The Inner
        City Reporter's Federal Reserve Beat

  

          Click here to Search This Site   -- For or with more information, contact us.

August 2, 2021

Governor Brainard, July 30: "Although the EPOP ratio for Black individuals has improved more strongly than the overall ratio over the course of 2021, closing about 40 percent of the December gap, it remains more than 3 percentage points below its pre-pandemic level and more than 2 percentage points below the current level of the EPOP ratio for white individuals."

July 26, 2021

Old National - 1st Midwest Was CRA Protested Now Fed Delays on FOIA But Closes Ears

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

FEDERAL COURT / S Bronx, July 23 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be a litmus test, see below.

And this one: Old National's proposal to buy First Midwest. On June 28, Fair Finance Watch and Inner City Press on the FOIA) filed the below with the Fed.

Andon July 21-22, these Federal Reserve questions to Old National's outside counsel at Patton Boggs below. But the next day, the Fed told Patton Bogg it was denying Fair Finance Watch's request to keep the comment period open, even while the Fed has yet to provide FOIA documents despite ostensibly granting expedited treatment to Inner City Press' request. This is a pro-corporate circus, that should be exposed under the new Antitrust Executive Order.

The Fed's questions: "July 21, 2021  Ms. Katie Wechsler Of Counsel Squire Patton Boggs (US) LLP 2550 M Street, NW Washington, DC 20037 Dear Ms. Wechsler: This correspondence relates to the application submitted by Old National Bancorp (Old National), Evansville, Indiana, to acquire through merger First Midwest Bancorp (First Midwest), and its subsidiary, First Midwest Bank, both of Chicago, Illinois, pursuant to section 3 of the Bank Holding Company Act of 1956 and Section 225.15 of Regulation Y of the Board of Governors of the Federal Reserve System (Board). Based on staff’s review of the current record, the following additional information, including the information in the Confidential Attachment, is requested. Supporting documentation, as appropriate, should be provided. Financial and Managerial 1. Provide pro forma financial statements and capital ratios as of June 30, 2021 for Old National and Old National Bank, as soon as available. 2. Provide the employment agreement for Michael Scudder. 3. Provide an update, if any, on the status of other required regulatory approvals for the proposed transaction, including state approvals. 4. Confirm the anticipated closing date of the merger. Confirm whether the bank merger and the holding company merger will occur on the same date. Legal 5. In response to Question 16 of the FR Y-3 application dated June 18, 2021 (“the Application”), you state that First Midwest Bank has five active wholly-owned operating subsidiaries. The list of five subsidiaries includes “First Midwest Holdings, Inc.” twice, and indicates that First Midwest Holdings, Inc. has a wholly-owned subsidiary, FMB Investments Ltd.  a. Confirm the number of active wholly-owned operating subsidiaries held either directly or indirectly by First Midwest Bank. If any of these subsidiaries were not listed in response to Question 16, identify them and provide brief descriptions of their respective activities.  b. Confirm whether First Midwest Securities Management, LLC is a wholly- owned operating subsidiary of First Midwest Bank. If so, provide a brief  description of its activities.  6. As referenced in the Agreement and Plan of Merger dated May 30, 2021, provide the First Midwest Disclosure Schedule and Old National Disclosure Schedule. 7. The response to Question 21(d) of the Application does not indicate whether any state community reinvestment laws apply to Old National. 12 U.S.C. § 1842(d)(3)(B) requires the Board to consider an applicant’s record of compliance with applicable state community reinvestment laws. Confirm that the Old National organization (i.e., Old National and its subsidiaries) is not subject to a state community reinvestment law in any jurisdiction in which it operates. If the Old National organization is subject to a state community reinvestment law, discuss the Old National organization’s record of compliance with the applicable state law(s). Convenience and Needs and Consumer Compliance 8. Page 4 of the Application states that the “Resultant Bank” will continue to maintain all the current branches of both Old National Bank and First Midwest Bank; however, the response to Question 20(c) also states, “As of this date, no final decision has been made with respect to branch closing or consolidations.” a. Clarify whether a decision will be made prior to consummation on which branches will be closed or consolidated as a result of the merger. b. Provide information about how branches will be evaluated when determining whether branches will be closed or consolidated as a result of the merger. c. Discuss how the impact of any branch closures in low- and middle-income and/or majority-minority communities will be mitigated.  9. Describe which components of First Midwest Bank’s and Old National Bank’s consumer compliance programs will be adopted into the Resultant Bank’s consumer compliance program. 

 10. Provide information on the Resultant Bank’s processes and procedures in the event that products are discontinued for existing customers and existing customers are transitioned into new products as a result of the merger. 11. Confirm whether the Resultant Bank plans to expand its Community Reinvestment Act assessment areas after the merger beyond the existing assessment areas of both Old National Bank and First Midwest Bank. Please submit your response to the Federal Reserve Bank of St. Louis within eight business days. In accordance with the Board’s procedures regarding ex parte communications, provide a copy of the public portion of your response (together with any attachments) directly to the commenter."

July 12, 2021

How will the Federal Reserve deal with this, from the antirust Executive Order? " (e)  To ensure Americans have choices among financial institutions and to guard against excessive market power, the Attorney General, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation, and the Comptroller of the Currency, is encouraged to review current practices and adopt a plan, not later than 180 days after the date of this order, for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act of 1956 (Public Law 84-511, 70 Stat. 133, 12 U.S.C. 1841 et seq.) that is in accordance with the factors enumerated in 12 U.S.C. 1828(c) and 1842(c)."

July 5, 2021

Still no docs: "This will acknowledge receipt of your electronic submission dated June 28, 2021, and received by the Board’s Information Disclosure Section on June 29. You request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552: the entirety of the application by Old National Bancorp, Evansville, Indiana; to merge with First Midwest Bancorp, Inc., and thereby indirectly acquire First Midwest Bank, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about Old National or First Midwest or either’s affiliates since January 1, 2020. The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation

June 28, 2021

Webster On Sterling Merger Protest Told By Fed To Respond, and to 12 Questions, Here

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

SOUTH BRONX / SDNY, June 26 – The proposed merger of Webster Financial Corp. and Sterling Bancorp has now been challenged, on disparate lending and regulatory evasions, first to the Federal Reserve and  the OCC.

  On June 25, the Fed asked the banks a series of questions, below and full letter on Patreon here

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

The Fed on June 25 wrote, copying Fair Finance Watch: "The application references a new mobile banking platform being developed by Sterling Bank  that will be adopted by the combined organization.  a. Describe any due diligence conducted by Webster Bank regarding the new mobile  banking platform and the extent to which the development is taking place in-house or  via a third party. 

b. Describe in greater detail the intended uses of the mobile banking platform and the  data collected therefrom, the specific features and products that will be offered by the  platform, and the ability of customers to opt in or out of its use, and to limit the data  that will be collected through the platform.  c. To the extent not already addressed in your responses to the previous questions,  discuss efforts to ensure that the mobile banking platform will be offered in  compliance with consumer protection laws, including fair lending laws. Your  discussion should include (i) the extent to which technology-based data that is alternative to data traditionally used in credit decisions would be used to underwrite  loans offered through the platform, (ii) any anticipated efforts to ensure such  alternative data is used in compliance with fair lending laws, and (iii) how proprietary  customer information would be safeguarded.  d. To the extent not already addressed in your responses to the previous questions,  describe any anticipated changes to the Community Reinvestment Act (“CRA”) plans  for the combined institution that would result from the implementation of the mobile  banking platform.

 2. The application states that “Webster Bank and Sterling Bank are carefully evaluating their  current consumer products and community development programs and services so that the  combined bank may incorporate the strongest components of both banks’ community  reinvestment activities.”  a. Provide an update on this review process including, if it is not yet complete, an  anticipated timeframe for completion.   . As this information becomes available, discuss whether any consumer products or  community development programs and services of either bank are expected to be  discontinued and whether, to the extent not already described in the application, any  products, programs or services will be made available in either bank’s market that are  not currently offered.  3. Page 36 of the application indicates that Webster Bank made more than 11,000 PPP loans.  Pages 37 and 73 of the application indicate that Webster Bank funded more than 18,000 PPP  loans totaling more than $2.0 billion. Page 57 of the application indicates that Webster Bank  has participated in funding nearly $1.98 billion in PPP loans to over 17,350 customers.  Confirm the latest figures for number and dollar volume of PPP loans.

 4. Respond to the public comment opposing the transaction, submitted June 3, 2021. Among  other things, the public comment generally criticizes Webster Bank’s fair lending  performance. The commenter also asserts that the CRA data of Sterling Bank is unreliable.  5. Provide pro forma asset and liability concentrations for Webster Bank as of March 31, 2021.  (Indicate if such analysis would be substantially similar for Webster at the consolidated  level). Pro forma asset or credit concentrations should be compared to pro forma tier 1  capital plus allowance for loan and lease losses for Webster Bank as of March 31, 2021. a. Provide further breakdown of pro forma concentrations by portfolio (retail,  commercial, and related subsectors) and by industry category (retail, restaurant,  hotels, office, etc.).  b. Discuss key processes that are currently employed and/or whether any enhancements  are needed to effectively monitor and manage asset or credit concentrations following  the proposed bank merger. This may include any de-risking initiatives or  recalibration of lending thresholds or risk tolerance limits.  c. Provide a pro forma asset composition mix for Webster Bank and discuss any  meaningful change relative to the bank’s actual balance sheet, with both profiles  (pro forma and actual) as of March 31, 2021.  Please provide your written response and supporting documentation via E-Apps to  Michael Sumrell at the Federal Reserve Bank of Boston. In addition, in accordance with the  Federal Reserve’s ex parte procedures, provide a copy of the public portion of your response  (together with any attachments) directly to the commenter." Watch this site.

June 21, 2021

Now the Fed has issued a procedural ruling on Inner City Press' Webster - Sterling FOIA request - but still not documents: "This is in response to your electronic submission dated June 3, 2021, and received by the Board’s Information Disclosure Section on June 4. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  the entirety of the application by Webster Financial Corporation to merge with Sterling Bancorp, and thereby indirectly acquire Sterling National Bank, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about Webster or Sterling or either’s affiliates since January 1, 2020. You also seek expedited processing for your request because “the records [should be] provided before the comment period ends (for now, July 8).” The Board’s Rules Regarding Availability of Information and the FOIA provide that a requester seeking expedited processing should demonstrate a compelling need for the records, and that this need may be evidenced by a statement that the requester is “a person who is primarily engaged in disseminating information” and there is “[a]n urgency to inform the public about an actual or alleged Federal Government activity.” See 12 C.F.R. § 261.12(c); see also 5 U.S.C. § 552(a)(6)(E)(v)(II). I have determined to grant your request for expedited processing"

June 14, 2021

It took the Fed a full week to acknowledge Inner City Press / Fair Finance Watch's comments on Webster - Sterling and send even the "public" portion of the application -- still, as of June 12, no substantive response to the FOIA request...

Greetings Mr. Lee,     We acknowledge receipt of your email correspondence dated June 3, 2021 to this Reserve Bank commenting on the proposed merger between Webster Financial Corporation, Waterbury, Connecticut, and Sterling Bancorp, Pearl River, New York.  Please see attached this Reserve Bank’s acknowledgement letter.

June 7, 2021

From the Fed, no mention if whether they will respond as they should during the comment period:

Dear Mr. Lee:
This will acknowledge receipt of your electronic submission dated June 3, 2021,
and received by the Board’s Information Disclosure Section on June 4. You request,
pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552:
the entirety of the application by Webster Financial Corporation to
merge with Sterling Bancorp, and thereby indirectly acquire Sterling
National Bank, including all portions for which the applicants have
requested confidential treatment, and for all records including
electronic records reflecting the FRS’ communications with or about
Webster or Sterling or either’s affiliates since January 1, 2020.
The Board makes every effort to fulfill requests in a timely manner; however,
there may be delays in fulfilling complex requests or those that require consultation.

May 31, 2021

Filed late May with the Fed: "Board of Governors of the Federal Reserve System  Attn: Chair Powell, Secretary Misback  20th Street and Constitution Avenue, N.W.  Washington, DC 20551     Re: Timely First Comment on Application by FirstBank Corp. of Fort Smith, Arkansas to acquire with Central Bancshares of Poteau, Inc., and Central National Bank of Poteau 

Dear Chair Powell, Secretary Misback 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 Applications by First Bank Corp. of Fort Smith, Arkansas to acquire with Central Bancshares of Poteau, Inc., and Central National Bank of Poteau. The comment period runs through May 26; this comment is timely.    

  The applicant's First National Bank of Fort Smith in Arkansas in 2019, based on its disparate marketing, made 308 home loans to whites and only FIVE to African Americans.    This is totally unacceptable.     

 Beyond the objective data, consider this public review: "9/24/2020 My name is Kelli Cormier I have an account with first national Bank Fort Smith Arkansas I am currently in Louisiana helping my father file a [claim] for his damage to property I called the bank and the contact center but refusing to give me my bank account information I've always gotten the information before as long as I have a codename to get them and they know it's me all of a sudden I'm 10 hours away and they're refusing to give me my f*cking information that's all right I'm gonna make a 10 hour trip to go close out my f*cking account." See, here

Also "By far this bank has the worst customer service in the area. Unfriendly staff who make no attempt to resolve your issues or assist with your needs. The trust department specifically needs a reorganization."  
   The target, Central National Bank of Poteau, in 2019 in Oklahoma based on its marketing made 54 home loans to whites and NO (none, zero) to African Americans.   

There is no public benefit to this proposal.        FFW and Inner City Press have been deeply concerned about the rush by the FRS' penchant to rubberstamp mergers by redliners, particularly during the pandemic. We note the Fed's recent website statement that a comment period has been extended to allow participation amid the Coronavirus crisis. This should be done, by the Fed's logic, on this and other application. We timely request public hearings.  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.."

May 24, 2021


How much of a joke on FOIA is the Fed? Well, still no real documents in response to long-ago FOIA requests about Bangladesh Bank / Lazarus Heist, nor branch closings in low income areas, nor Wirecard...

May 17, 2021

So State Street Corp. has admitted it ripped customers off by $290 million with hidden bank fees, and it has agreed to pay a $115 million criminal penalty to resolve a long-running investigation into those practices, the U.S. Department of Justice announced - but where was the Fed on Swiss Life?

May 10, 2021

Fed does it again: "Dear Mr. Lee: This is in response to your electronic message dated April 3, 2021, and received by the Board’s Information Disclosure Section on April 5, 2021. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request: the entirety of the application by Stock Yards Bancorp to acquire Kentucky Bancshares and Kentucky Bank including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about MStock Yards Bancorp or Kentucky Bancshares or either affiliates since January 1, 2020. Given the public comment period here, this request should be expedited such that the records are provided before the comment period ends (for now, April 12). Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 17, 2021, in order to consult with two or more components of the Board having a substantial interest in the determination of the request."

 Fed closes comment period April 12, extends FOIA time to May 17....

May 3, 2021

After CRA Protest to M&T People's Fed Asked 32 Qs, As of April 30 No Answers So 2d Protest

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

FEDERAL COURT / S Bronx, April 30 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be the litmus test.

  On March 27, Fair Finance Watch and Inner City Press on the FOIA filed a challenge with the Federal Reserve to the banks' application, below. We await full response to the FOIA.

  And on April 30, as the Federal Reserve and NYS comment period ostensibly closed, the Fed had STILL not provided the documents under FOIA, despite correctly granting expedited processing. And M&T which was told to send its response to question to Inner City Press, has not -- not by email, and not by regular mail. So Inner City Press has timely written to both regulators to demand that the comment period be extended. Watch this site.

April 26, 2021

While the Fed rubber stamps mergers and closes comment periods, this: "Monday, May 3 ***NEW YORK – Federal Reserve Bank of New York President John Williams speaks before Women in Housing and Finance Virtual Annual Symposium, 1410 EDT/1810 GMT. Via Webinar. Text and moderated Q&A expected." Moderated Q&A;

 Thursday, May 6 ***NEW YORK – Federal Reserve Bank of New York President John Williams gives opening and closing remarks before the New York Fed Web Series on Culture: Purpose and the Employee as Stakeholder, 0900 EDT/1300 GMT. Via Webinar. No text. No Q&A.."

No Q&A.

April 19, 2021

From the Fed:

This is in response to your email message dated April 3, 2021, and received by the Board’s Information Disclosure Section on April 5. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you have requested: the entirety of the application by M&T to acquire People’s, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about M&T or People’s since January 1, 2020. You seek expedited processing for your request because you would like to receive the records before the comment period ends. You believe “[t]he merger, the fair lending and money laundering issues and branch closings, make it a matter of urgency.” The Board’s Rules Regarding Availability of Information provide that a requester seeking expedited processing should demonstrate “a compelling need for the records,” and that this need may be evidenced by a statement that “the requester is a representative of the news media . . . and there is urgency to inform the public concerning actual or alleged Board activity.” 12 C.F.R. § 261.12(c).  2  I have determined to grant your request for expedited processing. Accordingly, your request will be accorded priority treatment and processed as soon as practicable.

Good - but where are the documents?

April 12, 2021

From the Fed on April 8:

This is in reference to your email message dated March 10, 2021, and received by the Board’s Information Disclosure Section on March 11.  Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:     all records in the possession or control of the FRS, from the past three years, regarding Wirecard, including but not reference to the bank’s collapse’s implications for the FRS’ view of German bank regulation under FBSEA. Inner City Press has been covering the US v. Weigand bank fraud trial in the SDNY, and Wirecard belatedly was raised in a cooperator’s testimony, as was OneCoin money launderer and Tbilisi banker Gilbert Armenta. Therefore, this is also a request for all records the FRS has, in the past three years, regarding Armenta, Ruja Ignatova, Mark Scott and/or OneCoin, and also regarding marijuana banking, central to the case(s).     Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until April 22, 2021, 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 April 22, 2021, 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.