Inner City Press' Community Reinvestment Reporter

  

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

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

May 10, 2021

In Ripple Case SEC Now Requests Records of All Legal Advice on XRP Compliance with Law

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, May 7 – In SEC v. Ripple Labs Inc. et al., a discovery hearing was held on April 30 before U.S. District Court for the Southern District of New York Magistrate Judge Netburn. Inner City Press live tweeted it, see below, then put underlying emails on Patreon here.

 On May 6, Judge Netburn issued an order: "ORDER granting in part and denying in part [126] Letter Motion for Discovery. Having reviewed the parties' submissions, the Court makes the following clarifications: (1)The SEC must produce communications with third-parties, including external agencies and market participants, subject to a privilege assertion. (2)The SEC need not produce informal intra-agency communications, such as emails, and such communications need not be searched or logged. (3)Intra-agency memoranda or formal position papers discussing Bitcoin, Ethereum, and XRP must be searched for and produced subject to a privilege assertion. Examples of such documents include Division reports, final reports of internal working groups, or formal position papers submitted to the Commissioners. Although such documents may ultimately be privileged, information that would be provided on a privilege log, such as dates and participants, may itself be relevant and is discoverable. (4)Any documents withheld on the basis of privilege must be identified on a privilege log. (5)The Court directs the parties to continue to meet-and-confer on the remaining issues presented in their letters. Respectfully, the Clerk of Court is directed to GRANT in PART the motion at ECF No. 126. (Signed by Magistrate Judge Sarah Netburn on 5/6/2021)."

On May 7, the SEC asked Judge Netburn for a conference to ask for an order compelling Ripple to "produce documents... discussing any legal advice Ripple sought or received as to whether Ripple's offers and sales of XRP were or would be subject to, and incompliance with, the federal securities laws." Then many exhibits are withheld. Watch this site.

From April 30: Netburn: There is not much case law in this area. [That's an understatement.]

Judge Netburn: The SEC's request to a foreign party could be rejected. But once a foreign regulator gets involved, it may be more compulsory.

 Lawyer: These are binding agreements, part of international law. It's not just the SEC calling up and saying, Could you help us? There is a treaty. That's not a request. It's back by the weight and power of the US government. Defendants don't have the same power.

 Lawyer: There should be a level playing field. Once the litigation beings, the SEC should play by the same rules we have do - the Hague Convention, letters rogatory. The SEC has to abide by this.

 Judge: If you agree you and the SEC could use the Hague Convention, what's the difference between that and the SEC's MOU, except that it's a bit easier for the SEC?

Lawyer: We only found out because a foreign party told the company and we raised it to the SEC

Lawyer: Under the Hague Convention, they'd have to make the request to you and we'd see it. Here, the SEC is operating outside the supervision of the court, in secret.

Lawyer: The SEC rushed at the end of the year, as the Administration was turning over. Now they have to play by the rules.

  and CRA?

May 3, 2021

As Crypto Paxos Gets Federal Bank Charter From Still Headless OCC, CRA Litmus Tests

By Matthew R. Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SOUTH BRONX, SDNY, April 26 – In the midst of the Coronavirus pandemic and after the insurrection, then-Comptroller of the Currency Brian Brooks on January 13 gave another quid pro quo gift, a bank charter to Anchorage, even as he quit with a week left in the Administration. Inner City Press asked, Where might he land and get rewarded for all this?

 Then in March we learned: Brooks "has joined blockchain credit startup Spring Labs as its first independent director, the Marina Del Rey, California-based fintech bragged." Revolving / revolting door.

  Now in April at the still headless OCC, another rubber stamp: "The OCC granted a national trust bank charter to Paxos after [a] thorough review of the company and its current operations,” the OCC announced in a press release on April 23. “In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications." Yeah, rigorous. Where is the renewed enforcement of the CRA? So far, the litmus tests are being failed.  

Paxos was founded in 2012 in New York City, but the company also has offices in Singapore and London as well. At the end of December 2020, Paxos had raised roughly $240 million in financing. The OCC now hands Paxos the authority to exercise fiduciary powers under 12 USC 92a and 12 CFR 5.26. We'll have more on this.

 Meanwhile Inner City Press' requests under the Freedom of Information Act into Brooks' conflicts of interest in the fintech and crypto-currency world have yet to be fully answered.  Did  Brooks take "his" documents with him?

Fair Finance Watch and others opposed and requested extensions on Figure, for which OCC has yet to answer Inner City Press' FOIA request, here

April 26, 2021

Webster Proposed Merger With Sterling Will Be Challenged Based on Disparities, Weak PPP Lending

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - CJR - PFT

SOUTH BRONX / SDNY, April 20– The proposed merger of Webster Financial Corp. and Sterling Bancorp will be challenged, on disparate lending and regulatory evasions.

  Fair Finance Watch has found that in 2019 in its home state of Connecticut, Webster National Bank made 3147 mortgage loans to whites, with 1364 denial to whites - while making only 71 loans to African Americans with fully 99 denials to African American. This is significantly worse than other banks in the state; the merger must be denied.

   Among the comments on the Community Reinvestment Act submitted to the Federal Reserve recently  is one from Webster Bank, arguing that Health Savings Account "deposits should not be considered when determining whether the requirement would apply or when delineating such assessment areas" and should be excluded from the definition of "retail domestic deposits."Consequently, HSAs should also be excluded from  Community Development Financing Metric.

This is scam. 

  Back on May 2, 2020 Fair Finance Watch, and Inner City Press on FOIA, filed a formal challenge with Otting's OCC to the application by Webster Bank to acquire State Farm Bank FSB, its problematic health savings accounts, no less.

   Webster has also under performed in PPP lending:  "the head of Waterbury-based Webster Bank admitted his company can improve its performance in getting money into the hands of loan applicants.  “Certainly we wanted to help every small business borrower and customer of Webster that we could,” said CEO John Ciulla, speaking Tuesday on a conference call. “We got through approximately 30 percent applications approved (and) 30 percent funded, plus or minus a few percentage points on both sides of that." On the CRA comments to the Fed, see NCRC's dashboard, here.

  Sterling has other issues, which Inner City Press previously documented to the OCC leading to delay. What will the still-delayed new Comptroller of the Currency do? Watch this site.

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April 19, 2021

In CRA Test BancorpSouth Bid For Cadence Will Be Challenged To Fed BXS Quit to Evade

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, April 17 – Whether or not the U.S. Community Reinvestment Act will be again enforced under the new Administration and its regulators is an open question.

  Now, a test. BancorpSouth, which when faced with race discrimination charges dropped its Federal Reserve Board holding company to get easier approvals from the FDIC, says it will buy Cadence Bancorp and its name.

  But Cadence *is* with the Federal Reserve, as Inner City Press documented here. So BancorpSouth's regulatory evasion would have to be reversed - and will be opposed. 

 BancorpSouth Bank in Mississippi in 2019 made 3756 home loans to whites and only 768 to African Americans. Its denial rate for African Americans was TWICE AS HIGH as for whites.   

   BancorpSouth Bank in 2019 made 6 loans to whites for each denial to whites. It made three loans to African Americans for every denial to African Americans.  

 This is totally unacceptable.

Cadence in Texas in 2019 made 3.40 loans to whites for every denial to whites, versus on 2.0 loans to African American for every denial to African American. Fair Finance Watch will be requesting public hearings.

       Previously, Inner City Press protested the applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas. - based on racial discrimination in lending. Then:     See, e.g., this.   BancorpSouth's CEO said the company wanted to “alleviate... regulatory oversight,” and become the “only state-chartered bank not a part of the Federal Reserve system.” 

The Fed's logic in extending a recent comment period due to Coronavirus must apply to this and other applications. These are litmus tests. Watch this site.

April 12, 2021

CRA Litmus Test As M&T People's Challenged On Racial Disparities In Lending in NY CT PA

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, J-I here – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be the litmus test.

  On March 27, Fair Finance Watch and Inner City Press on the FOIA filed a challenge with the Federal Reserve to the banks' application: "This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by M&T Bank Corporation to acquire People's United Financial.   

   The applicant M&T in New York State in 2019 made 8,613 home loans to whites and only 629 to African Americans.  M&T in New York State in 2019 made 3.4 loans to whites for each denial to whites. It made only 1.4 loans to African Americans for every denial to African Americans.  

 This is totally unacceptable.       

  The applicant M&T in Connecticut in 2019 made 251 home loans to whites and only 27 to African Americans.  M&T in Connecticut in 2019 made 2 loans to whites for each denial to whites. It made only 1.28 loans to African Americans for every denial to African Americans.    This is unacceptable. 

        The applicant M&T in Pennsylvania in 2019 made 3565 home loans to whites and only 106 to African Americans.

 M&T in Pennsylvania in 2019 made 2.52 loans to whites for each denial to whites. It made only 1.15 loans to African Americans for every denial to African Americans. 

  This is totally unacceptable.

     Meanwhile, People's says it will close some 140 branches.   

    FFW and Inner City Press have been deeply concerned about the rush by the FRS' penchant to rubberstamp mergers by redliners, particularly during the pandemic. We note the Fed's recent website statement that a comment period has been extended to allow participation amid the Coronavirus crisis. This should be done, by the Fed's logic, on this and other applications. We timely request public hearings.  

 The hearings, and your review, should also address M&T's discrimation, see, e.g., (EEOC v. Manufacturers and Traders Trust Co., d/b/a M&T Bank., Civil Action No. 1:16-cv-03180-ELH) in U.S. District Court for the District of Maryland, Northern Division.  See also, this.

  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.


April 5, 2021

SoFi Bank Bid To Buy Golden Pacific Protested By Fair Finance Watch As Regulatory Evasion

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SOUTH BRONX, April 3 – In the midst of the Coronavirus pandemic, and with a fintech and crypto-currency proponent then installed as Acting Comptroller, SoFi and its controller SoftBank sought to get a U.S. bank charter.

 On March 9, 2021 SoFi said it wants to buy Golden Pacific Bank, to "speed up" its charter and taking of insured deposits.

  On April 3, Inner City Press filed this: "Dear Acting Comptroller, Mr. Lybarger, and others in the OCC:  This is a timely first comment opposing and requesting an extension of the required OCC's public comment period on the application by SoFi Interim Bank to acquire Golden Pacific.       This is a major proposal, by a fintech in which SoftBank has a large stake.    

   Inner City Press / Fair Finance Watch opposed SoFi's previous, suspended attempt to get into banking. Since then the questions have only grown.   

  As to SoftBank, the dispute regarding another of its holdings, WeWork, portends the type of problems that regulators like the OCC are directed to keep out of, not invite into, the banking system. See also, for now, this  

This stealth proposal - it appears that Golden Pacific does not even report HMDA data - is a cynical attempt to game the regulatory system. See, e.g., "SoFi (NYSE:IPOE) is becoming a bank with its $22.3 million acquisition of Golden Pacific Bancorp (OTCPK:GPBI). Golden Pacific is a California-based community bank regulated by the Office of the Comptroller of the Currency and with $150 million in assets. The acquisition which will be paid for in cash builds on SoFi's current application to obtain a national bank charter with the OCC. On closing of the acquisition, the fintech company will switch its current bank application to a change of control application. This should accelerate the timeline for SoFi's attainment of a national bank charter."    Inner City Press opposes that CIBC application as well - but this application clearly should not be approved. Public hearings are needed, and requested.   

   For the above reasons, including the ongoing COVID-19 pandemic lockdowns and restrictions, the comment period should not yet start or should extended, until in person public hearings can be held." Watch this site.

March 29, 2021

As Ex-OCC Brooks Cashes Out To Spring Labs His Rules Subject Congressional Review Act

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SOUTH BRONX, SDNY, March 25 – In the midst of the Coronavirus pandemic and after the insurrection, then-Comptroller of the Currency Brian Brooks on January 13 gave another quid pro quo gift, a bank charter to Anchorage, even as he quit with a week left in the Administration. Inner City Press asked, Where might he land and get rewarded for all this?

 Now in March we know: Brooks "has joined blockchain credit startup Spring Labs as its first independent director, the Marina Del Rey, California-based fintech bragged." Revolting revolving door.

 Now, moves to overturn one of Brooks' last acts: plans to introduce Congressional Review Act resolutions to eliminate a Trump-era regulation that helps lenders charging 179% APR or more evade state- and voter-approved interest rate caps. The rushed “fake lender” rule took effect in December and was issued by the Office of the Comptroller of the Currency (OCC). The rule protects “rent-a-bank” schemes whereby predatory lenders (the true lender) launder their loans through a few rogue banks (the fake lender), which are exempt from state interest rate caps. The rule overrides 200 years’ worth of caselaw allowing courts to see through usury law evasions to the truth, and replaces it with a pro-evasion rule that looks only at the fine print on the loan agreement. Watch this site.

 Meanwhile Inner City Press' requests under the Freedom of Information Act into Brooks' conflicts of interest in the fintech and crypto-currency world have yet to be fully answered.  Will Brooks be taking "his" documents with him?

  Brooks went whole hog with Anchorage, the so-called first crypto bank. It should be reversed - but will it be? Anchorage was represented by Dana Syracuse through the revolving door from the NYS Department of Financial Services.

Fair Finance Watch and others opposed and requested extensions on Figure, for which OCC has yet to answer Inner City Press' FOIA request, here

March 22, 2021

In CRA Test First National Community Bank Bid for Georgia Heritage First Is Challenged to OCC

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, March 20 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open questions.

  Two months into the new Administration, Fair Finance Watch with Inner City Press on the FOIA filed comments with the Office of the Comptroller of the Currency on a proposal in Georgia, by First National Community Bank to acquire Heritage First Bank.

"The applicant First National Community Bank in Georgia in 2019 made 45 home loans to whites and only ONE to African Americans.    

 "The target Heritage First Bank in Georgia in 2019 made 44 home loans to whites and also only ONE to African Americans.    This is totally unacceptable.    

   FFW and Inner City Press have been deeply concerned about the rush by the OCC under previous Comptroller Brooks to rubberstamp mergers by redliners. This has been killing the Community Reinvestment Act and we timely request public hearings.   

The hearings, and your review, should also address First National Community Bank's prior consent order: "DUNMORE — First National Community Bank was released Wednesday from a federal consent order issued by the Office of the Comptroller of the Currency.  The order defined 21 articles the community bank had to address which included a capital plan to handle property acquisitions, develop and implement policies and procedures to ensure compliance with the Bank Secrecy Act."  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

The Fed's logic in extending a recent comment period due to Coronavirus must apply to this and other applications. These are litmus tests.

March 15, 2021

SoFi Bank Wants To Buy Golden Pacific After Got Charter Rubber Stamped by OCC Brooks

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SOUTH BRONX, March 10 – In the midst of the Coronavirus pandemic, and with a fintech and crypto-currency proponent then installed as Acting Comptroller, SoFi and its controller SoftBank are seeking to get a U.S. bank charter. The WSJ and others have reported the bid, but it is not yet on the OCC's website (which often lags behind such that public comment periods end before notice is given). 

 Meanwhile Inner City Press' requests under the Freedom of Information Act into then Acting Comproller Brian P. Brooks' conflicts of interest in the fintech and crypto-currency world have yet to be answers.  

And so on July 13 Fair Finance Watch filed with the OCC, below. Brooks before his ouster gave preliminary approval.

 Now on March 9 SoFi says it wants to buy Golden Pacific Bank, to "speed up" its charter and taking of insured deposits.

FWW's protest:  "July 13, 2020
 Office of the Comptroller of the Currency  DC Comptroller Brooks and Mr. Lybarger, Deputy Comptroller for Licensing  & Northeastern District Office 
 Re: Timely First Comment on SoFi's reported application to the OCC to get into banking 

Dear Mr. Lybarger, Ms. Cummings and others in the OCC:  This is a timely first comment opposing and requesting an extension of the required OCC's public comment period on reported proposal by SoFi to get a national bank charter.  

    This is a major proposal, by a fintech in which SoftBank has a large stake. Yet, it is not yet on the OCC's website, where as of July 13 the most recent Weekly Bulletin cuts on on July 4. The only charter application listed as open for comment is Monzo Bank; the New Bank application link does not work. So, any comment period will have be be extended. This is a request for the complete application, all portions that the OCC after review does not find withholdable under FOIA. 

     Inner City Press / Fair Finance Watch opposed SoFi's previous, suspended attempt to get into banking. Since then the questions have only grown. 

March 8, 2021

Third Rakuten Application Challenged to FDIC by Inner City Press Reply Is A Form Letter

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, March 6 – Whether or not the U.S. Community Reinvestment Act will be again enforced under the new Administration and its regulators is an open questions.

  On the 25th day of the new Administration, Fair Finance Watch with Inner City Press on the FOIA filed comments with the FDIC on the third application by Rakuten for Federal deposit insurance. And then, by regular mail, a form letter response from Rakuten, cc-ing regulators.

Among the complaints, most not addressed by the Rakuten form letter: "Re: Timely first opposition to (third) application by Rakuten for FDIC insurance  Dear Chairman McWilliams:      Inner City Press / Fair Finance Watch is hereby timely opposing the second re-submission by Rakuten Card Co., Ltd., a subsidiary of Rakuten, Inc., of an application for federal deposit insurance (Rakuten Application) with the Federal Deposit Insurance Corporation (FDIC) to insure the deposits of Rakuten Bank America (Rakuten Bank).     

Not only do we believe that the revised application has not meaningfully changed and does little to address the fundamental question of mixing banking and non-financial activity as raised by the initial application, including concerns involving the use, privacy, and security of customer information - we also have these Rakuten-specific concerns which must be addressed, including at the public hearings we are hereby timely requesting.

1) " Rakuten USA, Inc’s Americas President, Yasuhisa “Yaz” Iida, allegedly grooming, sexually harassing, and finally, demoting Director of Corporate Hospitality, Jessica Wyman, who spurned his advances across two and a half years." See here 

2) "A former SoftBank Corp. employee has been arrested on suspicion of illegally disclosing 5G trade secrets to his new employer, Rakuten Mobile Inc., as it was preparing to launch its own mobile network.  [Police] arrested Kuniaki Aiba, 45, on suspicion of leaking secret information in breach of a law preventing unfair competition. See, here 

3) Also on anticompetitive behavior by Rakuten: "antitrust watchdog will launch an investigation into e-commerce giant Rakuten Inc. after receiving a petition from a group of merchants over the planned free-shipping policy of the company's online shopping mall.  According to the petition organized by around 450 Rakuten marketplace merchants that was signed by 4,000 people, the company is abusing its dominant position by forcing them to shoulder the costs of free shipping for all orders." See, here

 4) Rakuten, Inc. has confirmed a judgement has been issued in a class action lawsuit against its consolidated subsidiary Buy.com Inc. (currently, RAKUTEN COMMERCE LLC) (U.S.). 1.Court and date of judgement (i) Court:  United States Court of Appeals for the Ninth Circuit, here

  Procedurally, we requested a copy of Rakuten's application and received an acknowledgement of the request - but not yet the application. "Thank you for your request to receive the public, non-confidential portion of the selected deposit insurance application.  The FDIC appreciates your interest and will forward the requested application to the email address indicated." The application should have been put online; the comment period should be extended.    FFW and Inner City Press have been deeply concerned about the rush by the FDIC to rubber-stamp mergers by redliners. This has been killing the Community Reinvestment Act and we timely request public hearings, including on these concerns: (i) significant risks to the Deposit Insurance Fund (DIF) raised by the affiliation, integration, and assimilation of banking and non-financial businesses, and (ii) consumer protection concerns raised by the collection, use, privacy, security, and safeguarding of customer information."

  Rakuten's head of banking development Lee Carter responded with a form letter: "Dear Mr. Lee, I acknowledge receipt... Thank you for your comments regarding the proposed CRA Plan...We welcome relevant and constructive feedback regarding the CRA plan."

And not the antitrust and other violations? This form letter was cc-ed to the FDIC and Utah regulators. The applications should be denied.

March 1, 2021

CRA Litmus Test Looms on M&T People's Proposal on Money Laundering Plus Redlining

By Matthew Russell Lee, Patreon