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.

October 26, 2020

Goldman Sachs Gets $2.9B Deferred Prosecution Deal Like HSBC Fed Reserved

By Matthew Russell Lee, Exclusive Patreon
Honduras - The Source - The Root - etc

FEDERAL COURTS NYC, Oct 22  – In the 1MDB scandal Inner City Press live tweeted a proceeding in August 2020, here and below.

Now on October 22, "today, in federal court in Brooklyn, Goldman Sachs entered into a deferred prosecution agreement with the United States Attorney’s Office for the Eastern District of New York and the Department of Justice’s Criminal Division, Fraud Section and Money Laundering and Asset Forfeiture Sections (the Department) in connection with a criminal information filed in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA. GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA. Previously, Tim Leissner, the former Southeast Asia Chairman and a Participating Managing Director of Goldman Sachs, pleaded guilty to conspiracy to violate the FCPA and conspiracy to commit money laundering. Ng Chong Hwa, also known as “Roger Ng,” former Managing Director of Goldman and Head of Investment Banking for GS Malaysia, has been charged with conspiracy to violate the FCPA and conspiracy to commit money laundering. Ng was extradited from Malaysia to face these charges and is scheduled for trial in March 2021. All four cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York."

  For those counting, HSBC also got a deferred prosecution agreement. And the Federal Reserve, in the shadows, has let Goldman Sachs into bank, and rubber stamps mergers like by Banco Bradesco to this day. From August 2020:

 OK - in EDNY, 1MDB / Malaysia defendant EDNY Ng Chong Hwa, a.k.a. “Roger Ng" charged with conspiring to launder billions of dollars embezzled from 1Malaysia Development is before Judge Margo K. Brodie. Inner City Press will live tweet - thread

 Judge Brodie says there is a back-up of cases caused by COVID19, no assurance this trial can go forward in January 2021. Says won't have real info in September - even if protocol is in place, it will still be being tested. AUSA points out extradition from Malaysia

 AUSA says a status conference in early October would be fine "even if the trial is moved a little bit." Defense lawyer: I understand the difficulties of the court. But I'd like to convince the government or your Honor to loosen Mr Ng's conditions of home detention

Defense lawyer: Malaysia is not allowing Americans into the country at all, at least until September. This is a challenge we face. We'd like Mr. Ng to get out a bit more, and exercise. Judge: I think the parties should work that out. Next date Oct 6 at 10 am?

Judge: Does that work? Yes. Yes. No need to exclude time on this matter but I'll do it anyway. See you in October. Have a good day. Adjourned.
 And on Goldman, from SDNY:

Bryan Cohen, a Goldman Sachs banker charged with insider trading with the same cooperating witness as Telemaque Lavidas now on trial, on January 7 pled guilty to conspiracy to commit securities fraud.

  The US Attorney's Office did not publicize the proceeding or its 30 to 37 month plea deal, but Inner City Press was in the U.S. District Court for the Southern District of New York Magistrates Court as the only media, and spoke afterward with Cohen's defense lawyer Benjamin Brafman. More on Patreon here.

  Brafman told Inner City Press the connection to the Lavidas trial is the same cooperating witness. More formally, he said that "To his credit, Mr. Cohen has accepted responsibility for his conduct and will thereby avoid a trial. We are hopeful that at sentencing we will be able to pursuade Judge Pauley that despite his criminal conduct Mr. Cohen is a fundamentally decent young man who should be sentenced in a relatively lenient fashion."

As HSBC and Wells Eye Harlem Brownstone Bankruptcy Appeal Arrives in SDNY

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

SDNY COURTHOUSE, Oct 22 – Laverne Leonard lives in a brownstone on 131st Street in Manhattan and is worried it will be foreclosed on by lenders and/or servicers who don't even own the loan, including HSBC and Wells Fargo as server. 
  On October 22 U.S. District Court for the Southern District of New York Judge Lewis J. Liman held a bankruptcy appeal proceeding. Inner City Press covered it.  

 Judge Liman asked where the property is, and noted that he had a big box of documents related to the matter. He urged Ms. Leonard to email his Chambers.

The case is In Re: Laverne Leonard, 20-cv-6811 (Liman)

October 19, 2020

As Bronx Amalgamated Closing Has Negative Impact Inner City Press Hits BNB Dime Merger

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

South Bronx, Oct 14 –  This is a tale of two closing of bank branches, in The Bronx and in Kenosha, Wisconsin.

  In the South Bronx closing, by Amalgamated Bank, the FDIC did not hold a public meeting.

  But as to Kenosha, the Federal Reserve has said: "This is in reference to the notice provided to the Federal Reserve Bank of Chicago (“Reserve Bank”) by Johnson Bank, Racine, Wisconsin to close its branch located at 2729 18th Street, Kenosha, Wisconsin.   This Reserve Bank received correspondence regarding the branch closure which discusses its adverse effects on available banking services in the area; this Reserve Bank considers the comment not frivolous. Therefore, under Federal statute 12 USC § 1831r-1, this Reserve Bank shall convene a meeting of interested parties to explore the feasibility of obtaining adequate alternative facilities and services for the affected area following the branch closure.... Respectfully,   Jeremiah Boyle Assistant Vice President Community and Economic Development Federal Reserve Bank of Chicago."

  This is the same Federal Reserve which rubber stamped Banco Bradesco, and even serviced Varo at the Reserve Bank level. But the FDIC held no meeting, even virtual, on this (acknowledged as negatively impactful by the New York State Department of Financial Services, which has yet to meaningful act of the negative impacts of Dime being taken over by BNB, below) --

"October 7, 2020 (TR-CRB) AMALGAMATED BANK 275 Seventh Avenue (Fourteenth Floor, New York, NY 10001  In accordance with Section 28-c of the Banking Law, the Superintendent of Financial Services has found that the closing of branch office at 94 East Burnside Avenue, Borough of Bronx, City of New York 10453, will result in a significant reduction of financial services in the community affected." And? We'll have more on this - and on Dime / BNB.

October 12, 2020

Citibank Tells Those Facing Discrimination To Move But Inner City Press Hits BNB Dime

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

South Bronx, Oct 6 –  Citigroup, the global colossus, has issued a report including on what is says individuals can do when faced with discrimination.

Citibank recommends... moving. Here, at page 93: "Move: While a difficult decision, relocation may be the answer to improved jobs prospects. Sixty five percent of the Black population resides in 16 states in the U.S. However, according to a survey by McKinsey and Company, on average these states rank below national averages in metrics that can lead to an improved quality of life and wealth generation. Black workers, especially younger workers can opt to move to states that are generating the most jobs in high paying industries."

  Beyond being a "difficult decision," isn't this just accepting and perpetuating redlining?

  Instead, here's what Inner City Press / Fair Finance Watch is doing:

October 5, 2020

Dime Community Bank To Be Bought By BNB With No Loans to African Americans So Protest

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

South Bronx, Sept 28 –  Brooklyn based Dime Community Bank, it is proposed, would be taken over by Long Island-based Bridge Bancorp, making few to no loans to people of color. Fair Finance Watch has filed a timely protest:

"September 28, 2020 New York State Department of Financial Services Attn: Linda A. Lacewell, Acting Superintendent of Financial Services A   Re: Timely First Comment on Applications by Bridge Bancorp, Inc. to acquire control of Dime Community Bank and all related applications

Dear Acting Superintendent Lacewell:  This is a timely first comment opposing and requesting an extension of the NYSDFS' public comment period on the Applications by Bridge Bancorp, Inc. to acquire control of Dime Community Bank and all related applications  The applicant's BNB Bank in New York State in 2019 made 108 HMDA-reported loans to whites -- and NONE to African Americans, and only two to Latinos. 

  This is unacceptable and Fair Finance Watch and Inner City Press hereby timely request public evidentiary hearings and that Bridge Bancorp's and BNB Bank's applications be denied on Community Reinvestment Act and fair lending grounds.  

  Dime Community Bank, whose record Inner City Press has previously critiqued with some impact, in 2019 in NYS made 16 HMDA reported loans to whites, five to African Americans and NONE to Latinos. This is too is unacceptable, particularly in combination. This proposed merger should be denied.   

 See also, Shelter Island Reporter of July 6, 2020: "Certain retail locations on the East End w[ould] operate under the BNB Bank name for at least one year, according to a press release. It did not specify which locations.... what started as a trickle of bank branch closings and mergers has turned into a river. Capital One was among a handful of major banks that bucked the trend as late as 2014, actually adding more branches. But three years ago it joined the brick-and-mortar vanishing act, as reflected by branch closings on the East End, including Shelter Island. According to The Economist, since the financial crisis of 2008, banks have closed more than 10,000 branches."

All impacts of this proposed merger should be disclosed - this a timely request to be emailed a copy of the application(s), which should have been placed on the Department's website for public review as many Federal agencies do.  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved." We'll have more on this.

       Watch this site.

September 28, 2020

Insurers Beat NYS Regulator In ACA Case in 2d Circuit Now SDNY Follows Suit

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

SDNY COURTHOUSE, Sept 24 – Insurers sued the NYS Superintendent of Financial Services for a 2017-18 regulation requiring them to pay a portion of the funds they received under the ACA's risk adjustment program into the NYS treasury. 

 The insurers won in the Second Circuit Court of Appeals. 

 On September 24 U.S. District Court for the Southern District of New York  Judge John G. Koeltl held a proceeding. Inner City Press covered it.

   The State's lawyer wanted a delay, to change their regulations seemingly voluntarily.

 Judge Koeltl rejected these optics, and granted the insurers summary judgment.

The case is, or was, UnitedHealthcare of New York, Inc. et al v. Vullo, 17-cv-7694 (Koeltl)

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September 21, 2020

Varo Bank The Bancorp Application Protested to OCC But Crypto Brooks Rubber Stamps It

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

South Bronx, Sept 14 –  The fintech Varo has applied to the U.S. Office of the Comptroller of the Currency of pro-crypto Brian Brooks for a transaction with The Bancorp. Fair Finance Watch filed a timely protest:

"September 7, 2020    Office of the Comptroller of the Currency  DC Comptroller Brooks & Western District Office  1225 17th Street, Suite 300 Denver, CO 80202  

Dear Comptroller Brooks and others in the OCC:    On behalf of Inner City Press / Fair Finance Watch (FFW) and in my personal capacity, this is questionlessly timely protest to the application by Varo regarding The Bancorp.

FFW and Inner City Press are deeply concerned about the rush by the OCC under Acting Comptroller Brooks to let fintechs and others into banking, and by his comment about not regulating entities (banks) but rather activities. This is killing the Community Reinvestment Act and we timely request public hearings. 


State Street Bank Is Sued For Boston Club Culture Now Complains About Discovery

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

SDNY COURTHOUSE, Sept 15 –   Two employees sued State State Bank for discrimination. Then their lawyer had some problems   

 On September 15 U.S. District Court for the Southern District of New York Judge Gregory H. Woods held a status conference. Inner City Press covered it.   

State Street's lawyer complained about the plaintiff getting double standards, while purporting to sympathize for their problems. The plaintiffs cite State Street's "notorious male-dominated 'Boston club' culture."

 The case is Shnyra et al v. State Street Bank and Trust Co., Inc., 19-cv-2420 (Woods)

September 14, 2020

Varo Bank The Bancorp Application Protested to OCC of Crypto Brooks By Fair Finance Watch

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

South Bronx, Sept 7 –  The fintech Varo has applied to the U.S. Office of the Comptroller of the Currency of pro-crypto Brian Brooks for a transaction with The Bancorp. Fair Finance Watch has filed a timely protest:

"September 7, 2020    Office of the Comptroller of the Currency  DC Comptroller Brooks & Western District Office  1225 17th Street, Suite 300 Denver, CO 80202  

Dear Comptroller Brooks and others in the OCC:    On behalf of Inner City Press / Fair Finance Watch (FFW) and in my personal capacity, this is questionlessly timely protest to the application by Varo regarding The Bancorp.

FFW and Inner City Press are deeply concerned about the rush by the OCC under Acting Comptroller Brooks to let fintechs and others into banking, and by his comment about not regulating entities (banks) but rather activities. This is killing the Community Reinvestment Act and we timely request public hearings.  

 As to Varo, consider for example the recent consumer complaints below, on top of  their service interruption in October 2019, including declined debit card transactions, which they tried to blame on their processor Galileo. See, e.g., this.

 More fundementally, consider weakened CRA duties, and disproportionate exclusion: low and moderate consumers disproportionately have prepaid or limited data plans and face disconnections of their mobile service. And just because consumers have email addresses does not mean that they have regular internet access, and if they close or move their accounts, they may lose access to their financial records.    

Despite or perhaps because of these and the service interruptions, using OCC deregulation, "Varo Money has raised an additional $241 million in Series D funding, the company announced today. The investment was co-led by new investor Gallatin Point Capital and existing investor The Rise Fund, co-founded by TPG. Also participating in the round were Bono (yes, that one), along with entrepreneur, impact investor and movie producer Jeff Skoll; plus HarbourVest Partners and Progressive Insurance.  To date, Varo has raised $419.4 million in funding."  

See also, for the record on which Inner City Press / Fair Finance Watch and I are timely requesting evidentiary hearings on this application, " NEWS Technology Finance  Unregulated Fintech Could be the Source of the Next Market Crash Posted to TechnologyFinance."    

Here for the record are recent consumer complaints against Varo:  Sep 02 Froze my account because I transferred money 3 times! 2.5 Details Varo Money - Froze my account because I transferred money 3 times! Varo Money - Froze my account because I transferred money 3 times! I was speechless when I received an email from Varo saying my account had been frozen due to an a number of transfers from my Chime account. I had a total of 3 transfers in the past year that I've had the account. I have $9,754 in my account and it came from unemployment, school refunds and tax refund. They won't respond to emails and customer service doens't know anything. How can this be legal? User's recommendation: find another bank because they will freeze your account.   No way to communicate with someone LOSS $9754 PREFERRED SOLUTION I want my money to be released immediately so I can transfer it to another bank 

Aug 07  Their website leaves many unanswered questions and when I called their listed phone number there was a very long and detailed recording and only by accident could you reach a prompt to talk with an agent. Another recording indicated that there would be a long delay in reaching an agent followed by some distorted music. After 20 minutes still no response so I disconnected. Their entire platform seems confusing and convoluted with unnecessary information. I would question the security of doing banking matters in an entirely mobile format with no customer service. 

Aug 04  Terrible service They closed my account. I've sent them 4 forms of id, proof of address, etc. After sending all that they said they still couldn't verify my identity and closed by account that I've had for years. Now I'm waiting for them to send my direct deposit back , and it's been a few days. User's recommendation: Don't use them."

       We timely request public hearings on, and the denial of, this application.  Thank you for your prompt attention,  Matthew R. Lee  Inner City Press / Fair Finance Watch."

  The Federal Reserve coordinated its timing with the OCC of Brian Brooks, who has numerous conflicts of interest in the fintech field.    Varo has bragged, "Varo has filed its Strategic Plan with the Office of the Comptroller of the Currency and believes that it will be approved in the near future. Varo respectfully submits that the OCC process is the appropriate forum for his comments. The Comment Letter vaguely references the “COVID-19 pandemic” and “Coronavirus restrictions” without providing any clear or definite demonstration as to how such pandemic or restrictions have interfered with the Commenter’s ability to meet the specified comment period or given rise to any hardship to Commenter or other meritorious reason to extend the comment period, or how the arbitrarily chosen “Phase Two” of such restrictions would alleviate any such unsubstantiated causes for delay. To the contrary, by virtue of the scope and content of the Comment Letter itself, the Commenter has clearly demonstrated his ability to comment within the specified comment period."

   What arrogance - commenting amid lockdowns is fine, the OCC is the place to comment. Well, now it's in.

       Watch this site.

September 7, 2020

From Coinbase Brooks Into OCC Says Will Not Regulate Entities Or Obey SDNY or CRA

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

UN GATE / SDNY COURT, Sept 1 – Acting U.S. Comptroller of the Currency Brian Brooks, as Coinbase’s chief legal officer,  was paid $1.4 million in salary -- separate from the stock options -- in the year and a half he spent with company, which had weighed seeking a charter through the OCC before making other moves to access the banking system."

  Now Brooks says, "I'm increasingly thinking of this agency as an activities regulator, not an entity regulator." But since the Community Reinvestment Act is enforced with regard to entities, this is an even more egregious attach on CRA than Otting engaged in. Combined with Brooks open contempt for rulings of the U.S. District Court for the Southern District of New York, it shows why he should be removed as Comptroller.

 On his conflicts of interest, Inner City Press asked - and then requested under FOIA - what are the "other tech firms" as to which Brooks is acknowledging a conflict.

   The OCC wrote to Inner City Press, faux apologizing for withholding information it has requested about Otting until after he had left the agency. Inner City Press immediately wrote back requesting a copy of Brooks' ethics letter and list of companies as to which even he acknowledges a conflict of interest.

  On June 18, that simple request was denied and so a FOIA request was filed, see below.

  And now more than a month later on July 22 the OCC has provide to Inner City Press under FOIA a copy of the ethics memo that Brooks is recused on: Amazon (minus AWS), Avant, Aventas, Merrill Lynch, CoinBase, EarnUp, Spring Labs, TextIQ - and Citibank N.A. residential mortgage business." We'll have more on this.

  From Inner City Press' FOIA request: "This is a request under FOIA on behalf of Inner City Press and in my personal capacity for all records concerning conflicts of interest or the appearance of conflict of interest by Acting Comptroller Brian Brooks, including but not limited to the Ethics letter Inner City Press requested from the OCC, below, and Coinbase, Avant, OneWest and any other firm.  Inner City Press in responding to a request by OCC to "close out" a FOIA request still not completed asked "I do have an OCC public information / transparency question - for the Acting Comptroller's ethics filing - can it be sent to me at Matthew.Lee@innercitypress.com? To identify it: "Brooks has submitted a letter through the agency's ethics office outlining companies he'll steer clear of because of potential conflicts of interest, including Amazon.com Inc., Bank of America Corp.'s Merrill Lynch unit, Coinbase and a number of other tech firms he's worked with." What are those companies? Thanks, -Matthew Lee, Inner City Press"  Days later and minutes ago Inner City Press received this: Good Morning Mr. Lee....  I don't know the answer to the question you asked.  You should file a FOIA request for the records you seek regarding the Acting Comptroller. " This is that request, on which expedited treatment should be granted - such disclosures are among the very purposes of FOIA."  Watch this site.

   Amid all this, Fair Finance Watch and Inner City Press / Community on the Move have launched a new project. And so far, Brooks' national banks have been among the worst. Watch this site.

August 31, 2020

Japanese FinTech Rakuten Retreats From CRA Evasion While OCC and Fed Cheer On Varo

By Matthew R. Lee

SOUTH BRONX, Aug 23 – Amid attacks on the U.S. Community Reinvestment Act now under Brian Brooks after Joseph Otting had his turn as Comptroller of the Currency, now Japan's Rakuten has withdrawn its application to get into banking. The opposition of smaller American banks didn't stop the OCC, and Federal Reserve on a delegated basis, from rubber stamping Varo into banking. But the line has been drawn, curved like an arrogant Amazon "smile," at this Japanese Internet company.

 Inner City Press / Fair Finance Watch has filed comments on all this. Previously: "A Japanese FinTech company is applying for a banking charter in the United States. The eCommerce firm Rakuten currently runs a shopper rewards program in the States, and said would file the necessary paperwork on Friday (July 26) with Federal Deposit Insurance Corp. (FDIC) and the state of Utah for an industrial loan company (ILC) charter.  Rakuten has about 13 million active users who earn rewards for purchasing products from participating merchants.   The bank would be headquartered in Utah and could handle users’ deposits, according to Lee Carter, Rakuten head of banking and potential ILC CEO. The company also wants to give members a credit card to make purchases in the future and also earn rewards.  Carter said he’s “kept a close eye on Square’s application.”  He also said the company would provide a complete plan for the Community Reinvestment Act with the application, because some groups are worried that FinTechs won’t be held accountable for certain rules.  “We have thought about that very, very carefully,” Carter said. “We’ll have specific goals for community service and investments back into the community."  We'll have about that.

August 24, 2020

Sued for PPP JPM Chase Citigroup Signature Tell Judge Rakoff of Chevron Deference

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

SDNY COURTHOUSE, Aug 21 – In the U.S. Paycheck Protection Program, banks limited the loans to their own customers first. Then they refused to pay compensation to agents, and got sued.

On August 21 U.S. District Court for the Southern District of New York Judge Jed S. Rakoff held an oral argument, on Zoom. Inner City Press covered it.  

  A lead defendant is JPMorgan Chase Bank, N.A.. There's also Citigroup, MUFG Union Bank and Signature Bank.

 Judge Rakoff was directed to Chevron deference and quipped, I think that's still good law. When the Zoom broke down, he said it must be "Putin."

  The banks have moved to dismiss for failure to state a claim and for lack of subject matter jurisdiction.  

  By the end of the proceeding, Judge Rakoff allowed sur-rebuttal and promised a prompt decision.

The case is James Quinn et al v. JPMorgan Chase Bank, N.A. et al., 20-cv-4100 (Rakoff)

August 17, 2020

The regulators, even amid the COVID-19 pandemic, have shown a willingness to rubber stamp applications including the Federal Reserve on a "delegate" / approval-only basis as they did with Varo's application to become a bank holding company.  

But these moves are drawing increasing scrutiny, and some bad-actors are having to settle charges, like Capital One's $80 million fine, here.... Aug, Texas: "Three affiliated banks have announced a merger to form a Central Texas banking franchise in San Antonio, Austin and the Texas Hill Country. Southwest Bancshares, Inc., a bank holding company for the Bank of San Antonio, Capitol of Texas Bancshares, Inc., a bank holding company for the Bank of Austin, and Texas Hill Country Bancshares, for the Texas Hill Country Bank, will merge into one company"  July 17, Missouri: "United State Bank, based in Lewistown, Missouri, signed a pending acquisition agreement with Canton State Bank, based in Canton, Missouri"  There are more branch closures, for example in Michigan, here.  And Florida, here (and South Carolina, here).

August 10, 2020