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.

July 21, 2014

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

July 14, 2014

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

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

July 7, 2014

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

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

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

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

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

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


June 30, 2014

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

June 23, 2014

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

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

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

Yeah, right...

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

June 16, 2014

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

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

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

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


June 9, 2014

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

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

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

June 2, 2014

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

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

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

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

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

May 26, 2014

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

Valley National has an extremely disparate lending record.

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

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

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

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

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

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

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

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

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

May 19, 2014

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

FFW commented, back in January, that

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

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

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

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

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

May 12, 2014

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

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

May 5, 2014

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

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

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

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

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

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

April 28, 2014

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

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

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

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

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

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

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

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

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

April 21, 2014

HMDA fight in Western Michigan:

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

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

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

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

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

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

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

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

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

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

April 14, 2014

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

April 12, 2014

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

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

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

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

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

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

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

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

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

I am out of the office until March 31.

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

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

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

Dear Mr. Lee:

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

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

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

Dear Mr. Lee:

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

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

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

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

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

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

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

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

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

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

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

Very Truly Yours,

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

April 5, 2014

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

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

March 31, 2014

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

By Matthew R. Lee

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

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

FFW commented, back in January, that

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

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

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

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

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

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

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

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

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

March 24, 2014

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

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

March 17, 2014

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

March 10, 2014

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

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

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

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

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

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

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

March 3, 2014

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

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

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

February 24, 2014

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

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

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

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

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

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

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

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

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

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

February 17, 2014

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

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

February 10, 2014

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

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

Dear Director for District Licensing and others in the OCC:

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

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

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

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

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

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

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

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

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

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

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

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


February 3, 2014

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

January 27, 2014

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

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

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

January 20, 2014

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

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

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

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

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

January 13, 2014

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

Dear Director for District Licensing and others in the OCC:

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

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

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

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

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

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

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

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

Banks Keep Offering Deposit Advances, Six Weeks After Crackdown

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

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

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

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

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

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

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

January 6, 2014

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

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

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

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

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


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

December 30, 2013

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

A recent article published in American Banker,

Consumer Advocates force tougher CRA enforcement on smaller banks

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

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

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

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

  We actually agree with that...

December 23, 2013

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

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

What is behind this? 


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

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

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

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

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

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

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

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

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

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

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

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


December 16, 2013

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

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

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

December 9, 2013

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

By Matthew R. Lee

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

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

The Fed's Investors - Roma order says that

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

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

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

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

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

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

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

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

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

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

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

December 2, 2013

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

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

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

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


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

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

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

Watch this site.

November 25, 2013

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

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

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

Prepared On: Saturday, November 23, 2013

20132291 MICHIGAN COMMERCE BANK 2950 STATE STREET SOUTH

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

Merger Information: Institutions Involved in this Merger:

BANK OF LAS VEGAS

1700 WEST HORIZON RIDGE PARKWAY, SUITE 101

HENDERSON , NV


INDIANA COMMUNITY BANK

511 WEST LINCOLN AVENUE

GOSHEN , IN


SUNRISE BANK OF ALBUQUERQUE

219 CENTRAL AVENUE NORTHWEST

ALBUQUERQUE , NM

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

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

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

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

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

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

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

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

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

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

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

November 18, 2013

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

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

November 11, 2013

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

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

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

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

Among proposed mergers we're looking at:

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

November 4, 2013

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

October 28, 2013

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

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

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

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

This is outrageous.

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

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

Really?

October 21, 2013

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

October 14, 2013

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

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

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

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

October 7, 2013

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

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

By Matthew Russell Lee

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

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

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

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

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

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

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

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

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

Watch this site.

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

Typical. We'll have more on this.

September 30, 2013

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

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

September 23, 2013

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

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

September 16, 2013

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

September 9, 2013

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

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

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

September 2, 2013

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

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

2. Based on the Bank's assessment of small business and residential credit needs, the Bank will continue to conduct focused advertising to solicit qualified small business and residential real estate applicants. The Bank will budget marketing funds to specify the types of advertisements to be utilized and the expected audience based on the demographics for the area of circulation;

3. The Bank will establish annual outreach goals to elevate awareness of the Bank's mortgage and small business products in each market or assessment area through the community based organizations it supports and other means deemed appropriate;

4. The Bank will monitor its level of home mortgage lending by market or assessment area taking into account borrower race, ethnicity, income and geographic location, with a goal of its levels being similar to peer lending or the demographic characteristics of each area within three years. The Bank will determine the peer group based upon factors such as market share, asset size, number and location of branches in the market, and volume of lending. The peer group must be approved by the Corporation;

5. The Bank will continue its efforts to expand its team of mortgage originators to solicit increased levels of qualified residential real estate borrowers consistent with its annual goals; and

6. The Bank will develop an Action Plan ("Plan") that addresses the aforementioned provisions, and upon Board approval of such Plan, the Bank will provide a copy to the Corporation, and will also provide quarterly updates detailing its progress in meeting the goals listed in the Plan.”

August 26, 2013

As Bank of America moves to close some drive-thru tellers, the OCC tells the public they can comment -- but only on the CRA exam. Per the Observer, Bill Grassano, spokesman for the Office of the Comptroller of the Currency, said the public can file comments with the regulator to explain how they are being hurt by changes a bank is making. Those comments go into a bank’s CRA record and are considered as part of a bank’s CRA examination, he said. Bank of America would not have to notify the OCC of the drive-up teller lane closures as long as the branches they are connected to remain open, Grassano said.

What a drive-thru loophole...

August 19, 2013

Amid Bank Mergers & High-Cost Consumer Loans, Subprime Summers for Fed?

By Matthew R. Lee

NEW YORK -- Despite being bailed out by the public and some now waning populist rhetoric from Washington, the continuing bank merger proposals show no concern for the public or for job loss.

  Why should they, when President Obama considers Larry Summer, on the Board of Directors of the no-doc (and thus subprime) Lending Club, to head the Federal Reserve?

  The biggest proposed bank merger in the US in the past month is the $2.3 billion agreement between Pacific Western Bank and CapitalSource Bank, to have a "national commercial lending arm."

  The comment? No "benefits for current clients of either bank. This is typical of this sort of deal. Management and Wall Street think it's just dandy. Meanwhile, employees lose their jobs and customers see more fees."

  But the investment bankers, of course, get paid.

  Then in Arkansas there's Liberty BancShares and Home BancShares, proposing to form a $7 billion bank with 92 branches in Arkansas (#2 in that state, to Arvest) and 59 outside the state. Governor Mike Beebe appeared at the press conference in support of the merger, which would lead to job loss. That's politics.

  In the Carolinas, there's Forest Commercial Bank into Carolina Alliance Bank in upstate South Carolina and western North Carolina, branches in Spartanburg, SC, Asheville, NC, and Hendersonville, NC, a loan production office in Charlotte and a proposed branch office to be located in Seneca, SC. But who would benefit?

  Inner City Press / Fair Finance Watch while considering those three has now commented to the Office of the Comptroller of the Currency against Republic Bank's proposal to buy H&R Block Bank. As stated, both institutions have a history of high cost lending to consumers, through tax refund anticipation loans and otherwise. See, "Steve Trager: Pending H&R Block bank deal could return Republic Bank to being mega tax refund provider," Insider Louisville, July 11, 2013

  Even if Republic denies that headline from its headquarters city, public hearings should be held on what Republic would do with H&R Block's "Emerald Card" program, particularly given its subsidiaries and their plans: Republic Prepaid Systems, "an issuing bank to offer general purpose reloadable prepaid debit, payroll, gift and incentive cards through third party program managers" and Republic Credit Solutions, "preparing to pilot short-term consumer credit products through multiple channels.”

  Reviewing 2011 HMDA data, the most recent data available (and largely unaddressed in existing Community Reinvestment Act performance evaluations and fair lending exams), ICP has examined Republic Bank & Trust Co's refinance and home improvement lending in the Louisville, Kentucky and Cincinnati MSAs.

  In the Louisville MSA in 2011 for refinance loans, Republic 40.4% of applications from African Americans, versus on 20% of applications from whites. Its denial rate for Latinos was even higher: 45.5%

  For home improvement loans, Republic denied 50% of application from African Americans versus 24.8% of applications from whites. Its denial rate for Latinos was 100%.

In the Cincinnati MSA in 2011, Republic made 27 refinance loans to whites and NONE to African Americans, nor Latinos. It made seven home improvement loans to whites, none to African Americans (denial rate 100%) nor Latinos.

  Inner City Press / Fair Finance Watch also commented to the Federal Reserve on the application by Chile's Banco De Credito E Inversiones to buy City National Bank of Florida. The current parent Bankia is surrounded by controversy and litigation, including involving the Spanish central bank with the Managing Director of the IMF Christine Lagarde mentioned as a witness, in connection with its bailout that is related to this proposed sale.

  Reviewing 2011 HMDA data, ICP has examined City National Bank of Florida's home purchase and refinance lending in the Fort Lauderdale, Miami and Orlando MSAs.

  In the Fort Lauderdale MSA in 2011 for refinance loans, City National Bank of Florida made 15 such loans to whites, and NONE to African Americans or Latinos. It denied all three of the applications it received from Latinos.

  In the Orlanda MSA in 2011 for conventional home purchase loans -- the only kind of home purchase loans City National Bank of Florida makes or reports -- it made 53 such loans to whites, only eight to Latinos and only TWO such loans to African Americans.

  In the Miami MSA in 2011 for refinance loans, City National Bank of Florida made 54 such loans to whites, only 16 to Latinos and only ONE such loan to an African American applicant.

  Analysis now proceeds on other proposed acquisitions. Watch this site.

August 12, 2013

While less than responsive to CRA comments, last week "New York's top financial regulator ordered 35 online payday lenders to stop offering loans there that violate state laws capping annual interest rates at 16 percent. The state also sent letters to 117 banks, asking them to help 'cut off' payday lenders from the global network used by banks to send money and collect payments." Could that be used on other industries?

Meanwhile in the UK, according to the FT, "Gareth Thomas, chair of the Co-op party, said that 'an urgent expansion of credit unions to offer low-cost financial services is overdue to help those whose budgets are stretched and for whom a payday lender can mean a fast ticket to increasing debts.' Likewise the Co-op is looking to the US Community Reinvestment Act for inspiration, which requires banks to work with community lenders in areas where they have only a limited presence." Well, that's ONE part of what the CRA is about...

August 5, 2013

Opposition to the Corker - Warner proposal continues to grow: it would eliminate the Affordable Housing Goals and replace them with... nothing.

July 29, 2013

So Larry Summers has been "speaking at internal meetings at Citi beginning in 2012, Mr. Summers attended small gatherings of clients 'where he provides insight on a broad range of topics, including the domestic and global economy,' a Citigroup spokesman said. The bank wouldn't say how much it is paying him," per Damian Paletta. Next!

It's worth noting, as Inner City Press / Fair Finance Watch did, that Fed Governor Jerome Powell, denier of FOIA appeals, was previously with Deutsche Bank and the Carlyle Group...

July 22, 2013

Through the revolving door from the CFPB: "Raj Date helped write new rules for U.S. mortgage underwriting as deputy director of the Consumer Financial Protection Board. Now he’s building a company that will offer loans to borrowers blocked by the agency’s standards. Date left the CFPB in January to found Washington-based Fenway Summer LLC."

And TO the CFPB, from Capital One: "Sartaj Alag will serve as Chief Operating Officer. Prior to taking on this role, Mr. Alag had established the Bureau's Office of Consumer Response and had worked in the private sector both as President of a Capital One subsidiary and as a management consultant at McKinsey & Company."

Reforms needed.

July 15, 2013

The Corker - Warner bill, getting a lot of play for being bipartisan, would hurt homeownership and low income housing -- what would happen to the affordable housing goals? This will be a focus going forward.

July 8, 2013

Deutsche Bank, which got involved as a direct subprime lender and as a trustee, has been accused by the City of Los Angeles of facilitating illegal evictions. Its attempts to get the case dismissed were rejected in April by the court.

And so now a settlement for a mere $10 million, of which Deutsche Bank brags it is not paying anything, that would be the services and the securitization trusts. When does immunity become impunity?


Just filed: a timely first comment on the applications by Investors Bancorp, MHC and Investors Bancorp (collectively, “Investors Bancorp”) to acquire Gateway Community Financial Corporation, its MHC and GCF Bank.

Reviewing 2011 HMDA data, the most recent data available (and still largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has now examined GCF Bank's home purchase, refinance and home improvement lending in the Camden MSA. It is disparate, and Investors' record give no assurance it would improve.

In the Camden MSA in 2011 for conventional home purchase loans, GCF Bank made 30 such loans to whites, and NONE to African Americans or Latinos. The only applications it received from an African American and Asian applicant, it denied. (There was no Table 4-1.)

For refinance loans in the Camden MSA in 2011, GCF Bank made 111 such loans to whites, only one to an African American and none to Latinos. Its denial rate for African Americans was 6.9 times higher than for whites.

In the Camden MSA in 2011 for home improvement loans, GCF Bank made 32 such loans to whites, and NONE to African Americans or Latinos.

Would Investors improve this? No. ICP has reviewed Investors Bank's home purchase and refinance lending in the New York City MSA and finds it outrageous.

For the record on this application: 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.

In the still proposed Roma transaction, at least 57 would be laid off. How many might be laid off here? Investors' management is not transparent, as simply one example on the questions raised about the Roma proposal. And now this one. Its CEO has been quoted, “We just had a pretty good exam with the Federal Reserve at the holding company. They had one or two comments on enhancing the dividend policy.” It is in that context that we are requesting all communications between the Federal Reserve System and Investors for the past year....

July 1, 2013

Bottom feeders: First Cash Financial Services has acquired 19 “large-format” U.S. pawn stores in the Houston, Dallas and Fort Worth markets, operating primarily under the Valu + Pawn brand. First Cash CEO Rick Wessel said in a June 25 press release release that the deal gives the company a new presence in the Houston market and expands its existing store base in the Dallas and Fort Worth area. The price for the all-cash asset purchase transaction was about $70 million, funded mainly with the company's revolving credit facility. The operations and earnings of the Valu + Pawn stores have been consolidated into First Cash, effective with the closing of the transaction June 25. Watch out...

June 24, 2013

M&T's (cheap) anti money laundering deal with the Fed will probably move the deal along faster -- but the deal makes it pretty clear that the money laundering loophole is in Wilmington Trust, which the Fed let M&T buy in 2011.

So what does it say about the Fed's merger reviews? The Fed should come up with a plan to improve itself, in 60 days (and approve no merger during that time.) Compare the Fed not even fining M&T, while state regulators last week fined even an accounting firm which helped a bank (Standard Chartered) conceal money laundering...

June 17, 2013

In Virginia, where's the public benefit? Union First Market Bankshares CEO G. William Beale says he would close at least 10 branches if allowed to acquire Charlottesville, Va.-based StellarOne Corporation. So why should he be allowed?

June 10, 2013

Hedge funds that profited on the way down from the collapses, for example Paulson & Company, the Carlyle Group's Claren Road Asset Management and Perry Capital, are now buying up the preferred shares of Fannie Mae with a eye to taking it private.

  They are buying in the markets, with little disclosure or oversight, and lobbying in DC. Also in the mix is James Millstein, "fixer" of AIG, now ready to cash in through, what else, Milstein & Company.

  On the other side, Fannie Mae has become a grab-bag, with fees imposed on mortgages for entirely unrelated government goals. Who wouldn't want such a pinata?

Renasant Bank has tried to rebut criticism to the FDIC of racial disparities in its lending patterns by saying the following: "Many barriers are psychological in nature." But can you blame the victim for this:

Reviewing 2011 HMDA data, in the Memphis MSA in 2011 for conventional home purchase loans, Renasant made 60 such loans to whites, and only TWO such loans to African Americans, and only ONE to a Hispanic.

For Table 4-1, Renasant made 46 such loans to whites, and only FOUR such loans to African Americans, and only THREE to Hispanics.

Cumulated home purchase lending in this MSA: Renasant made 104 home purchase loans to whites, and only SIX such loans to African Americans, and only FOUR to Hispanics. This is inconsistent with other lenders' demographics of lending in this MSA.

For refinance loans in the Memphis MSA in 2011, Renasant made 112 such loans to whites, and only SIX such loans to African Americans, and only ONE to a Hispanic. This is inconsistent with other lenders' demographics of lending in this MSA.

In the Atlanta MSA in 2011 for conventional home purchase loans, Renasant made 27 such loans to whites, and NONE to African Americans or Hispanic.

For Table 4-1, Renasant made 16 such loans to whites, and only ONE such loans to an African American, and only ONE to a Hispanic.

Cumulated home purchase lending in this MSA: Renasant made 43 such loans to whites, and only ONE such loans to an African American, and only ONE to a Hispanic. This is inconsistent with other lenders' demographics of lending in this MSA.

For refinance loans in the Atlanta MSA in 2011, Renasant made 204 such loans to whites, and only TWELVES such loans to African Americans, and NONE to Hispanics. This is inconsistent with other lenders' demographics of lending in this MSA.

Psychological?

June 3, 2013

How can Goldman Sachs purport to report on its Business Standards Impact, for 27 pages, and not even MENTION its subprime servicer Litton, and its recent shorting on compensation for victims?

May 27, 2013

So Spain's Bankia SA is proposing to sell its City National Bank of Florida and its 26 branches to Chilean bank Banco de Credito e Inversiones SA for $882.8 million. That's the proposal...

May 20, 2013

Inner City Press / Fair Finance Watch submitted timely comments on May 17, beginning:

Re: Proposed Changes to Interagency Q&A, and general comment about the need for more rigorous and transparent enforcement of CRA on merger and expansion applications

OCC: Docket ID OCC-2013-0003

Federal Reserve: Docket No. OP-1456

FDIC: Attention: Comments on CRA Interagency Q&A

To Whom It May Concern:

On behalf of Inner City Press / Fair Finance Watch ("ICP"), this is a timely comment on the proposed changes to the Inter-agency CRA Q&A (the "Q&A"). As you will hear from other members of the National Community Reinvestment Coalition (NCRC), the Q&A should have gone much further, and fall far short of the comprehensive revisions to the CRA regulation needed to keep pace with the changes in the banking industry.

Beyond the comments below, ICP would like to emphasize to the agencies that since CRA is only enforced on applications to merge or expand, it is essentialy that the agencies' processing of such applications, particularly when CRA comments are filed, must become more rigorous and more transparent. Recently ICP's experience is of information being withheld, insufficient questions being asked, and many of the answers also withheld. This undermines CRA.

See this week's Federal Reserve Report for more.

May 13, 2013

Oops! Rust Consulting short-changed those already ripped off on servicing by Goldman Sachs and Morgan Stanley. Hear the Fed scramble: http://www.federalreserve.gov/newsevents/press/bcreg/20130508a.htm

May 6, 2013

Funny how banks are. There's a CRA protest to Investors' Bank's application to buy Roma in New Jersey, and Investors Bank had to disclosed it last week on a conference called. But they wouldn't say much about it. So a reporter from the Newark Star-Ledger called Inner City Press / Fair Finance Watch, and we sent him a copy. He wrote a story, here; http://www.nj.com/business/index.ssf/2013/04/investors_roma_bank_merger_sti.html the bank apparently wouldn't give him their response.

Here's their record:

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.
 
  Watch this site.

April 29, 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

The (laundered) buck doesn't stop here, apparently: when M&T held its conference call on April 15, after having to admit regulatory problems will delay its challenged merger proposal with Hudson City Savings Bank, CEO Robert Wilmers wasn't on it.

He left CFO René Jones to take questions about his failure. Not a good sign.

Revolving door: OCC Chief Counsel Amy Friend is recusing herself for a year from discussions on the Dodd-Frank Act's Volcker rule in order for her to avoid conflicts of interest, according to SNL Financial. The conflict of interest stems from Friend's previous stint with consulting agency Promontory Financial Group LLC before she joined the OCC in February. While she worked with Promontory as a managing director, she advised a number of large institutions that are now being overseen by the OCC on matters related to the Volcker rule.

Friend handled former clients such as Citigroup Inc., Wells Fargo & Co., Morgan Stanley, American Express Co., Bank of New York Mellon Corp., Grosvenor Capital Management LP, LPL Financial Holdings Inc., MidCountry Financial Corp., National Australia Bank Ltd., Mitsubishi UFJ Financial Group Inc., and Fidelity Investments, a group of companies headed by FMR LLC, while she was in Promontory Financial. According to an OCC memorandum, Friend will recuse herself for a year from OCC business that involves her former employer as well as Morgan Stanley or five other former clients. She will not be recusing herself from OCC matters that involve former clients that she has not worked with for 12 months prior to her departure from Promontory.

Revolving door...

April 15, 2013

M&T has been challenged under CRA since the fall - and now may be delayed even longer:

M&T has learned that the Federal Reserve has identified certain regulatory concerns with M&T's procedures, systems and processes relating to M&T's Bank Secrecy Act and anti-money-laundering compliance program... M&T and Hudson City believe that the timeframe for closing the transaction will be extended substantially beyond the date previously expected. M&T and Hudson City intend to extend the date after which either party may elect to terminate the merger agreement if the merger has not yet been completed from August 27, 2013 to January 31, 2014.”

So in The Bronx in 2012, Citigroup denied the mortgage applications of African American 2.4 times more frequently then whites. In Manhattan, Citi's disparity at 2.63. And to the two groups, Citigroup made TEN TIMES as many loans in Manhattan as in The Bronx...

April 8, 2013

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

By Matthew R. Lee

SOUTH BRONX NY, April 7, 2013 -- In its second study of the just-released 2012 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that a range of regional banks including KeyCorp, US Bank NA and SunTrust Mortgage continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

  2012 is the ninth 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 KeyCorp confined African Americans to higher-cost loans above this rate spread 2.51 times more frequently than whites in 2012, Fair Finance Watch has found.

  KeyCorp denied the applications of African Americans 1.76 times more frequently than those of whites.

  KeyCorp confined Latinos to higher-cost loans above the rate spread 1.53 times more frequently than whites in 2012, the data show. It denied the applications of Latinos 1.44 times more frequently than those of whites.

  SunTrust Mortgage confined African Americans to higher-cost loans above this rate spread 2.50 times more frequently than whites in 2012; for Latinos its disparity was 1.50.

  US Bank NA confined African Americans to higher-cost loans above this rate spread 1.74 times more frequently than whites in 2012; for Latinos its disparity was 1.97. There are some irregularities in US Bank NA's data that Inner City Press will be further raising.

“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."

  In 2012, Toronto Dominion or TD Bank denied the applications of African Americans 1.75 times more frequently than those of whites. For both PNC and Regions the disparity for African Americans was 1.57.

  "The Federal Reserve is becoming more and more bank-friendly, including with recent Freedom of Information Act appeal denials by Governor Jay Power, formerly a hedge funder and Deutsche Bank official Jay Powell. It remains unclear if the Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2012 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

Instead, the Fed allowed the creation of a fifth mega-bank in Capital One when it acquired ING DIRECT and the subprime assets of HSBC. In 2012, Fair Finance Watch has found, HSBC denied the applications of African Americans 1.34 times more frequently than those of whites.

Also in 2012, fully 9.93 percent of Capital One's morgage loans to African American were higher cost loans, versus 7.61 percent of Capital One's loans to whites. To Latinos, the percentage was even higher: 10.31 percent.

And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Last week it studied the 2012 lending of the “Big Four” -- Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

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.

Challenged by the groups in 2012 and still pending are applications by Customers Bancorp and by M&T, to acquire Hudson City Savings Bank.

Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 44 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

In March 2013 Inner City Press and Fair Finance Watch began a challenge to Investors Bancorp's application to acquire Roma. 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 Latinos was FIVE TIMES higher than for whites.

 On April 5, Investors Bancorp announced it will try to also acquire $300 million Gateway Community Financial Corp - this also will be opposed, on the current record.

The Home Mortgage Disclosure Act required that the 2012 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks still did not provide their data by the deadline, despite confirming receipt of the request. Further studies will follow: watch this site.

April 1, 2013

In 2012 Disparities Continued at Citi, Chase, BofA & Wells as Fed Lax, ICP Studies & Challenges

SOUTH BRONX NY, March 30, 2013 -- In the first study of the just-released 2012 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that the Big Four banking behemoths Citigroup, JPMorgan Chase, Bank of America and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

  2012 is the ninth 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 2.09 times more frequently than whites in 2012, Fair Finance Watch has found.

  Citigroup confined Latinos to higher-cost loans above the rate spread 1.83 times more frequently than whites in 2012, 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 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 a whopping 2.32.

  "The Federal Reserve is becoming more and more bank-friendly, including with recent Freedom of Information Act appeal denials by Governor Jay Powell, formerly a hedge funder and Deutsche Bank official Jay Powell. It remains unclear if the Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2012 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

  Instead, the Fed allowed the creation of a fifth mega-bank in Capital One when it acquired ING DIRECT and the subprime assets of HSBC.

  In 2012, Fair Finance Watch has found, fully 9.93 percent of Capital One's mortgage loans to African American were higher cost loans, versus 7.61 percent of Capital One's loans to whites. To Latinos, the percentage was even higher: 10.31 percent.

  And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Challenged by the groups in 2012 and still pending, with FOIA issues, are applications by Customers Bancorp and by M&T, to acquire Hudson City Savings Bank.

  Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 44 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

  In March 2013 Inner City Press and Fair Finance Watch began a challenge to Investors Bancorp's application to acquire Roma. 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 Latinos was FIVE TIMES higher than for whites.

  The Home Mortgage Disclosure Act required that the 2012 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, despite confirming receipt of the request. Further studies will follow: watch this site.


March 25, 2013

On March 22 an NCRC discussion ranged from the Federal Reserve withholding too much information under the Freedom of Information Act to allowing former Legal Division staffers to re-appear advocating before the people they used to work with, or under.

While we've always liked her, the case in point was Patricia Robinson, formerly of Fed legal, now representing banks on mergers. Is it appropriate? How to know, given the redactions? We will continue on this.

March 18, 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.

For the reasons of record, and as argued by NCRC, the Federal Reserve should reconsider the ING approval...
 
  And the day after, ICP commented to the OCC:

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?

December 5, 2011

Capital One was required to send a copy of its November 15, 2011 submission to the Federal Reserve to ICP. But under the heading "Community Reinvestment Act," Capital One says "for additional responsive information, please see Capital One's... Confidential Responses enclosure." ICP is challenging the withholding of CRA responses, as well as Capital One's submissions on the key question of how much of its and HSBC's business is subprime, and the connection between ING DIRECT's loans and depositors. Watch this site.

November 28, 2011

With Capital One, the fight continues. This week this came in:

Subject: OCC Press Release: Capital One/HSBC Credit Card Application
From: Lybarger, Stephen @occ.treas.gov
Date: Mon, Nov 21, 2011 at 1:52 PM
To: "Matthew R. Lee" @ innercitypress.org

Matthew, The OCC today reopened the public comment period on the Capital One/HSBC credit card application. We have also made the application available on the OCC website, a link is contained in the press release. http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-138.html

Please forward to others who would have an interest.

Consider it done.

November 21, 2011

The OCC's stumbling processing of Capital One's application to buy the predatory credit card platform of Household International from HSBC had given rise to complaints and requests to improve the OCC's process. Will they? Watch this site.

November 14, 2011

The Office of the Comptroller of the Currency has yet to even extend its comment period on 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).

Inner City Press / Fair Finance Watch submitted a first comment to the OCC on October 18, and a second comment on November 6. After that, ICP received a copy of (most of) the application, which we contend should have analyzed subprime credit card lending as a separate product market. We also challenge the withholding of Exhibits, particularly but not only "Confidential" Exhibit D.

In a just filed third comment ICP has formally argued that the OCC should re-open its comment period, as while Capital One would presumptively become a global systemically important bank under Basel III, subject to loss absorbency requirements ranging from 1% to 3.5% of risk-weighted assets, Capital One is publicly said it is assuming this will NOT be the case, and has premised its application to the OCC on this dubious assumption.

Also, according to its Form 10-Q filed November 7, Capital One Financial Corp. increased its mortgage repurchase reserves for uninsured securitizations. The OCC should require answers, extend the comment period and hold public hearings.

November 7, 2011

To the Office of the Comptroller of the Currency, ICP submitted a first comment on October 18, of which the OCC has yet to even acknowledge receipt, much less get a responses from Capital One. (The OCC also did not respond to ICP's October 18 reuqest "please immediately send all portions of the applications for which Capital One has not requested confidential treatment by e-mail.")

The OCC should extend its comment period, and hold public hearings, particularly given the predatory history of the lending platform at issue which raises issues different from those in Capital One - ING DIRECT, in which the Federal Reserve extended the comment period and held public meetings. The OCC must go beyond that, given the issues raised.

October 31, 2011

So the Office of the Comptroller of the Currency has clarified its initial comment period on Capital One's application to buy the former Household International predatory lending business from HSBC -- it runs through November 7. A request has been made to extend it, as even the Fed did, in this case for 60 days. We'll see.

The subprime meltdown of 2008 and the global financial crisis that has followed was made possible by the largest banks' crackdown on internal whistleblowers who could have alerted the public to the predatory nature of the mortgage loans being securitized. Inner City Press was contacted by a number of such whistleblowers, many of them inside Citigroup's CitiFinancial subsidiary. Beyond those whose affidavits Inner City Press published, one in Knoxville, Tennessee was particularly significant. This whistleblower described to Inner City Press in detail how CitiFinancial's compensation schemes operated, including the sale of credit insurance on personal property with absolutely no benefit to the borrowers. Inner City Press submitted this information to the Federal Reserve, which ultimately fined Citigroup $75 million dollars. The whistleblower was not only fired, but sued and harassed. But the whistleblower persisted.


October 24, 2011

Even with the Federal Reserve having closed its comment period on Capital One - ING DIRECT while refusing to process FOIA requests, there is another, related process. On October 18, Inner City Press / Fair Finance Watch filed comments with the Office of the Comptroller of the Currency on Capital One's application to acquire the platform of predatory lender Household International from HSBC -- the OCC says it will accept comments at least through October 31:

Re: Timely Oppositions to, and Requests on, Capital One's applications to Acquire HSBC (Formerly Household Int'l) Banks

Dear Mr. Lybarger and others in the OCC:

On behalf of Inner City Press / Fair Finance Watch and its members and affiliates (collectively, "ICP"), this timely comment opposes 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).

When HSBC bought Household International, in order to avoid CRA review Household's Federal Savings Bank was dissolved. CRA was not reviewed.

Capital One, alongside its brick and mortar banking operations, is a nationwide credit card lender surrounded by mounting allegations of abusing consumers. As sampled below, Capital One's mortgage lending is disparate, and threatens to become more so as it limits and reported seeks to end its Federal Housing Administration lending.

As simply one example, in the Washington DC Metropolitan Statistical Area in 2009, the most recent year for which aggregate Home Mortgage Disclosure Act data is available, for conventional home purchase loans Capital One made 102 loans to whites and only 11 to African Americans.

Meanwhile for the FHA and VA loans in Table 4-1, Capital One made 25 loans to African Americans and 74 to whites. These disparities, Capital One's FHA lending policies and reported plan to cease FHA lending would harm protected classes and, disproportionately, low and moderate income families.

In Louisiana in 2010, Capital One denied 68% of applications from African Americans, versus only 44% of applications from whites. Capital One confined 8.1% of its Latinos borrowers to high cost (rate spread) loans, versus 6.3% of its white borrowers.

In the District of Columbia in 2010, Capital One denied 32.4% of applications from African Americans, versus only 11.7% of applications from whites - a denial rate disparity of 2.77.

Also for the record:

Thursday, September 15, 2011 4:24 PM ET

Credit conditions weaken at Capital One in August

Capital One Financial Corp. saw its credit trends reverse in August as delinquencies reported by the Capital One Master Trust inched higher to 3.32% from 3.31% in the prior month.

According to a Form 10-D filed Sept. 15, Capital One's net charge-off rate moved higher to 3.70% from 3.51% in July.

In a Form 8-K filed the same day, Capital One reported that the 30-day delinquency rate for its domestic card segment rose to 3.43% from 3.37% in the previous month. The annualized net charge-off rate for that segment climbed to 4.10% from 3.77%".

From a research report that came out right after that: "Sandler O'Neill & Partners LP analyst Michael Taiano reduced his 2011 and 2012 EPS estimates for McLean, Va.-based Capital One Financial Corp. to $7.25 and $5.46 from $7.51 and $6.00 following the release of the company's August credit performance. The analyst also lowered his price target to $54 from $58..."

You will be hear from other NCRC members about Capital One's disparate lending record, and the systemic risk and lack of public benefit of the Capital One - ING Direct proposal.

Capital One's mortgage lending disparities in 2010,was MORE disparate in New York State than elsewhere.


For example, in New York State in 2010 Capital One denied a whopping 72.7% of applications from Latinos, and 69.2% of application from African Americans, both higher that its nationwide numbers.

ICP is timely raising that the on this record the OCC should schedule a public meeting in New York, where Capital One was allowed to acquire North Fork, see e.g., http://www.highbeam.com/doc/1G1-143359086.html

To be continued.


October 17, 2011

The Federal Reserve closed its comment period on Capital One - ING DIRECT with more than 300 comments in opposition in the record, and while evading and outright ignoring and refusing to respond to FOIA requests. We'll have more on this.

October 10, 2011 --

At Occupy Wall Street, Baldwin Flacks for Capital One, Of Chase & Desperate Housewives

By Matthew Russell Lee

WALL STREET, October 8 -- In Zuccotti Park on Saturday night, there was drumming and tombstones for the Glass-Steagall Act. There were police on all four corners with bullhorns, and busses of tourists rolling past on Broadway snapping pictures.

  Earlier at a General Assembly in Washington Square Park, a self-described banker told the crowd to max out their credit cards to get an education, and then not pay it back. The bankers, he said, are living in million dollar condominium and don't need your money.

  In the days after the October 5 labor march and late night Wall Street action complete with pepper spray and batons, there's been increasing focus on who supports Occupy Wall Street. Obama, Nancy Pelosi, even Federal Reserve Board chairman Ben Bernanke saying he understands. Is this the death or new stage of the movement?

  For Inner City Press at least, the hunger for celebrities at Occupy Wall Street is troubling. Alec Baldwin, for example, tweeted Friday that despite Occupy Wall Street, Capital One is still a good partner. Really? Even the Fed has held three hearing on Capital One's rip-off of consumers, considering its application to buy ING DIRECT and HSBC's subprime credit cards.

  In Zuccotti Park Saturday night, a sign lay on the ground about Capital One abusive calling a borrower up to ten times a day. This is what Capital One does, but Alec Baldwin doesn't seem to care. He like Jimmy Fallon, both considered liberals, take Capital One's money to advertise for them.

  Some in Zuccotti Park, meanwhile, are happy for visits by celebrities, whether feel-good spiritualists who moonlight with the UN or otherwise.

  A close observer likened some of those in Zuccotti Park to the Desparate Housewifes in suburban New Jersey -- they are paid to keep the home fires burning, to "look good." But look good then: much is made online of a protester defecating on an NYPD squad car.

  Inner City Press' view, after the arrests of October 1 and the ad hoc moves on Wall Street October 5, is that some keep up residence in the park to keep the momentum going, but the energy comes from outside for real marches, best when challenging the physical symbols of the crisis: JPMorgan Chase, Goldman Sachs, further uptown Citigroup. Desperate Housewives indeed. Watch this site.


October 3, 2011 --

As Capital One Plays Chicago, Fed Plays Hide the (Predators') Ball

By Matthew R. Lee

SOUTH BRONX, September 27 -- At the second of the Federal Reserve Board's three public meetings on Capital One's application to acquire ING DIRECT, Capital One in Chicago Tuesday morning made much of the $180 billion, ten year lending pledge it made on September 20.

 But when asked if this would be broken down by region, Capital One's representative said "no," adding "we may change what we have included" in the pledge.

Inner City Press' testimony asserted that some portion of Capital One's pledge may be predatory lending of the type engaged in by the Household International platform Capital One is seeking simultaneously to buy from HSBC.

The Fed has yet to schedule a hearing in New York, where it allowed Capital One to buy North Fork Bank and make further disparate its lending. So ICP's testimony was graceously read into the record by another NCRC member.

Even so, the Federal Reserve decided to "comment" on the testimony, telling Inner City Press to submit a new Freedom of Information Act request for ING's "request for a non-control determination" for its proposal to own 9.8% of Capital One.

Inner City Press has said ING should apply, to allow comment on issues like ING being under investigation for violating sanctions and doing business in Sudan and Syria. Now the Fed says to request a copy of ING's "request for a non-control determination" -- on which no public comment is accepted. And the Fed has delayed responding ICP's pending FOIA requests.

  Nevertheless, ICP the next day submitted a new FOIA request, which has yet to even be acknowledged by the Fed. Watch this site.

The next hearing -- ostensibly the last -- is this  week in San Francisco, with the Fed's comment period slated to close on October 12. We will continue on this.

September 26, 2011

At the Fed's September 20 public meeting in Washington, Capital One whipped out a $180 billion lending pledge. However, with the still unexamined proposal for Capital One to lend through the subprime lending platform that HSBC acquired along with notorious predatory lender Household International, this pledge could represent new predatory lending.

September 19, 2011

Inner City Press / Fair Finance Watch has put in an eighth comment to the Federal Reserve on Capital One, including

ICP has received an FRB letter of September 12, responding to ICP's August 19 FOIA request by saying "there may be delays." The comment period should, in that case, be extended. In this context it is unreasonable to expect new FOIA requests, for example for the withheld portions of the September 9 response Capital One was supposed to send. The improperly withheld portions from be provided forthwith. And for the additional reasons set forth before a public meeting should be held in New York, where the Fed allowed Capital One to acquire North Fork, and in New Orleans, Louisiana and Texas.

ICP has reviewed the Loan Application Register of Capital One for 2010, during which year Capital One received 1034 applications in the District of Columbia (and 109 in California and 24 in Illinois.)

The 2010 New York and Louisiana disparities of Capital One have already been analyzed for the record. In the District of Columbia in 2010, Capital One denied 32.4% of applications from African Americans, versus only 11.7% of applications from whites - a denial rate disparity of 2.77.  

   Watch for NCRC testimony in DC - then Chicago.

September 12, 2011

  Inner City Press / Fair Finance Watch has submitted to the Federal Reserve a seventh comment opposing 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.

The Fed has yet to fully respond to ICP's FOIA requests and appeals: this should take place forthwith. And for the additional reasons set forth before a public meeting should be held in New York, where the Fed allowed Capital One to acquire North Fork, and in New Orleans, Louisiana and Texas.

ICP has reviewed theLoan Application Register of Capital One for 2010, during which year Capital One received 2279 applications in New York, 8786 in Louisiana and 4704 in Texas. (By comparison Capital One in 2010 received 1034 applications in the District of Columbia, 109 in California and 24 in Illinois.)

The New York disparities of Capital One have already been analyzed for the record. In Louisiana in 2010, Capital One denied 68% of applications from African Americans, versus only 44% of applications from whites. Capital One confined 8.1% of its Latinos borrowers to high cost (rate spread) loans, versus 6.3% of its white borrowers.

So why isn't the Fed holding a public meeting in Louisiana, and in New York? This should be done.

Also in New York, this transaction has an impact, including in terms of layoffs. According to SNL Financial:

Wednesday, September 07, 2011 1:30 PM ET

Capital One consolidating back-office ops

Capital One Financial Corp. is consolidating its New York back-office operations.

The McLean, Va.-based company is consolidating the majority of work currently done in Mattituck, N.Y., to Melville, N.Y., and Richmond, Va.

The move will affect about 135 jobs currently in Mattituck...

ICP is timely raising that the on this record the FRB should schedule a public meeting in New York, where it allowed Capital One to acquire Mattituck-based North Fork, see e.g., http://www.highbeam.com/doc/1G1-143359086.html

In an abundance of caution, ICP has put in a request to the Federal Reserve Bank of Chicago to testify, but this is entirely without prejudice to this formal request that the FRB hold a hearing in Capital One's major disparate market of New York (including given the NY Fed's questionable role in the systemic issues raised by this proposal.)


September 5, 2011

After the Federal Reserve's belated announcement of three public meetings on Capital One - ING Direct, Inner City Press has commented as follows to the Fed:

This is a sixth comment from Inner City Press / Fair Finance Watch ("ICP") opposing 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.

The Fed has yet to fully response to ICP's FOIA requests and appeals: this should take place forthwith. And for the reasons set forth before a public meeting should be held in New York, where the Fed allowed Capital One to acquire North Fork.

Given the issues raised, including by Federal Reserve official Thomas Hoenig and NCRC and others, about this proposal, it is imperative that the Fed either finalize these regulations before the public meetings, or further extend the comment period.

While the Fed scheduled three public meeting, two of the three are in communities in which Capital One does not have a branches, while the Fed has avoided Capital One's major market of New York (and New Orleans and elsewhere).

Capital One's mortgage lending disparaties in 2010, the most recent year for year data is available (from Capital One, as ICP obtained it), was MORE disparate in New York State than elsewhere.

For example, in New York State in 2010 Capital One denied a whopping 72.7% of applications from Latinos, and 69.2% of application from African Americans, both higher that its nationwide numbers...

As noted, on August 11, the day after Capital One announced a related proposal to acquire HSBC's largely subprime credit card business (much of which HSBC acquired along with the scandal tainted Household International), ICP asked that the comment periods should be extended specifically to allow comment on the proposals together, to avoid a segmented and illegitimately limited review.

ICP has yet to receive documents or even a confirmation of receipt of its FOIA Appeal of the improperly withheld records concerning Capital One, ING and the FRS. It is also still not clear what the FRS has done in response to ING's request for a ruling -- without any public comment -- that it would not control Capital One while owning up to 9.9% of the company.

August 29, 2011

As Fed Sets 3 Public Hearings on Capital One -ING Direct, ING and HSBC Subprime Card Filings Missing, Info Still Withheld

By Matthew R. Lee

SOUTH BRONX, August 26 -- With the Federal Reserve Board on August 26 belatedly granting over 200 requests for public hearings on Capital One and its application to acquire ING Direct, the question arises why the Fed delayed and why it now said "yes."

On August 25, three days after the Fed allowed the comment period to close on the application, the Fed admitted in writing to improperly withholding under the Freedom of Information Act some of Capital One's many communications with the Fed, writing to Inner City Press that

"subsequent to the Secretary's response of August 3, 2011, Board staff was informed that an employee at the Federal Reserve Bank of Richmond located additional responsive material. The employee had been traveling between the date of your request on July 22, 2011 and the date of the Secretary's response on August 3, 2011. Accordingly, Board staff was not aware that these additional responsive material existed until after the Secretary had responded to your request on August 3, 2011."

   With Fed chairman Ben Bernanke out in Jackson Hole, Wyoming, long time Fed official Tom Hoenig became on his way out a whistleblower, saying on camera that he has

"serious doubts about Capital One's proposed purchase of ING Direct. 'I have very grave concerns about allowing these amalgamations of institutions that by their very structure are too big to fail, too interconnected to fail and I think the burden should be very heavily against that,' Hoenig said."

   Now at public hearing set in Washington, Chicago and San Francisco, the Fed will have to consider testimony from hundreds, many from NCRC, on this and other points, including Capital One's abuse of credit card consumers, and the predatory lending history of the card platform it seeks to buy from HSBC to deploy the ING Direct deposits.

There is still the question of why ING has not filed an application for its proposal to acquire up to 9.8% of the stock of Capital One, and to control a seat on Capital One's board of directors. And there is still a slew of information improperly withheld by the Fed under FOIA.

The hearings are as follows:

Washington, D.C. – Tuesday, September 20, 2011, beginning at 8:30 a.m. EDT, at a location to be determined.

Chicago – Tuesday, September 27, 2011, beginning at 8:30 a.m. CDT, at the Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, IL.

San Francisco – Wednesday, October 5, 2011, beginning at 8:30 a.m. PDT, at the Federal Reserve Bank of San Francisco, 101 Market Street, San Francisco, CA.

  The Fed also re-opened and extended its comment period until October 12. We will continue on this.

   With these two acquisitions, Capital One could become a fifth "too big to fail" bank in the US, after JP Morgan Chase, Bank of America, Wells Fargo and Citigroup. The anachronistic gang in Capital One's television ads, along with Alec Baldwin, may be funny, but less so if considered too big to fail, possibly requiring bailouts.

  In group's  initial comments to the Fed, less has been said about ING, in part because ING's US business had been directed at a more affluent clientele, and because ING was not viewed as the applicant.

  But after Inner City Press filed a Freedom of Information Act request with the Federal Reserve Board on July 22, a partial response from the Federal Reserve shows that ING has quietly sought a ruling from Fed General Counsel Scott Alvarez that ING should not have submit any application subject to public comment to own up to 9.9% of Capital One. Click here to view the Fed's (first) FOIA partial denial letter, from which Inner City Press has already appealed.