Inner City Press' Community Reinvestment Reporter

  

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

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

May 23, 2016

Now looking into merger agreement that calls them Frontier (First Cash) and Cowboy (Cash America):

"(a) Regulatory Authorizations. All consents, authorizations, orders or approvals of each Governmental Authority necessary for the consummation
of the Merger and the other transactions contemplated by this Agreement set forth in Section 8.1(a) of the Frontier Disclosure Letter and Section 8.1(a) of the
Cowboy Disclosure Letter shall have been obtained.

(b) Antitrust Approvals. Any waiting period (and any extension thereof) applicable to the Merger and the other transactions contemplated by this
Agreement under the HSR Act shall have been terminated or shall have expired, and any other antitrust, competition, investment, trade regulation or similar
consents, authorizations, orders or approvals that are required under any other material Antitrust Law, the absence of which would prohibit the consummation
of the Merger and the other transactions contemplated by this Agreement, shall have been obtained or made or any applicable waiting period with respect
thereof shall have expired or been terminated."

  Can you say, unfair and deceptive?

May 16, 2016

 Despite the Federal Reserve saying that, after it extended its response time, it would provide Huntington - FirstMerit documents Inner City Press requested under FOIA by May 2 (see below), none of been provided. The comment period should not be closed by the Fed. Consider:

April 18, 2016

Re: Freedom of Information Act Request No. F-2016-0152

Dear Mr. Lee,

On March 21, 2016, the Board of Governors (“Board”) received your electronic message dated March 20, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entire[t]y of the “[a]pplication by Huntington to acquire FirstMerit” and all records reflecting FRS communications with Huntington or FirstMerit for the past twelve (12) months.

Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 2, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.

If a determination can be made before May 2, 2016, we will respond to you promptly. It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law.

Very truly yours,

Jeanne M. McLaughlin

Manager, Freedom of Information Office

And then... nothing.

May 9, 2016

  Inner City Press / Fair Finance Watch, which has protested Huntington - FirstMerit, was sent this by the Federal Reserve:

Dear Mr. Lee:
Attached is a memorandum summarizing staff’s telephone conversation with Ms. Patricia A. Robinson of April 25, 2016, counsel for Huntington Bancshares Incorporated (“Huntington”), regarding the application by Huntington to acquire all the voting shares of, and to merge with, FirstMerit Corporation and thereby indirectly acquire FirstMerit Bank, N.A., pursuant to section 3 of the Bank Holding Company Act of 1956, as amended.  We send this memorandum to you in accordance with the Board’s procedures regarding ex parte communications.

Date: May 3, 2016
To: File
From: Federal Reserve staff
Subject: Telephone Conversation with Patricia A. Robinson, Esq.
re:Application by Huntington Bancshares Incorporated to Acquire Shares of, and to Merge with, FirstMerit Corporation

On April 25, 2016, staff of the Board of Governors of the Federal Reserve System (Benjamin McDonough, Pam Nardolilli, Mark Buresh, Andrew Hartlage, and Brian Phillips) had a telephone conversation with Ms. Patricia A. Robinson, counsel for Huntington Bancshares Incorporated (“Huntington”), Columbus, in connection with the application filed by Huntington to acquire all the voting shares of, and to merge with, FirstMerit Corporation (“FirstMerit”) and thereby indirectly acquire FirstMerit Bank, N.A., both of Akron, all of Ohio, pursuant to section 3 of the Bank Holding Company Act of 1956, as amended.

Staff discussed with Ms. Robinson a capital-related matter regarding the issuance of Huntington preferred shares in exchange for currently outstanding FirstMerit preferred shares.

  UNsaid: Robinson used to work in the Fed's Legal Division...

May 2, 2016

Inner City Press / Fair Finance Watch has filed this:

This is a timely first comment opposing and requesting a complete copy of an and an extension of the FRB's public comment period on the Application by Chemical Financial Corporation to merge with Talmer Bancorp and thereby acquire voting shares of Talmer Bank and Trust.

This over $1 billion proposal is by a bank with a weak record of people to people of color and lower income people, and of consumer compliance.

In the Flint, Michigan MSA in 2014 Chemical Bank for home purchase loans had a 100% denial rate for Latinos; it made 14 such loans to whites and only three to African Americans. Chemical Bank's home refinance lending in the Flint MSA in 2014 was all to whites: 11 loans to whites, NONE to African Americans or Latinos. Similiarly for home improvement loans, 10 loans to whites, none to Latinos; African Americans submitted two applications, one denied, the other “withdrawn.”

In the Battle Creek MSA in 2014, Chemical Bank made 26 loans to whites and none to African Americans (again, two applications, one denied and the other “withdrawn”).

This is unacceptable. So is this:

La Michigan: “Oddly I had enough money in both of my Chemical Bank accounts and they charged me a $64 over draft fee for my smaller account. I HATE that BANK! It used to be Northwestern Bank, but Chemical bought them. I am getting ALL my money out of there as soon as my debit card comes from the credit union.”

The stated rationale of Northwestern selling out to Chemical was the same, increase compliance costs, etc. Chemical promises to increase lending. But has it? What of its public statements that is will be opening branches? Hearings are needed.

April 25, 2016

ICP Awaits Fed's FOIA Response on Huntington - FirstMerit, May 16 New Date

By Matthew R. Lee

NEW YORK, April 22 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, more Fed-favored banks like Goldman Sachs - through those in the upper bulge like Huntington, seeking to buy First Merit and close more than 100 branches.

 Inner City Press / Fair Finance Watch on March 19 filed with the Federal Reserve a challenge to Huntington's application to acquire First Merit and close 107 branches. On April 16, Inner City Press made a third filing, for an extension of the comment period.

  On April 22, a week after Inner City Press' request but a day after Huntington CEO Steve Steinour downplayed the branch closures to his shareholders, the Federal Reserve called Inner City Press and said the comment period will now run to May 16. Later this was put online.

 While appreciated, will this help keep branches open? We'll see - for now, the Fed has extended its time to respond to Inner City Press' long pending Freedom of Information Act request:

April 18, 2016
 
Mr. Matthew R. Lee
Inner City Press
PO Box 20047
New York, NY 10017
 
Re:       Freedom of Information Act Request No. F-2016-0152
 
Dear Mr. Lee,
 
On March 21, 2016, the Board of Governors (“Board”) received your electronic message dated March 20, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 2, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before May 2, 2016, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law.
 
  So the documents should come in before May 16. Watch this site.

April 18, 2016

Inner City Press has filed: This is a timely third comment opposing, reiterating ICP's March 20 FOIA request on, and requesting an extension of the FRB's public comment period on the Application by Huntington Bancshares to acquire FirstMerit Corporation.

  The Board has STILL not responded to ICP's FOIA request and the comment period must be extended on that ground alone.
 
   This proposed merger would, if approved, result in the closure or “consolidation,” see below, of more than 100 branches -- nearly 50 are in the Cleveland, Akron and Canton areas. Huntington's lending in two of these areas was analyzed in ICP's first comment; FirstMerit is initially reviewed here. More will follow. These closures and “consolidations” would cause harm; what would be the countervailing public benefit? Public hearings are needed.

In its most recently submission, Huntington states that “the Board published notice of the Application in the Federal Register on March 17, 2016, inviting the public to comment on the Application through April 15, 2016.  Therefore, the current comment period on the Application is 36 days and it remains open to provide interested members of the public and ample time to comment on the Application.”
 
  Inner City Press is informed that Huntington has represented that it will not oppose, in fact will support, an extension of the comment period. Yet it is 4:50 pm on April 15 and nothing has been announced. Therefore this submission, requesting an extension of the comment period.

April 11, 2016

  So 107 prospective branch closures by Huntington, and not only no Fed public hearing - no extension of the comment period to consider this near-unprecedented level of closure? Pathetic...

April 4, 2016

ICP Zeroes In On Huntington Bank, Shutting Low Income FirstMerit Branches

By Matthew R. Lee

NEW YORK, April 2 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, more Fed-favored banks like Goldman Sachs - through those in the upper bulge like Huntington, seeking to buy First Merit and close more than 100 branches.

 Inner City Press / Fair Finance Watch on March 19 filed with the Federal Reserve a challenge to Huntington's application to acquire First Merit and close 107 branches.

  Now Inner City Press has received Huntington's response to the Fed, and it is woefully inadequate. Inner City Press has replied:

"Huntington's Response to ICP, written by former Federal Reserve Board legal counsel Patricia Robinson -- we are concerned about this revolving door -- is dismissive of the issues raised.

 The Response states that 'Of the 107 consolidations / closings, a strong majority (62 of 107 or 58%) are short distance branch consolidations' -- but includes actions forcing consumers to travel more than one mile among these “consolidations.”

Even using this definition, Huntington in its Response to ICP admits to no fewer than 45 prospective branch closures, an extraordinary number militating for the requested public hearings.

Section D.1 of Huntington's Response to ICP lists low and moderate income branches and the income demographics of the branches that would “receive” them. Significantly, in every instance where the income demographics of the branches being shuttered and the “receiving” branch, Huntington has chosen to shutter the lower income branch.

There's moderate into middle, for example

Legacy FirstMerit Bank branch at:
430 Northfield Rd., Bedford, Ohio
44146
(Cuyahoga County)
– moderate-income census tract

“moving to”

Legacy Huntington Bank branch at:
5321 Warrensville Rd., Maple
Heights, Ohio 44137
(Cuyahoga County)
– middle-income census tract

There's low income into middle:

Legacy Huntington Bank Branch at:
1500 East Main Street, Kent, Ohio
44240
(Portage County)
– low-income census tract

moving to

Legacy FirstMerit Bank branch at:
1729 State Rt. 59, Kent, Ohio 44240
(Portage County)
– middle-income census tract

There's even moderate into upper:

Legacy FirstMerit Bank branch at:
3505 Lee Rd., Shaker Heights, Ohio
44120
(Cuyahoga County)
– moderate-income census tract

“moving to”

Legacy Huntington Bank branch at:
17121 Chagrin Blvd., Shaker
Heights, Ohio 44120
(Cuyahoga County)
– upper-income census tract

But there is NOTHING moving the other way. Hearings are necessary.

March 28, 2016

  Drilling in more closely into the negative impacts of the proposed Huntington - FirstMerit merger, covered here and here, Inner City Press / Fair Finance Watch has now looking at FirstMerit's record in 2014 in Akron:

  FirstMerit in the Akron MSA in 2014 made 214 home purchase loans to whites -- and only 13 to African Americans and only two to Latinos. Troublingly, FirstMerit denied the applications of African American for home purchase loans 4.14 times more frequently than for white: a 9.2% denial rate for whites versus a whopping 38.1% denial rate for African Americans.

For refinance loans, FirstMerit in the Akron MSA in 2014 made 158 loans to whites and only six to African Americans and none to Latinos. Its denial rate for African Americans was 35.7%, versus only 20.6% for whites.

For home improvement loans, Huntington in the Akron MSA in 2014 made 47 loans to whites and only two to African Americans and NONE to Latinos. Its denial rate for Latinos was 100%. Its denial rate for African Americans was 77%, versus 50% for whites.
 
  Not pretty. We'll have more on this.

March 21, 2016

 Inner City Press / Fair Finance Watch has filed a timely first comment opposing / requesting public hearings on the application by Huntington Bancshares to acquire FirstMerit Corporation.  This proposed merger would, if approved, result in the closure of more than 100 branches -- nearly 50 are in the Cleveland, Akron and Canton areas  Two of these areas are analyzed below; more will follow. These closures would cause harm; what would be the countervailing public benefit? Public hearings are needed.

  Huntington in the Akron MSA in 2014 made 197 home purchase loans to whites -- and only nine to African Americans and only three to Latinos. 

For refinance loans, Huntington in the Akron MSA in 2014 made 263 loans to whites and only nine to African Americans and only ONE to Latinos. Its denial rate for Latinos was 77.8%, versus only 50.7% for whites.

For home improvement loans, Huntington in the Akron MSA in 2014 made 23 loans to whites and only FOUR to African Americans and NONE to Latinos. Its denial rate for Latinos was 100%.

    Huntington in the Cleveland MSA in 2014 made 582 home purchase loans to whites -- and only 37 to African Americans and only nine to Latinos. 

For refinance loans, Huntington in the Cleveland MSA in 2014 made 680 loans to whites and only 58 to African Americans and only 14 to Latinos. Its denial rate for Latinos was 80%, versus only 54% for whites; Huntington's denial rate for African Americans was 72%.

For home improvement loans, Huntington in the Cleveland MSA in 2014 made 88 loans to whites and only NINE to African Americans and only one to Latinos. Its denial rate for Latinos was 96.4%, versus only 72.8% for whites; its denial rate for whites was fully 94%.

    We will have more comments, but for now the comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.

March 14, 2016

Good news / work in Kansas City: "Redlining complaints against First Federal Bank of Kansas City have led to a settlement aimed at creating $2.5 million worth of home loans in majority African-American neighborhoods. The U.S. Department of Housing and Urban Development mediated the settlement, which originated from complaints by the Concerned Clergy Coalition of Kansas City and the Historic East Neighborhoods Coalition of Kansas City."

  Inner City Press has protested BNC Bancorp and its proposed expansion for some time, based on lending disparities and lack of transparency. The Federal Reserve, while purporting to be transparent until its Rules on Ex Parte Communication, on March 11 provided Inner City Press with another terse memo that disclosed... nothing. Here it is:

On March 2, 2016, staff of the Federal Reserve System met with executives of BNC Bancorp (“BNC”), High Point, North Carolina at the Federal Reserve Bank of Richmond (“Reserve Bank”) to discuss financial, managerial, and supervisory related matters that the Board would need to consider in its review of BNC’s proposal to acquire Southcoast Financial Corporation (“Southcoast”), and its subsidiary bank, Southcoast Community Bank, both of Mount Pleasant, South Carolina, pursuant to section 3(a)(5) of the Bank Holding Company Act of 1956.

 Participants of the in-person meeting consisted of the following: Richard Callicutt (Chief Executive Officer and President) and David Spencer (Chief Financial Officer) of BNC, and Keith Larkin (Assistant Vice President of Supervision, Regulation and Credit), Paul Frey (Managing Examiner of Supervision, Regulation and Credit), Adam Drimer (Assistant Vice President in Applications), Richard Gilbert (Vice President of Supervision, Regulation and Credit) and Wayne Cox (Banking Applications Manager) of the Reserve Bank. Stuart C. Stock, Esq. (counsel for BNC) participated via teleconference. The following staff of the Board participated via teleconference: Patrick Grant of the Board’s Division of Banking Supervision and Regulation; and Victoria Szybillo and Amber Hay of the Board’s Legal Division.
 At the beginning of the meeting, staff of the Board’s Legal Division discussed the Board’s rules on Ex Parte communications that would govern any discussions related to BNC’s proposal to acquire Southcoast.
Discussion: The meeting was scheduled as a follow-up item to the Reserve Bank’s inspection of BNC and its subsidiary bank, Bank of North Carolina (“Bank”), Thomasville, North Carolina. The meeting centered on topics that would be considered by the Board in its review of an application under the financial, managerial, and supervisory factors of section 3 of the BHC Act. During the meeting, BNC’s executives shared information regarding (i) BNC’s plans for handling the integration of acquired entities into BNC’s banking organization, (ii) the Bank’s and BNC’s capital levels, and (iii) the Bank’s and BNC’s future plans
 Due to the receipt of a public comment alleging that BNC and Southcoast have engaged in discriminatory lending practices in certain metropolitan statistical areas, the Board’s rules on Ex Parte communications precluded discussion with BNC concerning the convenience and needs factor under section 3 of the BHC Act. Staff of the Board’s Legal Division remained throughout the meeting to ensure compliance with the Board’s rules on Ex Parte communications.March 7, 2016

Federal Reserve Gives ICP Memo of BNC Meeting, from Jan 28, Faux Ex Parte

By Matthew R. Lee

NEW YORK, March 1 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example.

  A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, after that, High Point Bank & Trust.

 On March 1 the Federal Reserve e-mailed Inner City Press a memo about a meeting it had with BNC Bank's highest executives, under the Fed's rules on Ex Parte contacts, avoiding the fair lending and Community Reinvestment Act issues which Inner City Press has raised. We are publishing the Federal Reserve memo online here.

  But as Inner City Press immediately replied, including to the Fed's Office of the Secretary, why did the Fed wait until March 1 to send a memo of a January 28, 2016 meeting -- more than a month? Does that comply with any meaningful rule on Ex Parte communications? We'll have more on this.

  There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. But after Fair Finance Watch protested the deal, and the Fed told BNC to send it a copy of the bank's response, the response was provided six days later with with the entirety of the Community Reinvestment Act response withheld. See here.

Inner City Press has immediately filed a Freedom of Information Act request, and a second comment with the Fed.

February 29, 2016

On First Niagara, Key Says It'll Address Branches Later, Withholds, ICP FOIAs

By Matthew R. Lee

NEW YORK, February 23 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the upper bulge like KeyCorp, seeking to buy First Niagara and close a lot of branches.

 In a submission to the Federal Reserve dated February 12 but only mailed to Inner City Press on February 20, Key answers questions about branch closings by saying "Additional information will be provided supplementally." Key withholds a Community Reinvestment Act and other answers. See here.

 Inner City Press on February 23 submitted a FOIA request:

This is a FOIA request for the entirety of the February 12, 2016 submission in connection with the Application by Application by KeyCorp to acquire First Niagara Financial Group of which a heavily redacted copy was received by Inner City Press on February 22-23, as a timely commenter, by Goldman Sachs. (The cover letter to ICP says February 12, but the USPS Express envelope says Feb 20, notice received Feb 22, picked up Feb 23.)

   Key's answer has many exhibits withheld -- all of which we are hereby requesting under FOIA. Simply as examples:  Page 1 referes to Confidential Exhibit 1 and 2(a); Page 2 refers to Confidential Exhibits 2(b), 3, 4 and 5; in the Community Reinvestment Acti section, “Confidential” Exhibit 10 is withheld. We also note that the Fed still owes ICP a FOIA response on this application, and that Key's answer on branch closings is 'Additional information will be provided supplementally.' The comment period must be extended; we request this information in advance."

February 22, 2016

As Regions Bank CRA Cut, ICP Protests Republic Bank, Key - First Niagara

By Matthew R. Lee

NEW YORK, February 17 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - through those in the upper bulge like KeyCorp, seeking to buy First Niagara and close a lot of branches, down to Kentucky-based Republic Bank, back in the tax loan business including in New York City.

  One development pointing in the other direction is the Community Reinvestment Act downgrade of Regions Bank. Inner City Press has previously commented to the regulators on disparities in Regions' record, while noting that the bank has timely provided its Home Mortgage Disclosure Act Loan Application Register data.

  As simply one example, in the Jackson, Mississippi MSA in 2014, Regions Bank denied the applications for convention home purchase loans of African Americans 3.21 times more frequently than whites.

Now, no new mergers. Shouldn't this apply to some other banks as well?

February 15, 2016

After ICP's Protest of NYCB - Astoria Bank, Fed Asks Qs Due Feb 26

By Matthew R. Lee

NEW YORK, February 13 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 After Inner City Press / Fair Finance Watch filed a timely protest, the Federal Reserve on January 8 asked NYCB 14 questions. Inner City Press has put the Additional Information letter online here, including a request to know which branches NYCB would close, how it would try to sell of Astoria's loans, etc. Inner City Press said, there should now be more fair lending questions, and the comment period should be extended.

 On January 21, the Federal Reserve has informed Inner City Press / Fair Finance Watch that the Fed is re-opening and extending its comment period on NYCB - Astoria until February 16.

 But on February 12, the Federal Reserve asked NYCB a series of questions, due February 26, telling NYCB to send a copy of its response then to Inner City Press. How can the comment period close ten days before that? On February 13 Inner City Press commented to the Fed in New York and Washington:

"This is a second timely comment opposing and requesting a further extension of the FRB's public comment period on the Application by New York Community Bancorp (“NYCB) to acquire 100% of the voting shares of Astoria Financial Corp and indirectly acquire Astoria Bank.

ICP commented on this application on January 6. On February 12, the Fed asked NYCB questions including

“Please describe in further detail NYCB’s business model with respect to mortgage loans secured by one-to-four family residential properties. In your description, discuss the channels NYCB uses to originate or acquire such loans, and describe the key elements of NYCB’s policies, procedures, and practices to ensure compliance with fair lending and consumer protection laws as they relate to such lending. Where such policies, procedures, and practices differ by channel, explain the key differences. Your response should discuss NYCB’s third party vendor management program, to the extent NYCB relies on third parties to originate or acquire such loans.”

ICP has commented on those issues and wishes to comment on NYCB's response, due on February 26. The comment period should be extended.

Furthermore on February 2 NYCB in an investors' presentation (here) bragged about how many of Astoria's branches are within one mile of an NYCB branch (52%). Clearly, the issue of which branches NYCB should be address before the comment period closed, including at the public meeting ICP is requesting.

Note for the record how NYCB's (and Astoria's) branching pattern disproportionately excludes Upper Manhattan and especially The Bronx, the most predominantly minority and the lowest income community in New York State. This map is incorporated into the record by reference. Action should be taken on this pattern, including on this merger application (which should be denied.)"

February 8, 2016

Huntington's CEO has already spoken of “significant” branch closings if allowed to acquire FirstMerit -- more than 100? We'll have more on this.

February 1, 2016

  Inner City Press waited and waited but has now filed this:

Dear Chair Yellen, Secretary deV. Frierson and others in the FRS:
This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application by KeyCorp to Acquire First Niagara.
First, the comment period must be extended. All the way back on December 16, 2015, Inner City Press submitted a FOIA request for documents related to this proposal. It was assigned number F-2016-00073 by the Federal Reserve.
But on January 20 the Manager of the FRB's Freedom of Information Office wrote to Inner City Press that “pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until February 2, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.” Full text below, for the record.
The comment period is set to expire on January 31 -- six weeks after ICP's FOIA request, but days BEFORE the Fed's response. This request to extend the comment period is being submitted on January 30 and must in context be granted.
In the interim, in support of ICP's request for public hearings, consider that in 2014, the most recent year for which Home Mortgage Disclosure Act data is available, Key Bank National Association in the Buffalo Metropolitan Statistical Area made 258 home purchase loans to whites but only seven to African Americans, while denying the applications of African Americans 2.56 times more frequently than those of whites. For refinance loans, Key's denial rate disparity for African Americans was 2.28.

In the New York City MSA, Key Bank National Association made 21 home purchase loans to whites and only ONE to an African American applicant. Key made 43 refinance loans to whites and NONE to African Americans. These disparities are not acceptable.

Nor is the lack of transparency, as the comment period is set to close, on branch closures or “consolidations.” The comment period must be extended and public hearings held.

Here for the record is the Fed's January 20 letter to ICP:

“Re: Freedom of Information Act Request No. F-2016-00073

Dear Mr. Lee,

On December 17, 2015, the Board of Governors (“Board”) received your electronic message dated December 16, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entire[t]y of the “Application by KeyCorp to acquire First Niagara Financial Group,” and for all records reflecting [Federal Reserve System] communications with KeyCorp or First Niagara for the past twelve (12) months. In an e-mail communication on December 17, 2015, you were provided with the public portion of the application by KeyCorp to acquire First Niagara Financial Group, Inc.

Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until February 2, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.

If a determination can be made before February 2, 2016, we will respond to you promptly.”

But on the eve of the closing of the comment period, nothing has been received. The comment period must be extended; on the current record, public hearings should be held and the application denied.

January 25, 2016

After ICP's Protest of NYCB - Astoria Bank, Fed Extends to Feb 16

By Matthew R. Lee

NEW YORK, January 21 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 After Inner City Press / Fair Finance Watch filed a timely protest, the Federal Reserve On January 8 asked NYCB 14 questions. Inner City Press has put the Additional Information letter online here, including a request to know which branches NYCB would close, how it would try to sell of Astoria's loans, etc. Inner City Press said, there should now be more fair lending questions, and the comment period should be extended.

 Now on January 21, the Federal Reserve has informed Inner City Press / Fair Finance Watch that the Fed is re-opening and extending its comment period on NYCB - Astoria until Tuesday, February 16. We'll have more on this.

January 18, 2016

After ICP's Protest of NYCB - Astoria Bank, FDIC Denies Expedited Processing

By Matthew R. Lee

NEW YORK, January 15 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 After Inner City Press / Fair Finance Watch filed a timely protest, the Federal Reserve On January 8 asked NYCB 14 questions. Inner City Press has put the Additional Information letter online here, including a request to know which branches NYCB would close, how it would try to sell of Astoria's loans, etc. There should now be more fair lending questions.

Now on January 15, after Inner City Press / Fair Finance Watch also filed comments with the FDIC, that agency has written to NYCB's Joseph Ficalora asking for a response, and stating that

"We are writing in reference to the enclosed e-mail that we received from Executive Director Matthew Lee, of Inner City Press/Fair Finance Watch concerning your institution's application to acquire Astoria Bank. We reviewed the subject e-mail in accordance with the guidelines of 12 C.F.R. Section 303, and deemed it a Community Reinvestment Act (CRA) protest for the purpose of your application. The subject e-mail raises issues regarding your institution's record of lending to African American and Latino persons. The anticipated time and research required to investigate these issues has contributed to the removal of your institution's application from expedited processing."

 NYCB's home mortgage lending is extremely disparate; its multi-family lending, some to slumlords, is no defense.

January 11, 2016

Protest of NYCB - Astoria Merger to Fed, Which Plays FOIA Games for Goldman

By Matthew R. Lee

NEW YORK, January 7 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 NYCB's home mortgage lending is extremely disparate; its multi-family lending, some to slumlords, is no defense. Inner City Press / Fair Finance Watch has filed this with the Fed:

  “On behalf of Inner City Press / Fair Finance Watch, this is a timely first comment opposing and requesting a complete copy of an and an extension of the FRB's public comment period on the Application by New York Community Bancorp ('NYCB') to acquire 100% of the voting shares of Astoria Financial Corp and indirectly acquire Astoria Bank.

  The applicant NYCB in the New York City MSA in 2014 made 109 home purchase loans to whites -- and only THREE to African Americans. For refinance loans, NYBC in the the NYC MSA in 2014 made 27 loans to whites and only ONE to an African American.

  While NYCB may attempt to minimize these severe disparities by pointing to multi-family loans, there are significant complaints about that lending; note also this account of the CFPB which lists the ostensibly mostly multi-family NYCB with more complaints against it than banks that are both larger and more “retail."

  In the Nassau Suffolk (Long Island) MSA in 2014 NYCB made 107 home purchase loans to whites -- and only ONE to an African American, while denying African Americans 4.7 times more frequently than whites. For refinance loans, NYBC in the the Long Island MSA in 2014 made 52 loans to whites and only three to African Americans and only TWO to Latinos, while denying Latinos 2.32 times more frequently than whites.
 
  In the Cleveland, Ohio MSA (where NYCB bought Ohio Savings), NYCB in 2014 made 17 refinance loans to whites in 2014 and only one to an African American, while denying African Americans, while denying African Americans three times more frequently than whites. Similar disparities exist for NYCB in New Jersey, Arizona and Florida -- ICP is requesting public hearings on this ill-conceived proposed merger.
 
  As the Federal Reserve surely knows, this proposal was driving by activist investor pressure on Astoria (by Basswood Capital Management LLC); both institutions' securities fell significantly in price when it was announced. The price to consumers would include the closure of branches, disclosure of which should be demanded during the extended comment period and at the requested public hearing(s).

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

 Meanwhile Goldman Sachs is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period. But now the Fed has given itself an extension to respond to Inner City Press' December 3 FOIA request for Goldman Sachs' withheld December 2 submission, writing this to Inner City Press:

"Re: Freedom of Information Act Request No. F-2016-0056
 
Dear Mr. Lee,
 
On December 3, 2015, the Board of Governors (“Board”) received your electronic message dated December 2, 2015, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entirety of the December 2 submission in connection with the “Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank.”
 
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until January 19, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before January 19, 2016, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law."

January 4, 2016

Inner City Press / Fair Finance Watch has commented, on Republic Bank, quoting the WSJ: "“Washington-based Fenway Summer LLC, in January reached a deal with Louisville, Ky.-based Republic Bancorp Inc. to offer a credit card that is being pitched as a more affordable alternative to payday loans, which are short-term loans that often charge triple-digit interest rates. The Build Card, which is being rolled out later this year, will charge an annualized interest rate of 25% to 30% and will cap borrowers’ initial credit lines at $500.”

Thirty percent interest? In New York, that's called usury.

But Republic has told the Federal Reserve (and FDIC) that it's just "adequately priced for risk." We'll have more on this.

December 28, 2015

Federal Reserve Asked BNC for CRA Info, Which Withholds It, Ozarks Inquiry

By Matthew R. Lee

NEW YORK, December 21 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example.

  A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, prospectively, High Point Bank & Trust.

  There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. But after Fair Finance Watch protested the deal, and the Fed told BNC to send it a copy of the bank's response, the response was provided six days later with with the entirety of the Community Reinvestment Act response withheld. See here.

Inner City Press has immediately filed a Freedom of Information Act request, and a second comment with the Fed.

 Separately, Inner City Press / Fair Finance Watch has filed the second of two comments to the St Louis Fed:

"This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Bank of the Ozarks to acquire Community & Southern.

This proposed transaction raises troubling Community Reinvestment Act issues. Bank of the Ozarks has a disparate lending record, including in the Atlanta MSA where it proposes to acquire C&S (which itself just acquired branches from CertusBank while leaving behind others to be closed, evading any review).

In the Atlanta MSA in 2014 for home purchase loans, Bank of the Ozarks made 25 such loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

For refinance loans, it made 17 loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

There is more to be said, but this is outrageous, and in the MSA in which Bank of the Ozark proposes to make this acquisition.

In the Little Rock MSA in 2014 for home purchase loans, Bank of the Ozarks made 332 such loans to whites and only 13 to African Americans -- it denied the applications of African Americans 4.3 times more frequently than those of whites.

This is outrageous, and systematic. Bank of the Ozarks has also had consumer compliance issues."

On BNC, Fair Finance Watch has raised to the Federal Reserve:

In the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites.

  Southcoast in the Charleston MSA in 2014 for conventional home purchase loans made 136 such loans to whites and NONE to African Americans. For refinance loans, Southcase made 35 loans to whites and only TWO to African Americans. To combine these two banks would make them worse.

  In the Greenville MSA in 2013 for home purchase loans, BNC made 117 such loans to whites and only SIX to African Americans, and only seven to Latinos.  For refinance loans, it made 31 loans to whites and only one to an African Americans and none to Latinos.

  BNC admits, as it must, that it is below-market in lending to African Americans, but paradoxically tries to use that the fact that it is subject to a compliance order as its defense to the Fed.

 To Fair Finance Watch, too. FFW asked to see, in writing, what are BNC's CRA plans going forward. BNC replied that it is "unable to share this with you. It is an internal document that is only shared with our Board of Directors and the FDIC (under the Order)."  FFW has requested a copy of the High Point application.

  Now the Federal Reserve has asked BNC for, among other things, for information about its Community Reinvestment Act compliance, and consumer compliance more generally. Inner City Press is putting the Fed's December 2 Additional Information letter online, here.

December 21, 2015

Inner City Press / Fair Finance Watch has filed the second of two comments to the St Louis Fed:

"This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Bank of the Ozarks to acquire Community & Southern.

This proposed transaction raises troubling Community Reinvestment Act issues. Bank of the Ozarks has a disparate lending record, including in the Atlanta MSA where it proposes to acquire C&S (which itself just acquired branches from CertusBank while leaving behind others to be closed, evading any review).

In the Atlanta MSA in 2014 for home purchase loans, Bank of the Ozarks made 25 such loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

For refinance loans, it made 17 loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

There is more to be said, but this is outrageous, and in the MSA in which Bank of the Ozark proposes to make this acquisition.

In the Little Rock MSA in 2014 for home purchase loans, Bank of the Ozarks made 332 such loans to whites and only 13 to African Americans -- it denied the applications of African Americans 4.3 times more frequently than those of whites.

This is outrageous, and systematic. Bank of the Ozarks has also had consumer compliance issues."

December 14, 2015

Inner City Press / Fair Finance Watch has filed a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Republic Bancorp, Inc. to acquire 100 percent of the voting shares of Cornerstone Bancorp

These transaction raises troubling Community Reinvestment Act issues. Republic has a disparate lending record and is growing worse. Significantly, after its rogue-like tax refund anticipation lending, now Republic is back with subprime cards. This should be reviewed, before this or any other acquisitions (see, e.g.http://www.bizjournals.com/tampabay/blog/morning-edition/2015/10/exclusive-republic-bancorp-eyes-1-operation-in.html) and ICP is requesting public evidentiary hearings on this. See, e.g., WSJ of Feb 18, 2015:

Washington-based Fenway Summer LLC, in January reached a deal with Louisville, Ky.-based Republic Bancorp Inc. to offer a credit card that is being pitched as a more affordable alternative to payday loans, which are short-term loans that often charge triple-digit interest rates. The Build Card, which is being rolled out later this year, will charge an annualized interest rate of 25% to 30% and will cap borrowers’ initial credit lines at $500.”

Thirty percent interest? In New York, that's called usury.

In the Louisville MSA in 2014 for home purchase loans, Republic made 651 such loans to whites and only 22 to African Americans, and only13 to Latinos. It denied the applications of African Americans 2.15 times more frequently than those of whites. For refinance loans, it made 215 loans to whites and only 10 to African Americans; for home improvement loans it made 129 loans to whites and only ONE to an African American, while denying 7 of 10 applications received from African Americans.

In Nashville in 2014, Republic made 13 home purchase loans to whites, NONE to African Americans or Latinos.

December 7, 2015

Inner City Press / Fair Finance Watch has commented to the Fed, "On October 22, Inner City Press / Fair Finance Watch belatedly received from the Fed SOME of the documents about this proposal as early as it could, on September 2. Dated December 3, and provided to Inner City Press on December 4, Governor Powell belatedly ruled on ICP's FOIA appeal - and while continuing to wrongfully (for ICP's perspective) withhold much information, acknowledged that basic information about what was to be acquired for wrongfully withheld. Accordingly, the comment period must be re-opened. We submit this at the earliest possible time and await confirmation that the comment period has been re-opened."

November 30, 2015

Inner City Press / Fair Finance Watch has commented to the Federal Reserve:

...The irregularities in this proceeding, including under FOIA, have been noted for example in http://www.americanbanker.com/news/law-regulation/fed-under-the-microscope-in-goldmans-deal-for-ge-deposits-1077968-1.html -- for which the Federal Reserve declined any comment. For the record:

"Fed Under the Microscope in Goldman's Deal for GE Deposits

November 23, 2015

WASHINGTON — The criticism by consumer advocates of Goldman Sachs' acquisition of GE Capital's online deposits has now given way to questions over how the Federal Reserve Board has handled the application... "They're kind of preapproving something before the public can learn anything about it," said Matthew Lee, founder of Inner City Press and Fair Finance Watch. "This is not the way it's supposed to be. It's just wrong. Wrong, wrong, wrong."

...The Fed declined to comment on the record and Goldman Sachs declined to comment beyond what it has said in public materials... The National Community Action Foundation — a Washington-based coalition of community groups — said in a Sept. 28 letter to the New York Fed that Goldman Sachs has "been a leader in helping develop effective and innovative programs to better our fight against poverty." The Carver Federal Savings Bank, which describes itself as "one of the largest African- and Caribbean-American managed banks in the United States," said in its Sept. 30 letter that it supports Goldman's application based on its investment in Carver and support in construction investment in its service area in Brooklyn.”

Note: ICP did not receive either of those submissions, nor it appears other parts of the record. These should be provided, and the comment period must be extended.

The rogue-like culture of Goldman Sachs has been further on display since ICP's last comment, see, e.g., https://www.sec.gov/news/pressrelease/2015-267.html

Washington D.C., Nov. 25, 2015 — The Securities and Exchange Commission today announced insider trading charges against a former Goldman Sachs employee accused of stealing nonpublic information in the firm’s e-mail system so he could trade illegally in advance of client mergers and make more than $450,000 in illicit profits.

November 23, 2015

Goldman Sachs Uses Small Bank Relief For Federal Reserve Pre-Review on GE

By Matthew R. Lee

NEW YORK, November 19 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example.

Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act show, is inappropriately bent on helping, including by closing its comment period.

 On November 19, Goldman Sachs submitted a purported reply to the Federal Reserve, stating among other things that "Certain Comment Letters express concern with the contact between GS Bank and Board staff prior to GS Bank submitting the Application. GS Bank respectfully submits that the contact was both appropriate and ordinary in the context of the Board’s own guidance on pre-filing communications.11 Additionally, the allegations of contact are not germane to the scope of the statutory factors set forth for Board consideration under the Bank Merger Act."

  The 2012 Fed letter Goldman Sachs cites was meant to benefit smaller banks - and did not envision Additional Information letters before the public was even notified of the proposal. The misuse of small bank "regulatory relief" by the likes of Goldman Sachs casts new light of legislative riders being considered for the US spending bill due December 11.

 Going forward, KeyCorp is trying to buy First Niagara, and NY Community Bank wants to buy Astoria; there will be opposition.

November 16, 2015

 There are yet more adverse developments regarding Goldman Sachs:

Goldman Sachs faces investigation over auction of securities,” November 3, 2015, Bloomberg and Chicago Tribune: http://www.chicagotribune.com/news/sns-wp-blm-goldman-e45af72c-8242-11e5-8bd2-680fff868306-20151103-story.html

Goldman Sachs added the offering and auction of securities, as well as 'when-issued trading,' to a list of activities that regulators and other government bodies are investigating.The bank made the disclosure Tuesday in a quarterly regulatory filing, without specifying which agencies or regulators are probing the items on the list.”

See also, Nov 3, 2015, “Goldman Sachs settles CDO class action,”http://www.lexology.com/library/detail.aspx?g=d1e75f3f-239c-42d9-8eea-8f68c8a41152

On November 3, 2015, Goldman Sachs Group Inc. agreed to settle a lawsuit brought by a class of investors over Goldman’s sale of two collateralized debt obligations.”

 And the Fed has STILL not ruled on Inner City Press' October 24 FOIA appeal...

November 9, 2015

Key Bank - First Niagara Would Trigger Branch Closing, Lending Disparities, FFW Says

By Matthew R. Lee

NEW YORK, November 3 -- The lack of seriousness in US bank regulation continues, even as new mergers portending significant branch closing impacts are announced.

 Inner City Press / Fair Finance Watch, which has previously expressed its concerns about both KeyCorp and First Niagara, sees no public benefit in the proposed merger of the two for $4.1 billion, announced on October 30.

  First Niagara already closed more than a dozen branches after it acquired them from HSBC (here were some of Fair Finance Watch' concerns when it grabbed New Alliance).  KeyCorp would closed yet more branches (here's some of Fair Finance Watch's analysis of KeyCorp's lending).

  In 2014, the most recent year for which Home Mortgage Disclosure Act data is available, Key Bank National Association in the Buffalo Metropolitan Statistical Area made 258 home purchase loans to whites but only seven to African Americans, while denying the applications of African Americans 2.56 times more frequently than those of whites. For refinance loans, Key's denial rate disparity for African Americans was 2.28.

 In the New York City MSA, Key Bank National Association made 21 home purchase loans to whites and only ONE to an African American applicant. Key made 43 refinance loans to whites and NONE to African Americans. These disparities are not acceptable.

 In other upstate / Western New York work, after Fair Finance Watch advocacy, Community Bank System Inc is expanding its Community Reinvestment Act assessment area, here.

  As to Goldman Sachs, Inner City Press / Fair Finance Watch filed a supplement comment on October 30 including Goldman's new and troubling settlement with the NYS Department of Financial Services regarding a former Federal Reserve employee impermissibly using Fed information for them. Public hearings and an extension of the comment period are needed.

 As detailed below, the Federal Reserve's General Counsel Scott Alvarez solicitiously agreed to weekend phone calls with Goldman's outside council Rodgin "Rodge" Cohen at Sullivan & Cromwell, and the Fed submitted its "Additional Information" request to Goldman in July, a full month before any application was submitted or the deal publicly announced.

  Thus there was no way for the public to be involved in the Fed's review, which is required by the Bank Merger Act (and the Administrative Procedures Act). The Fed began trying to essentially pre-approve some applications with a 2012 letter to banks, here - but it said no major issues could be addressed this way, and the interchanged would be subject to FOIA.

  In this case, though, where Inner City Press submitted its FOIA request as soon as it became aware of Goldman's GE proposal and application, none of the information would have been available until after the comment period was set to close on September. It has been extended to October 30, due to requests from ICP and other NCRC members, but the Fed is still withholding portions of its communication with Goldman in the face of the FOIA Appeal Inner City Press immediately filed. (ICP has also submitted a timely additional comment on these issues.)

  Inner City Press has previously litigated FOIA requests with the Fed and won, at least in part, for example in obtaining subprime lending information the Fed wanted to withhold, here.  But this should not be necessary in order for the public to have this basic information, during the comment period. Will members of Congress and other chime in? Watch this site.

  This process began by overbroad withholding of basic parts of Goldman's application, click here to view, which Goldman in an October 14 submission to the Fed, here, says has been cured (it has not been).

  Now the Federal Reserve has belatedly responded to Inner City Press / Fair Finance Watch's September 2 FOIA request, with some of its internal documents, many heavily redacted. FOIA letter here; FOIA documents released to ICP here


November 2, 2015

ICP Comments on Goldman Sachs, Will on Key & NY Community Bank

By Matthew R. Lee

NEW YORK, October 30 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example.

Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act show, is inappropriately bent on helping, including by closing its comment period.  At the other end of the spectrum, after Fair Finance Watch advocacy, Community Bank System Inc is expanding its Community Reinvestment Act assessment area, here.

 In between, and going forward, KeyCorp is trying to buy First Niagara in the same area as CBSI, and NY Community Bank wants to buy Astoria; there will be opposition.

  As to Goldman Sachs, Inner City Press / Fair Finance Watch filed a supplement comment on October 30 including Goldman's new and troubling settlement with the NYS Department of Financial Services regarding a former Federal Reserve employee impermissibly using Fed information for them. Public hearings and an extension of the comment period are needed.

 As detailed below, the Federal Reserve's General Counsel Scott Alvarez solicitiously agreed to weekend phone calls with Goldman's outside council Rodgin "Rodge" Cohen at Sullivan & Cromwell, and the Fed submitted its "Additional Information" request to Goldman in July, a full month before any application was submitted or the deal publicly announced.

  Thus there was no way for the public to be involved in the Fed's review, which is required by the Bank Merger Act (and the Administrative Procedures Act). The Fed began trying to essentially pre-approve some applications with a 2012 letter to banks, here - but it said no major issues could be addressed this way, and the interchanged would be subject to FOIA.

  In this case, though, where Inner City Press submitted its FOIA request as soon as it became aware of Goldman's GE proposal and application, none of the information would have been available until after the comment period was set to close on September. It has been extended to October 30, due to requests from ICP and other NCRC members, but the Fed is still withholding portions of its communication with Goldman in the face of the FOIA Appeal Inner City Press immediately filed. (ICP has also submitted a timely additional comment on these issues.)

  Inner City Press has previously litigated FOIA requests with the Fed and won, at least in part, for example in obtaining subprime lending information the Fed wanted to withhold, here.  But this should not be necessary in order for the public to have this basic information, during the comment period. Will members of Congress and other chime in? Watch this site.

October 26, 2015

FOIA Response to ICP Shows Goldman Met Fed in May on GE, Pre-Reviewed

By Matthew R. Lee, Exclusive

NEW YORK, October 23 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent, example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents just released to Inner City Press under the Freedom of Information Act show, is inappropriately bent on helping.

  It began by overbroad withholding of basic parts of Goldman's application, click here to view, which Goldman in an October 14 submission to the Fed, here, says has been cured (it has not been).

  Now the Federal Reserve has belatedly responded to Inner City Press / Fair Finance Watch's September 2 FOIA request, with some of its internal documents, many heavily redacted. FOIA letter here; FOIA documents released to ICP here, and embedded below.

 While Inner City Press is appealing, even as released the documents show that Goldman Sachs through its law firm Sullivan & Cromwell reached out to Fed General Counsel Scott Alvarez in May 2015 about the transaction, and was largely able to vet it with the Fed's staff by July, even receiving an "additional information" request before any application was filed.

  Since the public cannot comment or ask questions before a transaction is announced, this "pre-review" by the Fed in essence cuts public review and transparency out of the process. The Fed's rules against ex-parte communications can't be triggered before there is an application. But should Fed review be held, and apparently completed, before there is any public notice?

  The documents Inner City Press has obtained under FOIA show that on May 14 and May 18, Goldman Sachs and its outside counsel Rodgin "Rodge" Cohen of Sullivan & Cromwell told the Fed and its General Counsel Scott Alvarez of their plans for GE Capital Bank.

 On May 28, the Fed met with Goldman which presented a "deck" of information about "Project Apple," much of it still redacted as provided to Inner City Press (which is appealing under FOIA).

  As precedents, Goldman Sachs cited Capital One - ING and RBC - City National (see below).

 This was followed by a May 29, 2015 letter from "Rodge" to the Fed's Scott Alvarez, asking for confidential treatment of everything including the letter, and including from any Governmental inquiry. (Page 28 of FOIA response to ICP.) A similar letter was submitted by Cohen on June 16, attaching a letter the Fed has redacted in full from Goldman Sachs' Esta E. Stecher.

  Scott Alvarez took the conversation onto the telephone, not subject to FOIA, on June 16. His accompanying e-mails, as redacted, only say "Thanks! Scott."

 On June 26, the Fed' Alison Thro wrote that "Rodgin Cohen was in today briefly to discuss, among other things, GS’s plans to acquire the deposits of GE’s ILC. He asked what the next steps might be." What were those "other things"?

 On July 13, the Fed sent Cohen a "request for additional information concerning the proposal by GS Bank to purchase certain assets and assume the deposit liabilities of GE Capital Bank."

  A request for additional information is usually what the Fed sends a bank or bank holding company after it has submitted an application; a commenter would get a copy. Here, the Fed was pre-reviewing Goldman Sachs' proposal, entirely outside of any public scrutiny. (The later public questions are as if by rote: the fix was already in.)

  On Friday, July 17 the Fed's Thomas Baxter wrote to Scott Alvarez that the transaction would be public announced the next Monday -- AFTER the Fed's "additional information request" -- based on a long voicemail from Harvey Schwartz of Goldman Sachs. (Page 59 of FOIA response to ICP). Alvarez was on the phone with "Esta of GA and Rodge Cohen."

  Alvarez said he was willing to talk with Goldman Sachs on Sunday, July 19. Cohen had written to Alvarez:

"In view of the various communications on Friday and the intended announcement of the deposit assumption transaction on Monday, GS believes that it must decide over this weekend whether it can proceed as scheduled and, as a matter of fairness and transparency, what it can tell GE. As we have discussed, this transaction appears to be a centerpiece of the GE restructuring. We would therefore most appreciate the opportunity to have a conference call as soon as possible over the weekend to obtain as much clarity as possible as to timing and other relevant matters.
We apologize for intruding into your weekend and thank you your consideration of this request." (Page 65 of FOIA response.)

   The reference to "fairness and transparency" was apparently without irony. But Goldman stood the Fed up.

  But this announcement was postponed. Alvarez wrote on July 20 that "Rodge just sent a note that GS wants to postpone signing the deal with GE and the announcement for 2 to 3 weeks." More review continued, outside of public scrutiny. Alvarez made himself available on Sunday, July 26. But to no avail.

 The deal was publicly announced on August 13 and Goldman Sachs on August 18 submitted the apparently pre-approved application. Inner City Press / Fair Finance Watch submitted a comment and FOIA request (delayed until now); the end of the FOIA response has a redacted reaction to the "public comment." Now others have commented and a campaign has begun. But has the Fed already made up its mind?

On Goldman Sachs, Federal Reserve's Initial FOIA Response to Inner City Press on GE Capital Bank by Matthew Russell Lee

October 19, 2015

On Goldman, Federal Reserve Ignores Oct 16 FOIA Deadline, Collusion Like CIT?

By Matthew R. Lee

NEW YORK, October 17 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with CIT and OneWest a major, and Goldman Sachs the most recent, example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by overbroad withholding of basic parts of Goldman's application, click here to view, which Goldman in an October 14 submission to the Fed, here, says has been cured (it has not been).

  Inner City Press still has a pending Freedom of Information Act request; Fair Finance Watch and others, including NCRC, asked the Fed to extend its comment period, which has now been done, until October 30, with the Fed's FOIA response to Inner City Press due on October 16. But as of October 17, no response from the Fed, despite this letter:

"Re:       Freedom of Information Act Request No. F-2015-0336
 
Dear Mr. Lee,
 
On September 2, 2015, the Board of Governors (“Board”) received your electronic message dated September 2, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entirely of the “Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank,” and for all records reflecting FRS communications with Goldman Sachs for the past twelve (12) months. On September 3 and September 9, the Board provided you with the public portions of the application.
 
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until October 16, 2015, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before October 16, 2015, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law.
 
Very truly yours,
 
/signed/
 
Jeanne M. McLaughlin
Manager, Freedom of Information Office"

 But even by October 16, no response from the Fed. Only this from Goldman Sachs, only snail-mailed by its counsel:

Goldman Sachs' 2d Reply to Inner City Press, As Fed Withholds FOIA Documents by Matthew Russell Lee

October 12, 2015

Federal Reserve Re-opens Comment on Goldman Sachs-GE to Oct 30

By Matthew R. Lee

NEW YORK, October 5 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by withholding basic parts of Goldman's application, click here to view.

  Inner City Press still has a pending Freedom of Information Act request; Fair Finance Watch and others, including NCRC, asked the Fed to extend its comment period, responded to today:

"The Federal Reserve Board on Monday announced that the public comment period has been extended through October 30, 2015, on the application by Goldman Sachs Bank USA, New York, New York, to assume certain liabilities and acquire certain assets of GE Capital Bank, Holladay, Utah, under section 18(c) of the Federal Deposit Insurance Act... The original comment period, which closed on September 19, 2015, is being extended to allow interested persons more time to review the proposal and to provide comments... Comments regarding this application must be received at the Federal Reserve Bank of New York (Attention: Bank Applications Officer, 33 Liberty Street, New York, New York 10045; comments.applications@ny.frb.org) or the Office of the Secretary of the Board (20th Street and Constitution Avenue, NW, Washington, D.C. 20551) on or before October 30, 2015."

  Just last week, the Fed told Inner City Press a comment it submitted on Goldman Sachs, with new Home Mortgage Disclosure Act data, was "untimely" --

"Dear Mr. Matthew Lee, Executive Director Inner City Press/Fair Finance Watch

We acknowledge receipt on September 22, 2015 of your email dated September 22, 2015  ("Comment Letter"), commenting on the application filed by Goldman Sachs Bank USA... The public comment period for this application ended on September 19, 2015. Since your Comment Letter was received after the end of the public comment period, it will not be made a part of the record of this application unless the Board in its sole discretion determines to consider your late comments. However, you previously submitted timely comments that have been made part of the application record that the Board will consider."

October 5, 2015

Fed Won't Answer ICP's Goldman Sachs FOIA Request Until October 16

By Matthew R. Lee

NEW YORK, October 2 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by withholding basic parts of Goldman's application, click here to view.

  Inner City Press still has a pending Freedom of Information Act request; Fair Finance Watch and others, including NCRC, have asked the Fed to extend its comment period, with no response.

September 28, 2015

Financial Inclusion, Now Pitched by IMF, UNsolved in US, SDGs Reviewed

By Matthew Russell Lee

UN GENERAL ASSEMBLY -- A new International Monetary Fund study, just out from embargo today, says that  "financial inclusion is mentioned under several of the United
Nations Sustainable Development Goals (SDGs)" and that "this year’s post-2015 Development Agenda squarely puts financial inclusion as a key objective for United Nations member countries."
 
  So how will real financial inclusion be addressed during the UN General Assembly ministerial week, from on September 28 with Presidents Obama of the US and Buhari of Nigeria, through Peru on September 29 and India on October 1?

  Inner City Press asked the IMF on September 3, and will be asking countries. Of the above named countries, the IMF report ("Financial Inclusion: Can It Meet Multiple Macroeconomic Goals?" by Ratna Sahay, Martin Cihák, Papa N’Diaye, Adolfo Barajas, Srobona Mitra, Annette Kyobe, Yen Nian Mooi, and Seyed Reza Yousefi) states

"Nigeria: The comprehensive Financial Inclusion Strategy in 2012 aims to reduce the exclusion rate from 46 percent of the adult population (in 2010) to 20 percent by 2020. Working across key
stakeholders, the strategy seeks to address five major barriers to financial inclusion: (1) income; (2) physical access; (3) financial literacy; (4) affordability; and (5) eligibility.

"Peru: e-money. The authorities have taken various measures to expand access and usage of financial services. In 2014 the “financial inclusion opportunities map,” an interactive tool, was launched. It promotes an innovative “Peruvian model” based on the 2012 electronic e-money legislation and a new unified mobile payments platform that links various providers of financial services with customers.

"India: the Reserve Bank of India’s long-standing policy on priority sector lending (PSL) requires banks to set aside 40 percent of their assets to priority sectors. Most public sector
banks meet this requirement, but end up with high nonperforming loans and concentrated credit risk.  Recently, the Pradhan
Mantri Jan Dhan Yojana [PMPDY], a financial inclusion initiative, was launched with the goal of opening a bank account for every household."

India's seems like a particularly illuminating approach, including to the US, of which the report states

"The United States: the recently completed Financial Sector
Assessment Program (FSAP) (IMF, 2015d) calls for financial inclusion to feature more prominently on the U.S. policy
agenda. The Global Findex survey ranks the United States 27th out of 147 countries in terms of the percentage of adults with a bank account in a formal financial institution, and a 2013 Federal Deposit Insurance Corporation (FDIC) survey finds that 20 percent of U.S. households are 'underbanked' and 8 percent are 'unbanked.' More work is needed."

We, and NCRC, will have more on this.

September 21, 2015

Goldman Sachs Tells Fed to Ignore Segarra Leak & Settlements, ICP Reply

By Matthew R. Lee

NEW YORK, September 19 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by withholding basic parts of Goldman's application, click here to view.

  Now Goldman Sachs has purported to respond to the comments of Inner City Press / Fair Finance Watch by releasing a small amount of the withheld information, and arguing that what the wider Goldman Sachs does cannot or will no be considered by the Federal Reserve on this Bank Merger Act application by Goldman Sachs Bank. We've put Goldman Sachs' response online, here. It says:

“FFW states that the audio released by examiner Ms. Carmen Segara requires an extension of the comment period and a public hearing... GS Bank believes the issue is outside the scope of the statutory factors for Board consideration under the Bank Merger Act... Goldman Sachs Bank USA ('GS Bank') hereby submits its response to the three comment letters, submitted on September 2, September 3 and September 9, 2015 (the 'Comment Letters'), by the Inner City Press's Fair Finance Watch ('FFW')....

"FFW makes accusations of 'predatory practices' in the 'mortgage field' and 'municipal finance,' and states that there are a number of compliance settlements that must be reviewed in connection with the Application. FFW references several articles related to lawsuits, settlements and other events, all but one of which involve Goldman Sachs but not GS Bank. GS Bank respectfully submits that such comments are not substantiated by specific arguments or facts. GS Bank notes that none of the articles relate to GS Bank itself, and believes these issues are outside the scope of the statutory factors for Board consideration under the Bank Merger Act.”

  Goldman Sachs is arguing that the acts of a parent company cannot be considered when its bank applies to buy ($16 billion) in insured deposits, an absurd argument. FFW has submitted another comment to the Fed, including that

"ICP has received by mail from Goldman Sachs' counsel a purported response which claims that issues ranging from conflict of interest and under-regulation by the FRB (evidenced for example by the audio leaked by whistleblower Carmen Segarra) is not cognizable under the Bank Merger Act - an absurd argument. The FRB would be the decision maker, therefore such issues must be addressed.

 "Goldman Sachs cavalierly states that since it withdrew some of its indefensible requests for confidential treatment of its application, that issues is resolved. It is not - too much is still being withheld. Significantly, Goldman Sachs has offered no explanation of the specious requests for confidential treatment it made, denying commenters access to information during the comment period. As others now argue, the comment period would be extended and hearing held."

  Inner City Press will be covering this wider National (Community Reinvestment Coalition) protest, in which it joins; it has also submitted more comments to the New York State regulator, in a proceeding currently slated to come to a head on September 28, the first day of the UN General Assembly debate.

September 14, 2015

So M&T, noted discriminator, has settled a Fair Housing Act case. But its purported partner Hudson County has not - the merger should not be considered for any approval. Time for a hearing.

On Goldman Sachs - GE Capital, ICP has formally demanded that the Fed provide a FOIA ruling that can be appealed, before the comment period closes, whether on September 19 or later...

September 7, 2015

Goldman Sachs Blacks Out Basic Parts of Application to Buy $16B from GE

By Matthew R. Lee

NEW YORK -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It is withholding basic parts of Goldman's application, click here to view.

 As Inner City Press exposed last month, Royal Bank of Canada jumped the gun and began doing business with City National Bank without any Federal Reserve approval (see Los Angeles Times, here.)

 Now, even as New York regulators says their comment period on Goldman Sachs' GE Capital proposal extends at least through September 28, Goldman has published fine print notices in the New York Post and a newspaper in Utah saying the Federal Reserve will stop listening on September 19.

  Really? After the Fed made Goldman Sachs a bank holding company with no public comment period at all, so Goldman could get a bail-out? After the Fed's coziness with Goldman Sachs was again demonstrated, by the audio taped by then-Fed examiner Carmen Segarra?

  Inner City Press immediately submitted a Freedom of Information Act request for all of Goldman Sachs' GE Capital application and related records. The Federal Reserve has provided a heavily redacted copy, on which Inner City Press / Fair Finance Watch has commented to the FRB in Washington:

"Among many other things, Goldman Sachs believes it can withhold the volume of deposits it seeks to acquire from GE Capital Bank, WHAT is seeks to acquire (and what not to acquire) from GE Capital Bank, its number of employees in Utah, the contact people on its application, the number of non profit organizations it tells the FRB it serves on the board of -- presumptively public -- and even the NAMES of the exhibits it seeks to withhold entirely. This is abusive and unprecedented and the FRB must, in response, have the comment period begin again. Otherwise, applicants only benefit by making absurd and abusive requests for confidential treatment. There is much more to be said, including at the public hearings ICP is requesting, but it is imperative that the Board act on this as quickly as possible."

When Goldman Sachs became a bank holding company literally overnight in 2008, Inner City Press / Fair Finance Watch and others including NCRC asked the Fed how this was done with no public comment period at all.

In other news,

Now Community Bank System has been asked, by the Federal Reserve:

On May 23, 2015, Inner City Press/Fair Finance Watch ('ICP') submitted a comment (Comment Letter) in protest of CBSI's proposed transaction, and in the Comment Letter, ICP alleged that: 'When the planned merger of Oneida Savings ·Bank and Community Bank, N.A., occurs in July, about 60 employees could be out of a job.' Our records do not reflect a response from CB SI to ICP's allegation. If you wish to provide a response, please do so within 7 business days.”

August 31, 2015

Fallout of a merger in Ohio: “A century-old tradition came to an end this week as Lorain National Bank officially ceased to exist because of to a merger with Pennsylvania-based Northwest Bank. The transition didn’t occur without problems, according to Lorain National Bank customers... One man described the changeover as 'a screwed-up mess' in a voicemail left with the paper. He said customers could not access their accounts online, while others went to various bank branches and found them closed, which bank officials say wasn’t the case. 'As far as we know all of our branches are open,' said Melanie Clabaugh, Northwest Bank’s manager of communications. 'As is the case with any transition, you can run into a couple of issues.'”

A couple of issues? Where are the regulators on this?

Well, the Federal Reserve produced a video purporting to say what the Community Reinvestment Act is - without any description of the public comment on merger process. Hmm...

August 24, 2015

As ICP begins new campaigns as well, Community Bank System continues anti-CRA moves in its proposal to acquire Oneida. ICP has just put in this comment:

This is a interim supplemental comment opposing and again requesting an extension of the FRB's public comment period on this application:

Community Bank, Inc., DeWitt, New York to acquire Oneida Financial Corp, Oneida, NY, & indirectly acquire State Bank of Chittenango, Chittenango, NY, & Oneida Savings Bank, Oneida, NYk, & thereby engage in the operation of a savings association pursuant to section 225.28(b)(4) 4 Chicago 05/26/2015

ICP is a timely protestant to the application; as such CBSI was required to send it copies of its submissions to the FRS including its responses to Additional Information letters.

The record reflects that CBSI incorrectly withheld the majority of its July 29, submission. ICP complained and FOIA-ed, and CBSI's counsel emailed it a second version of the response with less information removed.

Now by regular mail ICP has received CBSI's Associate General Counsel's supplemental letter purporting to further reduce or gerrymander the bank's proposed future CRA assessment area.

ICP opposes such gerrymandering. CBSI's main defense to its disparate lending record is to claim that its community is less diverse than the counties it is in. Now it seeks to further limit its assessment areas -- this is precisely the problem

CBSI, on which as noted ICP has previously commented, has been getting worse. In 2013 for conventional home purchase loans in the Buffalo MSA, Community Bank NA made 44 such loans to whites, NONE to African Americans or Latinos.

CBSI's focus is exemplified by this August 11 report: “Community Bank System's wealth management subsidiary has a new office now open in the North Country. The new location opened Aug. 3 in Plattsburgh. It offers investments, insurance and trust planning and management.”

Here for the record is another August 11 report: “In a letter dated Aug. 7, the Fed instructs Community Bank System Inc. to sign a document declaring that it will not control expenses or hiring at Oneida Financial before the deal closes. If Community Bank signs off, it agrees to not interfere with Oneida Financial’s normal course of business.”

See, http://www.bizjournals.com/buffalo/blog/morning_roundup/2015/08/community-banks-oneida-deal-must-meet-new.html

ICP has not received any copy of any such signed commitment, which in any event it contends would not comply with antitrust law or the Bank Holding Company Act

August 17, 2015

That a federal judge, Katherine Polk Failla, opined that New York City's Responsible Banking Act was preempted by the US and NYS Community Reinvestment Act is not surprising. But will the De Blasio administration appeal?

Julian Bond called #PredatoryLending “legalized extortion,” here in 2011: http://www.stlamerican.com/business/local_business/article_de13df1c-31a3-11e1-be27-001871e3ce6c.html …. #RestInPeace

August 10, 2015

Fed Asks Community Bank System - Oneida To Drop Two Merger Agreement Provisions

By Matthew R. Lee

NEW YORK, August 8 -- The lack of seriousness in US bank regulation extends from large to smaller banks. As Inner City Press exposed last month, Royal Bank of Canada jumped the gun and began doing business with City National Bank without any Federal Reserve approval (see Los Angeles Times, here.)

  Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and tried to withhold fully eight of the nine responses. More here.

  Now an August 7 letter from the Federal Reserve to Community Bank System indicates problems with its February merger agreement, specifically Sections 5.7(b)(9) and (10). Click here to view Fed letter, uploaded by Inner City Press.

  How could a bank of this size, that wants to become bigger, write and sign a merger agreement like this?

 To find out, Inner City Press immediately filed a Freedom of Information Act request for the whole submission - and even the Federal Reserve has seen through Community Bank System's absurdly -- and tellingly -- overbroad withholding, releasing all but one part of one of the eight withheld responses.

  Here's is the Federal Reserve's letter to Inner City Press granting most of its FOIA request

August 3, 2015

Fed Rejects Community Bank System - Oneida Withholding 8 of 9 Responses

By Matthew R. Lee

NEW YORK, August 1 -- The lack of seriousness in US bank regulation extends from large to smaller banks. As Inner City Press exposed last month, Royal Bank of Canada jumped the gun and began doing business with City National Bank without any Federal Reserve approval (see Los Angeles Times, here.)

  Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and tried to withhold fully eight of the nine responses. More here.

  Inner City Press immediately filed a Freedom of Information Act request for the whole submission - and even the Federal Reserve has seen through Community Bank System's absurdly -- and tellingly -- overbroad withholding, releasing all but one part of one of the eight withheld responses.

  Here's is the Federal Reserve's letter to Inner City Press granting most of its FOIA request: here is the now unredacted version of Community Bank System's submission.

July 27, 2015

To FRB, Community Bank System - Oneida Withhold 8 of 9 Responses

By Matthew R. Lee

NEW YORK, July 25 -- The lack of seriousness in US bank regulation extends from large to smaller banks. Last week the Federal Reserve hauled off and approved CIT - One West, with whose executives the Fed met before the deal was even announced a year ago.

  Further down the food chain, Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and is trying to withhold fully eight of the nine responses. More here.

  Inner City Press is challenging this under the Freedom of Information Act, comparing Community Bank System's outrageous withholding at the Fed with other banks, and with Community Bank System's to the OCC, more here.

July 20, 2015

RBC - City National Gun Jumping Covered by LAT, After FFW Raised It, CBSI Contrasted

By Matthew R. Lee

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

  Now the LA Times has reported on the "letter from the Fed [which] asks the banks to respond to questions raised in written comments by [FFW]. Spokesmen for the banks declined to comment.... Fair Finance Watch, a New York advocacy group for minorities, questioned a deal between the banks in a June 11 comment letter to the Fed."

  Inner City Press first put that Fed letter online, here; then Canada's National / Financial Post reported without credit it had "obtained" it.

  By contrast, in another pending proposal, CBSI - Oneida, the Syracuse Post-Standard disclosed that "Inner City Press forwarded the letter to news outlets. Some of the Fed's questions focus on whether Community could improperly control matters at Oneida in advance of the acquisition. Community is working on Fed's questions, said Hal Wentworth, Community's senior vice president for retail banking."

  One common theme is that non-control (and therefore antitrust) laws are being violated. One difference is that CBSI does comment to the media -- if only to blame the messenger -- while larger RBC and CNB do not. Arrogance?

 On CBSI's blaming the messenger, FFW has commented to the Fed that it will "will comment again when CBSI has provided a copy of its response to the FRS' questions of July 13. Beyond the CRA and impermissible “control” questions raised therein, we wish at this time to raise the issues that, in a public response to ICP's comments, CBSI's SVP for retail banking said the following, in a prepared statement no less:

'In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. "This activist does not do business with either Oneida or Community Bank."'

If it would be inappropriate for CBSI to comment on or disclose information about its customers, in this context the same applies to the above-quoted, which, separately, is reminiscent of human rights abusing countries emphasizing where the rights groups who study and report on them are based."

  On June 6, FFW submitted into the record before the Fed:

"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015

July 13, 2015

On Dodd-Frank, ICP Asks IMF Of Redefining SIFI to $500B, Of Somalia Remittances

By Matthew Russell Lee

UNITED NATIONS, June 8 -- When the International Monetary Fund released reviews and papers about the United States, complete with support of the Dodd Frank Act and mentions of anti money laundering protection on June 8 Inner City Press asked about the proposal to raise the definition of Systemically Important Financial Institution from $50 billion up to $500 billion and if tight AML strictures are to blame for cutting off remittances to Somalia.

  Aditya Narain, IMF mission chief for the Financial Sector Assessment Program and deputy director, Monetary and Capital Markets department, told Inner City Press that the IMF believes such definition should give predictability, but should be based on risk and not necessarily only asset size.

  Narain told Inner City Press, "On the first one, our general belief is that supervisory approaches should be risk based, and therefore the materiality and proportionality of institutions should be taken into account for to develop supervisory frameworks. At the same time, we also recognize that it’s important to have some clear rules, regarding a unit, in this case size of institutions, because not only does it set a aseline of expectations, but it also provides a useful framework for people to anchor their expectations on. So that’s why, in a sense we would agree that it’s important to make these approaches risk based and therefore not dependent on size alone. I should add also, that our only political ideology is financial stability, for the purpose of this exercise.

  But will this be used FOR the Senator Richard Shelby draft bill?

  On remittances, Aditya Narain said it is an important question but one that the IMF is dealing with in other venues; it apparently wasn't raised to the US during this process. Why not?

 Narain told Inner City Press, "On the regulatory question, this is an issue which is being discussed in several forums where the IMF has been participating, and this is an issue not just for the US, although it has been most discussed in the context of the US, but the effects of the AML on remittances and the result, the stringent adherence to standards has led to a concern more globally that might be affecting the flow of remittances to those jurisdictions... where such remittances and the channels through which they flow are more important. We have not discussed this... there is work ongoing in the Fund, including in collaboration with other institutions like the World Bank... and we expect to be able to have more information on this in a few months time."

   In the embargoed media conference call, two questions in a row went to the Financial Times, which opined that the IMF report takes the side of the Democratic Party. The IMF disagreed. The IMF said, in writing, “As the epicenter of the global financial crisis that began in 2008, the United States passed a major law in 2010, the Dodd-Frank Act, to reform its financial system. Officials need to complete the rulemaking under the law, while parts of reform agenda face legislative proposals to water them down.”

   Central Banking asked two questions and Reuters one, on federal insurance regulation. The underlying papers will go online on the IMF's website. Watch this site.

Also: When the Fed acted on BB&T  - Susquehanna with FOIA issues not satisfactorily resolved, it said "in the first quarter of 2015, the FDIC also approved a proposal by Branch Bank to acquire 41 branches of Citibank, National Association, in Texas. In connection with that proposal, the FDIC directed Branch Bank to develop a CRA strategic plan." We'll have more on this.

July 6, 2015

RBC - City National Gun Jumping Questioned by Fed, After FFW Raised It

By Matthew R. Lee

NEW YORK, July 3 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  Now Royal Bank of Canada has been asked more questions by the Federal Reserve. Inner City Press has uploaded the letter, here.

  On June 6, FFW submitted into the record before the Fed:

"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015, quoted from below.

  Now the Federal Reserve has asked RBC:

"A commenter alleged that in May 2015 RBC and CNB collaborated to extend credit to a customer of CNB.  Please address this claim. In your response, discuss in detail in detail whether RBC exercises a controlling influence over the management or policies of CNC or CNB without prior approval of the Board. In addition, discuss whether, since entering into the proposed transaction, RBC and CNB have collaborated, or plan to collaborate, on extending credit to any other borrower, and describe the nature and circumstances of those collaborations."

  There are other problems, including RBC's non-compete agreement with PNC Financial Services. But this gun-jumping should be fatal to the proposed merger.

June 29, 2015

ICP Asks Of Tax Evader HSBC & Remittance Cutter Westpac In UN Global Compact

By Matthew Russell Lee

UNITED NATIONS, June 25 -- The UN Global Compact was studied and praised in a 205 page study by DNL-GL, launched on June 25. Inner City Press asked DNL-GL's Henrik Madsen if he has listened to critics of the Compact as "bluewashing," having as members banks like HSBC which engage in tax evasion and predatory lending.

  Madsen replied that he would be telling companies later in the day that they should pay their taxes. Fine - but HSBC has helped its customer to evade taxes. What about that?

  Georg Kell of the Compact said Madsen will be joining the Compact board of directors; earlier he said he's told the Compact principles are in the Koran.

 Inner City Press asked about Westpac, which cut remittances to Somalia. This was not directly answered.

Back on June 5 financial inclusion was the topic at the UN when Queen Maxima of the Netherlands held a press conference at the UN, for which she's the the “Special Advocate for Inclusive Finance for Development.”

  Inner City Press asked Queen Maxima what she has done on the issue of banks like Barclays and Westpac cutting of remittances to Somalia. Video here.

Note: 
So rather than trying to explain to the Federal Reserve why it violated the law and began to collaborate with City National it hasn't been approved to acquire, Royal Bank of Canada on June 24 told the Fed it had managed to get another comment withdrawn. Well, not that of Inner City Press / Fair Finance Watch. Lawless....

June 22, 2015

Talk about phoning it in. The Fed on June 15 wrote or ruled, on an application where Inner City Press / Fair Finance Watch was the commenter:

The Board received two comments from a single commenter who objected to the proposal principally on the basis of Sterling Bank’s record of extending home mortgage credit to minority individuals in the New York-Wayne-White Plains, New York-New Jersey Metropolitan Division (“New York City MSA”) and the NassauSuffolk Metropolitan Division (“Nassau-Suffolk MD”), as reflected in data reported under the Home Mortgage Disclosure Act (“HMDA”)17 for 2013. The commenter expressed concerns that, based on 2013 HMDA data, Sterling Bank was not meeting th credit needs of minority individuals in the communities served by the bank.18 The commenter also contended that Sterling Bank’s HMDA data are “irregular.” The commenter noted that the bank reported three withdrawn and three incomplete applications for refinance loans to African Americans in the New York City MSA and no denials, suggesting that the bank is prescreening minority borrowers.

Fn 18: Sterling represented that Hudson Valley Bank is primarily a commercial lender and does not have a material mortgage program. Mortgage loans represented approximately 14 percent of the bank’s overall lending portfolio as of December 31, 2014.”

FN 19: Sterling asserted that three loan applications were withdrawn at the prospective borrowers’ request because they did not wish to continue the transaction and that the three other applications were deemed incomplete because the prospective borrowers did not provide the requested property, asset, or income documentation needed by the bank to make a lending decision.”

So the Fed accepts 14% as “not material”? And that all people of color “requested” to withdraw their applications is acceptable? This vague commitment does not make up for it:

Sterling Bank has determined to increase its marketing and outreach efforts to better serve the needs of its communities and has adopted its revised CRA Plan. Although the bank intends to remain primarily a commercial lender, it expects to increase its outreach efforts for residential mortgages. Sterling Bank also stated that it will continue pursuing the other community development and CRA-related initiatives set forth in its revised CRA Plan. Sterling plans to reassess the goals and objectives in its CRA Plan to determine if any adjustments are necessary to reflect the acquisition of Hudson Valley.”

We'll have more on this. And this - on another application ICP has commented on, this was reported:

In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. 'This activist does not do business with either Oneida or Community Bank, but nonetheless made vague allegations regarding Community,' Wentworth said. 'These allegations were entirely without merit and will be fully addressed by Community Bank and Oneida Savings in the application process.'”

If it would be illegal for CBSI to so disclose information, for its own purposes, about those who have accounts with it, how is this not illegal too? And from a human rights perspective, what a pathetic and telling response. We'll have more on this.

June 15, 2015

  Inner City Press / Fair Finance Watch filed a fourth timely comment on RBC - City National on June 11:

By letter date June 1, the FRB granted FFW an extension of the comment period through June 11.
 
  Please note that RBC's belated release of some documents it improperly sought confidential treatment for does not resolve ICP's FOIA request - we are awaiting an FRB ruling in order to, if need be, appeal. We object, for example, to the continued redaction of “holder and interest” as to subsidiaries; even the ADDRESS of “Independence Investments, LCC,” even the description of Aston / LMCG and of City National Rochdale Hong Kong and RIM Securities and all of CNB Wealth Management; an unspecified volume of “Confidential” Exhibit 10; portions of the “Source of Funds” and “Interconnectedness” analysis; etc.

 Released (improperly withheld) information shows that RBC Bank did not make any community development loans, for example...

Meanwhile in Iowa, Farmers State Bank is planning on selling their closed branch property in Raymond -- with a 20 year deed restriction that another financial institution can not open in that location.
It's said the Union State Bank from Greenfield, Iowa is interested if the building was available. We'll have more on this.

June 8, 2015

RBC - City National Comment Period Extended, Banks Jumped the Gun

By Matthew R. Lee

NEW YORK, June 6 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  Now the Federal Reserve Board has granted FFW an extension of the comment period on the proposed merger, through June 11, FRB letter here, due to RBC improperly withholding information which was subsequently released after a Freedom of Information Act (FOIA) request by Inner City Press.

   FFW will comment by June 11 - but has submitted to the Fed an objection dated June 6 noting the two banks admitted they are already working together on transactions, without any authorization.

   FFW on June 6 submitted into the record before the Fed:

"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015

June 1, 2015

After CRA protest, First Tennessee has told the Fed that “First Tennessee is committed to achieving the targeted 30% of originated mortgage loans to LMI borrowers and is preparing plans accordingly. First Tennessee has formed a project team and is developing a detailed execution plan including initiatives to leverage marketing programs, review underwriting guidelines, and assess product design. First Tennessee anticipates the detailed plan will be completed by August 31, 2015.” But why should any merger be ruled on before then? And why are the applicants trying to withhold information about HMDA and a mortgage company relationship?

May 25, 2015

While the Senate is debate letting “community” banks out of most regulations, with both parties more or less on board, here's a snapshop from the field:

in Raymond, Iowa the last branch was closed by Farmers State Bank, whose only loan denial was to a moderate income applicant. The (part time) mayor of the town complained to the FDIC, which held a tele-conference that left him feeling (seeing) the rubber stamp. And so it goes.

May 18, 2015

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

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

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

May 11, 2015

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

By Matthew Russell Lee

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

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

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

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

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

May 4, 2015

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

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

April 27, 2015

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

April 20, 2015

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

By Matthew Russell Lee, Exclusive

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

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

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

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

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

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

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

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

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

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

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

April 13, 2015

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

April 6, 2015

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

March 30, 2015

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

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

March 23, 2015

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

March 16, 2015

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

By Matthew Russell Lee, Exclusive

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

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

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

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

March 9, 2015

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

March 2, 2015

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

Inner City Press / Fair Finance Watch

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

February 26, 2015

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

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

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

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

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

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

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

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

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

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

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

Inner City Press has appealed these and all other redactions.

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

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

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

This insider merger should not be approved.


February 23, 2015

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

By Matthew Russell Lee, Exclusive

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

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

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

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

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

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

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

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

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

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

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

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

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

    These “outsiders” sound like insiders.

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


  The next day the attendees were described:

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

Outside Attenders: ~13

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

Executives from OneWest (~3) included CEO

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

Board Attenders: ~10-12

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

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

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

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

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

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

February 16, 2015

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

February 9, 2015

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

By Matthew Russell Lee

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

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

"The purpose of the meeting is to collect information relating to the convenience and needs of the communities to be served, including a review of the insured depository institutions’ performance under the Community Reinvestment Act. The agencies also will consider and collect information on other factors in making a decision on the application, including the effects of the proposal on the stability of the U.S. banking or
financial system, the financial and managerial resources and future prospects of the companies and banks involved in the proposal, and competition in the relevant markets.

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

February 2, 2015

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

The case against Evans Bancorp continues...

January 26, 2015

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

January 19, 2015

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

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

January 12, 2015

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

By Matthew Russell Lee

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

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

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

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

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

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

* * *

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

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

January 5, 2015

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

December 29, 2014

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

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

December 22, 2014

CIT Says Don't Worry About Loss Shares

By Matthew Russell Lee

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

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

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

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

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

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

December 15, 2014

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

By Matthew Russell Lee

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

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

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

"Extreme care should be taken with respect to disclosure under Exemption 8 which protects matters that are 'contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.' [FN 20: 5 U.S.C. § 552(b)(8)]

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

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

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

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

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

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

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

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

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

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

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

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

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

December 8, 2014

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

December 1, 2014

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

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

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

We'll have more on this.

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

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

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

Whatever...

November 24, 2014

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

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

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

November 17, 2014

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

November 10, 2014

Submitted on the CRA Q&A:

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

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

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

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

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

November 3, 2014

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

October 27, 2014

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

October 20, 2014

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

By Matthew Russell Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

October 13, 2014

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

  So when will these concerns be addressed?

October 6, 2014

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

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

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

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

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

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

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

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

September 29, 2014

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

  Private actors means banks.

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

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

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

Further studies will follow: watch this site.

September 22, 2014

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

September 15, 2014

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

And this, on JPMorgan Chase:

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

By Matthew Russell Lee

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

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

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

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

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

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