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March 1, 2021

In CRA Test Challenges To VeraBank Panola Proposal CEO Tidwell Replies Fed Asks More

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

FEDERAL COURT / S Bronx, Feb 27 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open questions.

  On the 10th day of the new Administration, Fair Finance Watch with Inner City Press on the FOIA filed comments with the post-Brooks Office of the Comptroller of the Currency and with the Federal Reserve on a proposal by VeraBank of Texas to acquire Panola National Bank.

 The issues include that the applicant VeraBank in Texas in 2019 made 465 home loans to whites and only NINE to African Americans. Its denial rate for African Americans was more than FOUR TIMES than for whites.   

   That is to say, VeraBank in Texas in 2019 made 3.7 loans to whites for each denial to whites. It made less than one - 0.81 - loans to African Americans for every denial to African Americans.

   There is also this: "'In the second round we have seen about half the number of requests that we did in the first round,' said Brad Tidwell, president and CEO of Henderson-based VeraBank."

  To the OCC, the rubber-stamping of mergers by redliners under Brian Brooks and Joseph Otting has been explicitly noted. To the Fed, its logic in extending a recent comment period due to Coronavirus must apply to this and other applications.

  VeraBank CEO Brad Tidwell responded - but sent it only by regular mail, and not email. Now we have it, and it says among other things: "We take the issues that Mr. Lee raised in comment seriously, and we know that VeraBank, like all banks, can improve in extending credit to minority borrowers." Yes. It goes on: "relevant data for the 2019 HMDA reporting period: VeraBank had a 42% denial percentage for African American applicants and a 14% denial percentage for white applicants."

Is this acceptable?

The Fed has asked: "Page 16 of the Y-3 application describes the applicant’s plan to consolidate VeraBank’s branch located at 1708 East End Blvd North, Marshall, TX 75670 into the existing Panola National Bank branch located at 2203 Victory Drive, Marshall, TX 75672. VeraBank’s branch is currently located in a moderate-income/majority-minority census tract (0203.02) and Panola National Bank’s existing branch is currently located in an upper-income/non-majority minority census tract (0203.01). Please provide further information about the applicant’s rationale for consolidating VeraBank’s branch into Panola National Bank’s branch, and VeraBank’s plans to mitigate the impact of the consolidation on the bank’s community in the location to be closed. 2. Please provide an update on VeraBank’s Community Reinvestment Act efforts since the April 27, 2020, Community Reinvestment Act Performance Evaluation."

  The interim response, by email, is not from CEO Tidwell, but rather outside counsel, and says, "Please direct all future correspondence on this application to me."

These are litmus tests. Watch this site.

February 22, 2021

  Update from SDNY: "Sama v. Federal Reserve Bank of New York Case Number:    1:20-cv-10450-VEC Filer:     Document Number:    11 Docket Text: ORDER OF AUTOMATIC REFERRAL TO MEDIATION Mediator to be Assigned by 3/2/2021."

February 15, 2021

NY Federal Reserve Fired Ex FBI Agent Sama Escorted Him Out at 69 Now Cites Preemption

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

SDNY COURTHOUSE, Feb 9 – Robert N. Sama, 69, was terminated by the Federal Reserve Bank of New York on February 19, 2020. He had worked there since 2007.

He filed a lawsuit in the U.S. District Court for the Southern District of New York on December 10, 2020 - Inner City Press is reporting it that same day.  

From the complaint we learn that "each FRS Bank maintains an on-site law enforcement commad called a Law Enforcement Unit."

 Sama was Vice President of the FRBNY's LEU. He had previously been with the FBI for 29 years.  

After Sama's "escorted ejection," his job was given to LEU Captain Ronald Porter, who was "jumped three level" to handle Sama's LEU responsibilities. Here is Sama in a Fed report, as Vice President, Federal Reserve Law Enforcement. Law, indeed.

His complaint has been  assigned to SDNY Judge Valerie E. Caproni, and Magistrate Stewart D. Aaron.

Now on February 9, the FRBNY has filed an answer via an outside law firm, arguing among other things that the SDNY "lacks subject matter jurisdiction," that Sama "failed to mitigate his alleged damages" and that State and City claims are "preempted by federal law."

 Similarly, the Federal Reserve says that the FRBNY and other Reserve Banks are not subject to FOIA. Why then can they approve bank mergers? Inner City Press has a FOIA request pending.

The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Caproni)

February 8, 2021

  Just filed: "This is a FOIA request for the all withheld portions of the application to the Federal Reserve by Verbank to acquire Panola National Bank, including but not limited to presumptively mis-labeled “Confidential” exhibits: Reorganization Agreement 2 – Bank Merger Agreement 3 – Voting Agreement 4 – Employment Agreements 5 – Form of Director Support Agreement 6 – Form of Director Release 7 – Form of Officer Release 8 – Due Diligence Discussion 9 – Existing and Pro Forma Parent-Only and Consolidated Balance Sheets and  Regulatory Capital Schedules as of September 30, 2020  10 – Board Resolutions Approving the Reorganization Agreement, the First Merger,  the Bank Merger Agreement, and the Bank Merger   and for all record related to FRS communications with or about Verabank since January 1, 2020.  The Dallas Fed told Inner City Press: "If you seek the confidential portion of the application, you will need to submit a formal FOIA request to the Board of Governors  "    The request should be expedited and the records provided and appeal, if necessary, allow before the FRS comment period closes."

February 1, 2021

In extending the comment period, the Federal Reserve on its website says "The comment period is being extended to provide additional time for interested parties to comment on the application in light of the ongoing challenges from the coronavirus." But that is not in the Order the Fed published...

January 25, 2021

  No first VP at FRBNY -- "Michael Strine, first vice president of the Federal Reserve Bank of New York, previously announced his retirement at the conclusion of his current term on February 28, 2021. A search for his successor is now underway"

The others:  "The Federal Reserve Board on Thursday announced the approval of the reappointment of 12 Federal Reserve Bank presidents and 11 first vice presidents, as previously made by their respective boards of directors.1 Each individual has been approved to serve a new five-year term beginning March 1, 2021.  A list of presidents and first vice presidents, by Federal Reserve District, follows:  Boston: Eric S. Rosengren, president, and Kenneth C. Montgomery, first vice president  New York: John C. Williams, president  Philadelphia: Patrick T. Harker, president, and James D. Narron, first vice president  Cleveland: Loretta J. Mester, president, and Gregory L. Stefani, first vice president  Richmond: Thomas I. Barkin, president, and Becky C. Bareford, first vice president  Atlanta: Raphael W. Bostic, president, and André T. Anderson, first vice president  Chicago: Charles L. Evans, president, and Ellen J. Bromagen, first vice president  St. Louis: James B. Bullard, president, and Kathleen O. Paese, first vice president  Minneapolis: Neel T. Kashkari, president, and Ron J. Feldman, first vice president  Kansas City: Esther L. George, president, and Kelly J. Dubbert, first vice president  Dallas: Robert S. Kaplan, president, and Meredith N. Black, first vice president  San Francisco: Mary C. Daly, president, and Mark A. Gould, first vice president."

January 18, 2021

From the Fed's OIG: "Closed Investigations: 2020  Number Date Opened Date Closed Case Name 1 07/24/17 02/13/20 Alleged Bank Fraud 2 01/15/19 03/19/20 Employee Misconduct 3 09/27/18 03/27/20 Advance Fee Scheme 4 11/02/18 04/01/20 Alleged Bank Fraud 5 07/05/18 05/15/20 Advance Fee Scheme 6 08/11/15 06/23/20 Alleged Fraudulent Loans 7 04/23/20 06/30/20 Alleged Fraudulent Scheme 8 05/07/18 08/26/20 Alleged Bank Fraud 9 05/16/18 09/22/20 Alleged Bank Fraud 10 02/04/15 09/23/20 Alleged Bank Fraud 11 03/06/19 10/29/20 Alleged Bank Fraud 12 01/14/20 11/17/20 Alleged Fraudulent Scheme 13 11/09/18 12/15/20 Employee Misconduct 14 06/09/20 12/31/20 Alleged Fraudulent Loans" We'll have more on this.

January 11, 2021

 Here from the Council on Foreign Relations... Richard H. Clarida: "It is my pleasure to meet virtually with you today at the Council on Foreign Relations.1 I regret that we are not doing this session in person, as we did last year, and I hope the next time I am back, we will be gathering together in New York City again. I look forward to my conversation with Steve Liesman and to your questions, but first, please allow me to offer a few remarks on the economic outlook, Federal Reserve monetary policy, and our new monetary policy framework.  Current Economic Situation and Outlook In the second quarter of last year, the COVID-19 (coronavirus disease 2019) pandemic and the mitigation efforts put in place to contain it delivered the most severe blow to the U.S. economy since the Great Depression." And CRA? Watch this site.

January 4, 2021

Fed Governor Brainard: ...The Federal Reserve Financial Stability Report incorporated for the first time an analysis of the ways climate change could present risks to financial stability.38 Similarly, the Federal Reserve Supervision and Regulation Report described how climate-related risks can create microprudential risks and how supervisors are working to better understand, measure, and mitigate these risks.39 Last quarter, the Federal Reserve released a CRA proposal that for the first time highlighted the importance of investing in climate resilience for LMI and underserved communities.

We'll have more on this.

December 28, 2020

Look at the chair and vice chair of the Federal Reserve Bank of DallasDallas Greg L. Armstrong, co-founder and chairman and chief executive officer (retired), Plains All American Pipeline L.P., Houston, Texas, renamed Chair. Thomas J. Falk, executive chairman (retired), Kimberly-Clark Corporation, Dallas, Texas, renamed Deputy Chair.

Pipeline and Kimberly-Clark.

December 21, 2020

Gov Brainard at CBA:  we aim to modernize the CRA in a way that advances the core purpose of the statute, while also providing greater certainty, tailoring regulations, and minimizing burden. Over the next few months, the Federal Reserve System will host outreach meetings and listening sessions like this one around the country. We encourage the public to submit written comments by the deadline of February 16, 2021, and I look forward to your feedback [here]

December 14, 2020

NY Federal Reserve Firing Former FBI Agent Escorted Him Out at 69 So He Sues in SDNY

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

SDNY COURTHOUSE, Dec 10 – Robert N. Sama, 69, was terminated by the Federal Reserve Bank of New York on February 19, 2020. He had worked there since 2007.

He filed a lawsuit in the U.S. District Court for the Southern District of New York on December 10, 2020 - Inner City Press is reporting it that same day.  

From the complaint we learn that "each FRS Bank maintains an on-site law enforcement commad called a Law Enforcement Unit."

 Sama was Vice President of the FRBNY's LEU. He had previously been with the FBI for 29 years.  

After Sama's "escorted ejection," his job was given to LEU Captain Ronald Porter, who was "jumped three level" to handle Sama's LEU responsibilities.

  The complaint calls the FRB a "privately held corporation... not a federal agency and its employees are not federal employees with the protections inherent therein."  

 Similarly, the Federal Reserve says that the FRBNY and other Reserve Banks are not subject to FOIA. Why then can they approve bank mergers? Inner City Press has a FOIA request pending.

The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Unassigned)

December 7, 2020

To Federal Reserve Waller Squeaks In 48-47 In Lame Duck Distanced Self From Judy Shelton

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

SOUTH BRONX, Dec 5 – In the midst of the Coronavirus pandemic and the election, with a fintech and crypto-currency proponent installed as Acting Comptroller, SoFi and its controller SoftBank sought to get and then got a U.S. national bank charter. Now Judy Shelton is still being pushed for the Federal Reserve, albeit with dwindling chances.

 Her fellow-nominee Christopher Waller, who squeaked in last week 48-47 as the first lame duck Fed confirmee, said this about Shelton:

Q: Mr. Waller, given Ms. Shelton’s answers on monetary policy in her thirty years of writing on the gold standard, would you recommend we confirm her to the Fed?

Waller:  Senator, that’s your decision, not mine. 

Sen. Brown: I figured that would be your answer. Let me ask in a different way. So, you’re at St. Louis Fed, right? 

Waller: Correct. 

Sen. Brown: If you were interviewing for your research department, would you hire her? 

Waller: I have a very different research department, in terms of the type of academic research we do. Judy’s been much more in the public light, in terms of her research. My department’s all publishing for academic journals. No, that’s not [inaudible] 

Sen. Brown: If someone brought her body of work and writing to you, would you hire her? Or him? 

Waller: Like I said, where her outlets are compared to what we expect our staff… They’re just two different outlets for your research

 As of November 16, there are at least three GOP senators opposing. Joining Senators Collins and Romney, Senator Lamar Alexander said “I oppose the nomination of Judy Shelton because I am not convinced that she supports the independence of the Federal Reserve Board as much as I believe the Board of Governors should. I don’t want to turn over management of the money supply to a Congress and a President who can’t balance the federal budget.” And of course there are also CRA and fair lending laws.

 On November 17, cloture for her failed 47-50. Sen McConnell switched his "yes" vote to "no," to let him attempt to re-vote again. Watch this site.

November 30, 2020

Federal Reserve Board Is Sued For FOIA About Maiden Lane and FRBNY Now To 2d Cir

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

SDNY COURTHOUSE, Nov 28 – The U.S. Federal Reserve Board got a Freedom of Information Act request for "any records from Maiden Lane LLC and Maiden Lane II LLC and Maiden Lane III LLC containing the CUSIP Number 40431LAR9."

The Fed Board denied it "because these loans were issued by the FRB of New York, not as a delegated function of the Board."  

That is to say, the Federal Reserve Board is again saying its its Reserve Banks, to which it delegates rubber stamping of mergers, are not subject to FOIA. 

  In this case, the Federal Reserve Board has not sent its own lawyers, as it did when Inner City Press sued it under FOIA.

Instead, it is represented, like ICE or other agencies, by the US Attorney's Office at 86 Chambers Street.

  Now there's a bid to appeal to the Second Circuit Court of Appeals.

The case is Junk v. Board of Governors of the Federal Reserve System, 19-cv-385 (Cote).

November 23, 2020

To Federal Reserve Judy Shelton Fails 47-50 For Now But Another Attempt May Be Made

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

SOUTH BRONX, Nov 17 – In the midst of the Coronavirus pandemic and the election, with a fintech and crypto-currency proponent installed as Acting Comptroller, SoFi and its controller SoftBank sought to get and then got a U.S. national bank charter. Now Judy Shelton is being pushed for the Federal Reserve.

 As of November 16, there are at least three GOP senators opposing. Joining Senators Collins and Romney, Senator Lamar Alexander said “I oppose the nomination of Judy Shelton because I am not convinced that she supports the independence of the Federal Reserve Board as much as I believe the Board of Governors should. I don’t want to turn over management of the money supply to a Congress and a President who can’t balance the federal budget.” And of course there are also CRA and fair lending laws.

 On November 17, cloture for her failed 47-50. Sen McConnell switched his "yes" vote to "no," to let him attempt to re-vote again. Watch this site.

November 16, 2020

To Federal Reserve Board Judy Shelton Is Being Pushed Like Lameduck OCC OKing Charters