its fees are clear -- $32 plus one percent of the loan -- it also has a $10 technology access fee. This is a trillion dollar institution, engaged in usurious lending. And the band played on...

March 1, 2010

Bottom feeding subprime lender World Acceptance, charging interest rates up to 215%, is enabled by credit lines from JPM Chase and Bank of America, among others. It feasts off repeated refinances and roll overs, using the rule of 78s to fleeces its borrowers. Do Chase and BofA have any standards for the subprime lenders they will lend to? JPM Chase was previously exposed by Inner City Press / Fair Finance Watch for extensive lending to pawn shops and high cost check cashers. Even post crisis, the sleaze just continues. Watch this site.

February 22, 2009

Public Comment Period on Merger Only a "Technicality," Bank Law Insider Argues

When is a Federal Reserve public comment period not public? When banking law insider H. Rodgin Cohen says so, he seems to feel. In a February 17 letter copied to the Fed's general counsel Scott Alvarez, H "Can We Call You Rodge" Cohen urges the Fed to disregard a timely comment on lending disparities and other irregularities, arguing that the comment period was only open due to a "technicality."

While some would think this beneath ol' Rodge, perhaps Sullivan & Cromwell markets him as truly full service.

February 15, 2010

Subprimers from Fremont resurface as bottom feeders buying foreclosed home: Impunity

February 8, 2010

  So what did and does Hammering Hank Paulson think of the Community Reinvestment Act? He was Secretary of the Treasury, in charge of the Office of the Comptroller of the Currency and Office of Thrift Supervision, which regulate national banks and saving banks, respectively, including for CRA. But on February 2 on the Larry Kudlow show, when Kudlow included CRA among the causes of the economic crash, Paulson said nothing, then agreed, "That's right... you had all of this going on."

Mr. PAULSON: Well, what you need to understand is what had happened before even the middle of '07, which is you'd had these excesses had been building up for some times. You'd had a--we had been overstimulating housing. So if you look at the combined weight of all of our policies in the US government...

KUDLOW: Wait. It's HUD-backed, unaffordable mortgage loans, Fannie and Freddie?

Mr. PAULSON: What you have--yeah, yeah, Fannie and Freddie, the FHA, various state programs.

KUDLOW: Community Reinvestment Act.

Mr. PAULSON: You know, mortgage interest deduction. I'm not saying of them were...

KUDLOW: Zero capital gains tax on home sales.

Mr. PAULSON: That's right. And so you had--so you had all of this going on

   Meanwhile, click HERE for an InnerCityPress.com article last week about Paulson's book.

February 1, 2010

  Now, Goldman Sachs has blacked out large portions of its supposed response to the protest by Inner City Press Fair Finance Watch to the NY Banking Department, on issues of compliance by and regulatory review of its subprime subsidiary, Litton Loans. Inner City Press has appealed, specifically contesting that in the letter as provided to ICP by Goldman Sachs, under "Litton's Compliance Program," four full paragraphs are redacted. Under "Prior Regulatory Reviews of Litton," two paragraphs are redacted - the entirety of the section.Inner City Press is putting it online here. And so:

Dear FOIL Appeals Officer, Superintendent of Banks and others at NYBD:

On behalf of Inner City Press and its Fair Finance Watch (collectively 'ICP") , this is a timely FOIL appeal of your Department's denial of access to the redacted portions of Goldman Sachs' Response to ICP's Protest of the Applications by Goldman Sachs Bank USA.

Goldman Sachs unilaterally redacted large portions of the copy of its response which it mailed to ICP.

For example -- and ICP is hereby specifically contesting -- in the letter as provided, under "Litton's Compliance Program," four full paragraphs are redacted. Under "Prior Regulatory Reviews of Litton," two paragraphs are redacted - the entirety of the section.

Since it is the NYBD's duty to review the propriety of such withholdings, ICP has awaited a ruling by the NYBD -- anticipating based on the past practices of the NYBD and other regulators, and applicable law that much of the blacked out information would be released. In the interim, ICP appealed the withholding of portions of the Application.

But the NYBD has not ruled yet on Goldman Sachs' extensive and abusive redactions. Particularly given the massive public support Goldman received through TARP and otherwise, to withhold from the public its response to protests of its requests for expedited regulatory approval is inappropriate. Hence, prior to your Department making any decision on Goldman's contested application, this appeal.

Watch this site.

January 25, 2010--