Click here to Search This
Site -- For or with more information, contact us.
"The
Board is also
proposing to
make similar
changes to its
supervisory
rating
framework for
insurers
regulated by
the Board" - what,
for fair
insurnce?
Doubtful...
July
7, 2025
Amid
all the
criminality in
the financial
sector,
this was the
Federal
Reserve's
enforcement
action last
week:
WHEREAS,
the Board of
Governors of
the Federal
Reserve System
(the “Board of
Governors”),
pursuant to
section 8(e)
of the Federal
Deposit
Insurance Act,
as amended
(the “FDI
Act”), 12
U.S.C. §
1818(e),
issues this
Order of
Prohibition
(the “Order”)
upon the
consent of
Respondent
Kendall
Hickman
(“Hickman”), a
former
employee and
institution-affiliated
party, as
defined in
sections 3(u)
and 8(b)(3) of
the FDI Act,
12 U.S.C. §§
1813(u) and
1818(b)(3), of
Jonah Bank of
Wyoming (the
“Bank”), a
state member
bank; WHEREAS,
Hickman was an
employee of
the Bank from
July 1, 2021,
until her
termination on
June 15, 2023;
WHEREAS, prior
to and during
the same
period,
Hickman served
as a
bookkeeper for
a nonprofit
organization;
WHEREAS, from
March 6, 2018,
to June 16,
2023, Hickman
embezzled a
total of
$33,212.84
from the
nonprofit
organization;
Huge.
June
30,
2025
Gov
Barr: "As far
as collecting
data, I would
also point to
our Community
Perspectives
Survey and the
Small Business
Credit Survey,
which the
Cleveland Fed
has conducted
since 2020.2
Beyond
collecting and
analyzing
data, the
Federal
Reserve's CD
function also
conducts
qualitative
research to
understand the
"why" behind
the data" -
then why is
the Fed so
dismissive of
HMDA data? Now
the
2024 is out...
June 23,
2025
on
Friday, the
Board
announced the
termination of
the
enforcement
actions listed
below:
UniCredit,
S.p.A., Milan,
Italy,
UniCredit Bank
AG, Munich,
Germany, and
UniCredit Bank
Austria AG,
Vienna,
Austria Cease
and Desist
Order dated
April 15, 2019
(PDF)
Terminated
June 5, 2025
China
Construction
Bank
Corporation,
Beijing,
People's
Republic of
China and
China
Construction
Bank New York
Branch, New
York, New
York. Yeah.
June 16,
2025
Gov
Bowman: "to
promote
accountability,
regulators
must be
transparent—both
in supervision
and
regulation.
Successful
policymaking
requires
openness and
humility,
caution and a
deliberate
approach. I
can assure the
Committee that
if I am
confirmed as
the Vice Chair
for
Supervision, I
will be
strongly
committed to
these values." We'll see,
on FOIA and
esp on
mergers....
June
9, 2025
CFPB
Double
Kneecaps HMDA
Analysis as
Summary Table
Search Spins
and Spins
SOUTH
BRONX / DC, June
6 – Before Capital One announced and applied to
buy Discover, they and their law firm were
allowed to meet secretly with the Federal
Reserve, see below.
After they applied late March 20, 2024
Inner City Press submitted a Freedom of
Information Act request to the Fed. While they
granted expedited treatment, they delayed nearly
a near before on March 4, 2025 dumping over 1000
redacted pages.
On
March 28 the Fed has announced that "the federal
bank regulatory agencies today announced, in
light of pending litigation, their intent to
issue a proposal to both rescind the Community
Reinvestment Act (CRA) final rule issued in
October 2023 and reinstate the CRA framework
that existed prior."
On
March 31 the CFPB cut back on how HMDA data is
provided; on April 2 Fair Finance Watch
petitioned the Fed "to take emergency measures
to ensure public access to simply analyzable
data under the Home Mortgage Disclosure Act
(HMDA), including the 2024 data. Until now - for
2023 and before - CFPB has provided a filtering
page
for HMDA data, searchable by geography and
applicant characteristics.
On
March 31 the CFPB rather than adding 2024 data
to the filtering site linked above put
up only modified LARS by institution and a
large raw data date for which it provided a
warning.
The
effect of this is to make it significantly more
difficult for community groups to analyze and
compare lenders' HMDA data.
On
June 6, even for the 2023, a summary table
search even for a small institution just spun
and spun. The FRB should put a
simple collating / analyzing web interface with
the 2024 up forthwith.
The Fed's late-provided FOIA documents begin
with ex parte meetings between the bank, its law
firm and the Fed - telephone calls in February
2024, and a meeting inside the Fed on March 7,
2024 (the Fed waited until March 4, 2025 to
disclose this). 1000 page on Inner City Press'
DocumentCloud here.
200+ more pages here.
FOIA determination letter here
Inner
City Press has filed a FOIA appeal to the
Federal Reserve - and raised it in a March 21
comments, along with a new Bank for
International Settlements study that cries out
for denial of the merger.
On
March 24, the Fed's response: "Because your
letter was received after the end of the public
comment period, it will not be made a part of
the record of this case unless the Board in its
sole discretion determines to consider your late
comments." Yeah, discretion...
***
June 2,
2025
Thou
dost protest
too much: "At
the
President's
invitation,
Chair Powell
met with the
President
today at the
White House to
discuss
economic
developments
including for
growth,
employment,
and inflation.
Chair Powell
did not
discuss his
expectations
for monetary
policy, except
to stress that
the path of
policy will
depend
entirely on
incoming
economic
information
and what that
means for the
outlook.
Finally, Chair
Powell said
that he and
his colleagues
on the FOMC
will set
monetary
policy, as
required by
law, to
support
maximum
employment and
stable prices
and will make
those
decisions
based solely
on careful,
objective, and
non-political
analysis."
May
26, 2025
And
there is is,
or was:
Reconsideration
of Board
action --
request for
reconsideration
of the Board's
approval of
(1) the
application by
Capital One
Financial
Corporation
(Capital One),
McLean,
Virginia, to
acquire
Discover
Financial
Services
(Discover),
Riverwoods,
Illinois, and
(2) Capital
One's notice
to acquire
certain of
Discover's
nonbanking
companies.
Denied: May
12, 2025
May
19, 2025
Governor
Barr spoke at
the 2025
Northeast /
Mid-Atlantic
Small Business
Credit
Symposium
- but no 1071
update...
May 12,
2025
Friday
was Fed day: "Governor
Michael Barr
speaks at the
Reykjavik
Economic
Conference at
5:55 a.m.,
followed by
Fed Governor
Adriana Kugler
at 6:45 a.m. …
Richmond Fed
President Tom
Barkin will
speak at the
Loudoun County
Chamber of
Commerce at
8:30 a.m. …
Fed Governors
Christopher
Waller and
Lisa Cook, New
York Fed
President John
Williams,
Cleveland Fed
President Beth
Hammack,
former Fed
Governor Kevin
Warsh (and Larry
Summers) speak
at a monetary
policy
conference
hosted by the
Hoover
Institution.
All this
and they can't
respond to
FOIA requests
on a timely
basis...
May 5,
2025
April
28, 2025
On
April 24,
this: "The
Federal
Reserve Board
on Thursday
announced the
withdrawal of
guidance for
banks related
to their
crypto-asset
and dollar
token
activities and
related
changes to its
expectations
for these
activities.
These actions
ensure the
Board's
expectations
remain aligned
with evolving
risks and
further
support
innovation in
the banking
system. The
Board is
rescinding its
2022
supervisory
letter
establishing
an expectation
that state
member banks
provide
advance
notification
of planned or
current
crypto-asset
activities. As
a result, the
Board will no
longer expect
banks to
provide
notification
and will
instead
monitor banks'
crypto-asset
activities
through the
normal
supervisory
process." Now
what?
April
21, 2025
In Florida Disparate United Community Banks Granted ANB By Fed Amid Lending Disparities
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, April
16
–
In Florida, United Community Bank is trying to
move into the Miami area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Application by UCB
to acquire American National Bank.
But consider United Community Bank's disparate
lending record:
In South Carolina in 2023, United Community
Banks made 673 mortgage loans to whites with 282
denials. Meanwhile to African Americans in the
state it made only FIFTY ONE loans, while
denying fully 45 applications.
In
Florida in 2023, United Community Banks made 240
mortgage loans to whites with 86 denials.
Meanwhile to African Americans in the state it
made only TWELVE loans, while denying five
applications.
Nationwide, United Community Banks is scarcely
better. In 2023 overall it made 5576 mortgage
loans to whites with 4114 denials. Meanwhile to
African Americans nationwide it made only 477
loans, while denying fully 1246 applications.
That is to say, while UCB to whites had more
loans then denial, to African Americans it had
nearly three times as many denials as of loans.
On
April 16 the Fed approved, calling Fair Finance
Watch the commenter and noting, "The data cited
by the commenter corresponds to publicly
available 2023 data reported by both banks under
the Home Mortgage Disclosure Act of 1975
(“HMDA”), 12 U.S.C. § 2801 et seq." - this while
the Fed has refused to respond to FFW's petition
that it ensure 2024 HMDA data is available as
before. We'll have more on this.
Watch
this site.
***
April
14, 2025
Gov
Bowman, April 10:
"to promote
accountability,
regulators
must be
transparent—both
in supervision
and
regulation.
Successful
policymaking
requires
openness and
humility,
caution and a
deliberate
approach. I
can assure the
Committee that
if I am
confirmed as
the Vice Chair
for
Supervision, I
will be
strongly
committed to
these values."
We'll see:
Before
Capital One
announced and
applied to buy
Discover, they
and their law
firm were
allowed to
meet secretly
with the
Federal
Reserve.
After they applied late March 20, Inner
City Press submitted a Freedom of Information
Act request to the Fed. While they granted
expedited treatment, they delayed nearly a near
before on March 4 dumping over 1000 redacted
pages.
These begin with ex parte meetings between the
bank, its law firm and the Fed - telephone calls
in February 2024, and a meeting inside the Fed
on March 7, 2024 (the Fed waited until March 4,
2025 to disclose this). 1000 page on Inner City
Press' DocumentCloud here.
200+ more pages here.
FOIA determination letter here
Inner City Press immediately appealed. More than a month later, and apparently preparing its rubber stamp, the Federal Reserve upheld its own withholding in full and denied the appeal, letter here.
April
7, 2025
CFPB Kneecaps HMDA Analysis as Feds Drop CRA Rule as Fed Hides Talks with Capital One
SOUTH
BRONX / DC, April
2 – Before Capital One announced and applied to
buy Discover, they and their law firm were
allowed to meet secretly with the Federal
Reserve, see below.
After they applied late March 20, 2024
Inner City Press submitted a Freedom of
Information Act request to the Fed. While they
granted expedited treatment, they delayed nearly
a near before on March 4, 2025 dumping over 1000
redacted pages.
On
March 28 the Fed has announced that "the federal
bank regulatory agencies today announced, in
light of pending litigation, their intent to
issue a proposal to both rescind the Community
Reinvestment Act (CRA) final rule issued in
October 2023 and reinstate the CRA framework
that existed prior."
On
March 31 the CFPB cut back on how HMDA data is
provided; on April 2 Fair Finance Watch
petitioned the Fed "to take emergency measures
to ensure public access to simply analyzable
data under the Home Mortgage Disclosure Act
(HMDA), including the 2024 data. Until now - for
2023 and before - CFPB has provided a filtering
page
for HMDA data, searchable by geography and
applicant characteristics.
On
March 31 the CFPB rather than adding 2024 data
to the filtering site linked above put
up only modified LARS by institution and a
large raw data date for which it provided a
warning.
The
effect of this is to make it significantly more
difficult for community groups to analyze and
compare lenders' HMDA
data. The FRB
should put a simple collating / analyzing web
interface with the 2024 up
forthwith.
The Fed's late-provided FOIA documents begin
with ex parte meetings between the bank, its law
firm and the Fed - telephone calls in February
2024, and a meeting inside the Fed on March 7,
2024 (the Fed waited until March 4, 2025 to
disclose this). 1000 page on Inner City Press'
DocumentCloud here.
200+ more pages here.
FOIA determination letter here
Inner
City Press has filed a FOIA appeal to the
Federal Reserve - and raised it in a March 21
comments, along with a new Bank for
International Settlements study that cries out
for denial of the merger.
On
March 24, the Fed's response: "Because your
letter was received after the end of the public
comment period, it will not be made a part of
the record of this case unless the Board in its
sole discretion determines to consider your late
comments." Yeah, discretion...
***
March
31, 2025
Fed
Snubs New BIS
Study of Data
and Antitrust
Cited on
Capital One
Discover
Merger by FFW
SOUTH
BRONX, March
25 – Before Capital One announced and applied to
buy Discover, they and their law firm were
allowed to meet secretly with the Federal
Reserve.
After they applied late March 20, Inner
City Press submitted a Freedom of Information
Act request to the Fed. While they granted
expedited treatment, they delayed nearly a near
before on March 4 dumping over 1000 redacted
pages.
These begin with ex parte meetings between the
bank, its law firm and the Fed - telephone calls
in February 2024, and a meeting inside the Fed
on March 7, 2024 (the Fed waited until March 4,
2025 to disclose this). 1000 page on Inner City
Press' DocumentCloud here.
200+ more pages here.
FOIA determination letter here
Inner
City Press has filed a FOIA appeal to the
Federal Reserve - and raised it in a March 21
comments, along with a new Bank for
International Settlements study that cries out
for denial of the merger.
On
March 24, the Fed's response: "Because your
letter was received after the end of the public
comment period, it will not be made a part of
the record of this case unless the Board in its
sole discretion determines to consider your late
comments." Yeah, discretion...
***
March
24, 2025
New BIS
Study of Data
and Antitrust
Cited to Fed
Against
Capital One
Discover
Merger
SOUTH
BRONX, March
21 – Before Capital One announced and applied to
buy Discover, they and their law firm were
allowed to meet secretly with the Federal
Reserve.
After they applied late March 20, Inner
City Press submitted a Freedom of Information
Act request to the Fed. While they granted
expedited treatment, they delayed nearly a near
before on March 4 dumping over 1000 redacted
pages.
These begin with ex parte meetings between the
bank, its law firm and the Fed - telephone calls
in February 2024, and a meeting inside the Fed
on March 7, 2024 (the Fed waited until March 4,
2025 to disclose this). 1000 page on Inner City
Press' DocumentCloud here.
200+ more pages here.
FOIA determination letter here
Inner
City Press has filed a FOIA appeal to the
Federal Reserve - and raised it in a March 21
comments, along with a new Bank for
International Settlements study that cris out
for denial of the merger. Who's in the
OCC's and Fed's wallet, now?
***
March
17, 2025
Stock Fraudster Sterling Bancorp OKed To Sell Bank with Weak CRA to Everbank Shirking NY
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, March
14
–
Sterling Bancorp, which settled with DOJ on
securities fraud, it trying to sell its Sterling
Bank & Trust including in New York, where it
has a need to improve CRA Investment Test rating
to Everbank. Fair Finance Watch with Inner City
Press on the FOIA has filed a timely first
comment on, the Applications
This is a request for a full copy of, and a
timely first comment on, the Applications of
EverBank to acquire Sterling Bank & Trust
(with a rare Needs to Improve CRA rating on
Investment Test in New York), and not scandal
plagued Sterling
Bancorp.
Sterling Bancorp was recently prosecuted by DOJ;
EverBank purports that by buying the bank
portion it is not touched by the scandal. But
what is the showing that the criminal conduct at
the Bancorp was entirely insulated from the bank
and those who work there, and its
practices? As a
CRA matter, militating for a hearing, Sterling
Bank has a rare Needs to Improve rating on the
investment test in NY.
On
December 24 Everbank wrote in to the Fed stating
that "EverBank maintains the following two
office locations in New York, neither of which
is a “branch”... Islandia, NY: Located at 11
Oval Drive, Suite 107, Islandia, NY 11749.11
This location consists of an approximately
31,000 square-foot facility... EverBank notes
that its lease for the Islandia, New York
location is due to expire in 2025, after which
EverBank expects to move the back-office
operations currently conducted at that location
to another non-branch office location on Long
Island, New York." Needs to improve...
Nevertheless
on Friday, March 14 the Fed hauled off and
approved it, noting that FFW - "the commenter
criticized the CRA record of Sterling Bank with
respect to its “Needs to Improve” rating on the
investment test (“Investment Test”) component of
the bank’s statewide ratings in Michigan, New
York, and Washington" - then saying "EverBank
intends to renovate many of Sterling Bank’s
existing branches." Yeah.
***
March
10, 2025
In
Florida
Disparate
United
Community
Banks Wants
ANB Now Fed Qs
Including on
CRA
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, March
6
–
In Florida, United Community Bank is trying to
move into the Miami area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Application by UCB
to acquire American National Bank.
But consider United Community Bank's disparate
lending record:
In South Carolina in 2023, United Community
Banks made 673 mortgage loans to whites with 282
denials. Meanwhile to African Americans in the
state it made only FIFTY ONE loans, while
denying fully 45 applications.
In
Florida in 2023, United Community Banks made 240
mortgage loans to whites with 86 denials.
Meanwhile to African Americans in the state it
made only TWELVE loans, while denying five
applications.
Nationwide, United Community Banks is scarcely
better. In 2023 overall it made 5576 mortgage
loans to whites with 4114 denials. Meanwhile to
African Americans nationwide it made only 477
loans, while denying fully 1246 applications.
That is to say, while UCB to whites had more
loans then denial, to African Americans it had
nearly three times as many denials as of loans.
To
this, on February 11 UCB through outside counsel
replied that while Fair Finance Watch "cites
data for the Bank’s lending in South Carolina,
Florida and 'nationwide,' the comment’s
assertion that “nationwide” data is relevant is
misplaced." What a surprise. They ignore their
disparities.
In
March the Fed asked questions, including on CRA
(and a Confidential question), and "Discuss the
purpose of each of the following provisions in
the Merger Agreement and whether any provisions
listed below would be considered to permit UCBI
or United Community Bank to exercise prior
control over the management or policies of
Bank: i. ii. Article 5.1(u),
which states that American Bank may not make or
acquire or issue a commitment for (i) any
commercial real estate Loan in an original
principal amount in excess of $7,000,000, (ii)
any residential Loan originated for retention in
the Loan portfolio in an original principal
amount in excess of $1,500,00 or (iii) any
commercial or industrial Loan in an original
principal amount in excess of $2,000,000."
Watch
this site.
***
March 3,
2025
Gov
Philip
Jefferson said in
a speech last
week,
"Policymakers'
approach to
communication
has evolved
over time. In
the past,
policymakers
were not
focused on
clarity and
transparency
in their
communications
as they are
today. For
example,
former Fed
Chair Alan
Greenspan
famously
quipped in
1987, "If I
seem unduly
clear to you,
you must have
misunderstood
what I said.""
But how
transparent is
the Fed now?
Long delays on
FOIA, for
example....
February
24, 2025
Federal Reserve Defended Terminating Master Accounts Now BSJI Cites Fed on Debanking
by
Matthew Russell Lee, Patreon Book
Substack
SDNY COURTHOUSE,
Feb 17 – The Federal Reserve - both the Board of
Governors in Washington and the FRBNY - have
been sued by Banco San Juan International for
the terminal of its master account(s).
On
the motion to dismiss, oral arguments were held
on December 12 before U.S. District Court for
the Southern District of New York Judge John G.
Koeltl. Inner City Press was there. Thread:
Fed's
lawyers from Simpson Thacher law firm cite
Custodia (crypto) case. Does this outside
counsel rep raise conflicts of interest on
mergers?
Note:
Simpson Thacher represents many banks applying
to the Fed for merger approvals - why did
the Fed, which has many in house lawyers,
have to hire them? And isn't there now a
conflict of interest on the merger applications?
Fed: The Reserve Banks are not govt
Plaintiff:
The Fed never closed the master accounts of
Deutsche Bank, despite wrongdoing - and what
about "Toronto Dominion, which pled guilty to
money laundering"?
[Note:
TD's Leonardo Ayala is being prosecuted in the
District of NJ]
On
January 8, 2025 Judge Koeltl dismissed the
amended complaint, setting a time to further
amend: "the defendants' motions to dismiss are
granted. All of BSJI's claims are dismissed
without prejudice as discussed above. At oral
argument, counsel for BSJI indicated that BSJI
may wish to file a second amended complaint. Tr.
16. The time to file a motion to amend,
attaching a copy of the second amended complaint
and explaining how the second amended complaint
solves the deficiencies noted in this opinion,
is January 27, 2025. The defendants may respond
by February 10, 2025. The plaintiff may reply by
February 17, 2025. If the plaintiff does not
file any such motion by January 27, 2025, the
Court will issue an order directing that
judgment be entered dismissing the Amended
Complaint."
On
February 17 BSJI through counsel Abbe Lowell
wrote in citing Fed Chair Jerome Powell's recent
testimony that he is (belatedly) troubled by
de-banking by the Reserve Banks. Full letter on
Patreon here
Inner
City Press will stay on these cases.
This case is Banco San Juan Internacional, Inc. v. The Federal Reserve Bank of New York, et al., 1:23-cv-06414 (Koeltl)
***
February
17, 2025
As CFPB
Home Page Goes
404 HMDA
Petition to
Federal
Reserve by
Fair Finance
Watch
by
Matthew Russell Lee, Patreon Book
Substack
Bronx / Federal
Court, Feb 11 – When a "404: Page Not
Found" message began on the homepage of the U.S.
Consumer Financial Protection Bureau, a call
went out among consumer advocates to dig deeper
in the site and begin downloading data before it
is deleted. Fine.
But the CFPB has become the platform on which
new data under the Home Mortgage Disclosure Act
is released. Simply downloading past years' data
is not enough. Where will the 2024 data go, and
be available to the public?
Fair Finance Watch, with Inner City Press on the
FOIA, filed a petition for rulemaking and
emergency mitigation with the Federal Reserve
Board:
Governor
Powell, Ladies and Gentlemen:
Fair Finance Watch and Inner City Press are
writing to petition the Board of Governors of
the Federal Reserve System under section 553(e)
of the Administrative Procedure Act to engage in
rulemaking and, most immediately, to take
emergency measures to ensure public access to
data under the Home Mortgage Disclosure Act
(HMDA), including the 2024 data.
When the Consumer Financial Protection Bureau
was created, the hosting of HMDA data shifted
from the FFIEC to CFPB website.
Today February 10, 2025 the
CFPB.gov website went dark. While portions of
the site are as of this writing still available,
it is foreseeable that the HMDA data site may be
taken down. The
Community Reinvestment Act, among other banking
laws, is largely enforced by use and analysis of
HMDA data. It is imperative that public access
to HMDA data remain.
The
FRB should begin a process to ensure access to
HMDA data, on FFIEC or the FRB's own website -
by rulemaking, if necessary long term, but
immediate on an interim basis, if necessary
mirroring the CFPB cite as long as it remains
under threat.
This petition concerning the continued public
access to HMDA data is also made with reference
to Section 553(e) of the APA, and we
respectfully request a response.
Watch this site. Others like NCRC are advocating. We aim to have more from DC
***
February
10, 2025
Now the
Fed has
announced the
termination of
two
enforcement
actions with
Wells Fargo -
the one with
the predatory
lender Wells
Fargo
Financial...
February
3, 2025
Crime:
John Harold
Rogers, 63, a
former Senior
Adviser for
the Federal
Reserve Board
of Governors
was arrested
on charges
that he
conspired to
steal Federal
Reserve trade
secrets for
the People’s
Republic of
China
Revolving
door: Coinbase has
added to its Global
Advisory
Council former
New York Fed
President Bill
Dudley...
January
25, 2025
It was the
Federal
Reserve Bank of
Atlanta that
on January 23
asked "Provide
a complete
list of the
non-branch
offices of
EverBank,
National
Association
and Sterling
Bank. " Watch
this site.
January
20, 2025
On
Capital One
Discover OCC
Doubled Down
on FOIA
Withholding
Now Customers
Cut Off
SOUTH
BRONX, Jan
17 – Capital One has applied to buy Discover, in
an anticompetitive deal that should be rejected
by regulators if they mean what they have been
saying. After they applied late March 20,
Inner City Press submitted a second Freedom of
Information Act request to the Office of the
Comptroller of the Currency (and to the Federal
Reserve).
On
May 14 - still without providing FOIA documents
- the OCC and Fed set a July 19 virtual public
meeting.
On
the eve of it, Capital One announced a vague and
less than credible plan - they previously
violated their ING Direct pledge - including
this time $75 billion in largely subprime auto
loans. Fair Finance Watch testified for three
minutes.
On
June 25 the OCC belatedly responded to Inner
City Press' FOIA request - by withholding in
full 185 pages. OCC FOIA production on
DocumentCloud here.
Inner City Press appealed.
On July 24, the very day on which the OCC and
Fed said they were closing the written comment
period, the OCC upheld in full its FOIA denials,
determination letter on Inner City Press'
Document Cloud here.
Inner City Press has requested an extension of
the comment periods - the Fed hasn't even
responded.
Nor does it seem the Fed has taken note of
Capital One cutting off its own customers on
January 16, then passing the buck to a third
party vendor, Fidelity Information Services.
Something is deeply wrong with Capital One, but
the Fed and OCC don't seem to care.
Meanwhile
Capitol One lobbying continues even now in 2024,
from New
Mexico even to Harlem by a social worker
with bankers on the board. How is this
Astroturfing organized?
Without
approvals, now the banks have set shareholders'
votes for February 18, 2025.
As
documented by Fair Finance Watch, Discover Bank
in 2022 denied mortgage loans application from
African Americans more than twice as frequently
as those of whites. It grew worse in the
just-out 2023 data.
Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be denied. But will it be? Watch this site.
***
January
13, 2025
UMB Bank Heartland Merger Hit on Disparties and Uninsured Deposits Now Rubber Stamped
by
Matthew R.
Lee, Patreon Substack
SOUTH BRONX /
SDNY, Jan 10
–
When First Republic Bank failed / was given to
JP Morgan Chase, a small list of other regional
banks came into focus as in danger. Among them
was UMB - a bank whose lending Inner City Press
and Fair Finance Watch had been scrutinizing,
and now challenge.
UMB is asking its regulators to allow it to
expand, buying Denver-based Heartland. The
application, Fair Finance Watch on June 21
formally told the Fed, should not be
approved. In 2022, the most recent
year for which Federal data is available, UMB
Bank, N.A. made over 2000 mortgage loans to
whites, and only 117 loans to African Americans.
For
every denial to an African American, it made
only 2.02 loans. But for whites, for every
denial it made 3.45 loans. It should be referred
to DOJ.
There
is litigation, there is also this, reported at
the time of Silicon Valley Bank's failure: "UMB
Bank, a regional bank headquartered in Kansas
City, Missouri, and with branches across the
Midwest, Southwest, and Western United States,
has total assets of $38 billion and deposits
totaling $32 billion, according to the FDIC.
However, only 16% of deposits fall under the
$250,000 FDIC insurance threshold, leaving
74.11% (equivalent to $28.36 billion) vulnerable
to potential losses."
Why
would regulators even consider approving its
expansion? On June 21, Fair Finance Watch filed
a formal Community Reinvestment Act challenge to
UMB's application to the Federal Reserve, adding
state by state data:
UMB Bank in 2022 in Missouri made 842 mortgage
loans to whites, and only 76 loans to African
Americans. Meanwhile it denied 41 applications
from African Americans, and only 257 from
whites.
UMB Bank in Colorado - in which it seeks to
expand - in 2022 made 378 mortgage loans to
whites, and only 13 loans to African Americans.
Meanwhile it denied six applications from
African Americans, and only 107 from whites.
UMB Bank in 2022 in Texas made 78 mortgage loans
to whites, and only six loans to African
Americans. Meanwhile it denied two applications
from African Americans, and only 27 from
whites.
These disparities cry out for a referral to DOJ,
and public hearings on, and denial of, UMB's
major expansion application.
On
October 11 UMB's outside counsel Davis Polk sent
the Fed a response but withheld branch closing,
subsidiary, fintech and crypto information from
Fair Finance Watch - so Inner City Press cc-ed
them on a FOIA request.
On
November 29, the Fed responded with the branch
closing list and more - now on Inner City Press'
DocumentCloud here.
Watch
this site.
***
January
6, 2025
If the
Federal
Reserve Banks
are not the
government,
how can they
give out
approval like
this?
"New
York NBT
Bancorp Inc.,
Norwich, New
York—waiver of
application to
acquire Evans
Bancorp, Inc.,
Williamsville,
New York, and
thereby
acquire Evans
Bank, National
Association
(Evans Bank),
Angola, New
York, in
connection
with the
merger of
Evans Bank
with and into
NBT Bank,
National
Association,
Norwich, New
York.*
Granted:
December 18,
2024."
December
30, 2024
The Fed is
supposed to
sent copies of
its question
letters to
banking to the
community
groups which
have commented
on,
particularly
against, the
proposed
merger. But on
Capital One -
Discover, the
Fed just stopped.
Capital One
disclosed the
letter, but
not the
contents, in
SEC filings. A
new low.
December
23, 2024
Fraudster Sterling Bancorp Bid To Sell Bank with Weak CRA to Everbank Questioned on NY
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, Dec 20
–
Sterling Bancorp, which settled with DOJ on
securities fraud, it trying to sell its Sterling
Bank & Trust including in New York, where it
has a need to improve CRA Investment Test rating
to Everbank. Fair Finance Watch with Inner City
Press on the FOIA has filed a timely first
comment on, the Applications
This is a request for a full copy of, and a
timely first comment on, the Applications of
EverBank to acquire Sterling Bank & Trust
(with a rare Needs to Improve CRA rating on
Investment Test in New York), and not scandal
plagued Sterling
Bancorp.
Sterling Bancorp was recently prosecuted by DOJ;
EverBank purports that by buying the bank
portion it is not touched by the scandal. But
what is the showing that the criminal conduct at
the Bancorp was entirely insulated from the bank
and those who work there, and its
practices? As a
CRA matter, militating for a hearing, Sterling
Bank has a rare Needs to Improve rating on the
investment test in NY.
On
December 4 Everbank's outside counsel wrote in
that FFW "selectively criticizes a single
component of Sterling Bank’s most recent CRA
performance evaluation from states in which
Sterling Bank either no longer operates, will no
longer operate upon completion of the Proposed
Transaction, or maintains only a de minimis
banking presence" -- that would be New York, no
commitment to improve on the Needs to Improve.
As to Michigan the outside counsel says, or
brags, "EverBank intends to close Sterling
Bank’s only Michigan branch following completion
of the Proposed Transaction."
On
December 19, the Federal Reserve asked Everbank
questions including "Explain whether EverBank’s
office in New York is a “branch” within the
meaning of 12 U.S.C. 1841(o)(3) and indicate
whether loan proceeds are disbursed at that New
York office.
3.
The FR Y-3 notes: “following the Proposed
Transaction, the combined organization intends
to leverage the CRA and consumer protection
compliance strengths of both banks to create a
strong and comprehensive combined compliance
program.” The FR Y-3 subsequently states that
“EverBank does not anticipate any structural
changes to its CRA program, CRA leadership,
organizational structure, or oversight as a
result of the Proposed Transaction.” Clarify
whether the combined organization intends to
continue to utilize EverBank’s existing CRA and
consumer compliance programs following
consummation. If the combined organization
intends to incorporate specific aspects of
Sterling Bank’s CRA and consumer those programs
the combined organization intends to leverage
from Sterling Bank’s existing operations.
4.
The FR Y-3 notes that Sterling Bank would use
commercially reasonable efforts to close its
Southfield, Michigan branch... Indicate whether
a branch closure notice has been submitted under
section 42 of the FDI Act."
The
proposal should be denied.
***
December
16, 2024
SouthState Lending Disparities Triggered CRA Protest But Fed OKs Admitting Weak Carolinas
by
Matthew R.
Lee, Patreon Substack
SOUTH BRONX /
SDNY, Dec 13
–
When First Republic Bank failed / was given to
JP Morgan Chase, a small list of other regional
banks came into focus as in danger, banks whose
lending Inner City Press and Fair Finance Watch
had been scrutinizing, even more so that the
2023 data is out.
This week Inner City Press filed with the Fed, a
timely first comment on, the Applications of
SouthState Corporation to merge with Independent
Bank Group, Inc., and Independent
Bank.
SouthState in South Carolina in 2023 - data not
yet included in any CRA exam - made 5013
mortgage loans to whites, and only 228 loans to
African Americans. Meanwhile it denied only 670
applications from whites, and fully 195 from
African Americans. SouthState should be referred
to DOJ.
SouthState in North Carolina in 2023 - data not
yet included in any CRA exam - made 1334
mortgage loans to whites, and only FIFTY SEVEN
loans to African Americans. Meanwhile it denied
only 173 applications from whites, and fully 20
from African Americans.
SouthState in Georgia in 2023 - data not yet
included in any CRA exam - made 1176 mortgage
loans to whites, and only 318 loans to African
Americans. Meanwhile it denied only 304
applications from whites, and fully 88 from
African Americans.
Nationwide
in 2023, SouthState made 7798 mortgage loans to
whites, and only 947 loans to African Americans.
Meanwhile it denied only 2491 applications from
whites, and fully 558 from African
Americans.
Why would regulators even consider approving its
expansion?
On
August 9, SouthState submitted to the Fed a
response - that deals only with Independent
Bank.
On
September 18, the Fed asked SouthState questions
including "Confirm that no consumer products or
community development programs or services
offered by either organization will be
discontinued by the combined organization as a
result of the proposed transaction, other than
those identified in Confidential Exhibit 18 to
the application."
Inner
City Press has submitted a FOIA request with the
Fed for that obviously CRA-material Exhibits.
No thanks to the Fed, Inner City Press got the
exhibit - SouthState just withdrew its request
for confidential treatment, of this:
"CONFIDENTIAL SouthState Bank, N.A.
Independent Bank Discontinued Independent
Bank Products and Services June 2024
SSC and IBTX currently plan on discontinuing
Independent Bank’s mortgage warehouse program
and selling its Shared National Credits (SNC)
portfolio. Almost all purchased SNCs are in
Independent Bank’s commercial loan portfolio,
with the largest single industry concentration
in energy."
But
there is more being withheld. SouthState filed
on September 30: "Please see Confidential
Exhibit 1 to the Confidential Appendix for
additional information on branch actions
SouthState may plan to take that are unrelated
to the proposed transaction."
On
December 13 the Fed rubber stamped the deal,
even as it admitted it is order poor performance
in South Carolina and poor geographic
distribution of SouthState's loans in North
Carolina. This is today's Fed.
***
December
9, 2024
First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Now Fed Asks Sealed Question
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, Dec 5
–
In the Midwest, Busey Bank is trying to move
into the Kansas City area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Applications
Van Dukeman, First Busey's CEO called it a
"great fit from a cultural perspective." But
consider Busey Bank's culture - including
contempt for CRA, its disparate lending
record:
First
Busey's Busey Bank in Illinois in 2023 - data
not yet included in any CRA exam - made 1163
mortgage loans to whites, and only 772 loans to
African Americans. Meanwhile it denied only 216
applications from whites, and fully 24 from
African Americans. Busey Bank should be referred
to DOJ.
Busey
Bank in Missouri in 2023 - data not yet included
in any CRA exam - made 49 mortgage loans to
whites, and only seven loans to African
Americans. Meanwhile it denied only 21
applications from whites, and fully eight from
African Americans
Busey
Bank in Indiana in 2023 - data not yet included
in any CRA exam - made 22 mortgage loans to
whites, and only two loans to African
Americans.
Busey
Bank in Florida in 2023 - data not yet included
in any CRA exam - made 80 mortgage loans to
whites, and only ONE loan to an African
American.
Rather
than provide CRA info, First Busey's Monica L.
Bowe, Executive Vice President & Chief Risk
Officer of First Busey Corporation - and of the
Risk Management Association- submitted a letter
saying CRA conditions are never attached -
false, and telling.
Now
after questions Busey's outside counsel has
disclosed that Busey "has been the target of
multiple law firms’ efforts to solicit customers
via the internet to bring a mass arbitration
based on overdraft and NSF fees, specifically
Authorize Positive, Settle Negative and
Representment fees, both of which Busey Bank
stopped charging in 2022. Busey Bank first
became aware of these solicitations in February,
2024. Representatives of Busey have spoken with
representatives of some of these law firms and
have received demands for attorneys’ fees and
potential refunding of certain fees and Busey
management is currently discussing the path
forward with counsel."
On
December the Federal Reserve cc-ed Inner City
Press on its question to Busey Bank - but the
question was entirely withheld.
That's today Fed.
The
merger should be denied. Watch this site.
***
December
2, 2024
UMB Bank Application for Heartland Hit on Disparties Info Withheld Now Won Under FOIA
by
Matthew R.
Lee, Patreon Substack
SOUTH BRONX /
SDNY, Nov 29
–
When First Republic Bank failed / was given to
JP Morgan Chase, a small list of other regional
banks came into focus as in danger. Among them
was UMB - a bank whose lending Inner City Press
and Fair Finance Watch had been scrutinizing,
and now challenge.
UMB is asking its regulators to allow it to
expand, buying Denver-based Heartland. The
application, Fair Finance Watch on June 21
formally told the Fed, should not be
approved. In 2022, the most recent
year for which Federal data is available, UMB
Bank, N.A. made over 2000 mortgage loans to
whites, and only 117 loans to African Americans.
For
every denial to an African American, it made
only 2.02 loans. But for whites, for every
denial it made 3.45 loans. It should be referred
to DOJ.
There
is litigation, there is also this, reported at
the time of Silicon Valley Bank's failure: "UMB
Bank, a regional bank headquartered in Kansas
City, Missouri, and with branches across the
Midwest, Southwest, and Western United States,
has total assets of $38 billion and deposits
totaling $32 billion, according to the FDIC.
However, only 16% of deposits fall under the
$250,000 FDIC insurance threshold, leaving
74.11% (equivalent to $28.36 billion) vulnerable
to potential losses."
Why
would regulators even consider approving its
expansion? On June 21, Fair Finance Watch filed
a formal Community Reinvestment Act challenge to
UMB's application to the Federal Reserve, adding
state by state data:
UMB Bank in 2022 in Missouri made 842 mortgage
loans to whites, and only 76 loans to African
Americans. Meanwhile it denied 41 applications
from African Americans, and only 257 from
whites.
UMB Bank in Colorado - in which it seeks to
expand - in 2022 made 378 mortgage loans to
whites, and only 13 loans to African Americans.
Meanwhile it denied six applications from
African Americans, and only 107 from whites.
UMB Bank in 2022 in Texas made 78 mortgage loans
to whites, and only six loans to African
Americans. Meanwhile it denied two applications
from African Americans, and only 27 from
whites.
These disparities cry out for a referral to DOJ,
and public hearings on, and denial of, UMB's
major expansion application.
On
October 11 UMB's outside counsel Davis Polk sent
the Fed a response but withheld branch closing,
subsidiary, fintech and crypto information from
Fair Finance Watch - so Inner City Press cc-ed
them on a FOIA request.
On
November 29, the Fed responded with the branch
closing list and more - now on Inner City Press'
DocumentCloud here.
Watch
this site.
***
November
25, 2024
First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Now They Disclose Legal Threat
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, Nov 20
–
In the Midwest, Busey Bank is trying to move
into the Kansas City area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Applications
Van Dukeman, First Busey's CEO called it a
"great fit from a cultural perspective." But
consider Busey Bank's culture - including
contempt for CRA, its disparate lending
record:
First
Busey's Busey Bank in Illinois in 2023 - data
not yet included in any CRA exam - made 1163
mortgage loans to whites, and only 772 loans to
African Americans. Meanwhile it denied only 216
applications from whites, and fully 24 from
African Americans. Busey Bank should be referred
to DOJ.
Busey
Bank in Missouri in 2023 - data not yet included
in any CRA exam - made 49 mortgage loans to
whites, and onlyseven loans to African
Americans. Meanwhile it denied only 21
applications from whites, and fully eight from
African Americans
Busey
Bank in Indiana in 2023 - data not yet included
in any CRA exam - made 22 mortgage loans to
whites, and only two loans to African
Americans.
Busey
Bank in Florida in 2023 - data not yet included
in any CRA exam - made 80 mortgage loans to
whites, and only ONE loan to an African
American.
Rather
than provide CRA info, First Busey's Monica L.
Bowe, Executive Vice President & Chief Risk
Officer of First Busey Corporation - and of the
Risk Management Association- submitted a letter
saying CRA conditions are never attached -
false, and telling.
Now
after questions Busey's outside counsel has
disclosed that Busey "has been the target of
multiple law firms’ efforts to solicit customers
via the internet to bring a mass arbitration
based on overdraft and NSF fees, specifically
Authorize Positive, Settle Negative and
Representment fees, both of which Busey Bank
stopped charging in 2022. Busey Bank first
became aware of these solicitations in February,
2024. Representatives of Busey have spoken with
representatives of some of these law firms and
have received demands for attorneys’ fees and
potential refunding of certain fees and Busey
management is currently discussing the path
forward with counsel."
November
18, 2024
UMB Bank Application for Heartland Hit on Disparties Info Withheld Now FOIA Delay
by
Matthew R.
Lee, Patreon Substack
SOUTH BRONX /
SDNY, Nov 12
–
When First Republic Bank failed / was given to
JP Morgan Chase, a small list of other regional
banks came into focus as in danger. Among them
was UMB - a bank whose lending Inner City Press
and Fair Finance Watch had been scrutinizing,
and now challenge.
UMB is asking its regulators to allow it to
expand, buying Denver-based Heartland. The
application, Fair Finance Watch on June 21
formally told the Fed, should not be
approved. In 2022, the most recent
year for which Federal data is available, UMB
Bank, N.A. made over 2000 mortgage loans to
whites, and only 117 loans to African Americans.
For
every denial to an African American, it made
only 2.02 loans. But for whites, for every
denial it made 3.45 loans.
On
June 21, Fair Finance Watch filed a formal
Community Reinvestment Act challenge to UMB's
application to the Federal Reserve, adding state
by state data:
UMB Bank in 2022 in Missouri made 842 mortgage
loans to whites, and only 76 loans to African
Americans. Meanwhile it denied 41 applications
from African Americans, and only 257 from
whites.
UMB Bank in Colorado - in which it seeks to
expand - in 2022 made 378 mortgage loans to
whites, and only 13 loans to African Americans.
Meanwhile it denied six applications from
African Americans, and only 107 from whites.
UMB Bank in 2022 in Texas made 78 mortgage loans
to whites, and only six loans to African
Americans. Meanwhile it denied two applications
from African Americans, and only 27 from
whites.
These disparities cry out for a referral to DOJ,
and public hearings on, and denial of, UMB's
major expansion application.
On
October 11 UMB's outside counsel Davis Polk sent
the Fed a response but withheld branch closing,
subsidiary, fintech and crypto information from
Fair Finance Watch - so Inner City Press cc-ed
them on a FOIA request for:
This
is a formal FOIA request for the withheld
exhibits to UMB's October 11 submission to the
Federal Reserve in connection with its protested
application to acquire Heartland Financial, in
particular "Confidential" Exhibits A and B,
including about fintech and branch closings and
all activities engaged in by corporate
subsidiaries. This is presumptively public; if
any is withheld, all reasonably segregable
portions should be provided.
UMB
recites and responds: 1. Provide a description
of the activities conducted by the following UMB
subsidiaries: a. UMBCDC, Inc., Kansas City,
Missouri; b. UMB Financial Services, Inc.,
Kansas City, Missouri; c. UMB Management Equity
Holdings Inc., Kansas City, Missouri; d. UMB
Merchant LLC, Kansas City, Missouri; and e. UMB
Asset Management, LLC, Kansas City, Missouri The
requested information is included in AIR
Confidential Exhibit A. Convenience and Needs 2.
Provide an update on UMB Bank’s branch
consolidation analysis and confirm whether any
of the branches listed in Public Exhibit 3 of
the Additional Information Response, dated
August 5, 2024 (“August AI Response”) would be
consolidated, following consummation of the
proposed transaction. The requested information
is included in AIR Confidential Exhibit B.
Discuss any plans to engage in
crypto-asset-related activities or fintech
partnerships. The requested information is
included in AIR Confidential Exhibit
A.
Again,
this is both important for the public to know
and is presumptively public; if any is withheld,
all reasonably segregable portions should be
provided.
On
November 12 - a month after the request - the
Fed wrote that it was unilaterally extending its
time to respond to November 26.
Watch
this site.
***
Your support means a lot. As
little as $5 a month helps keep us going and grants you access
to exclusive bonus material on our Patreon page. Click here
to become a patron.
November
11, 2024
First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Info Hidden Now FOIA Delay
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, Nov 4 –
In the Midwest, Busey Bank is trying to move
into the Kansas City area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Applications
Van Dukeman, First Busey's CEO called it a
"great fit from a cultural perspective." But
consider Busey Bank's culture - including
contempt for CRA, its disparate lending
record:
First
Busey's Busey Bank in Illinois in 2023 - data
not yet included in any CRA exam - made 1163
mortgage loans to whites, and only 772 loans to
African Americans. Meanwhile it denied only 216
applications from whites, and fully 24 from
African Americans. Busey Bank should be referred
to DOJ.
Busey
Bank in Missouri in 2023 - data not yet included
in any CRA exam - made 49 mortgage loans to
whites, and onlyseven loans to African
Americans. Meanwhile it denied only 21
applications from whites, and fully eight from
African Americans
Busey
Bank in Indiana in 2023 - data not yet included
in any CRA exam - made 22 mortgage loans to
whites, and only two loans to African
Americans.
Busey
Bank in Florida in 2023 - data not yet included
in any CRA exam - made 80 mortgage loans to
whites, and only ONE loan to an African
American.
There
is litigation, for example under the FCRA, here
- dropped without explanation, presumable
settled, the FRB should ask First Busey about
all outstanding consumer litigation.
And
there was the First Busey board member,
Elisabeth Kimmel, caught in the college
admissions scandal, here.
When
the Fed provided the application, the banks had
withheld their CRA data. So, "This is a formal
FOIA request for the withheld exhibits to the
First Busey / CrossFirst application, in
particular "Confidential" Exhibits 9 ("First
Busey Community Reinvestment Act Data") and 10
("CrossFirst Community Reinvestment Act data").
This is presumptively public."
Rather
than provide the CRA info, First Busey's Monica
L. Bowe, Executive Vice President & Chief
Risk Officer of First Busey Corporation - and of
the Risk Management Association- submitted a
letter saying CRA conditions are never attached
- false, and telling.
Inner
City Press' FOIA request? The Fed on November 4
extended its time to reply - and unlike other
less arrogant banks, First Busey has provided
nothing. Watch this site.
***
November
4, 2024
Today's
FRB gives out
gifts to
redliners in
secret. Consider:
St. Louis
German
American
Bancorp, Inc.,
Jasper,
Indiana—waiver
of application
to acquire
Heartland
BancCorp,
Whitehall,
Ohio, and
simultaneously
merge
Heartland
Bank,
Whitehall,
Ohio, with and
into German
American Bank,
Jasper,
Indiana.
Granted:
October 22,
2024
From
September,
ongoing: Fair
Finance Watch
has been
concerned for
some time with
German
American
Bank's
outreach /
image and
lending. In
Indiana in
2023 - in HMDA
data not yet
taken into
account in any
CRA exam -
German
American Bank
based on its
marketing made
1743 mortgage
loans to
whites, and
only SIXTEEN
loans to
African
Americans.
Meanwhile it
denied 11
applications
from African
Americans, and
only 356 from
whites
October
28, 2024
From
the FRB of Chicago:
"Dear Matthew:
This is in
reference to
the filing by
First Busey
Corporation,
Champaign,
Illinois, to
merge with
CrossFirst
Bankshares,
Inc., Leawood,
Kansas
(“Applicant”),
and thereby
indirectly
acquire
CrossFirst
Bank, Leawood,
Kansas. This
will
acknowledge
receipt of
your comment
email dated
October 15,
2024. Your
comment has
been accepted
by the Federal
Reserve Bank
of Chicago
(“Reserve
Bank”)
relative to
this filing
and will be
made a part of
the record. A
copy of your
comment has
been forwarded
to Applicant
for an
opportunity to
respond and if
Applicant
responds, you
will be
provided a
copy of the
response. To
the extent the
comment letter
and request
for a hearing
dated October
15, 2024, also
seeks records
under the
Freedom of
Information
Act (“FOIA”),
it does not
comply with
section
261.11(a)(2)
of the Board’s
Rules relating
to the
submission of
FOIA requests
because you
have combined
a request for
records with
comments on an
application
and a hearing
request, 12
CFR
261.11(a)(2).
This
correspondence,
therefore,
will not be
processed as a
FOIA request.
Accordingly,
if you seek
information
under the
FOIA, you may
submit a
separate
request to the
Board’s
Freedom of
Information
Office that
complies with
the
requirements
of section
261.11 of the
Board’s
Rules."
But on FOIA
requests, even
when the Board
grants expedited
processing, no
records are
received on a
timely
basis...
October
21, 2024
Expedited? From
the Fed: This is
in response to
your
electronic
message dated
and received
by the Board
on October 11,
2024. Pursuant
to the Freedom
of Information
Act (“FOIA”),
5 U.S.C. §
552, you
request:
the withheld
exhibits to
UMB’s October
11 submission
to the Federal
Reserve in
connection
with its
protested
application to
acquire
Heartland
Financial, in
particular
“Confidential”
Exhibits A and
B, including
about fintech
and branch
closings and
all activities
engaged in by
corporate
subsidiaries.
You have
requested
expedited
processing
... I
have
determined to
grant your
request for
expedited
processing
because (1)
you are
primarily
engaged in
disseminating
information,
and (2) the
application
you seek is
pending with
the Board.
Accordingly,
your request
will be
processed as
soon as
practicable
and ahead of
other FOIA
requests.
We'll see.
October
14, 2024
On First Busey,
Inner City
Press has been
granted
expedited
processing: "I
have
determined to
grant your
request for
expedited
processing
because (1)
you are
primarily
engaged in
disseminating
information,
and (2) the
application
you seek is
open for"
comment...
October
7, 2024
First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch As CRA Exhibits Withheld
by
Matthew R.
Lee, Patreon Substack
FEDERAL COURT, Oct
4 –
In the Midwest, Busey Bank is trying to move
into the Kansas City area via merger, with a
disparate lending record. Fair Finance Watch
with Inner City Press on the FOIA has filed a
timely first comment on, the Applications
Van Dukeman, First Busey's CEO called it a
"great fit from a cultural perspective." But
consider Busey Bank's culture, its disparate
lending record:
First
Busey's Busey Bank in Illinois in 2023 - data
not yet included in any CRA exam - made 1163
mortgage loans to whites, and only 772 loans to
African Americans. Meanwhile it denied only 216
applications from whites, and fully 24 from
African Americans. Busey Bank should be referred
to DOJ.
Busey
Bank in Missouri in 2023 - data not yet included
in any CRA exam - made 49 mortgage loans to
whites, and onlyseven loans to African
Americans. Meanwhile it denied only 21
applications from whites, and fully eight from
African Americans
Busey
Bank in Indiana in 2023 - data not yet included
in any CRA exam - made 22 mortgage loans to
whites, and only two loans to African
Americans.
Busey
Bank in Florida in 2023 - data not yet included
in any CRA exam - made 80 mortgage loans to
whites, and only ONE loan to an African
American.
There
is litigation, for example under the FCRA, here
- dropped without explanation, presumable
settled, the FRB should ask First Busey about
all outstanding consumer litigation.
And
there was the First Busey board member,
Elisabeth Kimmel, caught in the college
admissions scandal, here.
When
the Fed provided the application, the banks had
withheld their CRA data. So, "This is a formal
FOIA request for the withheld exhibits to the
First Busey / CrossFirst application, in
particular "Confidential" Exhibits 9 ("First
Busey Community Reinvestment Act Data") and 10
("CrossFirst Community Reinvestment Act data").
This is presumptively public." Watch this site.
***
September
30, 2024
The Fed
has granted
expedited
processing,
they say, to
Inner City
Press'
SouthState
FOIA - but
still no
documents...
September
23, 2024
SouthState Lending Disparities Triggered CRA Challenge Now after FOIA Withheld Exhibit 18
by
Matthew R.
Lee, Patreon Substack
SOUTH BRONX /
SDNY, Sept
19 –
When First Republic Bank failed / was given to
JP Morgan Chase, a small list of other regional
banks came into focus as in danger, banks whose
lending Inner City Press and Fair Finance Watch
had been scrutinizing, even more so that the
2023 data is out.
This week Inner City Press filed with the Fed, a
timely first comment on, the Applications of
SouthState Corporation to merge with Independent
Bank Group, Inc., and Independent
Bank.
SouthState in South Carolina in 2023 - data not
yet included in any CRA exam - made 5013
mortgage loans to whites, and only 228 loans to
African Americans. Meanwhile it denied only 670
applications from whites, and fully 195 from
African Americans. SouthState should be referred
to DOJ.
SouthState in North Carolina in 2023 - data not
yet included in any CRA exam - made 1334
mortgage loans to whites, and only FIFTY SEVEN
loans to African Americans. Meanwhile it denied
only 173 applications from whites, and fully 20
from African Americans.
SouthState in Georgia in 2023 - data not yet
included in any CRA exam - made 1176 mortgage
loans to whites, and only 318 loans to African
Americans. Meanwhile it denied only 304
applications from whites, and fully 88 from
African Americans.
Nationwide
in 2023, SouthState made 7798 mortgage loans to
whites, and only 947 loans to African Americans.
Meanwhile it denied only 2491 applications from
whites, and fully 558 from African
Americans.
Why would regulators even consider approving its
expansion?
On
August 9, SouthState submitted to the Fed a
response - that deals only with Independent
Bank.
On
September 18, the Fed asked SouthState questions
including "Confirm that no consumer products or
community development programs or services
offered by either organization will be
discontinued by the combined organization as a
result of the proposed transaction, other than
those identified in Confidential Exhibit 18 to
the application."
Inner
City Press has submitted a FOIA request with the
Fed for that obviously CRA-material Exhibits.
No thanks to the Fed, Inner City Press got the
exhibit - SouthState just withdrew its request
for confidential treatment, of this:
"CONFIDENTIAL SouthState Bank, N.A.
Independent Bank Discontinued Independent
Bank Products and Services June 2024
SSC and IBTX currently plan on discontinuing
Independent Bank’s mortgage warehouse program
and selling its Shared National Credits (SNC)
portfolio. Almost all purchased SNCs are in
Independent Bank’s commercial loan portfolio,
with the largest single industry concentration
in energy."
Inner City Press is requesting an extension of the public comment period, public / virtual evidentiary hearings and that, on the current record, the applications not be approved
***
September
16, 2024
The Fed
is a paper
tiger? Not
only still
nothing on the
Porticoes
application -
on September
11 the Fed
issued an
enforcement
action against
Fieldpoint,
which
immediately
put out "“We
have a strong
partnership
with our
regulators,”
said H.
Russell
Holland,
President and
CEO of
Fieldpoint
Private. "Private
Holdings,
Inc., is the
holding
company of
Fieldpoint
Private Bank
& Trust, a
boutique
private
banking firm
headquartered
in Greenwich,
Connecticut,
with offices
in New York
City, Atlanta
and
Orlando/Winter
Park.
Fieldpoint
Private was
established at
the onset of
the Great
Financial
Crisis by 31
individuals,
including
former
Chairmen and
CEOs of some
of the most
well-known and
successful
financial and
consumer firms
in America."
September
9, 2024
More from the
FRB Chicago,
but from FRBNY,
*still*
nothing on the
Porticoes
application...
September
2, 2024
The Fed
*still* hasn't
sent the
request Porticoes /
"blank
check" bank
application.
But from
the FRB Chicago,
this:
"Pursuant to
your email
request,
attached is
the public
portion of the
below
filing:
ChoiceOne
Financial
Services,
Inc., Sparta,
Michigan to
merge with
Fentura
Financial,
Inc., and
thereby
indirectly
acquire The
State Bank,
both of
Fenton,
Michigan
Please confirm
receipt of
this email
after
verifying that
the document
could be
opened." We
confirmed; OOO
August
26, 2024
And
SouthState's
response -
much of it
confined to a
"Confidential"
exhibit:
Provide the
IBTX
Disclosure
Schedule
referenced in
the Merger
Agreement. A
copy of the
IBTX
Disclosure
Schedule is
attached as
Confidential
Exhibit 1. 3.
Describe in
greater detail
the purpose
and activities
of the various
trusts held by
SouthState and
IBTX that are
described in
the
application.
Both
SouthState and
IBTX have
formed or
acquired
statutory
business
trusts (the
“Trusts”) for
the purpose of
issuing trust
preferred
securities to
investors.
These entities
do not
otherwise
conduct any
business
activities.
Each of the
Trusts has
issued capital
and common
securities and
invested the
proceeds
thereof in an
equivalent
amount of
junior
subordinated
debentures
(the
“Debentures”)
issued by
either
SouthState or
IBTX. The
interest rate
payable on and
the payment
terms of the
Debentures are
the same as
the
distribution
rate and
payment terms
of the
respective
issues of
capital and
common
securities
issued by the
Trusts. The
Debentures are
subordinated
and junior in
right of
payment to all
present and
future senior
indebtedness.
SouthState and
IBTX have
fully and
unconditionally
guaranteed the
obligations of
their
respective
Trusts with
respect to the
capital and
common
securities.
Except under
certain
circumstances,
the common
securities
issued to
SouthState or
IBTX by their
respective
Trusts possess
sole voting
rights with
respect to
matters
involving
those
entities.
Under certain
circumstances,
SouthState and
IBTX may, from
time to time,
defer the
debentures'
interest
payments,
which would
result in a
deferral of
distribution
payments on
the related
trust
preferred
securities.
The Debentures
are callable
after five
years from the
date of
issuance,
therefore all
Debentures
formed or
acquired by
SouthState and
IBTX are
callable as of
June 30, 2024.
SouthState and
IBTX have
$118.6 million
and $57.3
million of
Debentures,
respectively,
outstanding as
of June 30,
2024. It is
SouthState’s
intent to
assume all
Trusts
outstanding at
IBTX and treat
the Debentures
as Tier 2
capital for
regulatory
capital
purposes. 4.
Indicate
whether
SouthState or
any of its
subsidiaries
are subject to
any state
community
reinvestment
laws. If
applicable,
explain how
the proposed
transaction
complies with
such law(s).
SouthState
confirms that
neither
SouthState nor
any of its
subsidiaries
are subject to
any state
community
reinvestment
laws. 5.
Confidential
Appendix. For
our responses
to the
information
requested in
the
Confidential
Appendix of
the AIR,
please see the
Confidential
Annex, which
also contains
Confidential
Exhibits 1 and
2.
August 19,
2024
The Fed
has asked
SouthState,
"4. Indicate
whether
SouthState or
any of its
subsidiaries
are subject to
any state
community
reinvestment
laws. If
applicable,
explain how
the proposed
transaction
complies with
such law(s)."
That's it?
August
12, 2024
Back on
June 26 on a
smaller merger,
Inner City
Press requested
records - and
was granted
expedited
treatment,
explicitly
with reference
to the July 25
expiration
of the public
comment period.
But no
records were given - and
on July 26, this: "Pursuant
to section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
August 9,
2024, in order
to consult
with two or
more
components of
the Board
having a
substantial
interest in
the
determination
of the
request." And
no response to
the timely
request to
exetnd the
comment
period...
But
even on August 9
by 10 pm, no
documents,
nothing.
Meanwhile the
underlying
bank urges
delegated
rubber stamp.
This is
today's Fed.
August
5, 2024
On
July 26, after a FOIA appeal - and after closing
the public comment period - the OCC belatedly
gave Inner City Press documents showing Capital
One briefed the OCC on a "big" deal in November
2023; it was code named "Project Sirius."
Then
overly chummy texts from Andy Navarrete, who
testified at the public meeting, and Pient Tran
to the OCC's Marci Heppner and others.
For
example, Andy to Marci, sorry for the late ping,
if Richard wanted to call, could you do a 1:1
Zoom at 7:30 [pm]. But of course. That and more
now on Inner City Press' DocumentCloud here
July
29, 2024
The Fed's FOIA scam is no limited to Capital One / Discovery. On June 26 on a smaller merger, Inner City Press requested records - and was granted expedited treatment, explicitly with reference to the July 25 expiration of the public comment period. But no records were given - and on July 26, this: "Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until August 9, 2024, in order to consult with two or more components of the Board having a substantial interest in the determination of the request." And no response to the timely request to exetnd the comment period...
July 22,
2024
From
Testimony
Opposing
Capital One's
Bid to Acquire
Discover
July
18,
2024
The day the
banks
announced the
proposed
merger, Inner
City Press
submitted
Freedom of
Information
Act requests
to both the
Federal
Reserve and
the Office of
the
Comptroller of
the
Currency.
The Fed, as
has become a
pattern,
granted Inner
City Press'
FOIA request
expedited
treatment -
and then did
not provide
any of the
responsive
documents,
claiming it
needed more
time.
July
15, 2024
On Capital One Discover 3 Minutes Each OCC Withholds 185 Pages Inner City Press Appeals - Still Nothing from the Fed
SOUTH
BRONX, July
9 – Capital One has applied to buy Discover, in
an anticompetitive deal that should be rejected
by regulators if they mean what they have been
saying. After they applied late March 20,
Inner City Press submitted a second Freedom of
Information Act request to the Office of the
Comptroller of the Currency (and to the Federal
Reserve).
On
May 14 - still without providing FOIA documents
- the OCC and Fed set a July 19 virtual public
meeting.
On
June 25 the OCC belatedly responded to Inner
City Press' FOIA request - by withholding in
full 185 pages. OCC FOIA production on
DocumentCloud here.
Inner City Press appealed.
At
the July 19 public meeting, "each speaker will
be allotted three minutes to speak at the
meeting," the OCC and Fed on July 9 said.
July 8,
2024
Now belatedly
the Federal
Reserve has
fined
Silvergate $43
million -
previously,
Inner City
Press submitted to the Federal Reserve a Freedom
of Information Act request including: "This is a
FOIA request for all record regarding the FRS'
approval for the application / request for
membership in the Federal Reserve System by
Farmington State Bank (giving rise to FRBSF
president Daly's approval on a delegated basis
in 2021), and the subsequent renaming of the
bank to Mooonstone and taking of a stake by
FTX/Alameda. Also, for Silvergate with its
FTX connections, record reflecting any review by
the FRS of Silvergate's (and Provident Bancorp
Inc., Metropolitan Commercial Bank, Signature
Bank, Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms... This
is a request for expedited treatment, in light
of the indictment of FTX / Alameda's Sam
Bankman-Fried and Caroline Ellison
(cooperating), and an upcoming January 3, 2023
hearing."
The Federal
Reserve has so far acknowledged receipt: "Your
request has been assigned number
FOIA-2023-00178. Please reference this number in
all future correspondence.
Request description: This is a FOIA
request for all record regarding the FRS'
approval for the application / request for
membership in the Federal Reserve System by
Farmington State Bank [also] any review by the
FRS of Silvergate's (and Provident Bancorp Inc.,
Metropolitan Commercial Bank, Signature Bank,
Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms."
There is also a
lawsuit in Federal court in California asserting
that
"Silvergate,
a publicly traded and federally regulated bank
catering to cryptocurrency customers, maintained
both FTX and Alameda accounts. It directly aided
and abetted FTX’s fraud and breaches of
fiduciary duty via first-hand participation in
the commingling of funds, improper transfers,
and lending out of customer money. Silvergate
processed billions in transfers from FTX’s
client account at Silvergate to the Alameda
accounts. Silvergate also accepted deposits from
FTX investors—intended to be stored, traded, or
cashed out—that at Bankman-Fried’s direction
were wired straight to Alameda bank accounts and
misused."
July 1,
2024
Governor Bowman on
June 27, thou dost
protest too
much: The
processing
timelines we
see also seem
inconsistent
with a process
that is
operating
truly as a
rubber stamp.
To be clear, I
think we have
room to do
better when it
comes to
timely
regulatory
action, while
maintaining a
rigorous
review of
applications.
But extended
review periods
are not
uncommon,
particularly
when you
include
preliminary
discussions
and
pre-filings
with
regulators in
the published
processing
timelines.
June
24, 2024
Bowman
in Salzburg:
"Regulators
must also
understand, to
the extent
possible, the
consequences
of specific
innovations.
Take, for
example, the
increasing
interest in
tokenization.
There is a
risk that
tokenized
products and
platforms
could
duplicate
existing bank
deposits and
payment rails,
potentially
creating
parallel
systems. How
would these
parallel
systems
interact with,
or even
replace,
current
systems? Will
the products
and platforms
that duplicate
these deposit
and payment
functions
provide the
same legal
protections
for customers
and the
overall
financial
system that
they currently
receive?"
Crypto....
June
17, 2024
While
we *still*
wait for
documents
under FOIA request
purported to
approve
for expedited
treatment,
this: "Dear
Matthew,
We appreciate
your interest
in watching
and testifying
at the public
meeting
regarding the
proposal by
Capital One
Financial
Corporation,
McLean,
Virginia, to
acquire
Discover
Financial
Services,
Riverwoods,
Illinois,
pursuant to
the Bank
Holding
Company Act;
and to merge
Discover Bank,
Greenwood,
Delaware, into
Capital One,
National
Association,
McLean,
Virginia,
pursuant to
the Bank
Merger Act.
The public
meeting will
start at 9:00
a.m. ET on
Friday, July
19, 2024, and
will be hosted
virtually on
an online
meeting
platform. The
Federal
Reserve Board
and the Office
of the
Comptroller of
the Currency
have received
your request
to testify and
are reviewing
your request."
Reviewing?
June
10, 2024
This
month Inner
City Press has
received two
letters from
the FRB-Dallas,
one responding
to CRA protest
filed in
March, and
only now transferred
from FRB-KC to Dallas
(but not the
Board?) and
the other to
the Board. Why the
delay?
June 3,
2024
Conflict
of interest?
Revolving
door? "Numisma
Bank in
Greenwich,
Conn., has
received
conditional
approval for a
Federal
Reserve master
account.
Numisma, which
focuses on
banknote
distribution,
is a tier 3
institution
that is
state-chartered
but isn’t
backed by the
Federal
Deposit
Insurance
Corp.
The Fed has
rejected
applications
by other
financial
institutions,
including
Custodia Bank
and The Narrow
Bank, on the
grounds that
granting
access would
present an
“undue risk.”
NOTE: Numisma
was co-founded
by former Fed
Vice Chair for
Supervision
Randal Quarles...
May
27, 2024
Fed sez:
SVB lost $40
billion in
deposits in a
single day,
with
management
expecting $100
billion more
in outflows
the next day.
Together,
these outflows
represented
about 85
percent of the
bank's
deposits. In
contrast, both
the failure of
Wachovia and
Washington
Mutual in 2008
involved less
severe
outflows that
evolved over
more than a
week (the
failure of
Wachovia in
2008 included
about $10
billion in
outflows over
8 days while
the failure of
Washington
Mutual in 2008
included
outflows of
$19 billion
over 16 days).
Return to text
4. Signature
Bank received
in one day
more than
1,600
withdrawal
requests
totaling
approximately
$18.6 billion,
representing
20 percent of
its deposits.
Return to text
5. First
Republic lost
around 20
percent of its
deposits in a
single day
May
20, 2024
Capital One Should Discover Merger Dead July 19 Public Meeting Inner City Press FOIAed Fed
SOUTH
BRONX, May
14 – Capital One has applied to buy Discover, in
an anticompetitive deal that should be rejected
by regulators if they mean what they have been
saying. While they applied late March 20, as of
1 pm on March 22 there was no notice of the
Federal Reserve's or OCC's websites. Inner City
Press submitted second FOIA requests to each
agency. Public hearings should be held, not only
on antitrust but also lending disparities at
both companies.
On
April 24 the Fed extended its comment period to
May 31 - without (yet?) granting public
hearings, nor providing the FOIA documents.
On
May 14 - still without providing FOIA documents
- the Fed and OCC set a July 19 virtual public
meeting: "The public meeting will be held
virtually on July 19, 2024, at 9:00 a.m. EDT.
Members of the public seeking to present oral
comments must register by 12:00 p.m. EDT on June
28, 2024, through the online registration
webpage, which will be posted on the Board's
Capital One-Discover Application Reading Room by
May 28, 2024."
On April 19 the Fed wrote to extended its time to respond to Inner City Press' February 19 FOIA to May 3
The OCC first put its application in its reading
room. And it is an outrage, Capital One gaming
the CRA system. For example "the Proposed
Transaction would result in CONA establishing a
new assessment area in Delaware, which
will include all census tracts in Sussex County
and seven contiguous census tracts in Kent
County."
That
for a nationwide card and subprime auto
lender...
As
documented by Fair Finance Watch, Discover Bank
in 2022 denied mortgage loans application from
African Americans more than twice as frequently
as those of whites.
Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be dead in the water. Watch this site.
***
May 13,
2024
Fed Disappeared CRA Linkbancorp Condition on Approval Now NJ Branches out of CRA
By
Matthew Russell Lee, Patreon Maxwell
Book
SOUTH
BRONX, May 10 – The Federal Reserve Board in
considering the proposed merger on the rebound
between New York-based Link Bank and Partners
Bancorp omitted at the eleventh hour - or
apparently the thirteenth hour - language about
a Community Reinvestment Act condition imposed
by the FDIC.
Now the Fed and its Governors have been asked
Why - and when.
Inner
City Press and Fair Finance Watch have long
exposed redlining - and in this vein, on May 6
they filed a Community Reinvestment Act
challenge with the FDIC and Federal Reserve.
In October, the FDIC required from LINKBANK a
plan to improve its lending to African
Americans, which Inner City Press has published
on its DocumentCloud
here.
But
Link kept spinning, issuing a press release
about these partial approvals without mentioning
the condition, and concluding it "remains
subject to the approval of the Board of
Governors of the Federal Reserve System and
other customary closing conditions. LINK
anticipates closing the Merger in the fourth
quarter of 2023." We asked, How do they know?
Well,
they know that the Fed has boiler plate ready,
ready to say it is concerned with HMDA
disparities without acting on them, ready to say
they conferred with the FDIC without
acknowledging the condition the FDIC required.
The
"Corrected" Fed approval emailed to Inner City
Press on November 16 did not acknowledge the CRA
condition. But the approval order first posted -
and voted on?- did. We on November 16 filed:
Dear
Chair Powell, Secretary Misback and others in
the FRS: This is a formal request
for reconsideration under 12 CFR Part 262.3(k)
of the Board's "corrected" -- dropping the
reference to FDIC's CRA Condition - Approval of
the above-captioned applications by LINKBANCORP,
Inc..
The Board's website currently says, of this
order, that "Note: The initial version of this
order was incorrect and inadvertently posted. A
corrected version was posted on November 15,
2023."
Meanwhile,
Deputy Associate Secretary Fennell's letter to
me dated November 16 states that "today the
Board of Governors of the Federal Reserve System
has approved the proposal." If the approval was
"today" / November 16, how was it corrected on
November 15? The copy emailed to us on November
16 is entitled "Corrected."
It's worse, much worse. The original (real?
approved?) version of the order stated
"The FDIC’s approval of the merger of Bank with
the Bank of Delmarva and Virginia Partners Bank
includes a condition requiring the resultant
institution to develop an action plan, including
a marketing plan and additional outreach, to be
submitted to the FDIC for approval, for
monitoring and improving the extent of home
mortgage applications from, and originations to,
African American applicants in the resultant
institution’s assessment areas. This condition
will help ensure that the resultant institution
continues to help in meeting the credit needs of
the African American population in the resultant
institution’s assessment areas."
It is true that the FDIC imposed a CRA
condition, after receiving comments from Fair
Finance Watch / Inner City Press. The FDIC sent
the order with condition to us and we posted it
online.
So why - and when - did the Federal Reserve,
which claims to have conferred with the FDIC as
primary supervisor, abruptly take out of its
already-posted approval order the language about
the CRA condition? Was it after the Board's
approval? Who decided that the CRA condition
language should be removed? Why? To make it
unenforceable?
The
"corrected" approval order, with the CRA
language removed, is said to be: "Voting
for this action: Chair Powell, Vice Chair
Jefferson, Vice Chair for Supervision Barr,
Governors Bowman, Waller, Cook, and Kugler."
When did each vote? Were they made aware of, and
is each Governor responsible for, the removal of
the CRA condition language?
These are clearly facts that we could not
present during the official comment period, or
even prior to approval (or at least,
"correction"). And they
militate for reconsideration, for airing to each
Governor and an explanation, given the
Governors' claims and statements about their
commitment to CRA.
On
November 21 past 5 pm, a Federal Reserve staff
attorney left Inner City Press a voicemail
reading a script that the Fed General Counsel -
without showing even this to the Board members -
determined there was nothing new in the request.
But Inner City Press didn't know about the
removal of the condition language until after
the Fed said it approved it - it could NOT have
been shown before. UNreal. And the new(ish)
Governnors? What do they think or do?
May 6,
2024
Bowman
watch, May 3
she said "the
inflow of new
immigrants to
some
geographic
areas could
result in
upward
pressure on
rents, as
additional
housing supply
may take time
to
materialize."
April
29, 2024
Capital One Should Discover Merger Dead FRB Extends to May 31 Inner City Press FOIAed Fed
SOUTH
BRONX, April
24 – Capital One has applied to buy Discover, in
an anticompetitive deal that should be rejected
by regulators if they mean what they have been
saying. While they applied late March 20, as of
1 pm on March 22 there was no notice of the
Federal Reserve's or OCC's websites. Inner City
Press submitted second FOIA requests to each
agency. Public hearings should be held, not only
on antitrust but also lending disparities at
both companies.
On
April 24 the Fed extended its comment period to
May 31 - without (yet?) granting public
hearings, nor providing the FOIA documents.
On April 19
the Fed wrote to extended its
time to respond to Inner City
Press' February 19 FOIA to May
3
April
22, 2024
Capital One Should Discover Merger Dead Inner City Press FOIAed Fed Now Delay to May 3
SOUTH
BRONX, April
19 – ...On April 19,
with the Fed's comment period coming to a close,
the Fed wrote to extended its time to respond to
Inner City Press' February 19 FOIA to May 3 -
AFTER the close of the comment period.
As
documented by Fair Finance Watch, Discover Bank
in 2022 denied mortgage loans application from
African Americans more than twice as frequently
as those of whites.
Previously, Inner City Press and NCRC challenged
Capital One's acquisition of ING Direct, see here.This
time, given the antitrust enforcement claims
being made in DC, this proposal should be dead
in the water. Watch this site.
April
15, 2024
Fair
lending be damned? On
April 11,
2024, the Fed
hauled off and
approved,
noting Inner
City Press /
Fair Finance
Watch
"objected to
the proposal,
alleging that
in 2021,
Provident Bank
and Lakeland
Bank made no
home loans to
African
American
individuals in
New York
State.30
30 The
data cited by
the commenter
corresponds to
publicly
available 2021
data by
Provident Bank
and Lakeland
Bank under
HMDA.
Following
consummation
of the
proposed
transaction,
the combined
organization
will add to
its assessment
area Bronx and
Kings
counties, each
of which
includes a
significant
number of
majority-minority
and LMI
communities...
The Board also
has considered
the DOJ
Consent Order,
including
Lakeland
Bank’s efforts
towards
meeting its
obligations
under the DOJ
Consent Order,
and that the
DOJ Consent
Order binds
Provident
without
further action
by the Board."
We'll see.
April
8, 2024
Capital One Should Discover Merger Dead As Inner City Press FOIAs Fed Barr Talks Basel 3
SOUTH
BRONX, April
3 – Capital One has applied to buy Discover, in
an anticompetitive deal that should be rejected
by regulators if they mean what they have been
saying. While they applied late March 20, as of
1 pm on March 22 there was no notice of the
Federal Reserve's or OCC's websites. Inner City
Press submitted second FOIA requests to each
agency. Public hearings should be held, not only
on antitrust but also lending disparities at
both companies.
While the OCC has yet to provide some records
requested under FOIA, it put its application in
its reading room. And it is an outrage, Capital
One gaming the CRA system. For example "the
Proposed Transaction would result in CONA
establishing a new assessment area in
Delaware, which will include all census tracts
in Sussex County and seven contiguous
census tracts in Kent County."
That
for a nationwide card and subprime auto
lender...
Still no records from the Fed, so this:
This
is a FOIA request for the entirety of Capital
One's applications for regulatory approval of
its Discover proposal, including all portions
for which Capital One has requested confidential
treatment, and all communications by your agency
with the banks since February 19. As of March 22
at 1 am, the Fed's most recent H2A is from March
15
As
documented by Fair Finance Watch, Discover Bank
in 2022 denied mortgage loans application from
African Americans more than twice as frequently
as those of whites.
Previously, Inner City Press and NCRC challenged
Capital One's acquisition of ING Direct, see here.This
time, given the antitrust enforcement claims
being made in DC, this proposal should be dead
in the water.
On
April 3 speaking at NCRC's Just Economy
conference Barr said the Fed will not follow the
OCC and FDIC with merger processing reform
proposals; then he walked Basel III endgame but
not explanation why the Fed can't or won't give
Capital One documents requested on Feb 19, as to
which they purported to grant expedited
processing. Watch this site.
April
1, 2024
On the
Capital One /
Discover
merger
application,
the Fed has
granted Inner
City Press
expedited
FOIA
processing -
but as of
March 29 had
not provided a
single document....
March 25,
2024
Backsliding?
The Fed and
the other
agencies
"extended the
applicability
date of the
facility-based
assessment
areas and
public file
provisions
from April 1,
2024, to
January 1,
2026.
Therefore,
banks will not
have to make
changes to
their
assessment
areas or their
public files
as a result of
the 2023 CRA
final rule
until January
1, 2026."
Meanwhile
the Fed had not
provided
a single
record, as of
March 23, in response
to Inner City
Press' February
19 FOIA request
about Capital
One / Discover...
March
18, 2024
"The
Federal
Reserve Board
on Thursday
issued an
enforcement
action against
JPMorgan Chase
& Co. and
fined the firm
approximately
$98.2 million
for an
inadequate
program to
monitor firm
and client
trading
activities for
market
misconduct.
The Board's
action
requires
JPMorgan Chase
to review and
take
corrective
action to
address the
firm's
inadequate
monitoring
practices,
which occurred
between 2014
and 2023" - but
how many of
JPM Chase's
acquisition
has the Fed
rubber stamped
during the
time period?
March
11, 2024
Governon
Bowman in New
Jersey on March 7
bemoaned
that "policy
reforms may
make bank
M&A
transactions
more difficult
for regulators
to approve and
slow the
application
processing
timeline."
March
4, 2024
The
Federal Reserve is
getting worse
and worse on
FOIA,
including on
banks sued by
DOJ for
discrimination.
They wrote to
Inner City
Press, you
requested "the
two exhibits
withheld in
full by
Provident
Financial
Services,
Inc., Jersey
City, New
Jersey in its
January 18,
2024
Additional
Information
response in
connection its
pending
application
to
acquire
Lakeland
Bancorp, Inc.,
Oak Ridge, New
Jersey,
and
thereby
indirectly
acquire
Lakeland Bank
…. Staff
searched Board
records and
located the
documents that
are responsive
to your
request. I
have
determined,
however, that
the withheld
portions of
the January
18,
2024,
Additional
Information
submission
that are
responsive to
your request
contain
confidential
commercial and
financial
information
(e.g.,
nonpublic
business plans
and
strategies
concerning
compliance and
lending). This
information is
subject
to
withholding
and will be
withheld from
you pursuant
to Exemption 4
of the FOIA,
5 U.S.C.
§ 552(b)(4). I
have also
determined
that the
information
should be
withheld
because it is
reasonably
foreseeable
that
disclosure
would harm an
interest
protected
by an
exemption
described in
subsection (b)
of the FOIA, 5
U.S.C. §
552(b). The
responsive
documents have
been reviewed
under the
requirements
of subsection
(b), but
no
reasonably
segregable
nonexempt
information
was found.
Accordingly,
approximately
18 pages of
information
will be
withheld from
you in full."
In full...
February
26, 2024
The Fed
just keeps extending
its time on
FOIA, and not
only on Capital
One / Discover: On
February 20:
"This is in
response to
your
electronic
message dated
January 19,
2024, and
received by
the Board’s
Information
Disclosure
Section on
January 22.
Pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, you
request: the
two exhibits
withheld in
full by
Provident
Financial
Services,
Inc., Jersey
City, New
Jersey in its
January 18,
2024
Additional
Information
response in
connection its
pending
application to
acquire
Lakeland
Bancorp, Inc.,
Oak Ridge, New
Jersey, and
thereby
indirectly
acquire
Lakeland Bank,
which recently
settled
lending
discrimination
charges with
DOJ[.]
Pursuant to
section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
March 5, 2024,
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 March
5, 2024, we
will respond
to you
promptly." Yeah.
February
19, 2024
Here's
a question:
What may have
been the role
of a Federal Reserve
Governor in
the lawsuit
against the
CRA regulation?
February
12, 2024
Before FNB Settled on Fair Lending Its Yadkin Merger Was Challenged But Fed Approved It
by
Matthew Russell Lee, Patreon Book
Substack
SOUTH
BRONX,
NY Feb 5 – When First National Bank of
Pennsylvania applied to the Federal Reserve to
buy Yadkin bank in North Carolina, Fair Finance
Watch challenged it on Community Reinvestment
Act and fair lending grounds.
The
Federal Reserve, as usually, rubber stamped the
merger. Now in February 2024 the
Justice Department had sued and settled with FNB
on fair lending grounds.
Inner
City Press had wanted to ask DOJ about the Fed
(including in its recent Patriot Bank action),
but has been unable so far. Watch this
site
February
5, 2024
On January
19 Inner City
Press
submitted a
FOIA request;
on January 31
the Federal
Reserve wrote
back: Pursuant
to the Freedom
of Information
Act (“FOIA”),
5 U.S.C. §
552, you
request: the
two exhibits
withheld in
full by
Provident
Financial
Services,
Inc., Jersey
City, New
Jersey in its
January 18,
2024
Additional
Information
response in
connection its
pending
application to
acquire
Lakeland
Bancorp, Inc.,
Oak Ridge, New
Jersey, and
thereby
indirectly
acquire
Lakeland Bank,
which recently
settled
lending
discrimination
charges with
DOJ[.] You
also seek
expedited
processing for
your request.
In support of
your request
for expedited
treatment, you
state that
“[t]his
information
was submitted,
unilaterally
withheld in
full, late in
the
application
process –
there is a
need to
release it for
public
knowledge
BEFORE the
Board acts on
the
application.”
I have
determined to
grant your
request for
expedited
processing.
Accordingly,
your request
will be
processed as
soon as
practicable
and ahead of
other FOIA
requests." But
still no
documents...
January
29, 2024
What is
happening to
the Federal
Reserve?
Beyond
misrating
Patriot Bank
just before
its DOJ
redlining
settlement,
how the Fed is
withholding
info about its
inquiry into
Lakeland
Bank's
discrimination
deal. Ten days
ago - with no
documents yet
- Inner City
Press / Fair
Finance Watch
FOIA-ed the
Fed: "This is
a formal FOIA
request for
the two
exhibits
withheld in
full by
Provident
Financial
Services,
Inc., Jersey
City, New
Jersey in its
January 18,
2024
Additional
Information
response in
connection its
pending
application
to acquire
Lakeland
Bancorp, Inc.,
Oak Ridge, New
Jersey, and
thereby
indirectly
acquire
Lakeland Bank,
which recently
settled
lending
discrimination
charges with
DOJ
The January 18
response
recites then
states:
Provide an
update to all
action items
included in
the Consent
Order,
reflecting
those items
which have
been completed
and any other
pertinent
updates,
including, but
not limited
to, the status
of any
deliverables
required under
the Consent
Order that
have not yet
been
completed.
Please refer
to the
attached
Confidential
Exhibit 1 for
a response to
this
Item.
The entire
response is
withheld,
about fair
lending
compliance,
including
public
commitments
that are
unfulfilled.
This cannot
stand; the
information
must be
provided
before the
Board acts in
any way on the
application
(other than
denial.)
January
22, 2024
Lakeland
Bank DOJ Deal
Left
Disparities So
Protest &
Fed Asks of
DOJ Settlement
Withheld
by
Matthew Russell Lee, Patreon Book
Substack
SOUTH
BRONX, NY, Jan 19 – When the US
Department of Justice sued and
immediately settled with
Lakeland Bank for fair lending
violations, it announced a
proposed merger with Provident
Bank.
As
if to sweep it under the carpet.
And
when Fair Finance Watch looked into it, it found
that the DOJ settlement did not address in any
way the banks' disparities in New York. So on
December 1, the FDIC's comment deadline, it
filed a protest, with Inner City Press on the
FOIA.
Jump
cut to March 15, 2023, when Provident's Deputy
General Counsel filed a letter with the New York
Fed, cc-ing Rodgin Cohen - only on New Jersey,
nothing on the disparities in New York.
On
January 18 Provident asked two Board questions -
by withholding the entire answers. Inner City
Press immediately FOIAed: " The January 18
response recites then states: Provide an update
to all action items included in the Consent
Order, reflecting those items which have been
completed and any other pertinent updates,
including, but not limited to, the status of any
deliverables required under the Consent Order
that have not yet been completed. Please refer
to the attached Confidential Exhibit 1 for a
response to this Item. The entire
response is withheld, about fair lending
compliance, including public commitments that
are unfulfilled. This cannot stand; the
information must be provided before the Board
acts in any way on the application (other than
denial.) Inner City Press / Fair Finance
Watch is a timely protestant to the application;
this is also again request that the FRB begin
putting all applications online, since the Fed
has a new electronic system for applicants. What
is the rationale for not doing this, and
allowing for delay for the public and community
organizations? In these contexts, this comment
period should be extended."
January
15, 2024
This is
what the Fed
is focused on:
The Federal
Reserve Board
on Thursday
announced the
execution of
the
enforcement
actions listed
below:
Consent
prohibition
order against
John Freeze
Former
employee of
Bank of
Jackson Hole,
Jackson,
Wyoming
Misappropriation
of documents,
including
confidential
supervisory
information
Consent cease
and desist
order and
civil money
penalty
against Randy
Johnson Former
employee of
Farmers and
Merchants
Savings Bank,
Manchester,
Iowa
Misappropriation
of
confidential
bank records
January
8, 2024
Corporate Fed,
Dallas
edition:
Thomas J.
Falk, retired
chairman and
chief
executive
officer,
Kimberly-Clark
Corporation,
Dallas, Texas,
renamed Chair.
January
1, 2024
The
Federal Reserve is on Threads,
UNlike
even
the United
Nations....
December
25, 2023
Why not
the Fed? U.S.
Bank will pay
$36 million
over
allegations
the company
illegally
blocked
out-of-work
consumers from
accessing
unemployment
benefits
during the
coronavirus
pandemic, top
federal
banking
regulators
announced on
Tuesday.
At the onset
of the
COVID-19
pandemic, U.S.
Bank had
contracts with
at least 19
states and the
District of
Columbia to
deliver
unemployment
benefits to
millions of
newly
out-of-work
Americans
through its
prepaid
card.
But due to
expanded
antifraud
controls, the
nation's
fifth-largest
lender froze
tens of
thousands of
prepaid card
accounts
without
leaving users
a way to
regain access,
according to
the U.S.
Office of the
Comptroller of
the Currency
and U.S.
Consumer
Financial
Protection
Bureau.
December
18, 2023
From
Basel III endgame to
climate, the
Fed has its
finger in the
wind. But on
protests from
low income
areas of
banks'
redlining? Not so much.
December
11, 2023
The Fed
didn't even
ask Atlantic
Union about this
issues, which
Inner City
Press raised
in September:
Re:
Second
Comments
Opposing the
Applications
by Atlantic
Union to
acquire
American
National
Bankshares
- after
Atlantic Union
is fined by
CFPB for exact
issue raised
in first
comment
Dear
Chair Powell,
Secretary
Misback and
others in the
FRS:
This is
a second
comment
opposing
Applications
of Atlantic
Union
Bankshares
Corporation,
Richmond,
Virginia to
acquire
American
National
Bankshares
Inc.,
and
American
National Bank
& Trust
Company.
Given the
CFPB's
December 7
fine and
statement
against
Atlantic
Union, on a
precise issues
raised in our
first comment
(and dismissed
in AU's law
firm's
response, and
not asked
about by the
FED in its AI
letter), this
comment must
be considered
timely.
See,
"CFPB Finds
Atlantic Union
Bank Misled
Customers
About
Fees The
Consumer
Financial
Protection
Bureau (CFPB)
has ordered
Atlantic Union
Bank to pay
$6.2 million,
saying the
bank misled
customers and
improperly
enrolled them
into paying
overdraft
fees.
The $6.2
million in
payments
includes
refunding at
least $5
million to
consumers and
paying a $1.2
million
penalty to the
CFPB’s victim
relief fund,
the regulator
said in a
Thursday (Dec.
7) press
release.
The CFPB found
that Atlantic
Union Bank
violated
federal law
when enrolling
thousands of
customers in
checking
account
overdraft
programs by
phone,
according to
the release.
Specifically,
the bank
charged fees
without proper
consent and
misled
customers
about the
terms and
costs of
overdraft
coverage, the
release
said.
“Atlantic
Union Bank
harvested
millions of
dollars in
overdraft fees
through a host
of illegal
practices,”
CFPB Director
Rohit Chopra
said in the
release.
“Americans are
fed up with
junk fee scams
and the CFPB
will continue
its work to
ensure
families are
treated
fairly.”
https://www.pymnts.com/news/cfpb/2023/cfpb-finds-atlantic-union-bank-misled-customers-about-fees/
The
comment period
should be
extended;
evidentiary
hearings
should be
held; and on
the current
record, the
application
should not be
approved
December
4, 2023
On
December 1 Fed
Government
Michael Barr
said, "Foreign
banks that
have branches
in the United
States have
access to the
discount
window.
Outside the
United States,
some of these
firms also
have access to
dollar
liquidity from
their own
central banks" --
which as Argentina
moves to
disband its
central
bank....
November
27, 2023
Fed Dropped CRA Condition on Linkbankcorp Approval after Posting now Governors Not Told
By
Matthew Russell Lee, Patreon Maxwell
Book
SOUTH
BRONX, Nov 21 – The Federal Reserve Board in
considering the proposed merger on the rebound
between New York-based Link Bank and Partners
Bancorp omitted at the eleventh hour - or
apparently the thirteenth hour - language about
a Community Reinvestment Act condition imposed
by the FDIC.
Now the Fed and its Governors have been asked
Why - and when. But the Fed General Counsel
dismissed the request for reconsideration
without the Governors even seeing it.
Inner
City Press and Fair Finance Watch have long
exposed redlining - and in this vein, on May 6
they filed a Community Reinvestment Act
challenge with the FDIC and Federal Reserve.
In October, the FDIC required from LINKBANK a
plan to improve its lending to African
Americans, which Inner City Press has published
on its DocumentCloud
here.
A
"Corrected" Fed approval emailed to Inner City
Press on November 16 did not acknowledge the CRA
condition. But the approval order first posted -
and voted on?- did. We on November 16 filed a
request for reconsideration, on this site.
On
November 21 past 5 pm, a Federal Reserve staff
attorney left Inner City Press a voicemail
reading a script that the Fed General Counsel -
without showing even this to the Board members -
determined there was nothing new in the request.
But Inner City Press didn't know about the
removal of the condition language until after
the Fed said it approved it - it could NOT have
been shown before. UNreal. And the new(ish)
Governors? What do they think or do?
November
20, 2023
Fed Dropped CRA Condition on Linkbankcorp Approval After Posting or Even Voting On It
By
Matthew Russell Lee, Patreon Maxwell
Book
SOUTH
BRONX, Nov 16 – The Federal Reserve Board in
considering the proposed merger on the rebound
between New York-based Link Bank and Partners
Bancorp omitted at the eleventh hour - or
apparently the thirteenth hour - language about
a Community Reinvestment Act condition imposed
by the FDIC.
Now the Fed and its Governors have been asked
Why - and when.
Inner
City Press and Fair Finance Watch have long
exposed redlining - and in this vein, on May 6
they filed a Community Reinvestment Act
challenge with the FDIC and Federal Reserve.
In October, the FDIC required from LINKBANK a
plan to improve its lending to African
Americans, which Inner City Press has published
on its DocumentCloud
here.
But
Link kept spinning, issuing a press release
about these partial approvals without mentioning
the condition, and concluding it "remains
subject to the approval of the Board of
Governors of the Federal Reserve System and
other customary closing conditions. LINK
anticipates closing the Merger in the fourth
quarter of 2023." We asked, How do they know?
Well,
they know that the Fed has boiler plate ready,
ready to say it is concerned with HMDA
disparities without acting on them, ready to say
they conferred with the FDIC without
acknowledging the condition the FDIC required.
The
"Corrected" Fed approval emailed to Inner City
Press on November 16 did not acknowledge the CRA
condition. But the approval order first posted -
and voted on?- did. We have on November 16
filed:
Dear
Chair Powell, Secretary Misback and others in
the FRS: This is a formal request
for reconsideration under 12 CFR Part 262.3(k)
of the Board's "corrected" -- dropping the
reference to FDIC's CRA Condition - Approval of
the above-captioned applications by LINKBANCORP,
Inc..
The Board's website currently says, of this
order, that "Note: The initial version of this
order was incorrect and inadvertently posted. A
corrected version was posted on November 15,
2023."
Meanwhile,
Deputy Associate Secretary Fennell's letter to
me dated November 16 states that "today the
Board of Governors of the Federal Reserve System
has approved the proposal." If the approval was
"today" / November 16, how was it corrected on
November 15? The copy emailed to us on November
16 is entitled "Corrected."
It's worse, much worse. The original (real?
approved?) version of the order stated
"The FDIC’s approval of the merger of Bank with
the Bank of Delmarva and Virginia Partners Bank
includes a condition requiring the resultant
institution to develop an action plan, including
a marketing plan and additional outreach, to be
submitted to the FDIC for approval, for
monitoring and improving the extent of home
mortgage applications from, and originations to,
African American applicants in the resultant
institution’s assessment areas. This condition
will help ensure that the resultant institution
continues to help in meeting the credit needs of
the African American population in the resultant
institution’s assessment areas."
It is true that the FDIC imposed a CRA
condition, after receiving comments from Fair
Finance Watch / Inner City Press. The FDIC sent
the order with condition to us and we posted it
online.
So why - and when - did the Federal Reserve,
which claims to have conferred with the FDIC as
primary supervisor, abruptly take out of its
already-posted approval order the language about
the CRA condition? Was it after the Board's
approval? Who decided that the CRA condition
language should be removed? Why? To make it
unenforceable?
The
"corrected" approval order, with the CRA
language removed, is said to be: "Voting
for this action: Chair Powell, Vice Chair
Jefferson, Vice Chair for Supervision Barr,
Governors Bowman, Waller, Cook, and Kugler."
When did each vote? Were they made aware of, and
is each Governor responsible for, the removal of
the CRA condition language?
November
13, 2023
Amid a
climate change
protest at the
IMF on
November 9,
who said "Shut
the f---ing
door"?
November
6, 2023
The Fed
last week ended
an enforcement
order against
Citigroup,
starting
"xWHEREAS,
Citigroup
Inc., New
York, New York
(“Citigroup”),
a registered
bank holding
company, owns
and controls
Citibank,
N.A., Sioux
Falls, South
Dakota (the
“Bank”), other
U.S. insured
depository
institutions,
various Edge
Act
corporations
organized
under section
25A of the
Federal
Reserve Act
(12 U.S.C. §
611 et seq.),
and multiple
other nonbank
subsidiaries" -
October
30, 2023
As CRA
Rule Launched
by Fed Ameris
Pre DOJ Deal
Was Protested
But Merger
Rubber Stamped
By
Matthew R. Lee, Patreon
NEW
YORK, Oct 24 – Will
the Federal
Reserve (and OCC
and FDIC)
actually
strengthen
Community
Reinvestment Act
enforcement, as
they today
belatedly
release the
rule? Well, the
bank with the
worst record in
the United
States for
gouging
consumers with
overdraft fees,
Ameris,
nevertheless got
a rubber stamp
approval from
the Fed, to buy
Hamilton State
Bancshares in
Georgia. Now
this month
it has settled
discrimination
charges with
DOJ. Tellingly,
the Fed could or
would not see
the
discrimination.
In
October 2023,
"The resolution
with Ameris Bank
was filed in the
U.S. District
Court for the
Middle District
of Florida,
along with the
Department’s
complaint, and
is subject to
court approval.
The Department’s
complaint
alleges that,
from 2016
through 2021,
Ameris Bank
avoided
providing
mortgage
services to
majority-Black
and Hispanic
neighborhoods in
Jacksonville and
discouraged
people seeking
credit in those
communities from
obtaining home
loans." Here's
what we said:
From
Fair Finance
Watch's (and
Inner City
Press') filings
with the Fed:
"Fair Finance
Watch has
reviewed Ameris'
lending in 2016,
the most recent
year for which
Home Mortgage
Disclosure Act
(HMDA) data
[wa]s available,
in both the
Atlanta and the
Jacksonville
Metropolitan
Statistical
Areas (MSAs) and
finds both to be
disparate..
In the
Jacksonville MSA
in 2016 for home
purchase loans,
Ameris denied
the applications
of African
Americans 2.69
times more
frequently than
those of whites.
Ameris made 203
such loans to
whites and only
SEVEN to African
Americans. In
the Jacksonville
MSA in 2016 for
home
improvements
loans, Ameris
made five such
loans to whites
and none to
African
Americans or
Latinos. In the
Jacksonville MSA
in 2016 for
refinance loans,
Ameris denied
the applications
of African
Americans 2.2
times more
frequently than
those of whites.
Ameris made 100
such loans to
whites and only
FOUR to African
Americans. This
is disparate.
October
23, 2023
In
October, FDIC
has required
from LINKBANK
a plan to
improve its
lending to
African
Americans,
which Inner
City Press has
published on
its
DocumentCloud
here.
But
Link keeps
spinning,
issuing a
press release
about these
partial
approvals
without
mentioning the
condition, and
concluding it
"remains
subject to the
approval of
the Board of
Governors of
the Federal
Reserve System
and other
customary
closing
conditions.
LINK
anticipates
closing the
Merger in the
fourth quarter
of 2023." How
do they know?
October
16, 2023
So
Governor Bowman went in
person to
Morocco and
gave a speech,
in front of a
painting of
the King. Bowman's
views on
Western Sahara
aren't known...
October
9, 2023
It
was said that
the Fed would
belatedly
release the
CRA reg on
October 6. But
this is all
they released:
"October 06,
2023
Federal
Reserve Board
finalizes a
rule
establishing
capital
requirements
for insurers
supervised by
the Board "
October
2, 2023
It's said the
CRA reg will
belated by
released on
October 6- watch
this site.
September
25, 2023
Fed wants to
hear more from
bankers: Governor
Michelle W.
Bowman to the
Independent
Community
Bankers of
Colorado: "I
strongly
encourage your
participation
to inform the
rulemaking
process. This
audience is
uniquely
positioned to
provide
real-world
feedback about
the intended
and unintended
consequences
of agency
rulemakings."
September
18, 2023
In
SDNY, Fed
trial moved:
"
Gardner-Alfred
et al v.
Federal
Reserve Bank
of New York
Case
Number:
1:22-cv-01585-LJL
Filer:
Document
Number:
187(No
document
attached)
Docket Text:
ORDER granting
[186] Letter
Motion to
Continue Trial
Date addressed
to Judge Lewis
J. Liman from
Alex Leonard
dated
September 14,
2023 filed by
Federal
Reserve Bank
of New York.
The Court
adjourns the
previously set
trial and
pretrial
deadlines and
adopts the
following
trial
schedule. The
joint pretrial
order,
requests to
charge,
proposed voir
dire, and in
limine motions
are due by
October 6,
2023.
Oppositions to
motions in
limine and
objections to
requests to
charge and
voir dire are
due by October
13, 2023. The
Final Pretrial
Conference is
rescheduled to
December 6,
2023 at 3:30PM
in Courtroom
15C at the 500
Pearl Street
Courthouse.
The Jury Trial
is rescheduled
to December
11, 2023 at
9:00AM in
Courtroom 15C
at the 500
Pearl Street
Courthouse"
September
11, 2023
Here's a strange headline from the Fed's website: "
September 05, 2023
2004??
September
4, 2023
What has the Fed done about JPM Chase's enabling of Jeffrey Epstein? Nothing. Even the NYSDFS acted on Deutsche Banks... In Epstein Case JPM Chase Says Congress Did Not Envision USVI Suit as Oct 23 Trial Looms In Epstein Case JPM Chase Says Congress Did Not Envision USVI Suit as Oct 23 Trial Looms
By Matthew
Russell Lee, Patreon Maxwell book
SDNY
COURTHOUSE, Aug 31 – J.P.
Morgan Chase and Deutsche Bank
were sued for their enabling
of Jeffrey Epstein, in
lawsuits filed on Thanksgiving
2022 in the U.S. District
Court for the Southern
District of New York, where
Inner City Press found them in
the docket. Then the US Virgin
Islands joined in against Chase
August
28, 2023
It's
on: "Banc of
California,
Inc., Santa
Ana,
California;
to acquire
PacWest
Bancorp, and
thereby
indirectly
acquire
Pacific
Western Bank,
both of
Beverly Hills,
California.
3
San
Francisco
09/29/2023" -
so how will
the Fed treat
this
application?
On greased
skids? And
mightn't JPM
Chase need to
apply? It's another
litmus
test...
August
21, 2023
Farmington Bank Belatedly Shut By Fed as SBF Jailed FOIA Appeal for Crypto Creeps Sequel
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE, Aug 17 – Alongside the
larger flame-out of Silicon
Valley Bank, Signature Bank
too failed.
The Federal
Reserve in belated response to
Inner City Press' FOIA request
says it has no record
of reviewing Signature and crypto, nor any "record
reflecting any
review by the FRS of
Silvergate’s (and
Provident Bancorp
Inc.,
Metropolitan
Commercial Bank,
Signature Bank,
Customers
Bancorp Inc.) of the
banks’ connections
with crypto-currency firms."
Federal Reserve
letter
to Inner City
Press here
The
Fed did, however,
belatedly give Inner
City Press
the Farmington
State
Bank
application it
approved, with
100%
ownership by
Bahamas
based Jean
Chalopin. It's now on
Inner City
Press'
DocumentCloud
here.
Now on August
17, after FTX's
Sam
Bankman-Fried
has been
remanded to
prison pending
trial (Inner
City Press
"Crypto
Creeps" book
here), the
Federal
Reserve has
belatedly
taken action
on Farmington,
the horse
decidedly out
of (and in the
case of SBF
back in) the
barn: "The
Federal
Reserve Board
on Thursday
announced an
enforcement
action against
Farmington
State Bank, of
Farmington,
Washington,
and its
holding
company, FBH
Corporation.
In 2022,
Farmington
improperly
changed its
business plan
without
notifying the
bank's
supervisors
and obtaining
prior approval
for those
changes.
Farmington has
previously
announced that
it will
voluntarily
sell its loans
and deposits
to the Bank of
Eastern
Oregon."
On
April 8, Inner
City Press filed a
FOIA appeal
with the Fed:
"This is an
appeal of the
FRB's denial
and delayed
and
untransparent
processing of
and
determinations
on Inner City
Press'
December 22,
2022 FOIA
request... After
more than
three months,
all the FRB
provided was
the public
portion of
Farmington
State Bank's
application -
this while FRB
Governor Barr
just told
Congress that
the Fed wants
to be
transparent,
including to
outside
reviews.
Most
cynically, the
Denial claims
that
"confidential
information is
not
responsive" -
basing that on
its
interpretation
of a first
request for
clarification,
a
misinterpretation
that all Inner
City Press was
request was
previously
public
information -
information
which even
then the Fed
did not
provide for
eleven
weeks.
We wanted and
want the
records
reflecting the
FRS' review of
Farmington
State Bank's
application,
and the
records about
the Fed's
review of
crypto and the
names firms:
Silvergate
with its FTX
connections,
record
reflecting any
review by the
FRS of
Silvergate's
(and Provident
Bancorp Inc.,
Metropolitan
Commercial
Bank,
Signature
Bank,
Customers
Bancorp Inc).
Does the Fed as Governor Barr said want to be transparent or not?
We'll have more on this.August
14, 2023
"The
Federal
Reserve Board
on Tuesday
provided
additional
information on
its program to
supervise
novel
activities in
the banks it
oversees.
Novel
activities
include
complex,
technology-driven
partnerships
with non-banks
to provide
banking
services to
customers; and
activities
that involve
crypto-assets
and
distributed
ledger or
"blockchain"
technology" -
let's see
what comes out
of the SBF trial,
now that he's
detained....
August
7, 2023
Link Bank Bid To Buy Partners Bancorp On the Ocean Rebound has Belated Fed CRA Questions
By
Matthew Russell Lee, Patreon Maxwell
Book
SOUTH
BRONX, Aug 1 – Pennsylvania, Delaware and
Virginia are portrayed as diverse and ever
progressive places. But their banks, not so
much.
Consider
for example the proposed merger on the rebound
between New York-based Link Bank and Partners
Bancorp, which recently broke off its proposed
deal with OceanFirst.
Inner
City Press and Fair Finance Watch have long
exposed redlining - and in this vein, on May 6
they filed a Community Reinvestment Act
challenge with the Federal Reserve.
On
August 1, the Fed belated asked: "ased on
staff’s review of Applicant’s letter to Mr.
William T. Wisser, dated July 24, 2023,
the following additional information is
requested. Supporting documentation should
be provided, as appropriate.
1.
Describe in detail how LinkBank will adjust its
fair lending program to accommodate the
expanded market area acquired from VPB,
particularly the
Washington-Arlington-Alexandria VA-MD
MMSA. 2. Clarify whether, and to what extent,
LinkBank intends to integrate the consumer
compliance and fair lending programs of TBOD and
VPB into the resultant institution’s
consumer compliance and fair lending programs.
3.
Provide a list of organizations and community
groups, if any, with which LinkBank has
engaged since 2021 to help reach African
American borrowers in Pennsylvania. In
your response, provide detailed
information about any partnerships that LinkBank
has engaged in with these organizations
and community groups since 2021. 4. Provide a
list of organizations and community groups, if
any, with which VPB has engaged since 2021
to help reach African American borrowers in the
Washington-ArlingtonAlexandria VA-MD MMSA. In
your response, provide detailed information
about any partnerships that VPB has
engaged in with these organizations and
community groups since 2021.
5.
Discuss in detail LinkBank’s and VPB’s efforts
to reach African American borrowers in any
area, including any specialized products and
marketing campaigns targeting such
borrowers, since 2021.6. Provide further
information on LinkBank’s recent CRA activities
since 2021, following the latest CRA
performance evaluation of The Gratz Bank on
March 22, 2021 (which preceded the
acquisition of LinkBank by The Gratz Bank and
the resulting institution’s name change to
“LinkBank”). In particular, provide further
information regarding LinkBank’s
activities to improve its geographical
distribution of loans throughout its assessment
areas since the March 22, 2021,
performance evaluation of The Gratz Bank. 7.
Provide further information on VPB’s CRA
activities since its October 2, 2017,
performance evaluation."
July 31, 2023
From
the Fed last
week: "The
Federal
Reserve Board
on Monday
announced a
consent order
and a $268.5
million fine
with UBS Group
AG, of Zurich,
Switzerland,
for misconduct
by Credit
Suisse, which
UBS
subsequently
acquired in
June 2023. The
misconduct
involved
Credit
Suisse's
unsafe and
unsound
counterparty
credit risk
management
practices with
its former
counterparty,
Archegos
Capital
Management LP"
- but what now
about the Hwang
subpoenas
reported in
this week's
Inner City
Press Bank
Beat report?
July
24, 2023
Bowman
watch, safe
harbor bid
edition: Fed
Governor
Michelle
Bowman says
the
Board
"should
improve its
approach to
processing
applications
in cases where
a member of
the public has
made an
adverse
comment,
particularly
when the
recent
supervisory
record
addresses the
concerns
raised and is
consistent
with
approval."
Vantage Bank
Texas
President and
CEO Jeff
Sinnott agrees
with Bowman -
not
surprising. But
what about
Quontic, which
the Reserve
Bank approved,
before the
enforcement
action?
July
17, 2023
Kids gloves,
from Link
Bank to BofA to...
"The Federal
Reserve Board
on Tuesday
announced the
termination of
the
enforcement
action listed
below: Capital
One Financial
Corporation,
McLean,
Virginia Cease
and Desist
Order dated
August 4,
2020"
July
10,
2023
Earlier
this year
Inner City
Press / Fair
Finance Watch
wrote to the
Federal Reserve
with
complaints
about Quontic Banks.
In a new low, after
the Board in
DC denied any
extension of
the comment
period, it was
the Federal
Reserve
Bank of
Philadelphia
which wrote
back and rubber-stamp
approved on a
delegated basis
- no HMDA
data, no
Board. Now
this: "Quontic
Bank
Acquisition
Corp.,
Astoria, New
York, and
Quontic Bank
Holdings
Corp.,
Astoria, New
York Written
Agreement
dated July 5,
2023." A
corrective
action
notice...
July
3, 2023
Stress
test shorts:
The decline in
Truist's and
U.S. Bancorp's
stressed CET1
ratio looks
rather poorly
compared to
the median
(-230 and -180
basis points,
respectively,
Figure 3), and
USB saw its
ratio drop to
the second
lowest in the
group,
surpassed only
by Citizens
Financial
Group (CFG)
with a
stressed CET1
ratio of 6.4%.
June
26,
2023
Since
Kugler has
pledged to
recuse herself
from
participating
in any matter
involving a
former
employer or
client for
four years —
beyond what’s
required under
the Biden
administration’s
ethics pledge
— and to
refrain from
signing on to
a financial
services firm
within four
years of
leaving
government -
why can't and
don't the
other Fed
governors?
June
19,
2023
Look who has
requested
access to
Reserve Bank
master
accounts and
financial
services
COMMERCIUM
FINANCIAL
CHEYENNE
WY
5/23/2022
Pending
Tier
3
Kansas
City
Not Federally
Insured
CUSTODIA BANK,
INC
CHEYENNE
WY
10/29/2020
Rejected
1/27/2023
Tier
3
Kansas
City
Not Federally
Insured KRAKEN
FINANCIAL
CHEYENNE
WY
10/6/2020
Pending
Tier
3
Kansas
City
Not Federally
Insured
MORNING STAR
FCU
LAME
DEER
MT
1/26/2023
Approved
4/28/2023
Tier
1
Minneapolis
NCUA NORTH
STAR COMMUNITY
CU
MADDOCK
ND
1/6/2023
Approved
5/10/2023
Tier
1
Minneapolis
NCUA GS&L
MUNICIPAL
BANK
GOUVERNEUR
NY
10/27/2022
Approved
2/28/2023
Tier
1
New
York
FDIC
FNALITY
LONDON
10/17/2022
Pending
TBD
New
York
Not Federally
Insured
June
12, 2023
Gov
Jefferson:
"the staffs of
the U.S.
federal
banking
agencies are
diligently
working on a
Basel III
endgame
proposal that
should be
issued for
public comment
soon. At the
same time, the
Federal
Reserve staff
is considering
ways to
enhance the
ability of
stress tests
to capture a
wider range of
risks and
identify
vulnerabilities
at the largest
banking
organizations."
June 5,
2023
Bowman
Watch II:
"This local
perspective is
one of the
great
advantages of
the Federal
Reserve
System's
regional
structure, and
of the Fed
Listens
initiative,
which
complements
the Board's
efforts to
understand
national
economic
conditions.
In 2019, the
Board launched
Fed Listens
with a year of
listening
sessions with
the public
focused on
monetary
policy"
May
29, 2029
Waller
watch: "There
is a little
over a month
between the
June and July
FOMC meetings,
and during
that time we
will learn
more about how
credit
conditions are
evolving. Over
four months
will have
passed between
the Silicon
Valley Bank
failure and
the July
meeting. By
then we will
have a much
clearer idea
about credit
conditions. If
banking
conditions do
not appear to
have tightened
excessively,
then hiking in
July could
well be the
appropriate
policy."
May 22, 2023
Bowman
watch: "I see
one of my many
functions and
roles as a
Member of the
Board of
Governors as
providing that
open door and
opportunity
for direct
engagement
with a
policymaker
for our
regional and
smaller banks,
as well. Your
Texas ABA
executive,
Chris Furlow,
who is a long
time friend
and colleague,
can put you
directly in
touch with me
should you
desire to do
so. "
May
15, 2023
Governor
Michelle W.
Bowman gave a
speech about
bank failures
- and nary a
word
about the exclusion
of the public
from any
review of those
being handed
the failed
banks, like JPM
Chase...
May
8, 2023
PacWest on the Ropes with Comerica to Follow Fed Collins on the Board as FRB Says All Good
by
Matthew Russell Lee, Patreon Book
Substack
FEDERAL
COURTHOUSE, May 4 – After the failures of
Silicon Valley Bank and Signature Bank in New
York, next was First Republic Bank.
On on May 3, PacWest Bank's shares tumbled, also
those of Western Alliance, Zions and Comerica --
which has former Federal Reserve big wig Michael
E. Collins cashing in on its board.
Meanwhile
the Federal Reserve Board in Washington assures
that all's well - as it denies FOIA requests
about its regulation, notably lax on fair
lending and the Community Reinvestment Act.
At 3 am Eastern time on May 1, the First
Republic (and $13 billion) was given to JPMorgan
Chase, which is already over the "maximum" 10%
of US deposits threshold - and whose CEO Jamie
Dimon has been ordered deposed about his
knowledge of, and link to, the pedophile
conspiracy of Jeffrey Epstein. It's come to
this.
The JPM Chase
complaint is on Patreon, here.
On March 20, 2023 U.S.
District Court for
the Southern District
of New York Judge
Jed S. Rakoff in a
bottom line order
dismissed some but
not all claims,
in the Epstein-related
cases against
JPMC and Deutsche
Bank.
***
May 1,
2023
FRB Downplays Its Failure on SVB As Claims No Review of Signature Crypto But FOIA Scam
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE, April 28 – Alongside the
larger flame-out of Silicon
Valley Bank, Signature Bank
too failed, FOIA
story below.
On SVB, the Federal Reserve on
April 28 issues a report
downplaying
it failure(s) and
notably not mentioning
the lack of any
public comment or
Community
Reinvestment Act /
CBA review as SVB
was
handed over to
First
Citizens, and
Signature
to NYCB.
The Federal
Reserve in belated response to
Inner City Press' FOIA request
says it has no record
of reviewing Signature and crypto, nor any "record
reflecting any
review by the FRS of
Silvergate’s (and
Provident Bancorp
Inc.,
Metropolitan
Commercial Bank,
Signature Bank,
Customers
Bancorp Inc.) of the
banks’ connections
with crypto-currency firms."
Federal Reserve
letter
to Inner City
Press here
The
Fed did, however,
belatedly give Inner
City Press
the Farmington
State
Bank
application it
approved, with
100%
ownership by
Bahamas
based Jean
Chalopin. It's now on
Inner City
Press'
DocumentCloud
here.
We'll have
more on this.
Inner
City Press submitted to the Federal Reserve a
Freedom of Information Act request
including about Signature Bank: "This is a
FOIA request for all record regarding FTX...
Also, for Silvergate with its FTX connections,
record reflecting any review by the FRS of
Silvergate's (and Provident Bancorp Inc.,
Metropolitan Commercial Bank, Signature Bank,
Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms... This
is a request for expedited treatment."
The
Federal Reserve acknowledged receipt and said it
was granting expedited process. Then -- nothing.
Now,
as the Fed belatedly backs up Signature Bank
after Silicon Valley Bank, the Fed tries to
paper its delay: "Months after the Federal
Reserve said it granted Inner City Press
expedited processing of its FOIA request on the
Fed's work / errors on crypto, and two months
after Inner City Press answered a request for
clarification, past 4 pm on Friday March 10,
2023, this: "Good afternoon Mr. Lee The second
part of your request seems to concern other
entities (Silvergate, Provident Bancorp Inc.,
Metropolitan Commercial Bank, Signature Bank,
Customers Bancorp Inc.). Please confirm
the scope of this part of your request, did you
intend to seek applications related information
for these entities?"
Inner City Press again immediately responded and clarified, about FTX. Now the response above. Watch this site."
***
April
24, 2023
Today's
Federal
Reserve
doesn't
believe that the
collapse of
banks and
crypto are
matters of
urgent public
concern -
they've written to
Inner City
Press: "In
support of
your request
for expedited
treatment, you
state that
“‘in light
of the
indictment of
FTX /
Alameda’s Sam
Bankman-Fried
and Caroline
Ellison
(cooperating),
and an
upcoming
January 3,
2023 hearing’
- case
proceeds.”
However, you
have not set
forth facts
demonstrating
an urgent need
to inform the
public about
an actual or
alleged
activity of
the Federal
Government.
Thus, I have
determined
that your
request does
not comply
with the
criteria for
expedited
processing." Really.
April
17, 2023
On April
14, the Fed
announced
"The Federal
Reserve Board
on Friday
announced its
approval for
UBS Group AG,
of Zürich,
Switzerland,
to acquire the
U.S.
subsidiaries
of Credit
Suisse Group
AG, of Zürich,
Switzerland.
The
application
was submitted
in connection
with UBS Group
AG's
acquisition of
Credit Suisse
Group AG. In
connection
with the
proposal, UBS
has committed
to provide the
Board with an
implementation
plan for
combining the
U.S. business
and operations
of UBS and
Credit Suisse,
which will be
updated
quarterly. The
implementation
plan will
address UBS's
obligations to
comply with
more stringent
enhanced
prudential
standards,
including
liquidity
standards." No such
announcement
with regard to
SVB -
First Citizens,
or Signature -
NYCB. So oversea
forced mergers
are "reviewed,"
but those in
the US are
not?
April
10, 2023
Fed-Speaks:
"The Federal
Reserve Board
on Thursday
announced that
it has fined
Wells Fargo
& Co., of
San Francisco,
California,
$67.8 million
for the firm's
unsafe or
unsound
practices
relating to
historical
inadequate
oversight of
sanctions
compliance
risks at its
subsidiary
bank, Wells
Fargo Bank,
N.A." Historical?
April
3, 2023
FRB Claims No Review of Signature Crypto But Here Is Farmington Application FRBSF OKed
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE, April 1 – Alongside the
larger flame-out of Silicon
Valley Bank, Signature Bank
too failed.
Now
the Federal Reserve in belated
response to Inner City Press'
FOIA request says it has no record
of reviewing Signature and crypto, nor any "record
reflecting any
review by the FRS of
Silvergate’s (and
Provident Bancorp
Inc.,
Metropolitan
Commercial Bank,
Signature Bank,
Customers
Bancorp Inc.) of the
banks’ connections
with crypto-currency firms."
Federal Reserve
letter
to Inner City
Press here
March
27, 2023
Credit Suisse USB Merger amid Bank Meltdown Preapproved by Fed as Collins on Comerica
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE, March 19 – Alongside the
larger flame-out of Silicon
Valley Bank, Signature Bank
too failed. Now on March 19 in
Switzerland, the
forced and subsidized
marriage of USB and Credit
Suisse. Both have
US subsidiaries but from the
Fed, this pre-approval:
"The
following
statement was
released by
Secretary of
the Treasury
Janet L.
Yellen and
Federal
Reserve Board
Chair Jerome
H.
Powell:
'We welcome
the
announcements
by the Swiss
authorities
today to
support
financial
stability. The
capital and
liquidity
positions of
the U.S.
banking system
are strong,
and the U.S.
financial
system is
resilient. We
have been in
close contact
with our
international
counterparts
to support
their
implementation.'"
Preapproval,
like the entry
of Goldman
Sachs and
Morgan Stanley
into the
banking
system, with
no comment
period.
On Signature
Bank's board of directors is
not only Barney Frank (who
after leaving Congress
undermine his own Dodd Frank
Act) but also former New York
State Superintendent of Banks
Derrick D. Cephas.
Among those being reviewed
by Moody, as
simply the first example,
former
Federal Reserve Bank of
Philadelphia and Cleveland
bigwig
Michael E.
Collins is on
the board of
Comerica, the
bank that abandoned
Detroit
for Dallas. The
Administration is saying that
people will be held
accountable - but who?
Next up: PacWest and Western Alliance, Intrust, UMB and Zions. Watch this site.
March 20,
2023
Amid Bank Meltdown Former Fed Collins on Comerica Board Like Signature Frank & Cephas
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE, March 14 – Alongside the
larger flame-out of Silicon
Valley Bank, over the weekend
Signature Bank too failed. On
Signature Bank's board of
directors is not only Barney
Frank (who after leaving
Congress undermine his own
Dodd Frank Act) but also
former New York State
Superintendent of Banks
Derrick D. Cephas.
March
13, 2023
Months after
the Federal Reserve
said it
granted Inner
City Press
expedited
processing of
its FOIA
request on the
Fed's work /
errors on
crypto, and
two months after
Inner City
Press answered
a request for
clarification,
past 4 pm on
Friday March
10, 2023,
this: "Good
afternoon Mr.
Lee
Staff is still
unclear about
the scope of
your
request.
Referring to
the initial
clarification
email below,
the second
part of your
request still
needs
clarification.
“The second
part of your
request seems
to concern
other entities
(Silvergate,
Provident
Bancorp Inc.,
Metropolitan
Commercial
Bank,
Signature
Bank,
Customers
Bancorp
Inc.).
Please confirm
the scope of
this part of
your request,
did you intend
to seek
applications
related
information
for these
entities?
Clarifications
are needed in
order to
conduct a
search of
Board records
and process
this portion
of your
request.”
I realize from
your January
10 email
response that
you are
seeking
application
submissions,
Additional
Information
“AI”, and
approval
information.
However, it is
unclear what
application(s)
you seek this
information
concerning.
Did you intend
to seek
applications
for FTX to
acquire or
merge with
Silvergate,
FTX to acquire
or merge with
Provident
Bancorp, Inc.,
or FTX to
acquire or
merge with
Metropolitan
Commercial
Bank? It
is unclear the
connection you
intended for
these
institutions
(other than
media
mentions) and
as such
conducting a
search of
Board records
cannot be
completed.
Did you intend
to seek
records that
reference all
of these
institutions
together?
Did you intend
to seek
applications
records about
each
institution?
If this was
your intent,
we need a
target
institution
ABC Bank and
Provident,
Signature Bank
and XYZ Bank,
for
example.
From these
examples
alone, the
interpretations
are
many. It
would be
helpful if you
could include
the date the
application
was approved
or announced
in the
H.2.
Doing so would
allow us to
search and
review records
more quickly,
should they
exist.
I realize that
you responded
in a timely
manner to our
last
communication
about this
request, but
your comments
were not
specific
clarifications
with respect
to the named
institutions
in part 2 of
your request
that would
enable staff
to conduct a
reasonable
search.
If you have
additional
context,
please provide
it as soon as
possible.
After which,
staff may be
able to make
reasonable
interpretations
regarding the
information
you seek."
Inner City
Press again
immediately
responded and
clarified, about
FTX.
Watch this
site.
March
6, 2023
BMO Harris BNP Got Fed OK Despite Peters Case With Climate Dismissed Now French Suit
By
Matthew Russell Lee, Patreon Story
FED
COURT / S Bronx, Feb 27 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question, or one
answered in the negative, at least by the
Federal Reserve. Consider: Inner City Press
immediately reported that BMO Harris'
application to buy Bank of the West and its more
than 500 branches from BNP would be a litmus
test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
February
27, 2023
The
Federal
Reserve's FOIA
responses
have hit
a new low; this
appeal has
been filed:
This is
a FOIA appeal
of the FRB's
total denial
of Inner City
Press' FOIA
request
regarding MVB
Bank's
February 7
additional
information
response, in
which MVB
answered each
and every
question with
referring to a
withheld,
"Confidential"
Exhibit. The
letter was and
is subject to
the Fed's ex
parte rules -
withholding
the entire
response,
including
after an
immediate FOIA
request, makes
the Fed's ex
parte rules
meaningless.
One of the
withheld
answers is
about pro
forma
organizational
chart, another
concerns
crypto, a
matter of
public import
on which the
Fed's record,
after the SF
Reserve Bank's
Farmington
State Bank /
FTX - Alameda
approval, is
ever more
questionable.
In
signing in to
the Fed's FOIA
site to obtain
this FOIA
denial, I
noticed that
the Fed lists
Inner City
Press' earlier
FOIA request
about
Farmington and
other Fed
crypto
approvals
(2023-178) as
"On Hold -
Need
Info/Clarification."
But on January
10, 2023 I
immediately
answered the
request for
clarification
/ narrowing.
What is
happening with
the Fed's FOIA
compliance?
What is
happening with
the crypto
FOIA request,
on which the
Fed purported
to grant
expedited
treatment?
These should
be dealt with,
on or in
parallel with
this appeal.
Thank
you for your
prompt
attention,
February
20, 2023
With
Lael Brainard
leaving, even
before
the CRA reg is
out, who's
next? With Governor
Bowman beating
the
drum for even
faster
and more
automatic merger
approvals, the
next Governors
better
be one that
stands up to
that...
February
13, 2023
Lakeland Bank DOJ Deal Left Disparities in NY So Protest Now Fed Questions to Provident Here
By
Matthew Russell Lee, Patreon Maxwell
book
SOUTH
BRONX NY, Feb 10 – When the US
Department of Justice sued and immediately
settled with Lakeland Bank for fair lending
violations, it announced a proposed merger with
Provident Bank.
As
if to sweep it under the carpet.
And
when Fair Finance Watch looked into it, it found
that the DOJ settlement did not address in any
way the banks' disparities in New York. So on
December 1, the FDIC's comment deadline, it
filed the below, with Inner City Press on the
FOIA.
We refer to the
application filed by Provident Financial
Services, Inc. (“Provident”), Jersey City, New
Jersey, for prior approval of the Board of
Governors of the Federal Reserve System (the
“Board”), pursuant to Section 3(a)(3) and
3(a)(5) of the Bank Holding Company Act of 1956,
as amended, and Section 225.15 of Regulation Y,
to acquire Lakeland Bancorp, Inc. (“Lakeland”),
Oak Ridge, New Jersey, and thereby indirectly
acquire Lakeland Bank, Newfoundland, New Jersey
(“Transaction”). Based on our review of the
current record, the following additional
information is requested. Please provide
responses to all the following items, including
those in the Confidential Annex. Supporting
documentation should be provided, as
appropriate. Convenience & Needs/Community
Reinvestment Act (“Act”) 1. Provident’s response
to Question 1 of the November 30 Request for
Additional Information (“November 30 AI
Request”) indicates that “[t]he combined company
will deliver an expanded set of products and
services to its customers and communities.”
Describe those products and services to be
offered by the combined organization that
Provident deems most beneficial to customers in
low- or moderate-income (“LMI”) geographies or
income levels. 2. Indicate whether any consumer
products or community development programs and
services of either bank are expected to be
discontinued as a result of the proposed
transaction, and whether any products, programs
or services that are not currently offered will
be made available in the combined organization’s
markets. 3. The application states “Provident
and Lakeland will determine through the
integration planning process how the Combined
Bank will continue the successful processes,
policies, procedures and technology platforms of
Provident and Lakeland to maintain a strong,
comprehensive and sustainable CRA program.”
Provide an update on these efforts. Mark J.
Menting, Esq. February 8, 2023 2 NONCONFIDENTIAL
// EXTERNAL Compliance Program 4. In the
response to Question 6(a) of the November 30 AI
Request, Provident stated that it anticipated
that its existing compliance risk management
program would “either be the successor policies
and procedures for the combined organization, or
that they may serve as a solid foundation for
revised policies and procedures going forward.”
If available, provide an update on the expected
compliance risk management program at the
combined organization. 5. Describe in greater
detail Provident Bank’s current fair lending
program and risk management controls with
respect to fair lending and discuss the
rationale behind the decision for the combined
organization to adopt the overall framework and
structure of Lakeland Bank’s fair lending
compliance program. To the extent not previously
addressed, include in your discussion any areas
of Lakeland Bank’s existing fair lending program
the combined organization intends to enhance, as
well as all efforts to ensure that the policies
and procedures adopted by the combined
organization will be adequate for the combined
organization to provide equal access to credit
to majority-minority communities in its
assessment area (“AA”). Branching 6. For
Provident Bank, Lakeland Bank, and the combined
organization, provide the number and percentage
of total branches that are or will be located in
LMI and/or majorityminority census tracts. 7. To
the extent not previously addressed, describe
the process by which Provident Bank currently
determines whether and where to open or close a
branch. Include in your discussion any fair
lending considerations the bank takes into
account in making such determinations. Indicate
whether the existing policies and procedures of
Provident Bank or Lakeland Bank will be
implemented at the combined organization.
Staffing 8. Discuss whether any existing staff
of Provident Bank or Lakeland Bank are under
consideration to be the combined organization’s
Chief Compliance Officer or Fair Banking
Officer. If so, identify those individuals and
provide an update regarding the timing and
content of the selection process, if available.
9. Confirm, if such is the case, that Lakeland
Bank’s current Community Development Officer
will continue in that role at the combined
organization. If not, indicate who will assume
that position at the combined organization, if
known. Mark J. Menting, Esq. February 8, 2023 3
NONCONFIDENTIAL // EXTERNAL 10. Provide an
update to the organizational chart provided in
response to question 6(b) of the November 30 AI
Request reflecting all compliance-related
positions at the combined organization. For
those positions where an individual has been
identified to fill the role, indicate that
individual’s name in the organizational chart.
Department of Justice (“DOJ”) Consent Order 11.
Under Section C of the Consent Order, Lakeland
Bank is required to take certain steps with
respect to fair lending training. Indicate
whether the combined organization intends to
continue to adhere to those training
requirements following the proposed acquisition.
If so, indicate whether they will apply to all
employees of the combined organization or only
those employees retained from Lakeland Bank. 12.
Provide an update on the timing of the opening
of the full-service branch in Newark, New
Jersey, as described in Paragraph 19 of the
Consent Order. In addition, provide an update on
the plans of Lakeland Bank or the combined
organization to open a second branch, if
available.
February
6, 2023
While the Fed
pretends to be
serious, now
on Custodia,
after allowing FTX
in through
Farmington
State Bank,
now they delegate
to a
(privately-owned)
Reserve Bank
the approval
for a bank
with a crypto
card and
other problems: "We
refer to the
Notice of
Change in Bank
Control (the
“Notice”)
submitted to
the Federal
Reserve Bank
of
Philadelphia
(“Reserve
Bank”) and the
Board of
Governors of
the Federal
Reserve System
(“Board”),
pursuant to
the Change in
Bank Control
Act of 1978,
as amended, by
(1) the Estate
of Steven B.
Schnall,
Sherri Silver
Schnall as
Preliminary
Executor, both
of New York,
New York, to
retain voting
shares of
Quontic Bank
Acquisition
Corp.
(“QBAC”), and
Quontic Bank
Holdings Corp.
(“QBHC”), and
thereby
indirectly
retain voting
shares of
Quontic Bank,
all of New
York, New
York; and (2)
the Schnall
Disclaimer
Trust A,
Sherri Silver
Schnall,
individually,
and as
co-trustee,
both of New
York, New
York, with
Amie Hoffman,
as co-trustee,
New Hope,
Pennsylvania;
and the Sherri
S. Schnall
Family
Irrevocable
Trust, Amie
Hoffman as
trustee, both
of New Hope,
Pennsylvania;
to acquire
voting shares
of QBAC, and
QBHC, and
thereby
indirectly
acquire voting
shares of
Quontic Bank.
Accordingly,
all
notificants in
the Notice to
become a group
acting in
concert. This
Reserve Bank,
acting under
authority
delegated by
the Board at
section
265.11(c)(5)(iv)
of its Rules
Regarding
Delegation of
Authority, has
determined not
to disapprove
the Notice."
We'll have
more on this.
January
30, 2023
Fed
Denies
Custodia Bank
After FTX
Wreck As
FOIAed on
Moonstone Bank
by Inner City
Press
By
Matthew Russell Lee, Patreon
SDNY
COURTHOUSE, Jan 27 – Amid the prosecution
of Samuel Bankman-Fried on wire fraud, money
laundering and campaign finance violation
charges, the role of the Federal Reserve is
coming to the fore. Now it seeks to step
back from its brink by denying the application
of Custodia, with order still withheld. See
below.
Inner
City Press was unsurprised to learn of Fed
laxity as Alameda invested in Farmington State
Bank, renamed Moonstone Bank.
Inner
City Press submitted to the Federal Reserve a
Freedom of Information Act request including:
"This is a FOIA request for all record regarding
the FRS' approval for the application / request
for membership in the Federal Reserve System by
Farmington State Bank (giving rise to FRBSF
president Daly's approval on a delegated basis
in 2021), and the subsequent renaming of the
bank to Mooonstone and taking of a stake by
FTX/Alameda. Also, for Silvergate with its
FTX connections, record reflecting any review by
the FRS of Silvergate's (and Provident Bancorp
Inc., Metropolitan Commercial Bank, Signature
Bank, Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms... This
is a request for expedited treatment, in light
of the indictment of FTX / Alameda's Sam
Bankman-Fried and Caroline Ellison
(cooperating), and an upcoming January 3, 2023
hearing."
The
Federal Reserve acknowledged receipt:
"Your request has been assigned number
FOIA-2023-00178. Please reference this number in
all future correspondence.
Request description: This is a FOIA
request for all record regarding the FRS'
approval for the application / request for
membership in the Federal Reserve System by
Farmington State Bank [also] any review by the
FRS of Silvergate's (and Provident Bancorp Inc.,
Metropolitan Commercial Bank, Signature Bank,
Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms."
On
January 27, still withholding documents, the Fed
"announced its denial of the application by
Custodia Bank, Inc., Cheyenne, Wyoming, to
become a member of the Federal Reserve System.
The Board has concluded that the firm's
application as submitted is inconsistent with
the required factors under the law.
Custodia is a special purpose depository
institution, chartered by the state of Wyoming,
which does not have federal deposit insurance.
The firm proposed to engage in novel and
untested crypto activities that include issuing
a crypto asset on open, public and/or
decentralized networks. The firm's novel
business model and proposed focus on
crypto-assets presented significant safety and
soundness risks. The Board has previously made
clear that such crypto activities are highly
likely to be inconsistent with safe and sound
banking practices. The Board also found that
Custodia's risk management framework was
insufficient to address concerns regarding the
heightened risks associated with its proposed
crypto activities, including its ability to
mitigate money laundering and terrorism
financing risks. In light of these and
other concerns, the firm's application as
submitted was inconsistent with the factors the
Board is required to evaluate by law. The
Board's order will be released following a
review for confidential information."
January
23, 2023
Fed
speak - but no
live
questions:
"What: Federal
Reserve Bank
of Dallas
President
& CEO
Lorie Logan
will speak
about U.S.
economic
outlook and
monetary
policy at the
McCombs School
of Business at
The University
of Texas at
Austin. Logan
took office
last August,
and with this
speech she
will introduce
the monetary
policy
objectives
that will
guide her
tenure. When:
Wednesday,
Jan. 18, 2023
4-4:05 p.m.,
Texas McCombs
Dean Lillian
Mills, welcome
and
introduction.
4:05-4:30
p.m., Dallas
Fed President
& CEO
Lorie Logan.
4:30-4:45
p.m., Q&A
moderated by
Julia
Coronado,
Texas McCombs
clinical
associate
professor of
finance; time
will not allow
for live
questions"
January
16, 2023
NY Fed Dissolved TRO to Fire Unvaccinated Staff Now Fed Accuses Lawyer of Contacts
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURTHOUSE, Jan 13 – The Federal
Reserve Bank of New York wants to fire longtime
employees Lori Gardner-Alfred of The Bronx and
Jeanette Diaz of Bayonne, New Jersey for not
being vaccinated against COVID-19. And now it
may be able to.
The two women won a temporary restraining order
in New York State court. But the FRBNY removed
the case to Federal court and Friday argued to
dissolve the TRO and fire the women, saying that
their harm is not
irreparable.
On March 4, U.S. District Court for the Southern
District of New York Judge Lewis J. Liman held a
proceeding. Inner City Press covered
it.
FRBNY
in-house lawyer Alex Leonard argued the TRO
should be immediately lift. The women,
representing themselves, asked for time to
respond to the papers the Fed, their employer
for decades, had just given them.
Judge Liman to his credit did give them time, until Sunday to file their response to his chambers by email. Then, it should be docketed.
Jeanette Diaz
asked about the FRBNY's
definition and denial of
religious exemptions. Judge
Liman said perhaps Mr. Leonard
could answer. But he said no,
that would be getting in to
the merits and the Fed's focus
was getting the TRO dissolved
and presumably firing the
employees.
On March 7, Judge Liman heard from the parties
again. Inner City Press live tweeted here:
now
staffers the Federal Reserve Bank of NY wants to
fire for being unvaccinated are before SDNY
Judge Liman as they were Friday. FRBNY lawyer:
Now plaintiffs over the weekend make a a
Constitution argument. But the New York Fed is
not a government agency.
[Inner
City Press: Then how does NY Fed approve bank
mergers? See, FRBNY Approves Berkshire Bank With
NTI Rating, here
Judge
Liman: Even if discrimination were being
alleged, would an injunctions be issues? NY Fed
staffer's new/1st lawyer: The very pressure put
on these plaintiffs to abandoned their bona fide
religious beliefs is irreparable harm, per se
Judge
Liman: What do you say about the NY Fed not
being a state agency? Lawyer: They removed to
this court by saying that are an organ of the
Federal government... [And, the Fed Board
had this "non government agency," owned by
banks, approving bank mergers]
Lawyer:
On the merits we have this Federal Reserve
agency, now trying to revoke the religious
exemption based on their job titles. These jobs
could be performed remotely. Or, in the office a
few days a week.
Lawyer: The Fed has granted others an ongoing
exemption. That burden is on the Fed to offer up
some justification. Judge Liman: What about
irreparable harm?
Lawyer:
There's the Northern District of NY
case... Judge Liman: Citation? Lawyer: 17
F.4th 368, 370
NY
Fed's Leonard: He says we are forcing them to
violate their religious beliefs. But it is a
condition of employment. They got a temporary
accommodation, but there's no longer a
reasonable one. We understand that's difficult.
See, the Hawaii Airlines case.
NY
Fed's Leonard: They did not claim in their state
court submission any free exercise violation. NY
Fed is not a government agency. Judge
Liman: Authority for that? A: Uh, uh, NY Fed's
employment actions are not state action. Judge:
Cases? A: Nothing on point.
NY
Fed's Leonard: There is no irreparable harm.
Judge
Liman: I'm going to take this under advisement.
I will render a decision quite quickly. Expect
to hear from me soon. Plaintiffs' lawyer:
There's a case, Agricultural Bank of China, 2016
WL 27566661
NY
Fed's Leonard: US v. Wells Fargo case, while not
on point, the Federal Reserve Bank for the
purpose of emergency lending are government
agencies, but by implication, not as employers.
Plaintiffs' lawyer: 24 hours for an interlocutor
appeal? NY Fed: We object. ]
NY
Fed's Leonard: We are doing this in the middle
of pandemic. We shouldn't be restrained any
longer. Judge Liman: Do you want to dismiss the
complaint under 12(b)(6)? NY Fed: There's no
complaint, it's futile. Yes, dismiss. Judge
Liman: I'm asking about process.
NY
Fed's Leonard: We'll submit more papers in 2
weeks.
Judge
Liman: Reply by April 11. We are adjourned.
On March 11, this: "ORDER granting in part [7] Motion Emergency Motion to Dissolve Ex Parte Temporary Restraining Order and Dismiss . Accordingly, the TRO is dissolved as improperly issued under Rule 65. See Rabbi Jacob Joseph School v. Province of Mendoza, 342 F. Supp. 2d 124, 127 (E.D.N.Y. 2004) ("The temporary restraining order that was issued without notice to the attorney for the Defendant whose identity was known, without declaring in an affidavit or verified complaint that immediate and irreparable harm would result before the adverse party or his attorney could be heard in opposition, was plainly in violation of Fed.R.Civ.P. 65(b), and the temporary restraining order was vacated for the additional reason that it was improperly issued."); Dolan v. Portaro, 2015 WL 3444351, at *1 (N.D. Ohio May 28, 2015) ("Had Plaintiff Dolan initially filed this case in this Court, the TRO could not have been granted. When the motion for a TRO was first made in state court, Plaintiff's counsel did not provide the required certification as to what efforts were made to give notice and why notice should not be required. Nor did Plaintiff's counsel file such certification in this Court after removal. That deficiency alone justifies dissolving the TRO."). Moreover, "[o]n this motion to dissolve a temporary restraining order,... the party that obtained that order... bears the burden of justifying continued injunctive relief." Gardner v. Weisman, 2006 WL 2423376, at *1 (S.D.N.Y. Aug. 21, 2006) (internal quotation marks omitted) (quoting SC Cowen Sec. Corp. v. Messih, 2000 WL 663434, at *1 (S.D.N.Y. May 17, 2000)). The FRBNY argues that the evidence submitted by Plaintiffs does not satisfy that burden, because they have not shown irreparable harm, a likelihood of success, or a balance of hardships in their favor, as further set forth herein. Plaintiffs also have not demonstrated a likelihood of success on the merits of their claims; their operative pleadings are wholly conclusory, and their arguments regarding a likelihood of success on the merits again hinge entirely on the Free Exercise claims, Dkt. No. 14 at 5; once again, the operative pleadings assert no Free Exercise claims. As such, Plaintiffs have not carried their burden of justifying continued injunctive relief. For this additional reason, the TRO must be dissolved."
On March 21 the New York Fed filed a motion to
dismiss, leading that "the New York Fed - part
of the nation's central bank and a federal
instrumentality established pursuant to the
Federal Reserve Act of 1913 is not a state
agency whose decisions are subject to review
under Article 78."
On
June 21 Judge Liman held another proceeding. He
said he did not anticipate granting a motion to
dismiss, but also doubted in a preliminary
injunction, given that the staffers have already
been fired. (The Fed's lawyer slipped in that
the Fed doubts that the lead plaintiff's beliefs
are religious).
Judge
Liman told counsel to discuss with their clients
the option of an expedited hearing on a
permanent injunctions. A case management plan is
due July 8, with another conference set for July
18 at 2 pm.
Inner City Press covered the July 18 conference;
there was a request for a trial in January but a
decision to hold it in May. Then into the docket
this: "ORDER deferring ruling on [27] Motion for
Preliminary Injunction. Upon consent of the
parties at Dkt. No. 41, the hearing on
Plaintiffs' motion for a preliminary injunction
will be consolidated with a trial on the merits
pursuant to Federal Rule of Civil Procedure
65(a)(2). (HEREBY ORDERED by Judge Lewis J.
Liman)."
As
the weather grows colder, the plaintiffs' lawyer
seek to leave them. Judge Liman ruled: "ORDER:
On October 28, 2022, plaintiffs Jeanette Diaz
and Lori Gardner ("Plaintiffs") emailed the
Court asking if they could be represented by
counsel at the conference scheduled for
Thursday, November 3, 2022 at 2:00 p.m. The
Court has not granted Plaintiffs' counsel's
motion to withdraw. Accordingly, if Plaintiffs
wish to communicate with the Court, they should
do so through counsel and file the communication
on the docket on ECF. SO ORDERED. (Signed by
Judge Lewis J. Liman on 10/28/2022)."
On
January 13, 2023, Judge Liman held another
conference in the case, about discovery. But the
Federal Reserve's lawyer dropped a bombshell,
claiming that plaintiffs' counsel did not in
fact have any agreement with the clients to
actually produce discovery - and was
communicating through a New York Fed staffer,
William Christie. Even before the oral
bombshell, the Fed's January 11 letter to Judge
Liman roundly critiqued plaintiffs' counsel. We
aim to have more on this.
Inner
City Press will continue to cover the case and
the Fed.
January
9, 2023
The
Federal Reserve
under the
Change in Bank
Control Act -
the same one
use or misused
on its
watch for FTX
/ Alameda to
buy into Farmington
State Bank now
Moonstone
- has declined
to extend the
comment period
on: "Dear
Mr. Lee: This
concerns your
correspondence
dated December
6, 2022,
regarding the
notice filed
under the
Change in Bank
Control Act of
1978, as
amended (“CIBC
Act”), 1 by
(1) the Estate
of Steven B.
Schnall,
Sherri Silver
Schnall, as
Preliminary
Executor, both
of New York,
New York, to
retain voting
shares of
Quontic Bank
Acquisition
Corp. (“QBAC”)
and Quontic
Bank Holdings
Corp.
(“QBHC”), and
thereby retain
voting shares
of Quontic
Bank, all of
New York, New
York; and (2)
the Schnall
Disclaimer
Trust A,
Sherri Silver
Schnall,
individually
and as
co-trustee,
both of New
York, New
York, with
Amie Hoffman,
as co-trustee,
New Hope,
Pennsylvania;
and the Sherri
S. Schnall
Family
Irrevocable
Trust, Amie
Hoffman as
trustee, both
of New Hope,
Pennsylvania,
to acquire
voting shares
of QBAC and
QBHC, and
thereby
indirectly
acquire voting
shares of
Quontic Bank,
all of New
York, New
York. You
requested an
extension of
the comment
period for
this proposal.
Notices were
published in
the Federal
Register
(November 21,
2022) and in
the relevant
newspaper of
general
circulation
(the New York
Daily News
(October 31,
2022))
providing
commenters
until December
6, 2022, a
total of 36
days, to
submit their
views on all
aspects of the
proposal. This
period
provided
sufficient
time for
interested
persons to
prepare and
submit their
comments. The
Board provides
a public
comment period
for notices to
provide
interested
persons the
opportunity to
submit
information
and views
related to the
statutory
factors it 1
12 U.S.C. §
1817(j).
2 must
consider under
the CIBC Act.
The Board’s
Rules of
Procedure
(“Rules”)2
also establish
a framework,
based on the
schedules
followed by
many courts,
that limits
iterative
responses
between
applicants and
commenters.
The Rules
contemplate
that the
public comment
period will
not be
extended
absent a clear
demonstration
of hardship or
other
meritorious
reason for
seeking
additional
time. Your
request for
additional
time to
comment does
not identify
circumstances
that would
warrant an
extension of
the public
comment period
for this
proposal.
Based on all
the facts of
record,
including the
reasons
discussed
above, I have
determined,
acting
pursuant to
authority
delegated by
the Board (12
CFR
265.5(a)(2)),
not to extend
the public
comment
period. Any
comments
received on or
before
December 6,
2022, have
been made part
of the record
of the
proposal that
will be
reviewed by
the Board"
Watch this
site.
January
2, 2023
While Inner City
Press looks
into how the
Federal
Reserve
allowed FTX /
Alameda to buy
into
Farmington
State Bank /
Moonstone Bank,
it commented to
the Fed on
"Notice of
Change in Bank
Control (the
“Notice”) by
(i) the Estate
of Steven B.
Schnall,
Sherri Silver
Schnall as
Preliminary
Executor, both
of New York,
New York; to
retain voting
shares of
Quontic Bank
Acquisition
Corp., and
Quontic Bank
Holdings
Corp., all of
New York, New
York, and
(ii), the
Schnall
Disclaimer
Trust A,
Sherri Silver
Schnall,
individually,
and as
co-trustee,
both of New
York, New
York, with
Amie Hoffman,
as co-trustee,
New Hope,
Pennsylvania;
and the Sherri
S. Schnall
Family
Irrevocable
Trust, Amie
Hoffman as
trustee, of
New Hope,
Pennsylvania
(all parties
to (i) and
(ii) together,
the
“Notificants”);
to acquire
voting shares
of Quontic
Bank
Acquisition
Corp., and
Quontic Bank
Holdings
Corp., and
thereby
indirectly
acquire voting
shares of
Quontic Bank."
Note that
beyond its
crypto rewards
program,
Quontic "has
become the
latest of a
handful of
US-based
financial
institutions
to have agreed
to work with
the
cryptocurrency
sector... It
opened a
checking
account for an
unnamed
Bitcoin ATM
firm--its
first crypto
client--several
weeks ago, and
claims to be
in contract
negotiations
to open
accounts for
another new
cryptocurrency
company, which
was also
unnamed."
And
how did Quontic
respond to
Inner City
Press' comment? With
pure
arrogance.
We'll have
more on this.
Watch this
site.
And how did
Quontic,December
26, 2022
On FTX Wreck Federal Reserve FOIAed by on Moonstone Bank & Others By Inner City Press
By
Matthew Russell Lee, Patreon
SDNY
COURTHOUSE, Dec 22 – Amid the prosecution of
Samuel Bankman-Fried on wire fraud, money
laundering and campaign finance violation
charges, the role of the Federal Reserve is
coming to the fore.
Inner
City Press was unsurprised to learn of Fed
laxity as Alameda invested in Farmington State
Bank, renamed Moonstone Bank.
Inner
City Press submitted to the Federal Reserve a
Freedom of Information Act request including:
"This is a FOIA request for all record regarding
the FRS' approval for the application / request
for membership in the Federal Reserve System by
Farmington State Bank (giving rise to FRBSF
president Daly's approval on a delegated basis
in 2021), and the subsequent renaming of the
bank to Mooonstone and taking of a stake by
FTX/Alameda. Also, for Silvergate with its
FTX connections, record reflecting any review by
the FRS of Silvergate's (and Provident Bancorp
Inc., Metropolitan Commercial Bank, Signature
Bank, Customers Bancorp Inc.) of the banks'
connections with crypto-currency firms... This
is a request for expedited treatment, in light
of the indictment of FTX / Alameda's Sam
Bankman-Fried and Caroline Ellison
(cooperating), and an upcoming January 3, 2023
hearing."
December
17, 2022
Does
the Fed
waiting until
4:30 pm on a
comment period
that ends at 5
pm to provide
a copy of a
bank's
application
requested a
week ago meet
any standard?
We'll have
more to say
about Lakeland
- Provident...
Brookline Bank Bid To Bring Disparities To NY By Buying PCSB Bank Rubber Stamped by Fed
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC-Guardian
UK - Honduras
- ESPN NY
Mag
SOUTH
BRONX, Dec 15 – New York and Massachusetts
are portrayed as diverse and progressive places.
But their banks, not so much.
Consider
for example the proposed and today FRB approved
merger between Brookline Bank in Massachusetts
and PCSB Bank in New York, with branches in
Mount Vernon, Eastchester and
elsewhere.
The Federal Reserve, while withholding beyond the comment period even the public portion of the application involving Lakeland Bank, with settled lending discrimination charges recently with DOJ, on December 15 rubber stamped Brookline's application, with this line: "The commenter objected to the proposal, alleging that in 2021, Brookline Bank made fewer home loans to African American individuals as compared to white individuals." They don't name the commenter - Inner City Press / FFW.
Bronx-based
Inner City Press has long exposed redlining.
Along with Fair Finance Watch it finds that in
2020, the most recent year for which Home
Mortgage Disclosure Act data is publicly
available, PCSB Bank in New York State made 79
loans to whites - and only seven to African
America. The dollar volume difference is even
worse, a twenty to one disparity.
So
what is the lending record in Massachusetts of
Brookline Bank, the proposed acquirer of PCSB?
December
12, 2022
On
December 9,
Inner City
Press filed
with the
Federal
Reserve, in
both NY and
DC, asking for
a copy of the
Provident -
Lakeland
application
that day. As
of December
10, none has
been provided.
This is
unacceptable -
what this
site.
December
5, 2022
Friday
news dump from the
Fed, Dec 2,
2022: The
Federal
Reserve Board
on Friday
invited public
comment on
proposed
principles
providing a
high-level
framework for
the safe and
sound
management of
exposures to
climate-related
financial
risks for
large banking
organizations.
The proposed
principles
would apply to
banking
organizations
with more than
$100 billion
in total
assets and
address both
the physical
risks and
transition
risks
associated
with climate
change. The
proposed
principles
would cover
six areas:
governance;
policies,
procedures,
and limits;
strategic
planning; risk
management;
data, risk
measurement
and reporting;
and scenario
analysis.
The proposed
principles are
substantially
similar to
proposals
issued by the
Office of the
Comptroller of
the Currency
and the
Federal
Deposit
Insurance
Corporation,
and the Board
intends to
work with
those agencies
to promote
consistency in
the
supervision of
large banks
through final
interagency
guidance.
Comments will
be accepted
for 60 days
November
28, 2022
The
Federal
Reserve wrote
to Citigroup,
which it has let
abuse
consumers for
years, on
November 22
thusly: Citigroup
"must, on or
before January
31, 2023,
submit to the
Agencies (1) a
mapping
document that
identifies the
actions in the
GARP that are
expected to
improve the
firm’s ability
to accurately
produce key
data in a
timely manner
that would be
relied upon to
execute its
resolution
plan
(Resolvability
Data Mapping),
(2) a detailed
description of
how each of
the actions
identified in
the
Resolvability
Data Mapping
will improve
the firm’s
ability to
accurately
produce data
in a timely
manner 13 The
2021 Targeted
Plan also
claimed that
certain
financial
resource
buffers and
assumptions
the Covered
Company views
as
conservative
about
resolution-related
capital and
liquidity are
sufficient to
mitigate any
effect of the
data integrity
and quality
issues on the
firm’s
resolution
capabilities.
7 integral to
execution of
the firm’s
resolution
strategy and
which of these
actions
(either
individually
or in
combination
with other
actions) the
Covered
Company
anticipates
will result in
the greatest
material
improvement to
the firm’s
resolution
capabilities
and that
accordingly
are a priority
for the firm,
and (3) a
detailed
description of
how the
Covered
Company will
demonstrate,
to itself and
the Agencies,
that the
improvements
to its data
governance
program will
result in more
accurate and
timely data
integral to
execution of
the firm’s
resolution
strategy (2
and 3
together, the
Remediation
Actions and
Evaluations
Descriptions).
The
shortcoming
will remain
outstanding
until the
Covered
Company
addresses the
remedial
actions in the
Resolvability
Data Mapping."
November
21, 2022
The Fed
issued a correction
to Gov Bowman's
Nov 17 speech:
"Note: A
previous
version of
this speech
incorrectly
attributed
statistics in
paragraph 9 to
the Survey of
Household
Economics and
Decisionmaking
(SHED). On
November 17,
this paragraph
was updated to
correctly
attribute
these numbers
to the Survey
of Consumer
Finances."
November
14, 2022
The Fed
in its new
Supervision
and Regulation
Report brags
about FedEZFile
and its
"two way
messaging" with
applicant
banks - without
addressing
how the Ex
Parte Rules
apply to it.
We aim to have
more on this.
November
7, 2022
BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now Promises, Promises
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FED
COURT / S Bronx, Nov 2 – Whether or not the U.S.
Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question. Consider:
Inner City Press immediately reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
This
is outrageous. The Fed itself should make these
exhibits public.
On
October 17, the Fed sent Fair Finance Watch a
copy of letter to "Ro" - "Dear Ro: Please
provide a response including supporting
documentation, to the following request: 1.
Provide the cover page for the FR Y-3F and
responses to any questions that were not already
covered in the initial FR Y-3 filing. Provide
your response by October 25, 2022, eight
business days from the date of this letter."
On
October 26, belatedly more formal, the Fed
asked: "Dear Rosemary: Please provide
responses to each of the following requests.
Supporting documentation, as appropriate, should
be provided... Describe whether the combined
banking organization would expand upon each
bank’s community development activities if the
proposal is consummated, and identify those
community development activities."
October
31, 2022
BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now 4 More Questions
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FED
COURT / S Bronx, Oct 26 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question. Consider:
Inner City Press immediately reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
On
October 26, belatedly more formal, the Fed
asked: "Dear Rosemary: Please provide
responses to each of the following requests.
Supporting documentation, as appropriate, should
be provided. 1. With respect to the Transitional
Services and Reverse Transitional Services
Agreements (“Agreements”), the March 9, 2022
request for additional information requested
copies of the draft and final Agreements, when
available. On August 23, 2022, BMO Stated the
final Agreements would be completed shortly and
provided to the Board of Governors within the
following weeks. Provide copies of the draft or
final agreements if available. If these are
currently unavailable, provide an update on when
the Agreements will be available. 2. Confirm
whether BHB plans to close, consolidate, or
relocate any BHB branches in connection with the
Proposed Transaction. 3. The March 11,
2022, response to commenters states “the
combined banking organization will continue to
offer both (a) a wide array of deposit, checking
and loan products (including Bank On certified
products) and (b) broad access to programs with
features that are available to assist [low- and
moderate-income (LMI)] and minority
individuals.” Provide greater detail regarding
the products and services that the combined
organization would offer to meet the convenience
and needs of the communities to be served by the
combined organization, including LMI individuals
and communities. In addition, identify if there
are any programs, products, or services offered
by BOTW, but not currently offered by BHB, that
would be made available by the combined
banking organization if the proposal is
consummated, and would help to meet the needs of
LMI customers. 4. Describe whether the combined
banking organization would expand upon each
bank’s community development activities if the
proposal is consummated, and identify those
community development activities."
October
24, 2022
BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now Another Question
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FED
COURT / S Bronx, Oct 17 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question. Consider:
Inner City Press immediately reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
This
is outrageous. The Fed itself should make these
exhibits public.
October
17, 2022
Talk
about burying
or hiding the
lede -- the
Federal
Reserve on
October 14
sent Fair
Finance Watch
a letter
saying it had
approved the
$8 billion
merger of US Bank and
MUFG, "order attached." But
there was no
order
attached. And
none was
listed on the
Board's
website - except,
it was hidden in
announcement
about a
comment
period. This is
not public
notice and
does not set the
15 day waiting
period to
request
reconsideration
running....
October
10, 2022
The Fed
announced -
only to banks? -
that "The
Federal
Reserve Board
announced on
Thursday that
it will
replace its
current bank
application
filing system
with a new and
upgraded
system later
this month.
The
substantive
requirements
of
applications
will remain
the same with
the new system
making the
filing process
more intuitive
and minimizing
paper
applications
and
communications.
The new
cloud-based
system, known
as FedEZFile,
will provide
real-time
status
tracking,
two-way
messaging, and
digitally
signed
documents for
applications.
An "Ask the
Fed" webinar
on the new
system will be
scheduled at a
later date."
Will it make
commenting for
the public,
and
transparency,
easier? Watch
this site.
October
3, 2022
Now
Governor Bowman,
who urged
banks to rally against
CRA proposal
even after the
comment period
for others
closed, wants to
further loosen
merger review,
saying last
week that "if
that framework
does not
account for
the full range
of
competitors,
we’re only
restricting
banks from
making
strategic
merger
choices, while
allowing those
outside the
framework to
proliferate.”
So, she says,
throw in
fintechs. We say no. Watch
this site.
September
26, 2022
Now the
Federal
Reserve is
belated
providing
Inner City
Press will
portions of
merger
applications
wrongfully approved
- but only
after the
comment period
long ago
closed. This
is a scam and
must be fixed.
September
19, 2022
Annals
of Fed FOIA:
"Good
afternoon Mr.
Lee,
We received
your message
indicating
that you were
having issues
with locating
documents
related to
FOIA request
FOIA-2022-00004
in your
account in the
Board’s FOIA
portal
system.
Your documents
for
FOIA-2022-00004
have been
emailed to you
in a separate
email,
however, I
wanted to
circle back
with you on
the account
issue.
After
reviewing
account and
access data
information,
we’ve become
aware that you
have 4
accounts in
our system."
Onward toward
transparency -
even on the
Fed's
great delay.
September
12, 2022
The
Federal
Reserve sent
out Toronto Dominion's
purported response
to substantive
issues raised
at the
Fed's public
meeting -
but the
response did
not address
the consumer abuse
issues raised,
and it appears
that Fed has not
asked about
them, just as
it never asked
MUFG about its
Russian
business. Does
Barr mean business? We'll
see.
September
5, 2022
BMO Harris BNP Face Fed Qss After Admitting Mislabeling Info Now Confidential Answers
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FED
COURT / S Bronx, Sept 2 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question. Consider:
Inner City Press immediately reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
On
August 23-4 the Fed has asked questions.
Late
on September 2, the banks submission answers -
referring repeated to withheld "Confidential"
exhibits:
"a.
Copies of policies and procedures for BHB’s new
overdraft program;
See
Confidential Exhibits A-1 thru A-15 for the
policies and procedures related to BHB’s
overdraft practices.
8.
Provide pro forma asset quality information,
including total allowance for loan losses for
BFC and BHB, as of March 31, 2022. Include a
discussion of why the proposed level of capital
and loan loss reserves would be adequate to
support the level of nonperforming assets
following consummation of the proposed
transaction.
See
Confidential Exhibit B.
9.
Provide actual and pro forma risk-based capital
ratios (and supporting documentation) calculated
according to CECL as of March 31, 2022.
See
Confidential Exhibit C.
10.
The original filing stated that there would be
no changes to the board of directors of Bank of
Montreal; however, the directorate of BFC and
BHB will include some representation from BOTW’s
current board of directors. Provide an update as
to who has been or will be asked to join the
directorate of BFC and BHB and include a 7
brief background on the individuals and the
timeline of when they will join post
consummation. In addition, please confirm that
there are still no contemplated changes to
the Bank of Montreal directorate.
See
Confidential Exhibit D.."
August
29, 2022
BMO Harris BNP Face Fed Questions Here As Admit Mislabeling Info Confidential, Misled
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, August 24 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced under the Administration and its
regulators remains an open question. Consider:
Inner City Press immediately reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials. As noted,
there are also climate and secrecy issues. Fair
Finance Watch and other raised branch closings.
Now
on August 23-4 the Fed has asked questions:
"BHB’s
and BOTW’s business models do not align and thus
the approval of this transaction would result in
branch closures. Discuss BHB’s plans to
integrate BOTW’s existing branches pursuant to
BHB’s overall business strategy. Specifically
discuss the function of retail branches in the
anticipated strategy and business model of the
combined organization. 2. Discuss whether BHB
plans to close any branches or relocate or
consolidate any BOTW or BHB branches in
connection with the proposed transaction. 3. One
commenter raised concerns that BHB would
discontinue BOTW’s CRA programs in California
following the merger. Discuss BHB’s plans with
respect to BOTW’s CRA community development
activities in California following consummation
of the proposed transaction, including loans,
investments, and services.
4.
Multiple commenters raised concerns that BOTW
did not engage in enough philanthropic
activities when compared to similar
institutions. Please respond to these
allegations. 5. Provide a list of organizations
and community groups, if any, with which BHB
engaged since 2020 to help reach African
American and Hispanic borrowers in Minneapolis,
Minnesota and the State of Wisconsin. If
applicable, provide detailed information
regarding such partnerships. In addition,
provide information about BHB’s current and
planned efforts to reach African American and
Hispanic borrowers in Minneapolis, Minnesota and
the State of Wisconsin, including specialized
products and marketing campaigns.
6.
Please provide a list of organizations and
community groups, if any, with which BOTW
engaged since 2020 to help reach African
American and Hispanic borrowers in Denver,
Colorado, San Francisco California, and the
State of California. If applicable, provide
detailed information regarding such
partnerships. In addition, provide information
about BOTW’s current and planned efforts to
reach African American and Hispanic borrowers in
Denver, Colorado, San Francisco, California, and
the State of California, including specialized
products and marketing campaigns.
August
22, 2022
The Fed
has
asked US
Bancorp... a
confidential
question: "Provide
an updated
version of
Confidential
Exhibit 13
(GSIB Score
Information)
from the
Confidential
Exhibits to
the
Application.
Please update
the exhibit
with data as
of June 30,
2022. Please
provide your
response via
E-Apps within
eight business
days of this
letter. Any
information
for which
confidential
treatment is
desired should
be so labeled
and separately
bound in
accordance
with section
261.17 of the
Board’s Rules
Regarding
Availability
of
Information,
12 CFR
261.17."
Yeah...
August
15, 2022
A
recent, much
delayed
FOIA response
says "In an
email message
with Mr. Wyatt
Eck of the
Board’s Legal
Division dated
June 28,
2022,
you agreed to
modify the
scope of the
second portion
of your
request to
seek
“email
communications
with First
Internet or
First Century
or either’s
affiliates”
between the
specified
timeframe." Why
agree to
limit, if it
still comes
so late?
August
8, 2022
So while the Fed
"deliberated"
on US Bancorp,
given their fine by
the CFPB,
does a
community
group really
have to write
it make them
aware of it?
Or would the Fed
just call the
comment untimely?
August 1,
2022
The Federal
Reserve,
already slow
on FOIA, has ground
to a halt.
Now they sent
you messages
that
your request
is closed, and
to sign in
their
website to find why.
But there,
neither
determination
records nor responsive
documents are visible.
And reply to
the Fed FOIA
email just
bounces
back. FOIA problems
solved, from
Federal
Reserve's
perspective! We'll
have more
on this.
July
25, 2022
NY Fed Dissolved TRO to Fire Unvaccinated Staff, Permanent Injunction Merged into Trial
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURTHOUSE, July 20 – The Federal
Reserve Bank of New York wants to fire longtime
employees Lori Gardner-Alfred of The Bronx and
Jeanette Diaz of Bayonne, New Jersey for not
being vaccinated against COVID-19. And now it
may be able to.
The two women won a temporary restraining order
in New York State court. But the FRBNY removed
the case to Federal court and Friday argued to
dissolve the TRO and fire the women, saying that
their harm is not
irreparable.
On March 4, U.S. District Court for the Southern
District of New York Judge Lewis J. Liman held a
proceeding. Inner City Press covered
it.
FRBNY
in-house lawyer Alex Leonard argued the TRO
should be immediately lift. The women,
representing themselves, asked for time to
respond to the papers the Fed, their employer
for decades, had just given them.
Judge Liman to his credit did give them time, until Sunday to file their response to his chambers by email. Then, it should be docketed.
Jeanette Diaz
asked about the FRBNY's
definition and denial of
religious exemptions. Judge
Liman said perhaps Mr. Leonard
could answer. But he said no,
that would be getting in to
the merits and the Fed's focus
was getting the TRO dissolved
and presumably firing the
employees.
On March 7, Judge Liman heard from the parties
again. Inner City Press live tweeted here:
now
staffers the Federal Reserve Bank of NY wants to
fire for being unvaccinated are before SDNY
Judge Liman as they were Friday. FRBNY lawyer:
Now plaintiffs over the weekend make a a
Constitution argument. But the New York Fed is
not a government agency.
[Inner
City Press: Then how does NY Fed approve bank
mergers? See, FRBNY Approves Berkshire Bank With
NTI Rating, here
Judge
Liman: Even if discrimination were being
alleged, would an injunctions be issues? NY Fed
staffer's new/1st lawyer: The very pressure put
on these plaintiffs to abandoned their bona fide
religious beliefs is irreparable harm, per se
Judge
Liman: What do you say about the NY Fed not
being a state agency? Lawyer: They removed to
this court by saying that are an organ of the
Federal government... [And, the Fed Board
had this "non government agency," owned by
banks, approving bank mergers]
Lawyer:
On the merits we have this Federal Reserve
agency, now trying to revoke the religious
exemption based on their job titles. These jobs
could be performed remotely. Or, in the office a
few days a week.
Lawyer: The Fed has granted others an ongoing
exemption. That burden is on the Fed to offer up
some justification. Judge Liman: What about
irreparable harm?
Lawyer:
There's the Northern District of NY
case... Judge Liman: Citation? Lawyer: 17
F.4th 368, 370
NY
Fed's Leonard: He says we are forcing them to
violate their religious beliefs. But it is a
condition of employment. They got a temporary
accommodation, but there's no longer a
reasonable one. We understand that's difficult.
See, the Hawaii Airlines case.
NY
Fed's Leonard: They did not claim in their state
court submission any free exercise violation. NY
Fed is not a government agency. Judge
Liman: Authority for that? A: Uh, uh, NY Fed's
employment actions are not state action. Judge:
Cases? A: Nothing on point.
NY
Fed's Leonard: There is no irreparable harm.
Judge
Liman: I'm going to take this under advisement.
I will render a decision quite quickly. Expect
to hear from me soon. Plaintiffs' lawyer:
There's a case, Agricultural Bank of China, 2016
WL 27566661
NY
Fed's Leonard: US v. Wells Fargo case, while not
on point, the Federal Reserve Bank for the
purpose of emergency lending are government
agencies, but by implication, not as employers.
Plaintiffs' lawyer: 24 hours for an interlocutor
appeal? NY Fed: We object. ]
NY
Fed's Leonard: We are doing this in the middle
of pandemic. We shouldn't be restrained any
longer. Judge Liman: Do you want to dismiss the
complaint under 12(b)(6)? NY Fed: There's no
complaint, it's futile. Yes, dismiss. Judge
Liman: I'm asking about process.
NY
Fed's Leonard: We'll submit more papers in 2
weeks.
Judge
Liman: Reply by April 11. We are adjourned.
On March 11, this: "ORDER granting in part [7] Motion Emergency Motion to Dissolve Ex Parte Temporary Restraining Order and Dismiss . Accordingly, the TRO is dissolved as improperly issued under Rule 65. See Rabbi Jacob Joseph School v. Province of Mendoza, 342 F. Supp. 2d 124, 127 (E.D.N.Y. 2004) ("The temporary restraining order that was issued without notice to the attorney for the Defendant whose identity was known, without declaring in an affidavit or verified complaint that immediate and irreparable harm would result before the adverse party or his attorney could be heard in opposition, was plainly in violation of Fed.R.Civ.P. 65(b), and the temporary restraining order was vacated for the additional reason that it was improperly issued."); Dolan v. Portaro, 2015 WL 3444351, at *1 (N.D. Ohio May 28, 2015) ("Had Plaintiff Dolan initially filed this case in this Court, the TRO could not have been granted. When the motion for a TRO was first made in state court, Plaintiff's counsel did not provide the required certification as to what efforts were made to give notice and why notice should not be required. Nor did Plaintiff's counsel file such certification in this Court after removal. That deficiency alone justifies dissolving the TRO."). Moreover, "[o]n this motion to dissolve a temporary restraining order,... the party that obtained that order... bears the burden of justifying continued injunctive relief." Gardner v. Weisman, 2006 WL 2423376, at *1 (S.D.N.Y. Aug. 21, 2006) (internal quotation marks omitted) (quoting SC Cowen Sec. Corp. v. Messih, 2000 WL 663434, at *1 (S.D.N.Y. May 17, 2000)). The FRBNY argues that the evidence submitted by Plaintiffs does not satisfy that burden, because they have not shown irreparable harm, a likelihood of success, or a balance of hardships in their favor, as further set forth herein. Plaintiffs also have not demonstrated a likelihood of success on the merits of their claims; their operative pleadings are wholly conclusory, and their arguments regarding a likelihood of success on the merits again hinge entirely on the Free Exercise claims, Dkt. No. 14 at 5; once again, the operative pleadings assert no Free Exercise claims. As such, Plaintiffs have not carried their burden of justifying continued injunctive relief. For this additional reason, the TRO must be dissolved."
On March 21 the New York Fed filed a motion to
dismiss, leading that "the New York Fed - part
of the nation's central bank and a federal
instrumentality established pursuant to the
Federal Reserve Act of 1913 is not a state
agency whose decisions are subject to review
under Article 78."
On
June 21 Judge Liman held another proceeding. He
said he did not anticipate granting a motion to
dismiss, but also doubted in a preliminary
injunction, given that the staffers have already
been fired. (The Fed's lawyer slipped in that
the Fed doubts that the lead plaintiff's beliefs
are religious).
Judge
Liman told counsel to discuss with their clients
the option of an expedited hearing on a
permanent injunctions. A case management plan is
due July 8, with another conference set for July
18 at 2 pm.
Inner City Press covered the July 18 conference; there was a request for a trial in January but a decision to hold it in May. Then into the docket this: "ORDER deferring ruling on [27] Motion for Preliminary Injunction. Upon consent of the parties at Dkt. No. 41, the hearing on Plaintiffs' motion for a preliminary injunction will be consolidated with a trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). (HEREBY ORDERED by Judge Lewis J. Liman)."
Inner
City Press will continue to cover the case and
the Fed.
July
18, 2022
According
to the Fed's
online H2A, as of
July 16 there
are only three
comment
periods on
applications
subject to CRA
open: two mergers
with public
meetings, and
one other. Is
that possible?
July
11, 2022
On Branch Closures Federal Reserve Withheld Info Then Found It Under FOIA on W Virginia
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC-Guardian
UK - FOIA
- ESPN NY
Mag
South
Bronx / SDNY, July 8 – Amid a wave of bank
branch closings in the US, particularly in lower
income areas, during the COVID-19 pandemic,
Inner City Press in October 2020 filed a Freedom
of Information Act request with the main US
regulator, the Federal Reserve, for information
about branch closing.
Tellingly,
despite talk about improved community and
consumer protection regimes among the bank
regulators, the Federal Reserve after 17 months
on this FOIA request has told Inner City Press
it has only five pages that it will release,
about a single Wisconsin branch closure (even
then, redacted).
Worse,
the Federal Reserve, charged with reigning in
swaps and even crypto-currency fraud, says it
does not maintain a list of branch closings, as
even the OCC does. This is shameful, and must be
addressed by the two incoming Governors, and who
ever will replace Sarah Bloom Raskin as a Fed
nominee.
From
the Fed's April 2022 FOIA request to Inner City
Press / Fair Finance Watch:
"This
is in response to your electronic message dated
and received by the Board’s Information
Disclosure Section on October 20, 2020. Pursuant
to the Freedom of Information Act
(“FOIA”), 5 U.S.C. § 552, you seek: electronic
records concerning requests to the Federal
Reserve System about branch closings or
consolidations in low or moderate income
census tracts including request for public
meetings, from July 4, 2018 to the date of
your response. Your request included an
example of a notice by the Federal Reserve Bank
of Chicago (“Reserve Bank”) for a public
meeting concerning the notice by Johnson Bank,
Racine, Wisconsin to close its branch
located at 2729 18th Street, Kenosha, Wisconsin.
You
further noted that your request also includes:
all such meetings held, as well as requests for
meetings, direct or indirect, which were
denied, as well as all non-exempt portion
of FRS records reflecting considering and
decision making on such requests.1
1
In an email correspondence with Ms. Katrina
Allen Austin of the Board’s Legal Division
on March 23, 2021, seeking clarification
about the nature of your request, you noted that
“[t]he OCC, for example, publishes each
branch closing in its Weekly Bulletins” and you
subsequently sought FRS “records [of] when
public meetings have been requested on branch
closings, and when they have been granted
…[separate] out those in LMI communities and
where public meetings were requested and /
or granted.” 2
In
light of your March 23, 2021, email, staff
interpreted your request as seeking
records concerning “branch closings by
FRS-supervised institutions (state member
banks) … where public meetings were requested
and / or granted” from 2020.2 You may wish to
know that the Board does not publish a “list of
branch closings” as the OCC does. Staff
searched Board records and located information
responsive to your modified request.
This information is subject to withholding
and will be withheld from you pursuant to
exemptions 5 and 6 of the FOIA, 5 U.S.C.
§§ 552(b)(5) and (b)(6), respectively. I have
also determined that the information
should be withheld because it is reasonably
foreseeable that disclosure would harm an
interest protected by an exemption described in
subsection (b) of the FOIA, 5 U.S.C. §
552(b). The responsive documents have been
reviewed under the requirements of
subsection (b), and all reasonably segregable
nonexempt information will be provided to
you. Additionally, approximately 5 pages are
being withheld in full.
Inner
City Press appealed - and then (much) later, the
Federal Reserve provided documents it had
initially withheld or "overlooked," it's phone
it in response to a branch closing by
First Community Bank of Bluefield, Virginia at
16 West Main Street, Richwood, West
Virginia; we're putting it on DocumentCloud here
and will again be appealing.
July 4,
2022
As BMO Harris Seeks Bank of the West For July 14 Federal Reserve Roadblocks and 2bl Speak
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, July 1 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced until the new Administration and its
regulators remains an open question. Back in
December Inner City Press reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials.
On
May 17 the Federal Reserve and OCC announced
that they will at least hold a public meeting:
The public meeting will be held virtually on
July 14, 2022, at 11:00 a.m. EDT. Members of the
public seeking to present oral comments must
register by 12:00 p.m. EDT on June 23, 2022,
through the online registration webpage."
Inner City Press / Fair Finance Watch visited
the page on June 20, Juneteenth (Observed), in
order to register - and found the Fed's "we want
to know your views" - in 200 characters. Is that
enough? Fair Finance Watch entered: "Concerns:
BMO Harris HMDA disparities (nationside in 2020
only 223 mortgages to African Americans, vs.
9270 to whites), its destruction of evidence in
a MN bankruptcy case; BNP's activities in
Russia."
Next came a series of Federal Reserve emails that went into spam, then a threat that if one didn't appear on screen for the Fed in one of four one-hour windows (three remaining) you couldn't testify. You had to ask to get the WebEx link. Inner City Press signed up - then came, at the same time, an FBI press conference about crypto fraud OneCoin, on which the Fed told Inner City Press under FOIA it has not a single document. Really?
The penultimate slot conflicts with a press conference by the incoming president of the UN Security Council for July, Brazil. And July 5? The irony is, Inner City Press did this same sign up for the US Bancorp - MUFG public meeting. Why have to do it again? We'll have more on this- watch this site.June
27, 2022
On Federal Reserve & Antitrust Inner City Press Asks IMF Georgieva Who Cites Concentration
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC-Guardian
UK - Honduras
- ESPN NY
Mag
SDNY
COURT / NYC, June 24 – When the
International Monetary Fund's Managing Director
Kristalina Georgieva took a half-dozen questions
on June 24 about the IMF's Article IV review of
the United States economy, Inner City Press
asked her about Federal Reserve transparency and
antitrust enforcement. Video here.
The
Article IV Concluding Statement on the US said,
among other things, "Changes to strengthen the
Federal Reserve’s communication tools would
carry a high payoff in the current conjuncture.
In particular, as an alternative to the Summary
of Economic Projections, the Federal Reserve
could begin publishing, at each policy meeting,
an internally consistent economic projection and
rate path, produced by Fed staff and potentially
endorsed (or 3 otherwise recognized)
by the FOMC. The Federal Reserve could also
usefully clarify in its Statement on Longer-Run
Goals and Monetary Policy Strategy how the
policy framework now applies in an environment
where inflation has moved well above 2
percent."
Inner
City Press specifically asked about the Fed's
communications in advance of its recent interest
rate increase of 75 basis points. Georgieva said
that the IMF applauded the move; her staff said
that, yes, communications could always improve.
In
response to Inner City Press' question about
antitrust enforcement, referencing two large
proposed bank mega-mergers (Bank of Montreal to
buy BNP Parisbas' Bank of the West, and Toronto
Dominion to buy First Horizon - issues exist on
each)
IMF staff and M-D said that corporation
concentration in the US and elsewhere is
becoming a problem.
June
20, 2022
Subpoena Sought in SDNY For Russian Gold Info From KBC Bank and Federal Reserve
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC-Guardian
UK - Honduras
- ESPN NY
Mag
SDNY
COURTHOUSE, June 14 – GMJ Asset Management
Company is seeking a discovery order against KBC
Bank and the Federal Reserve Bank of New York,
for information about Michael Zagrebelny and/or
Nicholskiy / St. Nicholas Bank.
It
involves, among other things, transfers of gold
from Russia.
On
June 13, 2022 U.S. District Court for the
Southern District of New York Judge Ronnie
Abrams held a proceeding. Inner City Press
covered it.
As
Inner City Press has noted, the FRBNY is trying
to quash or limit a subpoena for information
about the Yemeni Central Bank.
Here,
Judge Abrams referred the matter to Magistrate
Judge Jennifer E. Willis.
June
13, 2022
What do
the regulators
do when there
is a too-rare
Needs to Improve
CRA rating? They
ignore it - or
better yet,
just quickly
re-examine and
change it. From a
recent Federal
Reserve order:
"
in United Texas Bank’s
August 3, 2020, CRA performance evaluation, which was not the
most current CRA performance evaluation of the bank, 15 it
received a rating of “Needs to Improve” under the lending test
(“Lending Test”) - and the approved it.
While
the FDIC took
comments on
merger review
and the OCC
talks about
it, still
nothing,
nothing at all
from the
Federal
Reserve. What
will the new
Governors do?
Watch this
site.
May
30, 2022
On Federal
Reserve
governor
"Miki" Bowman, Inner
City Press has
checked the
CRA exam of
the bank she
worked at from
2010 through
2017, Farmers
and Drovers,
and noted: "
Because the
assessment
areas consist
entirely of
middle-income
geographies,
review of the
Geographic
Distribution
criterion
would not
result in
meaningful
conclusions.
Therefore,
this criterion
was not
evaluated.
The
institution
did not
receive any
CRA-related
complaints
since the
previous
examination;
therefore,
this factor
did not affect
the rating." A
bank entirely
in middle
income
geographies...
We'll have
more on this.
May 23,
2022
As BMO Harris Applies For Bank of the West Now Virtual Public Meeting July 14 Disparities
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, May 17 – Whether or not the
U.S. Community Reinvestment Act will actually be
enforced until the new Administration and its
regulators remains an open question. Back in
December Inner City Press reported that BMO
Harris' application to buy Bank of the West and
its more than 500 branches from BNP would be a
litmus test.
Fair
Finance Watch noted, from Day 1, that in 2020
BMO Harris denied many more mortgage
applications from African Americans than it
approved: 509 denied versus only 223 loans made
to African Americans, nationwide. BMO's numbers
for whites were the reverse: 9270 loans made,
versus less then six thousand denials.
May 16,
2022
Now
with two new
Governors,
what will
change at the
Fed? An RFI on
mergers? More
importantly,
an end to
rubberstamping?
We'll see.
May 9,
2022
The
Federal Reserve,
which
constructively
denies FOIA
request on
issues ranging
from branch
closings to crypto-currency,
pretends to be
transparent.
But why then
on its
page about
interactions
with the
public is
there nothing
on consumer
protection
since 2014? See
here.
May
2, 2022
With
Lisa Cook
delayed by
COVID among
those voting,
the Fed has
STILL not issued
the CRA
proposal for
comment, much
less a much
needed merger
review RFI.
Shameful.
April
25, 2022
That
even with two
new governors
coming, those
on the Board
haven't even
put out the
CRA proposal,
or an RFI on
merger review,
tells you all
you need to
know about
thatm...
April
18, 2022
On Branch Closures Federal Reserve Withholds Info and Tells Inner City Press No Closure List
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC-Guardian
UK - Honduras
- ESPN NY
Mag
South
Bronx / SDNY, April 11 – Amid a wave of
bank branch closings in the US, particularly in
lower income areas, during the COVID-19
pandemic, Inner City Press in October 2020 filed
a Freedom of Information Act request with the
main US regulator, the Federal Reserve, for
information about branch closing.
Tellingly,
despite talk about improved community and
consumer protection regimes among the bank
regulators, the Federal Reserve after 17 months
on this FOIA request has told Inner City Press
it has only five pages that it will release,
about a single Wisconsin branch closure (even
then, redacted).
Worse,
the Federal Reserve, charged with reigning in
swaps and even crypto-currency fraud, says it
does not maintain a list of branch closings, as
even the OCC does. This is shameful, and must be
addressed by the two incoming Governors, and who
ever will replace Sarah Bloom Raskin as a Fed
nominee.
From
the Fed's April 2022 FOIA request to Inner City
Press / Fair Finance Watch:
"This
is in response to your electronic message dated
and received by the Board’s Information
Disclosure Section on October 20, 2020. Pursuant
to the Freedom of Information Act
(“FOIA”), 5 U.S.C. § 552, you seek: electronic
records concerning requests to the Federal
Reserve System about branch closings or
consolidations in low or moderate income
census tracts including request for public
meetings, from July 4, 2018 to the date of
your response. Your request included an
example of a notice by the Federal Reserve Bank
of Chicago (“Reserve Bank”) for a public
meeting concerning the notice by Johnson Bank,
Racine, Wisconsin to close its branch
located at 2729 18th Street, Kenosha, Wisconsin.
You
further noted that your request also includes:
all such meetings held, as well as requests for
meetings, direct or indirect, which were
denied, as well as all non-exempt portion
of FRS records reflecting considering and
decision making on such requests.1
1
In an email correspondence with Ms. Katrina
Allen Austin of the Board’s Legal Division
on March 23, 2021, seeking clarification
about the nature of your request, you noted that
“[t]he OCC, for example, publishes each
branch closing in its Weekly Bulletins” and you
subsequently sought FRS “records [of] when
public meetings have been requested on branch
closings, and when they have been granted
…[separate] out those in LMI communities and
where public meetings were requested and /
or granted.” 2
In
light of your March 23, 2021, email, staff
interpreted your request as seeking
records concerning “branch closings by
FRS-supervised institutions (state member
banks) … where public meetings were requested
and / or granted” from 2020.2 You may wish to
know that the Board does not publish a “list of
branch closings” as the OCC does. Staff
searched Board records and located information
responsive to your modified request.
This information is subject to withholding
and will be withheld from you pursuant to
exemptions 5 and 6 of the FOIA, 5 U.S.C.
§§ 552(b)(5) and (b)(6), respectively. I have
also determined that the information
should be withheld because it is reasonably
foreseeable that disclosure would harm an
interest protected by an exemption described in
subsection (b) of the FOIA, 5 U.S.C. §
552(b). The responsive documents have been
reviewed under the requirements of
subsection (b), and all reasonably segregable
nonexempt information will be provided to
you. Additionally, approximately 5 pages are
being withheld in full.
April
11, 2022
Fed and Citizens Bank Thumbed Noses At CRA On Investors Bank, Govs Refuse to Reconsider
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, April 5 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced under the current Administration and
its regulators is an open question still -
though the answer is more and more No. The
proposed acquisition of Investors Bank by
Citizens Bank was a litmus test, one that both
Citizens and the Fed have failed.
Investors Bank is one of the most disparate
banks in New York State, where in 2020 it made
only three mortgage loans to African Americans,
while denying fully seven applications from
African Americans. By contrast, it made 164
loans to whites while denying only 76
applications from whites.
Inner City Press raised the 2019 disparities to
the FDIC - and on July 30 was contacted by the
FDIC that it imposed rare conditions on
Investors. Letter here.
This was raised on Citizens' applications: "be
aware that based on Fair Finance Watch's
comments to the FDIC about Investors, it
recently imposed a condition on Investors.
Investors has yet to meaningfully implement the
required improvements; this application should
not be approved, much less at this
time. The FDIC wrote:
"Matthew
Lee, Esquire Executive Director Inner City
Press/Fair Finance Watch Dear Mr. Lee: We
are writing to inform you that the FDIC approved
Investors Bank’s application to acquire eight
branches from Berkshire Bank. As part of the
application review process, we investigated the
issues you raised in your e-mail dated January
19, 2019... The Bank will develop and Board
approve an Action Plan within 60 days of
the effective date of this Order to ensure
that its home mortgage lending adequately
addresses the credit needs of all segments of
its market areas. The Action Plan should
include, at a minimum, the following: a. The
Bank will regularly monitor application and
origination activity of home mortgage
loans in majority-minority census tracts and
from Blacks throughout the Bank’s
assessment areas. b. The Bank will ensure
marketing and outreach efforts are inclusive of
all communities, including minority
communities within all the Bank’s assessment
areas. The marketing and outreach efforts
should focus on home mortgage product
awareness. Marketing activities should use
materials and media that reflect the racial and
ethnic composition of the targeted
communities. The Bank should also have
specific advertising and outreach goals,
and the results of these efforts should be
documented, monitored, and evaluated for
effectiveness. 5. Upon Board approval of
this Order, the Bank will provide a copy of the
signed Order to the FDIC's New York
Regional Office within 30 days. 6. Upon
Board approval of such Action Plan, the Bank
will provide a copy of the Plan to the
FDIC’s New York Regional Office. 7. The Bank
will provide the FDIC’s New York Regional Office
with quarterly updates detailing its
progress in meeting the goals listed in the
Action Plan."
But in response to this, Citizens only said
dismissively that the record of the acquiree
doesn't matter. So they could buy OneCoin? It is
major law firm making this argument. It is an
embarrassment. And the Federal Reserve's
question letter of October 22 does not address
it, and Citizens' law firm late provided its
"answer" and two responses to the Fed.
Nevertheless
on March 22 the Federal Reserve Board, with
Sarah Bloom Raskin blocked from joining and two
others yet to arrived, rubber stamped Citizens'
application. It stated that "The commenter also
alleged that, as a result of disparate
marketing, Investors Bank made
disproportionately fewer home loans in the
states of New Jersey and New York to African
American individuals as compared to white
individuals based on 2020 HMDA data. In
addition, the commenter noted that the FDIC had
imposed a condition in connection with a
previous branch acquisition that Investors Bank
develop an action plan to ensure that its home
mortgage lending adequately addresses the credit
needs of all segments of its market areas. The
commenter asserted that Investors Bank has yet
to meaningfully implement the required
improvements and that the proposal should not be
approved at this time."
The
Fed gave its March 22 approval despite Investors
having done very little or nothing. This as Fair
Finance Watch has raised another moribund
condition, by Oakwood Bank in Dallas, to
the FDIC. What do these conditions mean?
Inner
City Press filed a timely request for
reconsideration: "This is a timely request for
reconsideration of the Board's approval of the
Applications by Citizens Financial Group's
application to acquire Investors Bancorp noting
but not addressing Investor's weakness which
gave rise to FDIC condition.
This is a new low for the FRB. This was a
condition imposed by one of the two other
Federal bank regulators. If the Board won't even
inquire into and take a written position on a
merger partner's performance under a written
condition imposed by another regulators, these
conditions are meaningless.
Fair Finance Watch timely put into record before
the Board: The FDIC wrote: "Matthew Lee,
Esquire Executive Director Inner City Press/Fair
Finance Watch Dear Mr. Lee: We are writing
to inform you that the FDIC approved Investors
Bank’s application to acquire eight branches
from Berkshire Bank. As part of the application
review process, we investigated the issues you
raised in your e-mail dated January 19,
2019... The Bank will develop and Board
approve an Action Plan within 60 days of
the effective date of this Order to ensure
that its home mortgage lending adequately
addresses the credit needs of all segments of
its market areas. The Action Plan should
include, at a minimum, the following: a. The
Bank will regularly monitor application and
origination activity of home mortgage
loans in majority-minority census tracts and
from Blacks throughout the Bank’s
assessment areas. b. The Bank will ensure
marketing and outreach efforts are inclusive of
all communities, including minority
communities within all the Bank’s assessment
areas. The marketing and outreach efforts
should focus on home mortgage product
awareness. Marketing activities should use
materials and media that reflect the racial and
ethnic composition of the targeted
communities. The Bank should also have
specific advertising and outreach goals,
and the results of these efforts should be
documented, monitored, and evaluated for
effectiveness. 5. Upon Board approval of
this Order, the Bank will provide a copy of the
signed Order to the FDIC's New York
Regional Office within 30 days. 6. Upon
Board approval of such Action Plan, the Bank
will provide a copy of the Plan to the
FDIC’s New York Regional Office. 7. The Bank
will provide the FDIC’s New York Regional Office
with quarterly updates detailing its
progress in meeting the goals listed in the
Action Plan." The
Board in its approval merely recited this,
without addressing it: "the commenter noted that
the FDIC had imposed a condition in connection
with a previous branch acquisition that
Investors Bank develop an action plan to ensure
that its home mortgage lending adequately
addresses the credit needs of all segments of
its market areas. The commenter asserted that
Investors Bank has yet to meaningfully implement
the required improvements and that the proposal
should not be approved at this
time." Has Investors
meaningfully implemented these requirements? The
Fed with all its resources does not address it.
The Order makes a mockery of the regulators' way
to approve an otherwise unapprovable merger like
Investors. The Order should be
reconsidered, by each current government and
those incoming, before this proposal is
consummated - the Order should be stayed for
that purpose."
April
4, 2022
With Sarah
Bloom Raskin
out of the
running, who
will the
Administration
nominate for
the Federal Reserve
seat? Some
are talking about
existing
Fed personalities.
But if they
meant well on
CRA, we would
have known.
Others are
talking about
the AFL-CIO
economist, or
someone
(bipartisan)
to represent rural
America. Watch
this site.
March
28,2022
Fed and Citizens Bank Thumb Noses At CRA On Investors Bank FDIC Conditions, Rubber Stamp
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, March 22 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced under the current Administration and
its regulators is an open question still -
though the answer is more and more No. The
proposed acquisition of Investors Bank by
Citizens Bank was a litmus test, one that both
Citizens and the Fed have failed.
Investors Bank is one of the most disparate
banks in New York State, where in 2020 it made
only three mortgage loans to African Americans,
while denying fully seven applications from
African Americans. By contrast, it made 164
loans to whites while denying only 76
applications from whites.
Inner City Press raised the 2019 disparities to
the FDIC - and on July 30 was contacted by the
FDIC that it imposed rare conditions on
Investors. Letter here.
This was raised on Citizens' applications: "be
aware that based on Fair Finance Watch's
comments to the FDIC about Investors, it
recently imposed a condition on Investors.
Investors has yet to meaningfully implement the
required improvements; this application should
not be approved, much less at this
time. The FDIC wrote:
"Matthew
Lee, Esquire Executive Director Inner City
Press/Fair Finance Watch Dear Mr. Lee: We
are writing to inform you that the FDIC approved
Investors Bank’s application to acquire eight
branches from Berkshire Bank. As part of the
application review process, we investigated the
issues you raised in your e-mail dated January
19, 2019... The Bank will develop and Board
approve an Action Plan within 60 days of
the effective date of this Order to ensure
that its home mortgage lending adequately
addresses the credit needs of all segments of
its market areas. The Action Plan should
include, at a minimum, the following: a. The
Bank will regularly monitor application and
origination activity of home mortgage
loans in majority-minority census tracts and
from Blacks throughout the Bank’s
assessment areas. b. The Bank will ensure
marketing and outreach efforts are inclusive of
all communities, including minority
communities within all the Bank’s assessment
areas. The marketing and outreach efforts
should focus on home mortgage product
awareness. Marketing activities should use
materials and media that reflect the racial and
ethnic composition of the targeted
communities. The Bank should also have
specific advertising and outreach goals,
and the results of these efforts should be
documented, monitored, and evaluated for
effectiveness. 5. Upon Board approval of
this Order, the Bank will provide a copy of the
signed Order to the FDIC's New York
Regional Office within 30 days. 6. Upon
Board approval of such Action Plan, the Bank
will provide a copy of the Plan to the
FDIC’s New York Regional Office. 7. The Bank
will provide the FDIC’s New York Regional Office
with quarterly updates detailing its
progress in meeting the goals listed in the
Action Plan."
But in response to this, Citizens only said
dismissively that the record of the acquiree
doesn't matter. So they could buy OneCoin? It is
major law firm making this argument. It is an
embarrassment. And the Federal Reserve's
question letter of October 22 does not address
it, and Citizens' law firm late provided its
"answer" and two responses to the Fed.
Nevertheless
on March 22 the Federal Reserve Board, with
Sarah Bloom Raskin blocked from joining and two
others yet to arrived, rubber stamped Citizens'
application. It stated that "The commenter also
alleged that, as a result of disparate
marketing, Investors Bank made
disproportionately fewer home loans in the
states of New Jersey and New York to African
American individuals as compared to white
individuals based on 2020 HMDA data. In
addition, the commenter noted that the FDIC had
imposed a condition in connection with a
previous branch acquisition that Investors Bank
develop an action plan to ensure that its home
mortgage lending adequately addresses the credit
needs of all segments of its market areas. The
commenter asserted that Investors Bank has yet
to meaningfully implement the required
improvements and that the proposal should not be
approved at this time."
March
21, 2022
After Fed Disses Community Reinvestment Act Raskin Blocked By Manchin Cook 12-12 Tie
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURT, March 16 – When the US
bank regulators and Administration say they are
taking the Community Reinvestment Act more
seriously, it does not appear to be true.
Case
in point: the Federal Reserve Bank of New York
on February 28, on Berkshire Bank which got a
rare Needs to Improve CRA rating in New York
State, gave out an approval on a delegated
basis. The FRBNY cannot, as a matter of law and
as an entity owned by private banks, deny or
even condition an approval. This is a new low.
So to the blocking of Sarah Bloom Raskin, after
which this: Jay Powell advanced through the
Senate Banking Committee with Elizabeth Warren
opposing. Lael Brainard was backed in a 16-8
vote for the Fed vice chair, Phil Jefferson won
unanimous support and Lisa Cook moved forward to
the full Senate on a 12-12 tie. But will the Fed
just keep rubber-stamping?
Fair
Finance Watch, with Inner City Press on the
FOIA, which commented to the Fed on January 8,
has immediately filed a petition for review
saying it should be reviewed by each current,
and all Administration-nominated Governors:
Dear
Chair Powell, Secretary Misback and others in
the FRS: This is a timely petition to
review the decision today by the FRBNY to
approve - on a delegated basis -- the
Applications of TBB Investments LLC and TBB
Intermediate LLC to become bank holding
companies by acquiring Berkshire Bancorp, Inc
and Berkshire Bank -- which got a rare Needs to
Improve CRA rating in New York.
Significantly - and we think, disposively and
requiring review by the full Board and each
member, and the nominated members - Berkshire
Bank received a “Needs to Improve” rating in the
New York state assessment area during its May 7,
2019, CRA Performance Evaluation.
How
could the Reserve Bank, which has no authority
to deny or even condition approval on
applications, deign to rubber stamp this
application? This is a new low, and shows the
FRS is not complying with its and the
Administration's public statements about CRA and
fair lending...
See
also: "Reclusive landlord Moses Marx resigns as
Berkshire chairman, see here.
FFW
and Inner City Press are now even more deeply
concerned about the rush by the Federal
Reserve's to rubber-stamp mergers by redliners
and predatory lenders. This has been killing the
Community Reinvestment Act. This
bogus delegated approval must be stayed and
reviewed by each Governor and nominated
Governor.
Very
Truly Yours, Matthew
Lee, Esq. Executive Director
Inner City Press/Fair Finance Watch
This
was sent to the FDIC (Frank Hughes), NYSDFS, and
the bank lawyers at Stoock.
In a letter dated March 9 emailed to Inner City
Press / Fair Finance Watch on March 10, Federal
Reserve Board Secretary Ann E. Misback wrote,
"Your petition for review was presented to the
Board, and no member of the Board requested
review of the Reserve Bank’s action.
Accordingly, your request that the Board review
the Reserve Bank’s action on the Application is
denied." These Governors are: Chair Jerome H.
Powell, Michelle W. Bowman, Christopher J.
Waller and, yes, Lael Brainard."
They say that a privately
owned Federal Reserve Bank,
which has not authority to
disapprove any application,
can approve an application by
a bank with a Needs to Improve
CRA rating. We'll have more on
this.
March
14, 2022
Fed Governors Diss Community Reinvestment Act As FRBNY Approves Berkshire Bank With NTI Rating
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURT, March 10 – When the US
bank regulators and Administration say they are
taking the Community Reinvestment Act more
seriously, it does not appear to be true.
Case
in point: the Federal Reserve Bank of New York
on February 28, on Berkshire Bank which got a
rare Needs to Improve CRA rating in New York
State, gave out an approval on a delegated
basis. The FRBNY cannot, as a matter of law and
as an entity owned by private banks, deny or
even condition an approval. This is a new low.
Fair
Finance Watch, with Inner City Press on the
FOIA, which commented to the Fed on January 8,
has immediately filed a petition for review
saying it should be reviewed by each current,
and all Administration-nominated Governors:
Dear
Chair Powell, Secretary Misback and others in
the FRS: This is a timely petition to
review the decision today by the FRBNY to
approve - on a delegated basis -- the
Applications of TBB Investments LLC and TBB
Intermediate LLC to become bank holding
companies by acquiring Berkshire Bancorp, Inc
and Berkshire Bank -- which got a rare Needs to
Improve CRA rating in New York.
Significantly - and we think, disposively and
requiring review by the full Board and each
member, and the nominated members - Berkshire
Bank received a “Needs to Improve” rating in the
New York state assessment area during its May 7,
2019, CRA Performance Evaluation.
How
could the Reserve Bank, which has no authority
to deny or even condition approval on
applications, deign to rubber stamp this
application? This is a new low, and shows the
FRS is not complying with its and the
Administration's public statements about CRA and
fair lending...
See
also: "Reclusive landlord Moses Marx resigns as
Berkshire chairman, see here.
FFW
and Inner City Press are now even more deeply
concerned about the rush by the Federal
Reserve's to rubber-stamp mergers by redliners
and predatory lenders. This has been killing the
Community Reinvestment Act. This
bogus delegated approval must be stayed and
reviewed by each Governor and nominated
Governor.
Very
Truly Yours, Matthew
Lee, Esq. Executive Director
Inner City Press/Fair Finance Watch
This
was sent to the FDIC (Frank Hughes), NYSDFS, and
the bank lawyers at Stoock.
In a letter dated March 9 emailed to Inner City
Press / Fair Finance Watch on March 10, Federal
Reserve Board Secretary Ann E. Misback wrote,
"Your petition for review was presented to the
Board, and no member of the Board requested
review of the Reserve Bank’s action.
Accordingly, your request that the Board review
the Reserve Bank’s action on the Application is
denied." These Governors are: Chair Jerome H.
Powell, Michelle W. Bowman, Christopher J.
Waller and, yes, Lael Brainard."
They say that a privately
owned Federal Reserve Bank,
which has not authority to
disapprove any application,
can approve an application by
a bank with a Needs to Improve
CRA rating. We'll have more on
this.
March
7, 2022
Fed Scam on Community Reinvestment Act As FRBNY Approves Berkshire Bank With NTI Rating
By
Matthew Russell Lee, Patreon Maxwell
Book
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURT, Feb 28 – When the US
bank regulators and Administration say they are
taking the Community Reinvestment Act more
seriously, it does not appear to be true.
Case
in point: the Federal Reserve Bank of New York
on February 28, on Berkshire Bank which got a
rare Needs to Improve CRA rating in New York
State, gave out an approval on a delegated
basis. The FRBNY cannot, as a matter of law and
as an entity owned by private banks, deny or
even condition an approval. This is a new low.
Fair
Finance Watch, with Inner City Press on the
FOIA, which commented to the Fed on January 8,
has immediately filed a petition for review
saying it should be reviewed by each current,
and all Administration-nominated Governors:
Dear
Chair Powell, Secretary Misback and others in
the FRS: This is a timely petition to
review the decision today by the FRBNY to
approve - on a delegated basis -- the
Applications of TBB Investments LLC and TBB
Intermediate LLC to become bank holding
companies by acquiring Berkshire Bancorp, Inc
and Berkshire Bank -- which got a rare Needs to
Improve CRA rating in New York.
Significantly - and we think, disposively and
requiring review by the full Board and each
member, and the nominated members - Berkshire
Bank received a “Needs to Improve” rating in the
New York state assessment area during its May 7,
2019, CRA Performance Evaluation.
How
could the Reserve Bank, which has no authority
to deny or even condition approval on
applications, deign to rubber stamp this
application? This is a new low, and shows the
FRS is not complying with its and the
Administration's public statements about CRA and
fair lending.
As
we timely noted, on January 8, Fair Finance
Watch has been tracking Berkshire Bank, and has
found its lending patterns troubling. Berkshire
Bank in 2020 in New York State based on its
disparate marketing made 335 mortgage loans to
whites, with only 129 denials to whites -- while
making only TWO loans to African Americans, and
denying three applications from African
Americans. This is outrageous.
Also:
"Reclusive landlord Moses Marx resigns as
Berkshire chairman, see
https://www.crainsnewyork.com/commercial-real-estate/reclusive-landlord-moses-marx-resigns-berkshire-chairman
FFW
and Inner City Press are now even more deeply
concerned about the rush by the Federal
Reserve's to rubber-stamp mergers by redliners
and predatory lenders. This has been killing the
Community Reinvestment Act. This
bogus delegated approval must be stayed and
reviewed by each Governor and nominated
Governor.
Very
Truly Yours, Matthew
Lee, Esq. Executive Director
Inner City Press/Fair Finance Watch
This
has also been sent to the FDIC (Frank Hughes),
NYSDFS, and the bank lawyers at Stoock
February 28, 2022
After Investors Bank Hit With Conditions, Fed Rubber Stamps Home BancShares Texas Entry
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Nov 20 – 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 not only the
proposed acquisition of Investors Bank by
Citizens Bank NA but also Home BancShares /
Centennial Bank - Happy Bancshares will be
litmus tests.
On
November 20 Inner City Press filed with the
Federal Reserve:
"This
is a request for a full copy of, and a timely
first comment on, the Applications of South
State Corporation to merge with Home BancShares,
Inc. to merge with Happy Bancshares, Inc., and
thus indirectly acquire Happy State Bank. Fair
Finance Watch has been tracking Home BancShares'
Centennial Bank, including but not only because
it has a branch in New York.
The
applicant's Centennial in 2020 in Alabama based
on its disparate marketing made 46 mortgage
loans to whites, with 19 denials to whites --
while making only NO loans to African Americans.
This is far out of keeping with the
demographics, and other lenders, in Alabama -
this is outrageous. This application should be
denied, and a referral made to the Justice
Department, as the Fed did far too late on
Cadence Bank, whose lesser disparities Inner
City Press similarly raised to the Fed.
This
is a pattern. Centennial Bank in 2020 in
Arkansas based on its disparate marketing made
1943 mortgage loans to whites, with 282 denials
to whites -- while making only 113 loans to
African Americans, with 37 denials. This is out
of keeping with the demographics, and other
lenders, in Arkansas, in the state Home
BancShares' Centennial Bank presumably performs
best. South State Bank NA in 2020 in
New York based on its disparate marketing made a
mortgage loan to a white application, and none
to African Americans.
Centenntial
Bank in 2020 in Florida based on its disparate
marketing made 1591 mortgage loans to whites,
with 256 denials to whites -- while making only
52 loans to African Americans, with 16 denials.
This is out of keeping with the demographics,
and other lenders, in Florida. What could Home
BancShares' Centennial be expected to do in
Texas?
February
21, 2022
In CRA Protest of Stock Yards-Commonwealth Inner City Press Filed In Oct Rubber Stamp Feb
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Feb 17 – 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 Stock Yards
- Commonwealth has been a litmus test, one that
the Fed has failed, see below. Will it also fail
on CBTX
- Allegiance?
In February 2022 it was quietly reported that
the Stock Yards - Commonwealth proposal was
still delayed. Then the Fed, using years' old
language, rubber stamped it:
"The
Board received one adverse comment on the
proposal. The commenter objected to the
proposal, alleging that in 2020, both Stock
Yards Bank and Commonwealth Bank made fewer home
loans in Kentucky to African American
individuals as compared to white individuals. 21
In addition, the commenter asserted that the
proposal has no public benefit. Businesses of
the Involved Institutions and Response to the
Public Comment Stock Yards offers a variety
financial products and services, including
checking and savings accounts, mortgage and
business loans, and asset management services,
through Stock Yards Bank’s network of branches
in Kentucky, Ohio, and Indiana. Through its
branches in Kentucky, Commonwealth Bank offers
commercial, consumer, business, and agricultural
loan products; a variety of deposit products;
and investment advisory and trust services. 21
The data cited by the commenter appears to
correspond to publicly available 2020 data
reported by Stock Yards Bank and Commonwealth
Bank under the Home Mortgage Disclosure Act of
1975 (“HMDA”). 12 U.S.C. § 2801 et seq.... The
Board is concerned when HMDA data reflect
disparities in the rates of loan applications,
originations, and denials among members of
different racial, ethnic, or gender groups in
local areas. These types of disparities may
indicate weaknesses in the adequacy of policies
and programs at an institution for meeting its
obligations to extend credit fairly." The data,
below, corresponded but the Fed nevertheless
rubber stamped the merger, as it has in the
past. What has changed? In fact, it should
have been denied as should CBTX
(CommunityBank of Texas) - Alliance, on which
Fair Finance Watch has also filed.
February
14, 2022
Federal Reserve Rubber Stamps South State Atlantic Capital Merger Despite Aug CRA Protest
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Feb 11 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced until the new Administration and its
regulators remains an open question. On February
11, despite disparities raised in a CRA protest
by Inner City Press in 2021, the Fed rubber
stamped South State's merger.
The
acquisition by South State of Atlantic Capital
Bank in Georgia has been a litmus test. South
State is so disparate that in South Carolina in
2020 for mortgage loans to African Americans it
had more denials (147) than loans made (133) -
while making six loans to whites for every
denial to a white applicant.
On
August 17, 2021 Fair Finance Watch and Inner
City Press on the FOIA) filed a comment with the
Federal Reserve Board, below.
February
7, 2022
Talk
about dysfunction:
"The Federal
Reserve Board
on Friday
named Jerome
H. Powell as
Chair Pro
Tempore,
pending Senate
confirmation
to a second
term as Chair
of the Board
of Governors.
The action,
effective
February 5,
enables him to
continue to
carry out his
duties as
Chair after
the expiration
of his term on
the same day,
and while the
confirmation
process is
underway. In
its annual
organizational
meeting in
January, the
Federal Open
Market
Committee
separately
named him as
its
Chair.
President
Biden
nominated
Powell late
last year for
a second term
as Chair of
the Board of
Governors. His
term as a
Federal
Reserve Board
member runs
through 2028."
January
31, 2022
Inner
City Press /
Fair Finance
Watch challenged
Berkshire
Bank's
takeover, and
the Fed has
asked:
"Provide
a list of
organizations
and community
groups, if
any, with
which
Berkshire Bank
has engaged
since 2020 to
help reach
African
American
borrowers in
New York. In
your response,
please provide
detailed
information
about the
partnerships
that Berkshire
Bank engaged
in with these
organizations
and community
groups since
2020. 8.
Provide
information
about
Berkshire
Bank’s efforts
to reach
African
American
borrowers in
New York,
including
specialized
products and
marketing
campaigns,
since 2020 (if
any). 9.
Berkshire Bank
received a
“Needs to
Improve”
rating in the
New York state
assessment
area during
its May 7,
2019, CRA
Performance
Evaluation.
Describe
strategies, if
any, that
Berkshire Bank
has
implemented
since 2019 to
improve its
performance in
the New York
state
assessment
area."
Watch this
site.
January
24, 2022
As the
first CRA
challenge of
2022, Fair
Finance Watch
with Inner
City Press on
the FOIA filed
comments with
the Federal
Reserve
against First
Internet Bank,
below.
On January 19,
First Internet
Bank wrote to
say that
anything for
which it
requested
confidential
treatment MUST
be withheld.
For First
Internet Bank,
Larry Tomlin
of
SmithAmundsen
of
Indianapolis
tells Inner
City Press and
the regulators
and DOJ that
Fair Finance
Watch should
withdraw its
comments.
Really? Inner
City Press
immediately
filed a new
and expanded
FOIA request.
From
the Fed:
This will
acknowledge
receipt of
your
electronic
message dated
January 19,
2022, and
received by
the Board’s
Information
Disclosure
Section on
January 20.
You request,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552: the
entirety of
the
application by
First Internet
Bancorp to
acquire First
Century
Bancorp and
First Century
Bank, N.A.,
Commerce,
Georgia
including all
portions for
which the
applicants
have requested
confidential
treatment (and
which they
claim are
thereby
automatically
to be
withheld), and
for all
records
including
electronic
records
reflecting the
FRS’
communications
with or about
First Internet
or First
Century or
either’s
affiliates
since January
1, 2020.
January
17, 2022
Inner
City Press and
FFW challeged
to the Fed the
dubious Delta
Investment,
and now on
January 14 received entirely
empty of
withheld
echoes of
secret
communications:
Good
day,
Attached is
the public
portion of the
AI request and
AI response in
connection to
the notice
filed by Lucia
de Campos
Faria, Junia
de Campos
Faria
Ziegelmeyer,
and Eliana de
Campos Faria,
all of Sao
Paulo, Brazil;
Flavia Faria
Vasconcellos,
Rio de
Janeiro,
Brazil; The FC
Family Trust,
The White
Dahlia Company
Inc. as
trustee of the
FC Family
Trust, both of
Hampton, New
Hampshire; and
Claudia de
Faria
Carvalho, New
York, New
York, as
primary
beneficiary of
the FC Family
Trust
(collectively,
“Notificants”);
to acquire
voting shares
of Delta
Investment
Company
(Cayman),
Georgetown,
Cayman
Islands, and
thereby
indirectly
acquire voting
shares of
Delta National
Bank and Trust
Company, New
York, New
York.
Received:Jan
14, 2022 3:26
PM Expires:Feb
4, 2022 3:26
PM
From:lisa.brannon@ny.frb.org
To:innercitypress@gmail.com,
lee@fairfinancewatch.org
Cc:brian.steffey@ny.frb.org,
nadira.hosein@ny.frb.org,
karen.hsu@ny.frb.org
Subject:Additional
Information -
Delta
Investment
Attachments:AI
Request -
Delta
12-27-2021
Nonconfidential.pdf
AI Request -
Delta
12-27-2021
Nonconfidential.pdf
, 11-2-21 AI
Response.pdf
11-2-21 AI
Response.pdf ,
image001.gif
image001.gif ,
image002.png
image002.png ,
10.12.21 AI
Request email
PUBLIC.pdf
10.12.21 AI
Request email
PUBLIC.pdf
But
there are just
cover
letters, no
actual
questions or
answers, it
appears...This
is today's
Federal
Reserve.
January
10, 2022
Why do some
Federal
Reserve
entities - FR Banks
and even the
governmental
Board in DC -
not list an
email address
for comments
on pending
merger
applications. Check
out these, as
we will, in
2022:
Federal
Reserve Bank
of Chicago
Colette A.
Fried,
Assistant Vice
President, 230
South LaSalle
Street,
Chicago, IL
60604-1413
Federal
Reserve Bank
of St. Louis
Holly A.
Rieser,
Manager, P.O.
Box 442, St.
Louis, MO
63166-2034
Federal
Reserve Bank
of Kansas City
Jeffrey
Imgarten,
Assistant Vice
President, 1
Memorial
Drive, Kansas
City, MO
64198-0001
Federal
Reserve Bank
of Dallas
Karen Smith,
Director,
Applications,
2200 North
Pearl Street,
Dallas, TX
75201-2272
Federal
Reserve Bank
of San
Francisco
Sebastian
Astrada,
Director,
Applications,
101 Market
Street, San
Francisco, CA
94105-1579
Board
of Governors
of the Federal
Reserve System
Ann E.
Misback,
Secretary,
20th &
Constitution
Avenue, N.W.,
Washington,
D.C.
20551-0001
January
3, 2022
The
Fed routinely
extends its
time under
FOIA: "This is
in response to
your
electronic
message dated
November 8,
2021, and
received by
the Board’s
Information
Disclosure
Section on
November 9.
Pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, you
request:
all withheld
portions of
the additional
information
submitted by
Stock Yards
Bancorp dated
Nov 4 (emailed
to Inner City
Press on Nov 8
citing the
Board’s ex
parte rules)
as part of its
challenged
application to
acquire
Commonwealth
Bank. The
response, on
issues raised
by the timely
protest by
Inner City
Press and Fair
Finance Watch,
confines
compliance
information to
“Confidential”
Exhibits B and
C, which they
seek to
withhold in
full. This is
unaccepable;
all other
Stock Yards
requests for
confidential
treatment in
this
proceeding
should be
reviewed and
the improperly
withheld
information
provided to
Inner City
Press on an
expedited
basis, for
comment,
before any
determination
other than
Denial is
issued on
Stock Yards
application[.]
Pursuant to
section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
December 23,
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
December 23,
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." Yeah,
the law.
December
27, 2021
The
Federal
Reserve waited
until
Jay Powell
was
re-appointed,
and many
financial
journalists
were already
holiday
minded, to dole
out these
approvals:
12/17/2021
Federal
Reserve
announces
approval of
application by
WSFS Financial
Corporation
Orders on
Banking
Applications
12/17/2021
Federal
Reserve
announces
approval of
application by
Webster
Financial
Corporation
Orders on
Banking
Applications
12/17/2021
Federal
Reserve
announces
approval of
application by
First Citizens
BancShares,
Inc.
Three
big mergers
rubber stamped
in one day - a
new low.
December
20, 2021:
The
Federal Reserve
has hit a new
low - it doesn't
maintain its
online H2A of pending
applications
subject to
public
comment.
When one
seeks to use it,
sorting newest
to older, the
newest
date has a
comment period
that
ends before
the current
date. This
is an outrage.
December
13, 2021
So what
are the views
on merger
review of the
candidates for
the Federal
Reserve's
supervision
seat? They
include Richard
Cordray who is
the
ex-director of
the Consumer
Financial
Protection
Bureau, Sarah
Bloom Raskin,
who is a
former Fed
Governor and
deputy
Treasury
Secretary, and
Raphael Bostic
the President
of the Federal
Reserve Bank
of
Atlanta.
Other
candidates for
board slots
include
Valerie
Wilson,
director of
the
left-leaning
Economic
Policy
Institute’s
Program on
Race,
Ethnicity, and
the Economy;
Lisa Cook, a
professor of
economics and
international
relations at
Michigan State
University;
William
Spriggs, chief
economist at
the AFL-CIO
and Karen
Dynan, a
former top
Treasury
official. Watch this cite.
December
6, 2021
Inbox
from Old
National to the
Fed,
cc-ed to Inner
City Press but with major
withholdings:
"Please
confirm
whether Old
National Bank
(ONB) monitors
branch
locations in
Marion County,
which is part
of the
Indianapolis
Community
Reinvestment
Act
assessment
area, in order
to manage fair
lending risk.
Please also
confirm
whether
the bank has
any plans to
open new
branches in
majority-minority
census tracts
in
Marion County
following the
merger.
The Bank
confirms that
it monitors
all branch
locations,
including
those located
in
Marion County,
Indiana to
manage fair
lending risk
as required
and
contemplated
by its
applicable
policies which
it believes
are mandated
by regulation
and
supervisory
guidance.
Please see
Confidential
Exhibit A for
additional
information." This
is fraud.
November
29, 2021
As Biden Taps Jay Powell for 2d Term at Fed, CRA Protests of Home BancCorp, Citizens & South State Pend
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Nov 22 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced until the new Administration and its
regulators remains an open question.
November
22, 2021
How
sleazy are
some banks,
and how sleaze
does the
Federal
Reserve let
them be? Inner
City Press is
a challenger
to Webster -
Sterling. The
Fed asked the
banks
questions; the
banks
were supposed
to send Inner
City Press copy of
their answer.
But not only
did Webster's
corporate
counsel withhold
information
about branch
closing - the
letter making
the request to
withhold
that was not
emailed to
Inner City
Press but
instead sent by snail mail,
to an old
address Inner
City Press
never used in its
challenge to
this merger.
Hide the
ball...
November
15, 2021
Citizens Bank Gets Pot & Lending Qs from Fed After Investors Bank Hit With FDIC Conditions
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Nov 10 – 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
acquisition of Investors Bank by Citizens Bank
NA is litmus test.
Investors
Bank is one of the most disparate banks in New
York State, where in 2020 it made only three
mortgage loans to African Americans, while
denying fully seven applications from African
Americans. By contrast, it made 164 loans to
whites while denying only 76 applications from
whites.
Inner City Press raised the 2019 disparities to
the FDIC - and on July 30 was contacted by the
FDIC that it imposed rare conditions on
Investors. Letter here.
This ha been raised on Citizens'
application, to the Fed and OCC, below.
November
8, 2021
Fed Qs on Protested Webster Merger As Sterling National Bank Is Sued SDNY For China Wires
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SOUTH
BRONX / SDNY, Nov 5 – The proposed merger of
Webster Financial Corp. and Sterling Bancorp has
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
Now Inner City Press can report that on November
5, it was sent a copy of the Federal Reserve's
additional letter to Webster and its (ex-Fed)
outside counsel: "November 5, 2021 Dear Ms.
Patricia A. Robinson, This letter refers to the
application filed by Webster Financial
Corporation, Waterbury, Connecticut (“Webster”),
for the prior approval of the Board of Governors
of the Federal Reserve System (the
“Board”), to acquire Sterling Bancorp
(“Sterling”), and thereby indirectly
acquire Sterling National Bank. Based on staff’s
review of the current record, the following
additional information is requested.
Please provide your responses to the items
listed below. Supporting documentation should
be provided as appropriate.
1.
You have indicated that Sterling Bank and
Webster Bank do not have any current plans
to consolidate, relocate or close any branches
before consummation of, or otherwise
unrelated to, the proposed transaction. Confirm
if that is still the case and confirm that
any anticipated branch closures, consolidations,
or relocations that may occur following
the merger will be conducted in a manner
consistent with Webster Bank’s branch
closing policies and procedures and the
branch closing requirements contained in section
42 of the Federal Deposit Insurance Act
(12 U.S.C. § 1831r-1). If not, discuss why not.
Your response should include a copy of any
applicable policies and procedures, to the
extent not already provided.
November
1, 2021
NY Federal Reserve Makes Settlement Secret After It Fired Ex FBI Agent Sama 69 Years Old
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURTHOUSE, Oct 28 – 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 reported it that
same day. And now on October 27,
2021, the move to settle with no transparency,
see below.
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.
On
February 9, the FRBNY 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 FOIA requests pending.
On
October 27, amid a scandal about conflicted
stock trading by Federal Reserve Bank presidents
and others, the FRBNY's outside counsel filed a
letter to Judge Caproni that "the parties have
reach an agreement to settle this matter and are
in the process of finalizing the settlement
agreement."
And
on October 28, it was nailed down: "ORDER:
WHEREAS on October 27, 2021 (Dkt. 28), the
parties notified the Court that they have
reached an agreement in principle resolving all
issues; IT IS HEREBY ORDERED THAT all previously
scheduled conferences and other deadlines are
CANCELLED. IT IS FURTHER ORDERED that this case
is DISMISSED with prejudice and without costs
(including attorneys fees) to either party. The
Clerk of Court is respectfully directed to
terminate all open motions and to CLOSE the
case. Within 30 days of this order, the parties
may apply to reopen this case. Any such
application must show good cause for holding the
case open in light of the parties settlement and
must be filed within 30 days. Any request filed
after 30 days or without a showing of good cause
may be denied solely on that basis.
Additionally, if the parties wish for the Court
to retain jurisdiction to enforce their
settlement agreement, they must submit within
the same 30-day period: (1) their settlement
agreement to the Court in accordance with Rule
6.A of the Courts Individual Practices and (2) a
request that the Court issue an order expressly
retaining jurisdiction to enforce the settlement
agreement. See Hendrickson v. United States, 791
F.3d 354 (2d Cir. 2015). SO ORDERED. (Signed by
Judge Valerie E. Caproni on 10/28/2021)."
But what are the terms of the settlement? If
company are pushed to disclose this, how much
more so the Fed? Uh, Congress?
The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Caproni)
***
October
25, 2021
Horse
already out of
the barn:
"Reserve Bank
presidents now
will be
required to
publicly
disclose
financial
transactions
within 30
days, as Board
Members and
senior staff
currently
do. The
Board and the
Reserve Banks
will
incorporate
these new
restrictions
into the
appropriate
Federal
Reserve rules
and policies
over the
coming
months."
October
18, 2021
despite
an October 2
request, only
on October 15
did the Fed
provide the
"public
portion" of
the Stock
Yards -
Commonwealth
application,
and even then
with portions
inappropriately
withheld at
Stock Yards'
request. This
is a litmus
test that is
being failed.
October
11, 2021
For
this time Oct
7, 2022,
S&P
Global,
"Politics
likely at play
in First
Citizens, CIT
deal delay,"
by Lauren
Seay, "Matthew
Lee, executive
director of
Inner City
Press said:
"at the Fed
under Chair
Jay Powell CRA
is not given
the weight
that it should
be, so I don't
think it's the
reason here."
The delay may
also be an
attempt by
Powell to
"seem more
serious on
merger review.
They send a
message if
they want to
send one by
delaying. But
what's the
point of a
message if
nobody knows?
The ball is in
their court to
say why," Lee
said. here
October
4, 2021
Amid Protest to Fed of Citizens Bid for Investors Bank 2 Reserve Bank Presidents Out 4 Investing
By
Matthew Russell Lee, Patreon Story Order
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Sept 29 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced until the new Administration and its
regulators, particularly the Federal Reserve
which already in essence runs the OCC and has
its chair position in competition, is an open
question.
And now, after reports of trading improprieties that remain unaddressed by the Governors including Chair Jay Powell, Robert Kaplan, president of the Federal Reserve Bank of Dallas, has resigned, immediately after - and with slightly more transparency than - the Boston Fed's Rosengren. That's not saying much.
September
27, 2021
After CRA Protest of South State's Atlantic Capital Bid Fed Asks Questions & Gives 8 Days
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, Sept 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.
Now
the proposed acquisition by South State of
Atlantic Capital Bank in Georgia will be a
litmus test. South State is so disparate that in
South Carolina in 2020 for mortgage loans to
African Americans it had more denials (147) than
loans made (133) - while making six loans to
whites for every denial to a white applicant.
On
August 17, Fair Finance Watch and Inner City
Press on the FOIA) filed a comment with the
Federal Reserve Board, below.
On
September 4, Fair Finance Watch commented to the
Office of the Comptroller Currency, which some
say has changed for the better. We'll see - now
on September 7, South State has written to Fair
Finance Watch, cc-ing the OCC and Fed: "Dear Mr.
Lee... In the matter regarding the concerns of
the Bank’s disparate marketing, the Bank is
committed to providing equal access to credit
throughout our footprint. The Bank takes a
multi-layered approach to ensure that marketing
of credit products reach all communities within
the Bank’s Assessment Area and each application
is underwritten without consideration of a
prohibited basis. The Bank has undergone reviews
by independent audit firms with reports dated
June 30, 2020 and June 30, 2019 where marketing
efforts have been reviewed. The reviews did not
yield any fair lending concerns."
Then
something is very wrong with those audits.
The
Fed briefly extended the comment period - but
then on September 23 asked this of South State:
"This correspondence relates to the application
filed by South State Corporation, Winter Haven,
Florida (“South State”), parent of South State
Bank, National Association (“South State Bank”),
to merge with Atlantic Capital Bancshares, Inc.
(“Atlantic Capital”), and thereby acquire its
subsidiary, Atlantic Capital Bank, National
Association (“Atlantic Capital Bank”), both of
Atlanta, Georgia, pursuant to sections 3(a)(3)
and 3(a)(5) of the Bank Holding Company Act of
1956, as amended (“BHC Act Application”). Please
respond in full to the following additional
information items, including those listed in the
confidential annex, and provide supporting
documentation as appropriate. ASSET
QUALITY 1. Provide the following classified
asset information, as of June 30, 2021, for
South State Bank, Atlantic Capital Bank, and the
pro forma institution. a. The amount of
internally classified assets, comprised of the
separate categories of substandard, doubtful,
and loss, with relevant components of other real
estate owned separately identified in each
category. b. Detail for the calculation of the
classified assets ratio, including the level of
classified assets compared to the total amount
of tier 1 capital and allowance for loan loss
reserves. INTEGRATION RISK 2. Given South
State’s significant and recent merger with
CenterState Bank Corporation in June 2020,
describe the status of integration of the two
companies, including whether South State’s key
resources have the bandwidth to successfully
execute and integrate the proposed merger with
Atlantic Capital. OTHER INFORMATION 3.
Clarify whether Atlantic Capital has elected to
be treated as a financial holding company under
the Bank Holding Company Act of 1956, as
amended. Section 3.1 of the Agreement and Plan
of Merger between South State Corporation and
Atlantic Capital Bancshares, Inc. indicates that
Atlantic Capital has not made this election,
while the response to question 1 of the Form FR
Y-3 indicates that Atlantic Capital is “a
designated financial holding company.” 4.
Provide the following: a. Pro forma
organizational charts of South State, including
South State Bank, following consummation. b.
Update on the status of all other agency
filings. c. Copy of the Form S-4 filed with the
Securities and Exchange Commission in connection
with the proposed transaction. Request for
Additional Information South State Corporation
September 23, 2021 Page 2 of 2
Please address your response to Mr. Erien O.
Terry and submit within eight business days."
But that's after the close of the ("extended")
comment period...
As
to the Fed, which denies FOIA requests after
five months, here,
on August 25, this strange response: "Dear Mr.
Lee, This is to
acknowledge receipt of your email to the Office
of the Secretary for the Board of Governors of
the Federal Reserve System (Board) dated August
17, 2021, regarding the proposal of South State
Corporation to merge with Atlantic Capital
Bancshares, Inc., and thereby indirectly acquire
Atlantic Capital Bank, NA. To date, South
State Corporation has not filed an application
with the Federal Reserve System.
Currently, the public comment period for the
proposal will end on September 20, 2021.
If an application is filed within the next three
months from the date your comment was sent, your
correspondence will be made part of the record,
and the Board will evaluate your comment.
We will also send a copy of the public portions
of the application as soon as possible after the
application is received.
Sincerely, Jennifer
Snow Senior Examiner Supervision,
Regulation, and Credit Federal Reserve
Bank of Atlanta
Integrity. Excellence. Respect."
How
can there be a comment period with expiration
date, if there is no application? Inner City
Press asked, and on August 26 is told:
"Our
procedures provide that advance notice in the
Federal Register may be requested in advance of
a filing. The comment period end date applies to
the Federal Register notice, which was filed in
advance of the application being filed."
September
20, 2021
Talk
about a scam:
"By electronic
message dated
March 10,
2021, and
received by
IDS on March
11,
you submitted
a request
seeking:
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
[and] all
records the
FRS has, in
the past three
years,
regarding
[Gilbert]
Armenta, Ruja
Ignatova, Mark
Scott and/or
OneCoin, and
also regarding
marijuana
banking,
central to the
case(s).
On August 31,
2021, the
Deputy
Secretary
denied your
request for
information.
You
subsequently
appealed that
decision and
requested
expedited
processing of
your appeal.1
Pursuant to
the Board’s
Rules
Regarding
Availability
of Information
(“Board’s
Rules”), as a
member of the
news media you
are required
to
demonstrate
that there is
“[a]n urgency
to inform the
public about
an actual or
alleged
Federal
Government
activity[.]”2
In support of
your request
forexpedited
treatment, you
allege that
“[t]hese are
serious
criminal
issues, and
the
Fed would
explanation
took five
months on the
initial
request, to
provide not a
single
document[.]”
However, you
have not set
forth facts
demonstrating
an
urgent need to
inform the
public of
Board
activity.
Rather, you
provided only
a
conclusory
statement that
you believe
there are
“serious
criminal
issues.”
Moreover,
neither the
amount of time
the Board took
to respond to
your initial
request, nor
the volume of
information
provided in
response to
your request,
has any
bearing on
whether the
records you
requested are
urgently
needed.
Thus, I have
determined
that your
request does
not comply
with the
criteria for
expedited
processing
because you
have not set
forth facts
demonstrating
an
urgency to
inform the
public
concerning
actual or
alleged Board
activity.3
Your request
for expedited
processing,
therefore, is
denied without
prejudice to
your filing a
new request
providing
additional
information
that meets the
requirements
of
the Board’s
Rules for
expedited
processing.
Accordingly,
your appeal is
being
processed
under the
Board’s normal
FOIA
procedures."
September
13, 2021
FOIA
request
acknowledged -
but still no
records: "Your
request has
been assigned
number
APP-2021-00016.
Please
reference this
number in all
future
correspondence.
Request
description:
This is a FOIA
appeal of the
Deputy
Secretary's
August 31,
2021 denial in
full of my and
Inner City
Press' March
10, 2021 FOIA
request
for "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
[and] all
records the
FRS has, in
the past three
years,
regarding
[Gilbert]
Armenta, Ruja
Ignatova, Mark
Scott and/or
OneCoin, and
also regarding
marijuana
banking,
central to the
case(s)"
September
6, 2021
Federal
Reserve on
OneCoin &
Wirecard FOIA
Takes 5 Month
to Deny, Inner
City Press
Appeal
By
Matthew Russell Lee, Patreon FOIA
Denial
BBC
- Guardian
UK - Honduras
- ESPN
SDNY
COURT / BRONX, Sept 4 – The Federal
Reserve took five months to act on Inner City
Press' Freedom of Information Act request about
OneCoin, Wirecard and marijuana banking - and
that provided no documents at all. Denial
on DocumentCloud here.
In
response to Inner City Press' March 2021 FOIA
request, the Fed on August 31 wrote:
"This
is in reference to your email message dated
March 10, 2021 and received by the Board’s
Information Disclosure Section on March 11. In
your email, you note that “Inner City
Press has been covering the US v. Weigand bank
fraud trial in the SDNY[.]” In light of
this coverage, and 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 [and] all records
the FRS has, in the past three years,
regarding [Gilbert] Armenta, Ruja Ignatova, Mark
Scott and/or OneCoin, and also regarding
marijuana banking, central to the case(s).
With
respect to the part of your request seeking the
past three years’ worth of records
regarding Wirecard, staff searched Board records
but did not locate any information related
to implications of “the bank’s collapse” or the
Weigand case you reference in your
request.1 With respect to the part
of your request seeking all records “regarding
[Gilbert] Armenta, Ruja Ignatova, Mark
Scott and/or OneCoin” for the past three years,
staff searched Board records and located
one responsive document.
I
have determined, however, that the
responsive information constitutes confidential
supervisory information (e.g., a
supervisory report). This information is subject
to withholding and will be withheld pursuant to
exemption 8 of the FOIA, 5 U.S.C. §
552(b)(8).
Inner City Press has appealed:
"This
is a FOIA appeal of the Deputy Secretary's
August 31, 2021 denial in full of my and Inner
City Press' March 10, 2021 FOIA request
for
'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 [and] all
records the FRS has, in the past three years,
regarding [Gilbert] Armenta, Ruja Ignatova, Mark
Scott and/or OneCoin, and also regarding
marijuana banking, central to the
case(s)" After taking more
than five months, the Federal Reserve says it
has no records about Wirecard, and only one
about OneCoin, which it withholds in full. This
is an appeal - and a request for how the Fed can
justify taking five months to provide no
documents at all. As to
Wirecard, the request is not as circumscribed as
the response makes it appear. Given the payments
issues raised by the Wirecard collapse, Inner
City Press finds it hard to believe that the Fed
has no records concerning it. And since the
Federal Reserve did not and does not regulate or
supervised OneCoin, Inner City Press contests
the invocation of the bank supervision exemption
to withhold this record in full. Particular
given statements on cryptocurrency from Federal
Reserve officials, for example the present of
the Minneapolis Federal Reserve, that the entire
Federal Reserve System claims to have a single
document about OneCoin is not
credible. As to marijuana banking,
to refuse to provide any documents is
unacceptable. Given the legal issues of this
substance being illegal federally but legal in
several states, it is impossible to believe that
the Fed has not provided guidance to banks on
the topic. Those records are responsive,
particularly after five months."
August
30, 2021
CRA Protest to South State-Atlantic Capital, Fed Begins Closing Comments Before Application
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, August 26 – Whether or not the
U.S. Community Reinvestment Act will be again
enforced until the new Administration and its
regulators is an open question.
Now
the proposed acquisition by South State
Corporation of Atlantic Capital Bank in Georgia
will be a litmus test. South State is so
disparate that in South Carolina in 2020 for
mortgage loans to African Americans it had more
denials (147) than loans made (133) - while
making six loans to whites for every denial to a
white applicant.
On
August 17, Fair Finance Watch and Inner City
Press on the FOIA) filed a comment with the
Federal Reserve Board, below.
On
August 25, this strange response: "Dear Mr.
Lee, This is to
acknowledge receipt of your email to the Office
of the Secretary for the Board of Governors of
the Federal Reserve System (Board) dated August
17, 2021, regarding the proposal of South State
Corporation to merge with Atlantic Capital
Bancshares, Inc., and thereby indirectly acquire
Atlantic Capital Bank, NA. To date, South
State Corporation has not filed an application
with the Federal Reserve System.
Currently, the public comment period for the
proposal will end on September 20, 2021.
If an application is filed within the next three
months from the date your comment was sent, your
correspondence will be made part of the record,
and the Board will evaluate your comment.
We will also send a copy of the public portions
of the application as soon as possible after the
application is received.
Sincerely, Jennifer
Snow Senior Examiner Supervision,
Regulation, and Credit Federal Reserve
Bank of Atlanta
Integrity. Excellence. Respect."
How
can there be a comment period with expiration
date, if there is no application? Inner City
Press asked, and on August 26 is told:
"Our
procedures provide that advance notice in the
Federal Register may be requested in advance of
a filing. The comment period end date applies to
the Federal Register notice, which was filed in
advance of the application being filed."
August
23, 2021
So: “I
was more
optimistic
about crypto
and bitcoin
five or six
years ago,”
Neel Kashkari,
president of
the Federal
Reserve Bank
of
Minneapolis,
said Aug 17,
2021.
“So far what
I’ve seen is …
95% fraud,
hype, noise
and
confusion.”
August
16, 2021
Old National - 1st Midwest Was CRA Protested Now Gets Asked About Multi-State Lending
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, August 11 – 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.
And
on 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.
August
9, 2021
Old National - 1st Midwest Was CRA Protested Now Withholds All Answers So New FOIA
By
Matthew Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, August 4 – 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.
And
on 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.
And
now Old National has tried to withhold all of
its CRA responses, triggering this FOIA request:
" This is a FOIA request for the all withheld
portions of the additional information submitted
by Old National on August 2 as part of its
challenged application seeking to aquire First
Midwest including but not limited to the all of
the withheld convenience and needs answers:
"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. (c) Please see
Confidential Exhibit E for the requested
information. 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. Please see Confidential Exhibit F for
the requested information. 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. Please see Confidential
Exhibit G for the requested information."
This is an outrage. This follows up on our
previous and still outstanding FOIA request for
the withheld portions fo the Application and the
Fed's communications with and about the
applicants."
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.
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.
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.
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.
April
5, 2021
Filed
with the Fed,
after a full
week of
silence:
This is
a formal FOIA
request for
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.
Note:
in a letter
emailed to the
Board a full
week ago, we
requested a
portion of
these records
and of of this
date a week
later have
received no
response at
all, and no
records. 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 30). The
merger, the
fair lending
and money
laundering
issues and
branch
closings, make
it a matter of
urgency.
CRA Litmus Test As M&T People's Challenged On Racial Disparities In Lending in NY CT PA
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL
COURT / S Bronx, March 27 – 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: "This
is a timely first comment opposing and
requesting an extension of the FRB's public
comment period on the Applications by M&T
Bank Corporation to acquire People's United
Financial.
The applicant M&T in New York State in 2019
made 8,613 home loans to whites and only 629 to
African Americans. M&T in New York
State in 2019 made 3.4 loans to whites for each
denial to whites. It made only 1.4 loans to
African Americans for every denial to African
Americans.
This
is totally
unacceptable.
The applicant M&T in Connecticut in 2019
made 251 home loans to whites and only 27 to
African Americans. M&T in Connecticut
in 2019 made 2 loans to whites for each denial
to whites. It made only 1.28 loans to African
Americans for every denial to African
Americans. This is
unacceptable.
The applicant M&T in Pennsylvania in 2019
made 3565 home loans to whites and only 106 to
African Americans.
M&T
in Pennsylvania in 2019 made 2.52 loans to
whites for each denial to whites. It made only
1.15 loans to African Americans for every denial
to African Americans.
This is totally unacceptable.
Meanwhile, People's says it will close some 140
branches.
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 applications. We
timely request public hearings.
The
hearings, and your review, should also address
M&T's discrimation, see, e.g., (EEOC v.
Manufacturers and Traders Trust Co., d/b/a
M&T Bank., Civil Action No.
1:16-cv-03180-ELH) in U.S. District Court for
the District of Maryland, Northern
Division. See also, this.
March
22, 2021
The
Federal
Reserve
doesn't think
Wirecard, and
the
failure of the
German
regulators atop
Deutsche Bank
and
Commerzbank is
a matter of
public or
urgent concern: "Dear
Mr. Lee: 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). You
have requested
expedited
processing for
your request.
Pursuant to
the Board’s
Rules
Regarding
Availability
of Information
(“Board’s
Rules”), as a
member of the
news media you
are required
to demonstrate
that there is
“[a]n urgency
to inform the
public about
an actual or
alleged
Federal
Government
activity.”1 In
support of
your request
for expedited
treatment, you
assert that
“[t]hese are
matters of
public
interest and
urgency[.]”
However, you
have failed to
explain why
the
information
you have
requested—approximately
three (3)
years of Board
records—is
urgently
needed. Thus,
I have
determined
that your
request does
not comply
with the
1 12 C.F.R. §
261.12(c)(1)(i)-(ii).
2
criteria for
expedited
processing,
because you
have not set
forth facts
demonstrating
an urgency to
inform the
public
concerning
actual or
alleged Board
activity.2
Your request
for expedited
processing,
therefore, is
denied without
prejudice to
your filing a
new request
providing
additional
information
that meets the
requirements
of the Board’s
Rules for
expedited
processing.
Accordingly,
your request
is being
processed
under the
Board’s normal
FOIA
procedures." We'll
have more on
this.
March
15, 2021
Webster Bank Games CRA with Health Savings Accounts Fair Finance Watch Challenged to OCC
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SDNY
COURT, March 13 – Among the comments on the
Community Reinvestment Act submitted to the
Federal Reserve is one from Webster Bank, arguing
that Health Savings Account "deposits should not
be considered when determining whether the
requirement would apply or when delineating such
assessment areas" and should be excluded from
the definition of "retail domestic
deposits."Consequently, HSAs should also be
excluded from Community Development
Financing Metric.
This
is scam.
Back on May 2, 2020 Fair Finance Watch, and
Inner City Press on FOIA, filed a formal
challenge with Otting's OCC to the application
by Webster Bank to acquire State Farm Bank FSB,
its problematic
health savings accounts, no less. Here is some
of it:
"This
is a timely first comment opposing and
requesting an extension of the OCC's public
comment period on the Application by Webster
Bank NA to acquire State Farm FSB / Health
Savings Accounts. Given complaints against State
Farm's HSAs, and Webster Bank's PPP performance,
public hearings are needed when they are not, as
now, prohibited by social distancing rules. The
CRA deform
proposal should be shelved.
While
Comptroller Otting has said he never saw
discrimination (except being told by family
members about it), consider for the record on
this application that even as reflected by the
too-limited 2018 HMDA data available on the
CFPB's website, Webster Bank in New York State
in 2018 made 270 loans to whites - and only NINE
to African Americans, out of proportion to the
demographics of its service area and of other
lenders' activities in
it. While
making only NINE loans to African Americans in
NYS in 2018, Webster denied 16 applications from
Africans, much more disparate that its ratio for
whites: 270 loans made, 145 denial:
significantly more disparate to African
Americans.
This application should be denied. And for the
record, the CFPB's elimination of the HMDA
information that has been available on the
FFIEC's and even its own website for 2017 data
is part of the destruction of CRA and HMDA of
which the OCC is a part.
Consider for the record that "the head of
Waterbury-based Webster Bank admitted his
company can improve its performance in getting
money into the hands of loan applicants.
“Certainly we wanted to help every small
business borrower and customer of Webster that
we could,” said CEO John Ciulla, speaking
Tuesday on a conference call. “We got through
approximately 30 percent applications approved
(and) 30 percent funded, plus or minus a few
percentage points on both sides of that."
Webster Bank has the third biggest base of
deposits in Connecticut, offering both
traditional savings and loans accounts as well
as a health-savings account business that is
among the largest in the nation. On Tuesday,
Webster bolstered its HSA Bank subsidiary with
the acquisition of 24,000 health-savings
accounts from State Farm totaling $140
million."
March 8, 2021
Wheels
of justice -
against
tellers, not
CEOs:
"WHEREAS, the
Board of
Governors of
the Federal
Reserve System
(the “Board of
Governors”),
pursuant to
section 8(e)
of the Federal
Deposit
Insurance Act,
as amended
(the “FDI
Act”), 12
U.S.C. §
1818(e),
issues this
Order of
Prohibition
(this “Order”)
upon the
consent of
Respondent
Jeremy Boles
(“Boles”), a
former
institution-affiliated
party, as
defined in
sections 3(u)
and 8(b)(3) of
the FDI Act,
12 U.S.C. §§
1813(u) and
1818(b)(3), of
SunTrust Bank
(the “Bank”),
a state-member
bank; WHEREAS,
between June
10, 2016, and
May 1, 2017,
while employed
as a Teller
Coordinator at
the Bank’s
Hillsborough
Square Branch
in Tampa,
Florida, Boles
misappropriated
funds from a
Bank
customer’s
account for
his personal
benefit;
WHEREAS, after
the misconduct
continued for
nearly a year,
Boles
disclosed his
conduct and
paid
restitution to
the Bank in
the full
amount of the
Bank’s loss in
May 2017;
WHEREAS,
Boles’ conduct
posed
financial,
legal and
reputational
risks to the
Bank; WHEREAS,
Boles’ conduct
constituted
violations of
law or
regulation,
unsafe or
unsound
practices, and
breaches of
fiduciary
duty; and 2
WHEREAS, by
affixing his
signature
hereunder,
Boles has
consented to
the issuance
of this Order
by the Board
of Governors
and has agreed
to comply with
each and every
provision of
this Order."
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."
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.
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 Dallas:
Dallas
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.
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.
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
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- The
Source
SOUTH
BRONX, Nov 12 – 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.
Meanwhile
Inner City Press' requests under the Freedom of
Information Act into Acting Comproller Brian P.
Brooks' conflicts of interest in the fintech and
crypto-currency world have yet to be fully
answered.
On November 9, Fair Finance Watch and Inner City
Press have begun a call to block Brooks from
handing out any more national bank charters
between now and January 20 - such charters would
be illegitimate, gifts by a lame duck. How much
more so this: the Senate majority says it is
moving forward to have a vote on a long-pending
Federal Reserve Board nominee, Judy Shelton.
Even in September 2020 she was said to not have
the votes for confirmation. We'll have
more on this.
On
July 13 Fair Finance Watch filed with the OCC,
including this: "July 13, 2020
Office of the Comptroller of the
Currency DC Comptroller Brooks and Mr.
Lybarger, Deputy Comptroller for Licensing
& Northeastern District Office
Re: Timely First Comment on SoFi's
reported application to the OCC to get into
banking
Dear
Mr. Lybarger, Ms. Cummings and others in the
OCC: This is a timely first comment
opposing and requesting an extension of the
required OCC's public comment period on reported
proposal by SoFi to get a national bank
charter.
This is a major proposal, by a fintech in which
SoftBank has a large stake. Yet, it is not yet
on the OCC's website, where as of July 13 the
most recent Weekly Bulletin cuts on on July 4.
The only charter application listed as open for
comment is Monzo Bank; the New Bank application
link does not work. So, any comment period will
have be be extended. This is a request for the
complete application, all portions that the OCC
after review does not find withholdable under
FOIA.
Inner City Press / Fair Finance Watch opposed
SoFi's previous, suspended attempt to get into
banking. Since then the questions have only
grown.
For now, we note that Inner City Press asked the
OCC's FOIA unit for a copy of Comptroller
Brooks' conflict of interest list with fintechs
but has yet to receive it. Pending receipt, we
ask that Acting Comptroller Brooks be recused
from this application and that you confirm this
in writing.
As to SoftBank, the dispute regarding another of
its holdings, WeWork, portends the type of
problems that regulators like the OCC are
directed to keep out of, not invite into, the
banking system.
For the above reasons, including the ongoing
COVID-19 pandemic lockdowns and restrictions,
the comment period should not yet start or
should extended, until in person public hearings
can be held, and Comptroller Brooks' should be
recused pending/and his conflict of interest
list should be released."
November
9, 2020
From
the Fed last
week: "While
this report is
focused on
safety and
soundness
initiatives,
it is also
important to
note that on
September 21,
2020, the
Board issued
an Advance
Notice of
Proposed
Rulemaking to
modernize the
regulations to
implement the
Community
Reinvestment
Act with a
120-day
comment
period.6 6 See
Board of
Governors of
the Federal
Reserve
System,
“Federal
Reserve Board
Issues Advance
Notice of
Proposed
Rulemaking on
an Approach to
Modernize
Regulations
That Implement
the Community
Reinvestment
Act,” news
release,
September 21,
2020, https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200921a.htm
yeah...
November
2, 2020
Amid the
exposed failure of
the SARs
system, the
Federal
Reserve has
come out with
a decidedly
uninspiring
proposal: "The
Financial
Crimes
Enforcement
Network
(FinCEN) and
the Federal
Reserve Board
today invited
comment on a
proposed rule
that would
amend the
recordkeeping
and travel
rule
regulations
under the Bank
Secrecy Act.
FinCEN and the
Board,
pursuant to
their shared
authority, are
proposing
amendments to
the
recordkeeping
rule jointly,
while FinCEN,
pursuant to
its sole
authority, is
proposing
amendments to
the travel
rule.
Under the
current
recordkeeping
and travel
rule
regulations,
financial
institutions
must collect,
retain, and
transmit
certain
information
related to
funds
transfers and
transmittals
of funds over
$3,000. The
proposed rule
lowers the
applicable
threshold from
$3,000 to $250
for
international
transactions.
The threshold
for domestic
transactions
remains
unchanged at
$3,000." Oh.
October
26, 2020
Banco
Bradesco Over
Inner City
Press Protest
OKed Now
Appeal Not
Shown To Fed
Board
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, Oct 20 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Amid
the Coronavirus pandemic, it has continued to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted. As of June 7, the
Fed simply extended its time to reply.
On
October 7 the Federal Reserve rubber stamped the
troubled and troubling merger, stating in part
that "A commenter objected to the proposal and
alleged disparities in the number of home
purchase loans made by BAC Bank to African
Americans and Hispanics, as compared to Asians,
in the New York City Metropolitan Statistical
Area (“New York City MSA”), based on data that
BAC Bank reported under the Home Mortgage
Disclosure Act of 1975 (“HMDA”) for its 2017
mortgage-related lending activities. 29 In
27 12 U.S.C. § 2903. 28 Bradesco’s New York
branch is not authorized to take insured
deposits and is not subject to the CRA. 29 12
U.S.C. § 2801 et seq. - 12 - addition, the
commenter asserted that BAC Bank denied 100
percent of home purchase applications from
Hispanics in the New York City MSA based on the
bank’s 2017 HMDA data. The commenter also
alleged disparities in the number of home
purchase loans made by BAC Bank to African
Americans as compared to Whites in the Miami,
Florida MSA, based on 2017 HMDA data.
Furthermore, the commenter alleged that the
proposal does not have a public benefit,
including under the CRA, and that Bradesco plans
to acquire BAC Bank to disproportionately serve
affluent clients. BAC Bank’s Business and
Applicants’ Response to the Public Comments BAC
Bank offers a variety of products and services
in the areas of personal banking, wealth
management, corporate banking, institutional
banking, and real estate financing. BAC Bank
serves domestic and international customers,
and, as previously noted, the bank’s sole
deposit-taking office is located in Florida. In
response to the public comments, Bradesco
asserts that the fair lending and CRA records of
BAC Bank do not support a conclusion that the
bank has engaged in improper lending practices."
Yeah.
So
on October 15, we filed a timely request for
reconsideration: "Re: Timely Request for
Reconsideration of FRB approval, with
information about COVID-19 Impacts withheld and
BAC lending record ignored, of Banco Bradesco to
acquire BAC Florida Dear Chair
Powell" This is a timely request for
reconsideration of the above-captioned
application. As you may know, Inner City Press /
Fair Finance Watch timely opposed the
application on CRA and then other grounds,
including the need to publicly disclose the
financial irregularities of Banco Bradesco and
the impact of COVID-19 on this proposed
transaction. All
of these records were withheld, and BAC's CRA
and fair lending records was ignored, to deliver
up an approval on the applicant's timeline. This
"servicing" of the industry cannot continue on
this timely request, which the full Board should
consider at an in person
meeting. As we stated in
August 2019, this is a proposal by a bank in
Brazil where authorities are reviewing the bank
for corruption, to buy a US bank with a
disparate lending record in order to use it to
serve disproportionately the affluent. There is
no public benefit; the application should be
denied... We submitted a FOIA request for
all of the redacted information - in fact, it
should have been provided forthwith under the Ex
Parte Rules. But it never was."
October
19, 2020
Banco
Bradesco Over
Inner City
Press Protest
Rubber Stamped
So Filing to
Federal
Reserve
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, Oct 15 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Amid
the Coronavirus pandemic, it has continued to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted. As of June 7, the
Fed simply extended its time to reply.
Now
on October 7 the Federal Reserve has rubber
stamped the troubled and troubling merger,
stating in part that "A commenter objected to
the proposal and alleged disparities in the
number of home purchase loans made by BAC Bank
to African Americans and Hispanics, as compared
to Asians, in the New York City Metropolitan
Statistical Area (“New York City MSA”), based on
data that BAC Bank reported under the Home
Mortgage Disclosure Act of 1975 (“HMDA”) for its
2017 mortgage-related lending activities. 29
In 27 12 U.S.C. § 2903. 28 Bradesco’s New
York branch is not authorized to take insured
deposits and is not subject to the CRA. 29 12
U.S.C. § 2801 et seq. - 12 - addition, the
commenter asserted that BAC Bank denied 100
percent of home purchase applications from
Hispanics in the New York City MSA based on the
bank’s 2017 HMDA data. The commenter also
alleged disparities in the number of home
purchase loans made by BAC Bank to African
Americans as compared to Whites in the Miami,
Florida MSA, based on 2017 HMDA data.
Furthermore, the commenter alleged that the
proposal does not have a public benefit,
including under the CRA, and that Bradesco plans
to acquire BAC Bank to disproportionately serve
affluent clients. BAC Bank’s Business and
Applicants’ Response to the Public Comments BAC
Bank offers a variety of products and services
in the areas of personal banking, wealth
management, corporate banking, institutional
banking, and real estate financing. BAC Bank
serves domestic and international customers,
and, as previously noted, the bank’s sole
deposit-taking office is located in Florida. In
response to the public comments, Bradesco
asserts that the fair lending and CRA records of
BAC Bank do not support a conclusion that the
bank has engaged in improper lending practices."
Yeah.
October
12, 2020
Federal
Reserve Banco
Bradesco
Q&A After
Inner City
Press Protest
Leads To
Rubber Stamp
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Oct 7 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Amid
the Coronavirus pandemic, it has continued to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted. As of June 7, the
Fed simply extended its time to reply.
October
5, 2020
Fed Inaction As Amid PPP Abuse Lenders Like Live Oak Bank Issue Prurient Denial To Inner City Press Data Q
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SDNY
COURT / SOUTH BRONX, Oct 1 –
Amid the COVID-19 pandemic, fair lending and the
Community Reinvestment Act are taking a back
seat, or worse. Some banks to which CRA applies
are excluding smaller businesses and those in
communities of color. And some banks bragging
about the PPP loans won't provide any
information - we are Pressing.
Inner City Press / Community on the Move has
begun contacting both banks and non-banks for
their Paycheck Protection Program data. Without
yet getting into the full results, note that
Inner City Press asked Live Oak Bank, twice: "On
behalf of Inner City Press / Community on the
Move and its Fair Finance Watch project, and in
my personal capacity, this is a formal request
for Live Oak's full CRA Public File and
pressingly for the following with regard to the
Paycheck Protection Program (PPP) and Economic
Injury Disaster Loans (EIDL), in light of the
COVID-19 pandemic and the need for this
information: 1. How many loans has Live
Oak made pursuant to the programs? 2. What
is the total dollar amount of loans made
pursuant to the program 3. What is the
average loan size? ... 9. What percentage of
your PPP loans are to borrowers with a previous
borrowing relationship with your institution?"
Their SVP for communications sent only the CRA
file, performance evaluation and strategic plan
- no date. Now after months of non response on
data by Live Oak Bank, on October 1 came this:
"Thank
you for your interest in Live Oak Bank Based on
your responses, our loan programs are not a fit
for your business at this time. Some of the most
common reasons for this are listed
below: Loan amount is below our
minimum Business is not based in the
United States FICO credit score does
not meet our minimum requirements
Prior bankruptcy Prior loss to
creditors or government Pending
legal action Presently suspended,
debarred, proposed for debarment, declared
ineligible or voluntarily excluded from
participation in this transaction by any Federal
department or agency Revenues
derived from gambling, loan packaging, or from
the sale of products or services, or the
presentation of any depiction, displays or live
performances, of a prurient sexual nature."
Oh really... We'll have more on this.
September 28,
2020
So how did the
Federal
Reserve keep
rubber
stamping for
the banks
now being
exposed for
failing to
asked on FinCen
SARs?
We'll have
more on this.
September
21, 2020
What a scam:
now Banco
Bradesco, in a
response they
want partial
withheld, argues
that its "pecuniary
contribution"
in Brazil
is not really
a fine. Really?
September
14, 2020
Why
doesn't the
Federal
Reserve's OMWI
report
address the
way the Fed's
work impact,
and often
short changes,
communities of
color and minority
and women
owned businesses?
We'll have
more on this.
https://www.federalreserve.gov/publications/March-2020-Report-to-the-Congress-on-the-Office-of-Minority-and-Women-Inclusion.htm
September
7, 2020
Federal
Reserve Amid
Covid Asks
Banco Bradesco
of BCB Fine cc
Fair Finance
Watch
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Sept 4 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Amid
the Coronavirus pandemic, it has continued to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted. As of June 7, the
Fed has simply extended its time to reply.
Next the Fed telephoned Bradesco to ask about
the impact of the US travel ban on Brazil on the
proposed transaction and integration. The
question was not conveyed to Inner City Press
until Bradesco's entirely redacted answer. This
is Orwellian. Inner City Press has written to
the Fed: "This is a FOIA request for the all
withheld portions of the additional information
submitted by Banco Bradesco on or about May 29,
2020 as part of its challenged but still being
processed amid the COVID-19 pandemic to aquire
BAC including but not limited to the redaction
of the entire answer to the Fed's telephonic
question (not otherwise provided to ICP) about
the effect of the travel ban on Brazil on the
proposed transaction. This follows up on our
previous and still outstanding FOIA request
which we voluntarily narrowed on April 30 in
response to the inquiry by Katrina Allen-Austin
of the Legal Division dated the same date and
the FOIA after that. Note: processing of this
application should be suspended until COVID-19
restrictions, which continue in New York after
June 8, are lifted."
Now on September 4, the Fed has asked this: "We
refer to the application filed on behalf of
Banco Bradesco, S.A., Lecce Holdings S.A.,
Fundação Bradesco, BBD Participações S.A., Nova
Cidade de Deus Participações S.A., and Cidade de
Deus Cia. Commercial de Participações,
(“Bradesco”) all of Osasco, São Paulo, Brazil,
to become bank holding companies by acquiring
substantially all of the shares of BAC Florida
Bank, Coral Gables, Florida, pursuant to Section
3 of the Bank Holding Company Act, as amended
(“BHC Act”). Based on our review of the
current record, we request the following
additional information. Please also respond to
the questions in the Confidential Annex.
Supporting documentation should be provided, as
appropriate. 1. Describe any situations in
which the Central Bank of Brazil (“BCB”) has
imposed fines higher than the contribution
payment made by Bradesco under the Termo De
Compromisso (“Termo”) with the BCB on May 29,
2020. 2. Please confirm whether any of the
transactions or activity addressed in the Termo
relate to USD transactions transmitted
through financial institutions in the United
States. Please provide your response
addressed to the undersigned within 8 business
days of the date of this letter. Any information
for which confidential treatment is desired
should be so labeled and separately bound in
accordance with Section 261.15 of the Board's
Rules Regarding Availability of Information. 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.
August 31,
2020
So the Fed
correctly sent
to the board a
challenged
application by
First Illinois
Bancorp -
while on a
policy setting
sell-out
application by
Varo, it confined it
at Federal
Banks of SF to
rubber stamp.
This is a
scam.
August 24, 2020
At the
Federal
Reserve, FOIA
appeals used
to be handled by
a Governor,
for a time,
Governor
Powell. Now
it's just one
staff member
rubber
stemping the
withholdings
of another:
Inner City
Press this
week got this:
"Based on a de
novo review of
the Deputy
Secretary’s
decision, and
upon the
recommendation
of counsel
regarding the
legal issues
involved, I
affirm the
Deputy 2 See 5
U.S.C. §§
552(b)(1)-(9).
3 5 U.S.C. §
552(b)(4). 4
Food Mktg.
Inst. v. Argus
Leader Media,
139 S. Ct.
2356, 2366
(2019).
3
Secretary’s
decision to
withhold
information
contained in
Banco
Bradesco’s May
29 response to
an additional
information
request from
the Federal
Reserve Bank
of New York
and the Board,
pursuant to
exemption 4.
If you believe
that the Board
is withholding
information
from you
contrary to
your legal
rights, you
may seek
judicial
review of my
decision in an
appropriate
United States
District Court
pursuant to 5
U.S.C. §
552(a)(4)(B).
Additionally,
if you have
any questions
regarding the
processing of
your request,
you may
contact the
Board’s FOIA
Public
Liaison, Ms.
Candace
Ambrose, at
202-452-3684
for
assistance.5
Sincerely,
(Signed) Ann
E. Misback Ann
E. Misback
Secretary of
the Board."
August
17, 2020
The
regulators,
even amid the
COVID-19
pandemic, have
shown a
willingness to
rubber stamp
applications
including the
Federal
Reserve on a
"delegate" /
approval-only
basis as they
did with
Varo's
application to
become a bank
holding
company.
Inner City
Press / Fair
Finance Watch
immediately
wrote in
appeal to the
Board - and
still no
answer...
August
10, 2020
Federal Reserve Rubber Stamp of Varo Bank Protested to Chair Powell Collusion With OCC
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
South
Bronx, Aug 3 – How corrupt has the Federal
Reserve become using the COVID-19 pandemic as
ground cover? Well, despite rules that
substantively challenged applications can only
be approved by the Board of Governors in DC, on
July 28 the Fed rubber stamped on a delegated
basis fintech Varo's application to form a bank
holding company. It is an unprecedented now low
- but happens while the Federal Reserve
withholds under FOIA all information about the
impact of COVID-19 on the application by
Brazil-based Banco Bradesco. Something has gone
dreadfully wrong on C St.
Here's the Fed's - Federal Reserve Bank of San
Francisco's - July 28 letter, sent to Inner City
Press: "Dear Mr. Walsh:
The Federal Reserve Bank of San Francisco
(“Reserve Bank”), acting under authority
delegated by the Board of Governors of the
Federal Reserve System (“Board”), and having
considered the relevant statutory factors,
hereby approves the subject application. In
consideration of this filing, reliance was
placed upon all the representations and the
commitments made by or on behalf of Bancorp. No
significant changes in the transaction should be
made prior to consummation without our approval.
Approval of the application is subject to the
Board’s authority to require reports by and make
inspections and examinations of BHCs and their
subsidiaries, and to require such modification
or termination of activities of a holding
company or any of its subsidiaries as the Board
finds necessary to ensure compliance with the
BHC Act. Approval of the application is also
subject to receipt of all other required
regulatory approvals, non-objections, or
consents with this transaction. The proposed
transaction may be consummated upon approval. 1
Please notify the undersigned in writing when
the transaction is consummated."
August
3, 2020
Federal Reserve Rubber Stamps Varo Into Banking On Delegated Basis As Denies FOIAs
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
South
Bronx, July 28– How corrupt has the
Federal Reserve become using the COVID-19
pandemic as ground cover? Well, despite rules
that substantively challenged applications can
only be approved by the Board of Governors in
DC, on July 28 the Fed rubber stamped on a
delegated basis fintech Varo's application to
form a bank holding company. It is an
unprecedented now low - but happens while the
Federal Reserve withholds under FOIA all
information about the impact of COVID-19 on the
application by Brazil-based Banco Bradesco.
Something has gone dreadfully wrong on C St.
Here's the Fed's - Federal Reserve Bank of San
Francisco's - July 28 letter, sent to Inner City
Press: "July 28, 2020
Via Electronic Mail Mr. Colin Walsh Varo Money,
Inc. 222 Kearny Street, 9th Floor San Francisco,
California 94108 RE: Varo Money, Inc., San
Francisco, California (“Bancorp”), to become a
bank holding company (“BHC”) through the
acquisition of 100 percent of the voting shares
of Varo Bank, N.A. (In Organization), Draper,
Utah, pursuant to Section 3(a)(1) of the Bank
Holding Company Act (“BHC Act”) Dear Mr. Walsh:
The Federal Reserve Bank of San Francisco
(“Reserve Bank”), acting under authority
delegated by the Board of Governors of the
Federal Reserve System (“Board”), and having
considered the relevant statutory factors,
hereby approves the subject application. In
consideration of this filing, reliance was
placed upon all the representations and the
commitments made by or on behalf of Bancorp. No
significant changes in the transaction should be
made prior to consummation without our approval.
Approval of the application is subject to the
Board’s authority to require reports by and make
inspections and examinations of BHCs and their
subsidiaries, and to require such modification
or termination of activities of a holding
company or any of its subsidiaries as the Board
finds necessary to ensure compliance with the
BHC Act. Approval of the application is also
subject to receipt of all other required
regulatory approvals, non-objections, or
consents with this transaction. The proposed
transaction may be consummated upon approval. 1
Please notify the undersigned in writing when
the transaction is consummated."
July
27, 2020
Filed
with the Fed:
"This is a
FOIA appeal of
the Deputy
Secretary's
July 17 denial
in full of my
and Inner City
Press' June 7
FOIA request
for the
withheld
portions of
the additional
information
submitted by
Banco Bradesco
on or about
May 29, 2020
as part of its
challenged but
still being
processed amid
the COVID-19
pandemic to
aquire BAC
including but
not limited to
the redaction
of the entire
answer to the
Fed's
telephonic
question (not
otherwise
provided to
ICP) about the
effect of the
travel ban on
Brazil on the
proposed
transaction.
It is an
outrage that
every single
word in this
bank's
response about
this PUBLIC
HEALTH
emergency is
being withheld
by the Federal
Reserve.
Note:
processing of
this
application
should be
suspended
until COVID-19
restrictions,
which continue
in New York,
are lifted."
July
20, 2020
It took
the Fed SIX
WEEKS to issue
this denial in
full: "This is
in response to
your email
message dated
June 7, 2020,
received by
the Board’s
Information
Disclosure
Section on
June 8.
Pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, you
request:
all withheld
portions of
the additional
information
submitted by
Banco Bradesco
on or about
May 29, 2020
as part of its
challenged but
still being
processed amid
the COVID-19
pandemic to
aquire [sic]
BAC including
but not
limited to the
redaction of
the entire
answer to the
Fed’s
telephonic
question (not
otherwise
provided to
ICP) about the
effect of the
travel ban on
Brazil on the
proposed
transaction.
Staff searched
Board records
and located
information
that is
responsive to
your request.
I have
determined,
however, that
the redacted
portions of
the May 29
letter and the
confidential
exhibits
consist of
confidential
commercial and
financial
information
(e.g.,
business plans
and
strategies;
financial
statements).
This
information is
subject to
withholding
and will be
withheld from
you pursuant
to exemption 4
of the FOIA, 5
U.S.C. §
552(b)(4). I
have also
determined
that the
information
should be
withheld
because it is
reasonably
foreseeable
that
disclosure
would harm an
interest
protected by
an exemption
described in
subsection (b)
of the FOIA, 5
U.S.C. §
552(b). The
responsive
documents have
been reviewed
under the
requirements
of subsection
(b) and all
reasonably
segregable
nonexempt
information
will be
provided to
you. The
document being
provided to
you will
indicate the
amount of
information
that has been
withheld and
the applicable
exemption. In
addition,
approximately
30 pages of
information
will be
withheld from
you in their
entirety.
2
Accordingly,
your request
for the
withheld
portions of
Banco
Bredesco’s May
29 submission
is denied in
full for the
reason cited
above."
July
13, 2020
The Fed asks
for more time
- so it
can't just rubber
stamp for
Bradesco, can
they? "FOIA
Request No.
F-2020-00240
Dear Mr.
Lee:
On June 8,
2020, the
Board of
Governors
(“Board”)
received your
correspondence
dated June 7,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, for, “all
withheld
portions of
the additional
information
submitted by
Banco Bradesco
on or about
May 29,
2020[.]”
Pursuant to
section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
July 20, 2020,
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 July
20, 2020, 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."
July
6, 2020
From
the Federal Reserve:
"Barclays Bank
PLC, London,
England and
Barclays Bank
PLC New York
Branch, New
York, New York
Cease and
Desist Order,
dated May 20,
2015
Terminated
June 25, 2020"
- but not
announced
until a full
week
later on July
2 - why?
June 29,
2020
From
the Fed, after
a long day,
this: "Staff
searched Board
records and
located the
letter dated
April 24 that
is responsive
to the first
part of your
request. I
have
determined,
however, that
the redacted
portions of
the letter
contain
confidential
commercial and
financial
information
(e.g., pro
forma
financials;
projected
asset quality
and capital
ratios; and
business plans
and
strategies).
This
information is
subject to
withholding
and will be
withheld from
you pursuant
to exemption 4
of the FOIA, 5
U.S.C. §
552(b)(4). I
have also
determined
that the
information
should be
withheld
because it is
reasonably
foreseeable
that
disclosure
would harm an
interest
protected by
an exemption
described in
subsection (b)
of the FOIA, 5
U.S.C. §
552(b). The
responsive
document has
been reviewed
under the
requirements
of subsection
(b) and all
reasonably
segregable
nonexempt
information
will be
provided to
you. The
document being
provided to
you will
indicate the
amount of
information
that has been
withheld and
the applicable
exemption." All
information
about the
impact o
COVID-19
redacted.
UNacceptable.
June
22, 2020
Varo Dodges on CRA and Covid Outage When Challenged on Federal Reserve Application For Banking
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
South
Bronx, June 15 – With fintechs pushing to
get into banking, through now ex-Comptroller
Joseph Otting who after trashing the Community
Reinvestment Act left and immediately joined
fintech Black Knight, and through the PPP, on
June 10 Fair Finance Watch with Inner City Press
on FOIA submitted timely comments to the Federal
Reserve opposing Varo's application, pointing
for example at Varo's service interruption in
October 2019, including declined debit card
transactions, which they tried to blame on their
processor Galileo. See here.
Now on June 15 Varo's CEO Colin Walsh, as
submitted by outside counsel
Mitchell S. Eitel at Sullivan & Cromwell has
passed the buck again on its service disruption,
and sought to hide behind the OCC of Otting and
Brooks, which has no credibility: "Varo Money,
Inc. (“Varo”) hereby responds to the comment
letter submitted by Mr. Matthew Lee of Inner
City Press/Fair Finance Watch (the “Commenter”)
on June 10, 2020... We strongly disagree with
the Commenter’s suggestion that Varo itself was
the cause of a “service interruption in October
2019, which [Varo] tried to blame on [Varo’s]
processor Galileo.” On October 16, 2019, Galileo
Processing experienced an impact to their
systems, and it was reported that the customers
of Chime, another Galileo client principally
discussed in the article cited by the Commenter,
were prevented “from making purchases and
accessing cash"... we note that as it
transitions to a bank, Varo Bank will use Visa
DPS, not Galileo, as its processor after a brief
transition period.... Varo has filed its
Strategic Plan with the Office of the
Comptroller of the Currency and believes that it
will be approved in the near future. Varo
respectfully submits that the OCC process is the
ap- propriate forum for his comments.
Finally, with respect to the Commenter’s request
that “all comment periods” for applications
before the Federal Reserve be extended until “at
least Phase Two of the Coronavirus restrictions
in New York”, Section 262.25(b)(2) of the
Federal Reserve’s Rules of Procedure state that
the Secretary of the Federal Re- serve may grant
a brief extension of the comment period in cases
where a commenter for good cause is una- ble to
send its comment within the specified comment
period upon “clear demonstration of hardship or
other meritorious reason for seeking additional
time” to comment. In general and as it relates
to Varo’s Application, we believe that the
Commenter’s request is overly broad and that
there is no basis to extend the com- ment
period. The Comment Letter vaguely references
the “COVID-19 pandemic” and “Coronavirus
restrictions” without providing any clear or
definite demonstration as to how such pandemic
or restrictions have interfered with the
Commenter’s ability to meet the specified
comment period or given rise to any hardship to
Commenter or other meritorious reason to extend
the comment period, or how the arbitrarily
chosen “Phase Two” of such restrictions would
alleviate any such unsubstantiated causes for
delay. To the contrary, by virtue of the scope
and content of the Comment Letter itself, the
Commenter has clearly demonstrated his ability
to comment within the specified comment period."
June
15, 2020
Varo Challenged on Federal Reserve Application For Banking After Service Outage and CRA Dodge
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SDNY
/ South Bronx, June 10 – With fintechs
pushing to get into banking, through now
ex-Comptroller Joseph Otting who after trashing
the Community Reinvestment Act left and
immediately joined fintech Black Knight, and
through the PPP, on June 10 Fair Finance Watch
with Inner City Press on FOIA submitted timely
comments to the Federal Reserve opposing Varo's
application, pointing for example at Varo's
service interruption in October 2019, including
declined debit card transactions, which they
tried to blame on their processor Galileo. See here.
Fair Finance Watch has timely asked the Federal
Reserve for a hearing on weakened CRA duties,
and disproportionate exclusion: low and moderate
consumers disproportionately have prepaid or
limited data plans and face disconnections of
their mobile service. And just because consumers
have email addresses does not mean that they
have regular internet access, and if they close
or move their accounts, they may lose access to
their financial records.
Despite
or perhaps because of these and the service
interruptions, using OCC deregulation, "Varo
Money has raised an additional $241 million in
Series D funding, the company announced today.
The investment was co-led by new investor
Gallatin Point Capital and existing investor The
Rise Fund, co-founded by TPG. Also participating
in the round were Bono (yes, that one, also
trying to get Ireland onto the UN Security
Council in a June 17 virtual election), along
with entrepreneur, impact investor and movie
producer Jeff Skoll; plus HarbourVest Partners
and Progressive Insurance. To date, Varo
has raised $419.4 million in
funding."
See
also, for the record on which Inner City Press /
Fair Finance Watch are timely requesting
evidentiary hearings on this application, " NEWS
Technology Finance Unregulated Fintech
Could be the Source of the Next Market Crash
Posted to TechnologyFinance."
At to the Fed itself, currently the FRB's H2A
states "The H.2A is released each Friday and
will be updated at least every three days.
June 8, 2020 - Updates to current release May
29, 2020 - Current release."
June
8 and May 29 are more than three - more than ten
- days apart. As previously raised to the
Board, without any response, as of December 28,
2019 the most recent application on the FRB's
online H2A had a comment period ending December
20 - that is, already closed.
June
8, 2020
Federal
Reserve Amid
Covid Lets
Banco Bradesco
Go Secret On
Travel Ban As
Fair Finance
Watch Says No
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, June 7 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Now
amid the Coronavirus pandemic, it continues to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted. As of June 7, the
Fed has simply extended its time to reply.
Next the Fed telephoned Bradesco to ask about
the impact of the US travel ban on Brazil on the
proposed transaction and integration. The
question was not conveyed to Inner City Press
until Bradesco's entirely redacted answer. This
is Orwellian. Inner City Press has written to
the Fed: "This is a FOIA request for the all
withheld portions of the additional information
submitted by Banco Bradesco on or about May 29,
2020 as part of its challenged but still being
processed amid the COVID-19 pandemic to aquire
BAC including but not limited to the redaction
of the entire answer to the Fed's telephonic
question (not otherwise provided to ICP) about
the effect of the travel ban on Brazil on the
proposed transaction. This follows up on our
previous and still outstanding FOIA request
which we voluntarily narrowed on April 30 in
response to the inquiry by Katrina Allen-Austin
of the Legal Division dated the same date and
the FOIA after that. Note: processing of this
application should be suspended until COVID-19
restrictions, which continue in New York after
June 8, are lifted." Watch this site.
June
1, 2020
What
is the Fed
going to do
about this?
LIBOR Case Against JPMorgan and Bank of America Settled As SDNY Judge Buchwald Signs Off
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- The
Source
SDNY
COURTHOUSE, May 26 – In a multi-district
antitrust case about LIBOR dating back to 2011,
on May 26 U.S. District Court for the Southern
District Judge Naomi Reice Buchwald held a short
proceeding, covered by Inner City Press, then
signed off on a settlement ending the case:
"FINAL JUDGMENT AND ORDER OF DISMISSAL WITH
PREJUDICE, GRANTING FINAL APPROVAL OF SETTLEMENT
BETWEEN LENDER PLAINTIFFS, JPMORGAM CHASE &
CO. AND JPMORGAN CHASE BANK, N.A. ("JPMORGAN")
AND BANK OF AMERICA CORPORATION AND BANK OF
AMERICA, N.A. ( "BOA") AND UBS AG ("UBS"): NOW,
THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND
DECREED THAT: Unless indicated otherwise,
capitalized terms used herein have the same
meanings defined in each of the Agreements. For
purposes of finally approving the Settlements,
the Court has jurisdiction over the subject
matter of the Lender Action, Lender Plaintiffs,
all Lender Class Members, and, solely for
purposes of effectuating the Settlements and
subject to the limitations contained in the
Agreements, the Settling Defendants.
Lender
Plaintiffs' Counsel are awarded attorneys' fees
in the amount of $1,120.000 plus interest at the
same rate as earned by the Settlement Funds, and
expenses in the amount of $11,688.47 plus
interest at the same rate as earned by the
Settlement Funds, if such amounts are not paid
from out of the Settlement Funds within five (5)
business days following the entry of this Final
Judgment and Order of Dismissal with Prejudice.
Plaintiff The Government Development Bank for
Puerto Rico is awarded the sum of $ 15,000 plus
interest at the same rate as earned by the
Settlement Funds, as reasonable costs and
expenses and as a service award directly
relating to the representation of the Lender
Class.
All
agreements made and orders entered during the
course of this Lender Actionrelating to the
confidentiality of information shall survive the
Settlements and be binding on the Parties,
including but not limited to the Stipulation and
Protective Order entered on March 21, 2016 (ECF
No. 1347). And as set forth herein., Bank of
America Corporation, Bank of America
Corporation, Bank of America N.A., Bank of
America, N.A., J.P. Morgan Chase & Co., J.P.
Morgan Chase Bank, N.A., JPMorgan Chase &
Co., JPMorgan Chase Bank National Association,
JPMorgan Chase Bank, National Association,
JPMorgan Chase Bank, National Association, UBS
AG, UBS AG, UBS AG, UBS AG, Bank Of America
Corporation and Bank of America Corp.
terminated. (Signed by Judge Naomi Reice
Buchwald on 5/26/2020) (ama) (Entered:
05/26/2020)."
May
25, 2020
Now the Fed
takes 12 days
to acknowledge
an emailed
FOIA request,
while
preparing to
rubber stamp
the underlying
bank merger
application -
UNacceptable.
From May 22:
"May 22,
2020
FOIA Request
No.
F-2020-00214
Dear Mr.
Lee:
This will
acknowledge
receipt of
your
correspondence
dated May 10,
2020 and
received by
the Board’s
Information
Disclosure
Section on May
11, 2020, in
which you
request,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, “all
withheld
portions of
the additional
information
submitted by
Banco Bradesco
on or about
May 6,
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."
Really?
May 18, 2020
As US Bank Regulators Suspend Non Critical Exams Or Go 95% Off-Site New Project on Abuses
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
UN
GATE / SDNY COURT, May 11 –
Amid the COVID-19 pandemic, fair lending and
Community Reinvestment Act are taking a back
seat, or worse.
While
U.S. Comptroller of the Currency Joseph Otting
is pushing forward with his proposal to weaken
the CRA, his new chief national bank examiner
Blake Paulson said bank examinations have gone
95% off-site.
The Federal Reserve says it is suspending
"non-critical" examinations, even at the largest
institutions.
Meanwhile
the Fed is pushing forward to approve bank
merger applications, like Banco Bradesco - BAC
which Fair Finance Watch has been opposing, as
it has commented to the OCC against the
acquisition of State Farm's health savings
account business by Webster Bank, based in part
of Webster's problematic Paycheck Protection
Program performance.
Fintechs and other non-bank financial firms are
now at the PPP trough and are getting sued. For
example, there is the lawsuit filed as a class
action against Fountainhead Commercial Capital
LLC on May 6, noting the finance firm advertised
that it would process loan requests on a
first-come, first-served basis and then
stealthly shuffled its line of PPP applicants so
that it would lock down the largest lending fees
first.
Meanwhile Paulson of the OCC, which wants to
admit fintechs into banking without regulation,
says no one is in PPP for the money. This while
in response to Inner City Press' FOIA request
for Otting's schedule the OCC redacted the names
of banks that he met without, and obscured
others. (A FOIA appeal has been filed.)
May
11, 2020
Federal
Reserve Amid
Covid Lets
Banco Bradesco
Redact Exhibit
Names As Fair
Finance Watch
Says No
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, May 10 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Now
amid the Coronavirus pandemic, it continues to
appear that the Federal Reserve is churning
forward to try to rubber stamp a bank merger. On
April 7 the Fed asked Banco Bradesco's New York
law firm to supplement the record with how it is
dealing with current economic situation. On
April 24 the bank's law firm Shearman &
Sterling sent an answer to the Fed - with the
entire Covid section, as sent as required to
Fair Finance Watch and Inner City Press,
entirely redacted. Inner City Press FOIA-ed
that, then was asked to narrow the request.
So
S&S submitted another filing, with even the
name of the exhibits redacted.
May
4, 2020
EDNY Probe of FIFA Makes Bank Hapoalim Pay $30M For Money Laundering, More to Fed
By
Matthew Russell Lee,
Patreon, Thread
Video
Honduras
- The
Source - The
Root - etc
SDNY
COURTHOUSE, April 30 -- From the U.S. District
Court for the Eastern District of New York,
this: "Bank Hapoalim B.M. (“BHBM”), an Israeli
bank with international operations, and its
wholly owned subsidiary, Hapoalim (Switzerland)
Ltd. (“BHS”), have agreed to forfeit $20,733,322
and pay a fine of $9,329,995 to resolve an
investigation into their involvement in a money
laundering conspiracy that fueled an
international soccer bribery scheme."
From
DC: "Federal Reserve Board announces it has
fined Bank Hapoalim B.M. $37.35 million for the
firm’s unsafe and unsound practices resulting in
violations of U.S. tax laws."
More
EDNY: "Specifically, BHBM and BHS have admitted
that they, through certain of their employees,
conspired to launder over $20 million in bribes
and kickbacks to soccer officials with
Fédération Internationale de Football
Association (“FIFA”) and other soccer
federations."
EDNY
prosecutors' FIFA cases include 26 publicly
announced individual guilty pleas (including
Blazer, Rocha, Hawilla, Callejas all 4 are
deceased). Several defendants who pleaded
guilty were sentenced, including Takkas, Hector
Trujillo, Li, Jimenez, Salguero, Pletsch.
They have completed their sentences (except for
supervised release and financial
components). Others who pleaded guilty are
awaiting sentencing - 2 individual defendants
(Napout and Marin) convicted at trial. They have
been sentenced. Napout is in prison.
Marin was granted compassionate release last
week and is in Brazil - 4 corporate guilty pleas
(two Traffic entities, Mimo, US Imagina LLC) - 1
corporate Deferred Prosecution Agreement - 2
corporate Non Prosecution Agreement."
Regarding those cases with particular regard to
Honduras (which saw another indictment on April
30 across the East River in the SDNY, here), The death of FIFA
scandal plagued former
Honduras president Rafael
Callejas was confirmed by
current drug scandal plagued
president Juan Orlando
Hernandez on April 5; AP
reported that "Callejas, 76,
pleaded guilty in 2016 and was
reportedly being held at a
prison in Atlanta when he
died."
Richard
P. Donoghue, United States Attorney for the
Eastern District of New York, Brian A.
Benczkowski, Assistant Attorney General of the
Justice Department’s Criminal Division, William
F. Sweeney, Assistant Director-in-Charge,
Federal Bureau of Investigation, New York Field
Office (FBI), and Ryan L. Korner, Special
Agent-in-Charge, Internal Revenue Service
Criminal Investigation, Los Angeles Field Office
(IRS-CI), made the announcement. “Today’s
resolution marks another successful chapter in
this District’s effort to hold accountable those
corporations and individuals who participated in
a bribery scheme that corrupted international
soccer,” stated United States Attorney Donoghue.
“This Office, along with our law enforcement
partners, will continue to identify wrongdoers
who manipulate international soccer in order to
reap illicit profits and bring them to justice.”
“For nearly five years, Bank Hapoalim employees
used the U.S. financial system to launder tens
of millions of dollars in bribe payments to
corrupt soccer officials in multiple countries,”
stated AAG Benczkowski. “Today’s announcement
demonstrates the Department’s commitment to
holding financial institutions to account when
they knowingly facilitate corruption and other
criminal conduct.” 2 “This
announcement illustrates another aspect in the
spider web of bribery, corruption and backroom
deals going on behind the scenes as soccer games
were played on the field. Bank Hapoalim admits
executives looked the other way, and allowed
illicit activity to continue even when employees
discovered the scheme and reported it. The New
York FBI Eurasian Organized Crime Task Force and
our law enforcement partners have doggedly
pursued every strand uncovered in this criminal
investigation, and will keep at it until
they root out all of the bad actors,” stated FBI
Assistant Director-in- Charge Sweeney.
“This forfeiture sends a clear message that no
matter how complex or far reaching the
conspiracy, justice will prevail. Bank Hapoalim
B.M. and its subsidiary, Hapoalim Ltd.,
participated in a conspiracy that corrupted
international soccer, its confederations, and
member associations,” stated IRS-CI Special
Agent-in-Charge Korner. “IRS-CI is proud to work
alongside our international law enforcement
partners, the FBI, and the United States
Attorney’s Office to bring closure to this
egregious international scandal that corrupted
the sport of soccer.” According to
admissions in the statement of facts stipulated
to by BHBM and BHS as part of the agreement,
from approximately December 10, 2010 to February
20, 2015, BHBM and BHS personnel conspired with
sports marketing executives, including
executives associated with Full Play Group S.A.
(“Full Play”), a sports media and marketing
business based in Argentina, and others, to
launder at least $20,733,322 in bribes and
kickbacks to soccer officials. In exchange for
those bribes and kickbacks, the soccer officials
awarded or steered broadcasting rights for
soccer matches and tournaments to the sports
marketing executives and their companies. Full
Play allegedly executed the illegal payments
from accounts held at BHS and BHBM’s branch in
Miami, Florida, which were held in the names of
Full Play subsidiaries and affiliates. BHBM and
BHS admitted they, through BHS and BHBM’s Miami
branch, conspired to launder money for Luis
Bedoya, who at various times served as the
president of the Federación Colombiana de
Futbol, a vice president of the Confederación
Sudamericana de Fútbol (CONMEBOL), and a member
of FIFA’s executive committee. BHBM and BHS
allowed accounts controlled by Bedoya to be used
to receive illicit bribe and kickback payments.
In November 2015, Bedoya pleaded guilty to
racketeering conspiracy and wire fraud
conspiracy in the Eastern District of New York.
He is awaiting sentencing. Despite BHS
compliance personnel repeatedly raising concerns
about certain payments made to soccer officials
from the accounts associated with Full Play,
BHBM and BHS failed to take action. Instead, the
banks’ relationship managers continued executing
illicit bribe and kickback payments on behalf of
Full Play. As outlined in the agreement, the
government’s decision to enter into a
three-year, non-prosecution agreement with BHBM
and BHS was premised upon the banks’ thorough
and complete cooperation, BHBM’s pledge to
review and improve its 3 anti-money
laundering program, and the banks’ other
substantial remedial efforts, which include
closing Bank Hapoalim (Latin America) S.A. and
BHBM’s branch in Miami. BHS is also in the
process of closing its operations." Inner City
Press will follow these cases as much as
possible.
As to previously SDNY target on FIFA Rafael
Callejo there was only one problem with that.
Even a cursory search of the U.S. Bureau of
Prisons website for Rafael Callejas finds one,
76, Register Number: 81120-053, released from
U.S. custody on
12/17/2015.
April
27, 2020
Federal
Reserve Amid
Covid 19
Letting Banco
Bradesco
Redact All on
Virus Fair
Finance Watch
Says No
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, April 25 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
Now
amid the Coronavirus pandemic, it still appears
that the Federal Reserve is churning forward to
try to rubber stamp a bank merger. On April 7
the Fed asked Banco Bradesco's New York law firm
to supplement the record with how it is dealing
with current economic situation. On April 24 the
bank's law firm Shearman & Sterling sent an
answer to the Fed - with the entire Covid
section, as sent as required to Fair Finance
Watch and Inner City Press, entirely redacted.
Inner City Press has written to the Fed: "This
is a FOIA request for the all withheld portions
of the applications and applications additional
information submitted by Banco Bradesco to
aquire BAC including but not limited to the
redacted portions of the April 24 submission,
required to be sent to Fair Finance Watch and
Inner City Press under the ex parte rules, which
redacted the ENTIRE RESPONSE as to the impact of
the Coronavirus economic downturn on the banks
and merger. This is unacceptable."
April
20, 2020
Let the
conflicts of
interest
begin, while
many small
businesses are
excluded by
the big banks
getting the
PPP cash (and
leaving their
ATMs empty) -
"The Federal
Reserve Board
on Friday
announced a
rule change to
bolster the
effectiveness
of the Small
Business
Administration's
(SBA) Paycheck
Protection
Program (PPP).
The change
will
temporarily
modify the
Board's rules
so that
certain bank
directors and
shareholders
can apply for
PPP loans for
their small
businesses.
To prevent
favoritism,
Board rules
limit the
types and
quantity of
loans that
bank
directors,
shareholders,
officers, and
businesses
owned by these
persons can
receive from
their related
banks. These
requirements
have prevented
some small
business
owners from
accessing PPP
loans—especially
in rural
areas.
The SBA
recently
clarified that
PPP lenders
can make PPP
loans to
businesses
owned by their
directors and
certain
shareholders,
subject to
certain limits
and without
favoritism.
The Board's
change will
allow those
individuals to
apply for PPP
loans... The
rule change is
effective
immediately
and will be in
place while
the PPP is
active.
Comments will
be accepted
for 45 days
after
publication in
the Federal
Register."
April 13, 2020
Federal
Reserve Amid
Covid 19
Rubber Stamp
Prepared For
Banco Bradesco
Fair Finance
Watch Says No
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, April 7 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
April
6 2020
As Regulators Give Even Volcker Rulers More Time Community Reinvestment Act Comment Period Must Be Extended
By
Matthew Russell Lee, Patreon
Periscope
BBC
- Decrypt
- LightRead - Honduras
-
Source
BRONX
/ SDNY, April 2 -- With the Community
Reinvestment Act under attack by US Comptroller
of the Currency Josephy Otting, Fair Finance
Watch and Inner City Press on March 11 submitted
a third comment this time making an obvious
request.
They
ask that in light of Coronavirus / COVID-19 the
comment period on the assault on CRA be extended
for months. See also here.
Though it shouldn't have been
necessary, Fair Finance Watch
commented again on March 20,
noting postponements by SEC
and others.
With Otting
even still resisting
postponing his dream of
weakening the CRA, his OCC has
joined not only his sometime
partner in crime the FDIC but
also the Fed providing a TWO
YEAR extension for
big banks, while still
threatening to push through his attack
on CRA, ghoulishly using
Coronavirus,
see below.
On April 2,
an even more
telling move
involving
the OCC (and
the FDIC,
Fed and
others) - to
refuse to
extend a
comment
period, in
this case
ending April
1, but to say
that for those
commenting on
the Volcker
Rule,
comments will
be considered
for at least a
month after
the
"expiration"
of the comment
period.
March
30, 2020
Troubling:
Why does the
Fed need
BlackRock?
Parts of the
Fed’s
bond-buying
program fit
more squarely
in an asset
manager’s
wheelhouse.
While the
Fed’s main job
is to set
big-picture
monetary
policy by
purchasing
Treasury debt,
a fund firm
like BlackRock
can be tapped
for its
expertise in
evaluating and
managing
different
kinds of debt,
like
portfolios of
corporate
bonds --
something
that’s not a
main skill set
of the central
bank.
BlackRock
Financial
Markets
Advisory, an
arm that
consults with
government
agencies and
institutions,
will manage
the projects.
Aladdin, the
risk-monitoring
software that
BlackRock will
use in the
process,
already
watches over
more than $20
trillion, with
a client base
including
insurers,
pensions and
fellow asset
managers
March
23, 2020
Given the
Coronavirus
crisis, how
can the
Federal
Reserve be
closing the
public comment
period on
mergers on
which public
hearings can
be requested?
We'll have
more on this,
from Inner
City Press and
Fair Finance
Watch which is
also raising
the issue to
the other bank
regulatory
agencies.
March
16, 2020
On March 14 President Trump said of Jerome Powell, I could remove him, or demoted him to regular Governor status and appoint another Chair.
How
long can this
go on?
March
9, 2020
It begins:
"After careful
consideration
of the growing
public health
concerns
associated
with the
coronavirus
(COVID-19),
the organizing
sponsors of
the 2020
National
Interagency
Community
Reinvestment
Conference
(NICRC),
scheduled
March 9-12 in
Denver,
Colorado, have
made the
decision to
postpone the
conference.
The Federal
Reserve, the
Office of the
Comptroller of
the Currency,
and the
Federal
Deposit
Insurance
Corporation
jointly made
this decision
out of an
abundance of
caution to
help safeguard
the health and
well-being of
the more than
1,300
registered
conference
participants.
The NICRC
planning team
is working to
confirm a date
to reschedule
the conference
as soon as
possible later
this year. "
March
2, 2020
Look
who's
promoting Joe
Otting and his
assault on
CRA, March 10
in Denver:
"Esther L.
George
President and
CEO Federal
Reserve Bank
of Kansas
City
introduced
by
Jackson
Winsett
Assistant Vice
President and
Community
Affairs
Officer
Federal
Reserve Bank
of Kansas
City
Remarks on
Modernizing
the CRA
Joseph M.
Otting
Comptroller
of the
Currency
introduced
by Barry
Wides Deputy
Comptroller
for Community
Affairs Office
of the
Comptroller of
the Currency."
February
24, 2020
Morgan Stanley, Made a Bank Holding Company Without Comment by FRB, Now Makes $13B Offers For E-Trade, Highlighting Community Reinvestment Act Fight
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
February
17, 2020
Community Reinvestment Act Attack by Otting Triggers Fed Powell Half True Answer in House
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SOUTH
BRONX, Feb 11– The
current US Comptroller of the Currency Joseph
Otting cashed out of his position with OneWest
Bank in California by overseeing fake comments
in favor its acquisition by the CIT Group.
Then, emboldened, he devoted the Office of the
Comptroller of the Currency to weakening or
destroying the Community Reinvestment Act which
provides for the public process that he
subverted with fake comments.
On February 11, Federal Reserve chairman Jerome
Powell answered but was not held to task on the
CRA. Rep. Nydia Velazquez, D-N.Y., asked Powell
if he "would agree... that it's more important
to get the rule right than to do it quickly."
"Yes,
I mean I think that's been our approach and will
continue to be," Powell said in response.
But
the Fed's approach has also been to allow
applicants like Banco Bradesco to withhold for a
month their answers in CRA protested
proceedings. We'll have more on this.
Inner City Press, which along with CRC opposed
the merger and then pursued a Freedom of
Information Act request for all documents about
Otting's fraud, soon found its and Fair Finance
Watch's comments to the OCC being rejected, or
ignored, or returned.
While Inner City Press' FOIA requests get fee
waivers from the Federal Reserve and a range of
agencies in the US and beyond, Otting's OCC
suddenly started denying them, hindering access
to the merger applications on which CRA is
enforced.
Otting
is trying to push through this CRA-killing
proposal on a short comment period, cognizant of
the other CRA, the Congressioal Review Act. But
it is obvious that even banks want more time.
February
10, 2020
Received
from an
increasingly
untransparent
US Federal
Reserve: all
portions that
Banco Bradesco
chose ot
withheld, and
late-send,
will be
withheld.
Well, we will
be appealing.
Watch this
site.
February
3, 2020
While some are
praising the
Federal
Reserve on
CRA, note that
when Banco
Bradesco
without
explanation
withheld its
submission
from Fair
Finance Watch
during a CRA
protest, the
Fed ignored
it, leading
Bradesco's
lawyer Reena
Agrawal Sahni
to arrogantly
write to the
Fed, smail
mail to Inner
City Press,
that "we do
not believe
that there was
been any
gaming of a
system." Well,
we do - no
explanation of
withholding
the document
for a month is
even offered.
In a court,
there would be
sanctions for
contempt. At
the Fed, with
banks? It's
all among
friends. We'll
have more on
this.
January
27, 2020
Here
a report Inner
City Press is
looking into:
Iraqi Union
Bank is owned
by the
brothers Aqil
and Ali
Muftin, who
according to
the report
have close
ties with
pro-Iran
former Iraqi
PM Nuri
al-Maliki.
In 2016, the
American
Federal
Reserve placed
$200 million
of the bank's
funds on hold
due to
suspicion of
corruption.
But
the Fed's slow
and worse
response to
FOIA on
Bangladesh
Bank does not
bode well..
January
20, 2020
To Fed
Bradesco Late
Sent CRA
Redacted Info
to Inner City
Press But
FRBNY Ignores
It
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Jan 15 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
On
December 12 on a two and a half week delay the
Federal Reserve sent Inner City Press a terse
summary of an ex parte meeting it held with
Bradesco. The delay was not explained; if the
past is any guide, this may just be the Fed
ticking the boxes in order to rubber stamp
Bradesco's application despite its record.
Now the Fed has entirely ignored evidence that
Banco Bradesco and its outside law firm gamed
the system and violated the Fed's own Rules
Against Ex Parte Communications by withholding
for a month from Inner City Press a letter they
emailed to Fed - and snail mailed a month late
to Inner City Press.
And the Fed's delay spawned even more outrageous
behavior by Bradesco and its outside law firm
Shearman and Sterling. Inner City Press / Fair
Finance Watch on January 11 complainted to the
Federal Reserve Board: "Re: Outraged
Supplemental Comment on Application by Banco
Bradesco to acquire BAC Florida in Extraordinary
Circumstances: redacted CRA answer of Dec 11
sent to us Jan 9
Dear
Chair Powell, Secretary Misback and others in
the FRS:
This
is a supplemental comment opposing and
requesting redacted information late sent --
cynically mailed a month late - and in this
connection an extension of the FRB's public
comment period on the Application by Banco
Bradesco to acquire BAC
Florida. As we stated in
August, this is a proposal by a bank in Brazil
where authorities are reviewing the bank for
corruption, to buy a US bank with a disparate
lending record in order to use it to serve
disproportionately the affluent. There is no
public benefit; the application should be
denied.
Troublingly, today I received in regular mail an
envelope mailed on January 9 by Bradesco's
outside law firm. Inside the envelope was a
submission including about CRA, redacted - and
the letter to the Fed was dated December 11,
four weeks prior.
So
Bradesco is trying to redacted CRA information -
and cynically snail mailed its submission to
Inner City Press four weeks after they submitted
it to the Fed.
We
have today submitted a FOIA request for all of
the redacted information - in fact, it should be
provided forthwith under the Ex Parte
Rules. But the Fed must act on this, the four
week delay. The comment period must be reopened
and this application should - must - be denied.
Otherwise banks will game the system and the Fed
simply accept it. This letter should be
responded to forthwith."
January
13, 2020
To Fed
Bradesco Late
Sends
Community
Reinvestment
Act Redacted
Info to Fair
Finance Watch
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Jan 11 – Amid escalating attacks
on the U.S. Community Reinvestment Act, Inner
City Press / Fair Finance Watch back in August
filed comments under the CRA opposing Banco
Bradesco's application to acquire BAC Florida,
see below.
On
December 12 on a two and a half week delay the
Federal Reserve sent Inner City Press a terse
summary of an ex parte meeting it held with
Bradesco. The delay was not explained; if the
past is any guide, this may just be the Fed
ticking the boxes in order to rubber stamp
Bradesco's application despite its record.
And the Fed's delay spawned even more outrageous
behavior by Bradesco and its outside law firm
Shearman and Sterling. Inner City Press / Fair
Finance Watch on January 11 complainted to the
Federal Reserve Board: "Re: Outraged
Supplemental Comment on Application by Banco
Bradesco to acquire BAC Florida in Extraordinary
Circumstances: redacted CRA answer of Dec 11
sent to us Jan 9
Dear
Chair Powell, Secretary Misback and others in
the FRS:
This
is a supplemental comment opposing and
requesting redacted information late sent --
cynically mailed a month late - and in this
connection an extension of the FRB's public
comment period on the Application by Banco
Bradesco to acquire BAC
Florida. As we stated in
August, this is a proposal by a bank in Brazil
where authorities are reviewing the bank for
corruption, to buy a US bank with a disparate
lending record in order to use it to serve
disproportionately the affluent. There is no
public benefit; the application should be
denied.
Troublingly, today I received in regular mail an
envelope mailed on January 9 by Bradesco's
outside law firm. Inside the envelope was a
submission including about CRA, redacted - and
the letter to the Fed was dated December 11,
four weeks prior.
So
Bradesco is trying to redacted CRA information -
and cynically snail mailed its submission to
Inner City Press four weeks after they submitted
it to the Fed.
January
6, 2020
Last week
Inner City
Press reported
on its
complaint to
the Federal
Reserve about
the Fed having
hid merger
proposals
until the
comment
periods
closed. Now
they've posted
a few - but no
written
response to
the complaint
or the formal
requests in
it. We'll have
more on this.
December
30, 2019
Community Reinvestment Act Assault By OCC Joined In By Federal Reserve Hiding Mergers CFPB Hiding Data
By
Matthew Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- CJR -
PFT
SDNY
/ BRONX, Dec 28 – The assault against the U.S.
Community Reinvestment Act, begun by Comptroller
of the Currency Joseph Otting then joined in by
the FDIC and the Consumer Financial Protection
Bureau withholding mortgage data, has reached
the Federal Reserve.
For
months the Federal Reserve has first slowed down
its disclosure of pending merger applications on
which the public can comment under CRA, and now
outright hide them, such that on its website no
proposed mergers have open comment periods. Call
it the death, or attempted murder, of the
Community Reinvestment Act.
Alongside comments to the OCC and FDIC, Inner
City Press / Fair Finance Watch on December 28
filed comments with the Federal Reserve: Dear
Chair Powell, Secretary Misback, others in
FRB: On behalf of Inner City Press /
Fair Finance Watch and in my personal capacity,
this is questionlessly tiemly protest to one
sample application, a complaint about the FRB's
failure update its H2A, and on the withholding
of 2018 HMDA data in online form by CFPB and
other FFIEC regulators including the FRB - and a
demand for actions.
Currently as of December 28, the most recent
application on the FRB's online H2A has a
comment period ending December 20 - that is,
already closed. This negligence, or intentional
exclusion of the public, has been the case at
the FRB for months. All comment periods must be
re-opened.
Here
is a timely protest to one sample application
that (only) the Federal Register tells us has a
comment period expiring "not later than December
30, 2019.A. Federal Reserve Bank of Chicago
(Colette A. Fried, Assistant Vice President) 230
South LaSalle Street, Chicago, Illinois
60690-1414:1. Bosshard Financial Group, Inc., La
Crosse, Wisconsin; to merge with Northern
Bankshares, Inc., and thereby indirectly acquire
Mc Farland State Bank, both of McFarland,
Wisconsin.Board of Governors of the Federal
Reserve System, November 25,
2019."
Second
and more systematic problem, that must be solved
or all comment periods extended: the Consumer
Financial Protection Bureau for 2018 data has
unilaterally removed the ability of the public
to view HMDA data by race on its website, which
the FFIEC / Federal Reserve allowed in previous
years and the CFBP did even in 2017. Inner City
Press / Fair Finance Watch contends that the
CFPB's move is both anti-public and
illegal.
Given
this situation, which must be addressed, for now
Inner City Press timely submitted the two
attached photos from the CFPB's disturbingly and
intentionally stripped down site. In 2018 in
Wisconsin, McFarland made 206 loans to white,
and only three to African Americans. This is an
interim protest; the comment period(s) must be
extended.
Here
are some more applications not in the FRB's H2A,
requiring explanation and extension of comment
periods:
not
later than December 20, 2019. A. Federal
Reserve Bank of Atlanta (Kathryn Haney,
Assistant Vice President) 1000 Peachtree Street
NE, Atlanta, Georgia 30309. 1. BCI Financial
Group, Inc., Miami, Florida; to merge with
Executive Banking Corporation, and thereby
indirectly acquire Executive National Bank, both
of Miami, Florida. In connection with this
proposal, Bci Financial Group, Inc.'s parent
companies, Empresas Juan Yarur SpA and Banco de
Credito e Inversiones S.A., both of Santiago,
Chile, to indirectly acquire Executive Banking
Corporation and Executive National
Bank. not later than December 20,
2019. A. Federal Reserve Bank of St. Louis
(David L. Hubbard, Senior Manager) P.O. Box 442,
St. Louis, Missouri 63166-2034. 1. Citizens
Union Bancorp of Shelbyville, Inc., Shelbyville,
Kentucky; to merge with Owenton Bancorp, Inc.,
and thereby indirectly acquire Peoples Bank
& Trust Company, both of Owenton,
Kentucky.
not
later than January 23, 2020. A. Federal
Reserve Bank of St. Louis (David L. Hubbard,
Senior Manager) P.O. Box 442, St. Louis,
Missouri 63166-20341. Comments can also be sent
electronically to
Comments.applications@stls.frb.org:
First Horizon National Corporation, Memphis,
Tennessee; to acquire IBERIABANK Corporation and
thereby indirectly acquire IBERIABANK, both of
Lafayette, Louisiana.
B.
Federal Reserve Bank of New York (Ivan Hurwitz,
Senior Vice President) 33 Liberty Street, New
York, New York 10045-0001. . Barclays US
Holdings Limited, New York, New York; a company
organized under the laws of the Cayman Islands,
to become a bank holding company by acquiring
Barclays US LLC, also of New York, New York, and
thereby indirectly acquire Barclays Bank
Delaware, Wilmington, Delaware. In addition,
Barclays PLC and Barclays Bank PLC, both of
London, England, to retain Barclays US Holdings
Limited and thereby indirectly acquire Barclays
US LLC and Barclays Bank Delaware.
not
later than January 9, 2020. A. Federal
Reserve Bank of New York (Ivan Hurwitz, Senior
Vice President) 33 Liberty Street, New York, New
York 10045 1. First Bancorp, San Juan,
Puerto Rico; to acquire Santander BanCorp and
thereby indirectly acquire Banco Santander
Puerto Rico, both of San Juan, Puerto Rico. In
addition, FirstBank Puerto Rico, San Juan,
Puerto Rico, to become a bank holding company
for a moment in time by acquiring Santander
BanCorp and thereby indirectly acquiring Banco
Santander Puerto Rico.
In this context, Inner City Press / Fair Finance
Watch is demanding an extension of all comment
periods by the FRB, its intervention with the
CFPB to restore access on the website itself to
2018 HMDA data, and on the current record the
denial by the FRB of these application(s). Thank
you for your prompt attention, Matthew R. Lee
Inner City Press / Fair Finance Watch
Watch this site.
December
23, 2019
Heard in Germany: "One study estimated that more than a quarter of bitcoin users and roughly half of bitcoin transactions, for example, are associated with illegal activity," the Fed's Lael Brainard told the Monetary Policy: The Challenges Ahead event in Frankfurt. But what had the Fed done about the banks which participated in money laundering for OneCoin? We'll have more, much more, on this in 2020.
December
16, 2019
After
Community
Reinvestment
Act Protest to
Banco Bradesco
Fed Delays
Report on Ex
Parte Meeting
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Dec 13 – Amid escalating attacks on
the U.S. Community Reinvestment Act, Inner City
Press / Fair Finance Watch back in August filed
comments under the CRA opposing Banco Bradesco's
application to acquire BAC Florida, see below.
December
9, 2019
From
last week's
Senate Banking
Committee:
Comptroller
Otting was
here where he
basically said
he thought the
Fed was not
going to be
involved. So
for the record
and for my
colleagues,
can you clear
up whether you
intend to have
the Fed
involved in
this much
needed reform
process.
QUARLES:
Well, this is
a -- you know
this is a
continuing
effort to look
at -- at CRA
modernization.
There is
agreement
among all the
agencies, as
well as
everyone who
considers the
issue;
community
groups, the
banks. I think
among many
here that --
you know that
CRA -- that
the
implementation
of the
Community
Reinvestment
Act can be
improved given
evolution in
the banking
industry.
And given, you
know as I've
said, kind of
the
ossification
of practice
over time. The
Federal
Reserve is
committed to
that and has
been working
together with
the other
agencies as
part of this
process.
Now, the issue
that's
immediately at
hand is when
will a notice
of proposed
rulemaking
come out. But
that is an
interim step
to any final
rule. At the
outside of the
process, the
OCC went
forward
independently
of both the
FDIC and the
Fed with an
advanced
notice of
proposed
rulemaking.
We all
benefited from
the
information
that they
received. The
Fed also had a
broad
information
gathering
process at all
our reserve
banks at the
same time as
that advanced
notice of
proposed
rulemaking was
happening.
The FDIC had
its separate
process. And
all of that
has come into,
now, the
consideration
of the notice
of proposed
rulemaking. So
while it isn't
-- you know
while it
hasn't 100
percent been
decided yet
whether it --
at this next
step, the
notice of
proposed
rulemaking,
all three
agencies will
go together or
some may go
separately in
the same way
as that first
step was done
separately by
each of the
agencies.
But it was all
part of a
joint process.
I wouldn't
draw too much
from if that
is, again, one
or two
agencies going
separately on
the notice of
proposed
rulemaking
because we
will continue
to be working
together on
trying to get
to a final
rule and my
expectation is
still that
when we get to
that final
rule, it will
be all three
agencies
together.
WARNER:
(Inaudible)
Because you
know obviously
if we have
OCC, FDIC, you
guys not
involved;
we're ending
up with a new
set of rules
and
regulations
that would
cover 80
percent of the
market but not
the very
critical
component that
you guys
cover.
You know we're
not going to
be able to
bring that
consistency
modernization
and what I
think very,
very important
role that CRA
plays. So
...
QUARLES:
Completely
agree.
WARNER:
I'm going to
-- I'm going
to take your
answer as yes,
you guys will
be involved.
There will not
be a
hodge-podge of
rules. There
will be a
uniform final
answer that
will include
all three
regulatory
agencies.
QUARLES:
That's the
objective.
WARNER:
OK. So that is
a yes. You
know as I try
to put as many
words as
possible in
your mouth; it
would be -- it
will be all
three?
QUARLES:
Well, yes
would be one
of the words
that I would
say. But yes,
as -- that --
that is the
objective is
that we -- we
are aiming to
get to a final
rule all
together. And
if it happens
that the
interim steps
happen at
different
speeds, I
wouldn't draw
too much from
that.
December
2, 2019
From
the speech
last week by
Governor Lael
Brainard at
the
Presentation
of the 2019
William F.
Butler Award
New York
Association
for Business
Economics, New
York, New
York: "To be
successful,
formal makeup
strategies
require that
financial
market
participants,
households,
and businesses
understand in
advance and
believe, to
some degree,
that policy
will
compensate for
past misses. I
suspect
policymakers
would find
communications
to be quite
challenging
with rigid
forms of
makeup
strategies,
because of
what have been
called
time-inconsistency
problems." The
speech also
has
"communications"
in the title,
but very
little about
transparency,
as the Fed for
example
withholds
nearly all
records about
the Bangladesh
Bank hack.
Next stop: the
Fed's
knowledge of
the banks
laundering
money for
OneCoin...
November
25, 2019
What has amazed Inner City Press while covering the OneCoin / Mark Scott money laundering trial in the SDNY for the past three weeks is the number of banks implicated: Deutsche Bank, BNY Mellon, IBERIABANK and others - we'll be raise these issues, watch this site.
November
18, 2019
Inner
City Press /
Fair Finance
Watch received
from the
Federal
Reserve last
week a cover
letter -
without the
attachment
that went to
Banco
Bradesco:
"Dear Mr.
Lee
Please see the
attached AI
request in
connection
with the
filing by
Banco
Bradesco,
S.A., Lecce
Holdings S.A.,
Fundacao
Bradesco, BBD
Partipacoes
S.A., Nova
Cidade de Deus
Participacoes
S.A., and
Cidade de Deus
Cia. Comercial
de
Participcoes
(collectively,
the
“Applicants”),
all of Osasco,
Sao Paulo,
Brazil for
prior approval
of the Board
of Governors
of the Federal
Reserve System
(the “Board”)
pursuant to
Section
3(a)(1) of the
Bank Holding
Company Act of
1956, as
amended, and
Section 225.15
of Regulation
Y, to become
bank holdings
companies by
acquiring
substantially
all of the
shares of BAC
Florida Bank,
Coral Gables,
Florida.
Once we
receive the
response, we
will forward
to you also."
And attached,
on this: "
Please see the
attached
additional
information
request letter
in connection
with the
filing by
Banco
Bradesco,
S.A., Lecce
Holdings S.A.
, Fundacao
Bradesco, BBD
Participacoes
S.A., Nova
Cidade de Deus
Participacoes
S.A., and
Cidade de Deus
Cia. Comercial
de
Participcoes,
all of Osasco,
Sao Paulo,
Brazil, to
become bank
holding
companies by
acquiring
substantially
all of the
shares of BAC
Florida Bank,
Coral Gables,
Florida." That
that, nothing
attached...
For
now: "
Banco
Bradesco Class
Action
Settlement
Hits 2 Day
Hitch on
Blacksmiths
and Rule 11 in
SDNY
By
Matthew Russell Lee, Patreon
Honduras
- The
Source - The
Root - etc
SDNY
COURTHOUSE, Nov 12 – In 2016 Banco
Bradesco was sued for fraud on the market for
withholding information about being investigated
as part of the Operation Zelotes probe of tax
fraud in Brazil.
The
case, a putative class action, was filed in the
U.S. District Court for the Southern District of
New York and was assigned to Judge Gregory H.
Woods.
On
November 13 in Judge Woods' nearly empty
courtroom what was styled as a fairness hearing
on a near-final settlement was held. Only two
issues held up Judge Woods signing off on the
over $14 million settlement, with 25% going for
attorneys fees. In the gallery was only Inner
City Press.
An October 8 notice of motion says that
"Court-appointed Lead Counsel Kessler Topaz
Meltzer & Check LLP will on and hereby do
move this Court, on November 13, 2019 at 4:15
pm, for entry of an Order awarding attorney's
fees and expenses."
But at the time, with the gallery nearly empty,
the order was not signed. The firm wanted Judge
Woods to find that they had not violated Rule
11.
Judge Woods, however, said he did not have the factual predicate to be comfortable making that finding, and ask for further filings by November 15, including on a proposed $7,605.61 payment to Boilermaker-Blacksmith National Pension Trust. The case is In Re Banco Bradesco S.A. Securities Litigation, 16-cv-3144 (Woods).
November 11,
2019
"Thousands of companies around the world are now reporting climate-related financial exposures to the Carbon Disclosure Project (CDP) under the guidelines of the Financial Stability Board (FSB) Task Force on Climate-Related Financial Disclosures." That's Lael Brainart; in other news, no follow through on ensuring that FOIA requests related to mergers are ruled on before the Fed closes comment periods. Also, problems with HMDA availability from CFPB: isn't this as much in the Fed's wheelhouse and area of responsibility?
November
4, 2019
While the CFPB
continues to
withhold basic
mortgage
lending data,
we note that a
spokesperson
for disparate
LendingClub is
quoted: “We
are completely
committed to
fair lending
practices.
Researchers at
the
Philadelphia
Fed have
analyzed our
data and
concluded that
we’re lending
in more areas
where banks
are closing
their
branches,
we’re
improving
pricing and
the quality of
credit
decisioning,
and increasing
financial
inclusion.”
Wait - so now
the Federal
Reserve has
handing out
fair lending
cover up fig
leafs to
disparate
fintechs? What
will the
Federal
Reserve Board
do about this?
By Matthew Russell Lee
SOUTH
BRONX, SDNY COURT, Oct 5 – Talk about bias: a
member of the U.S. Federal Reserve Board,
Michelle Bowman, who is supposed to objectively
review challenged bank mergers had been quoted
that mergers are good: mergers “in a general
sense, are a natural and often desirable
consequence of competition in a vibrant market
economy,” Bowman said.
This is unacceptable. Meanwhile the Fed is
still withholding
documents about the Bangladeshi Central Bank
hack and its role in it requested months ago by
Inner City Press under the Freedom of
Information Act, has put out for comment a proposal
to further weaken its duties under FOIA. The
proposal does not even address an obvious
disrespect by the Fed to public commenters which
Inner City Press raised to a Fed Governor
earlier this year. Now as a first comment, this
has been submitted:
June
15, 2019
Via
e-mail to regs.comments [at] federalreserve
[dot] gov
Board
of Governors of the Federal Reserve System Attn:
Governors, Ann E. Misback, Secretary 20th Street
and Constitution Avenue NW Washington, DC
20551
Re: First Comment on Docket No. R–1665 and RIN
No. 7100 AF 51
Dear
Governors and Ann E. Misback,
Secretary:
On
behalf of Inner City Press, a frequent requester
to the Federal Reserve Board (FRB) and other
agencies under the Freedom of Information Act
(FOIA), and in my personal capacity, this is a
first comment on the proposed revisions to the
FRB's proposed rulemaking (proposal) that would
amend the Board’s Rules Regarding Availability
of Information (Board’s
Rules).
As a
practitioner what is most disappointing about
this rulemaking is that the FRB has not even
proposed to address a major problem raised to
it, including to Governor Lael Brainard earlier
this year: that the FRB routinely delays
responding to FOIA requests and even frivolous
requests for confidential treatment by
applicants for regulator approval under AFTER
the Board has approved contested merger
applications. As Inner
City Press asked Governor Brainard, how does
this FRB failure not incentivize applicant banks
to make overbroad requests for confidential
treatment of their applications, responses to
public comment and response to FRB Additional
Information requests, knowing that there is no
repercussion nor commitment by the FRB to
address the overbroad withholding request until
after their applications are
approved? Given the FRB's
legal duty to consider public comments on
mergers, including comments informed by what the
applicant banks actually submit, the FRB must
address this problem in this
rulemaking.
Overall,
the FRB not only denied expedited processing of
Inner City Press' request for FRB records
concerning its actions and role in the
Bangladesh Bank hack and case - it has refused
to respond to an appeal of its constructive
denial of access to any records, after months,
see below incorporated herein by reference. This
too must be addressed.
For now, we also note the potential abuse, shown
most recently by the FRB's sister agency the
OCC, that allowing the agency to do nothing to
begin collecting records as long as it disputes
a fee waiver request. The OCC is still disputing
a fee waiver request for the submissions of WSFS
for approval to acquire Beneficial in
Philadelphia, long after the OCC (like the FRB)
approved the
Application. We may have
further comment but wished the raise the above
at the earliest possible time in the process to
ensure that the FRB belatedly address the
issue(s).
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, Sept 7 – Amid attacks on the U.S.
Community Reinvestment Act this month Inner City
Press / Fair Finance Watch in early August filed
comments under the CRA opposing Banco Bradesco's
application to acquire BAC Florida. Now
the Federal Reserve has asked Bradesco some
questions, below. Here's some of the protest:
"This is a timely first comment opposing and
requesting documents about and an extension of
the FRB's public comment period on the
Application by Banco Bradesco to acquire BAC
Florida.
This is a proposal by a bank in Brazil where
authorities are reviewing the bank for
corruption, to buy a US bank with a disparate
lending record in order to use it to serve
disproportionately the affluent. There is no
public benefit; the application should be
denied. Fair
Finance Watch has been reviewing the Home
Mortgage Disclosure Act (HMDA) data for 2017 for
BAC Florida and finds, troublingly, that for
home purchase loans in the New York City MSA it
made 13 such loans to Asians, and none to
African Americans or Latinos. For Latinos it
hada 100% denial
rate. In the
Miama MSA in 2017, BAC Florida made 68 home
puchase loans to whites and none to African
Americans. Now see,
for the record, "Brazil's Bradesco to buy
Florida bank to focus on wealthy individuals" -
"Banco Bradesco SA has embarked on its
first-ever international acquisition by paying
approximately $500 million to buy BAC Florida
Bank, which focuses on high-net-worth
individuals in a move intended to close the gap
with Brazilian rivals. Based in Coral
Gables, BAC Florida is controlled by Grupo
Pellas, which was founded in 1877 in
Nicaragua. After the deal closes, Bradesco
said its main goal is to provide a wide range of
financial services in the United States to
Bradesco clients and lure new customers to BAC
Florida. Bradesco Chief Executive Officer
Octavio de Lazari said on a call with
journalists that the Brazilian bank’s private
banking clients have increasingly demanded
diversification and greater access to global
products. “This move underscores our
expansion not only in the U.S., but also in
Latin America as a whole, as BAC has clients all
over the region,” he said. Around 20 percent of
BAC Florida’s clients are Brazilian and 9
percent are American. Still, Lazari said
Bradesco is not seeking to build a retail base
outside Brazil, but wants to boost its private
banking business." Where is the
CRA?
Now
see
this, on managerial resources, also for the
record and the request for an evidentiary
hearing: "Brazilian anti-graft prosecutors mull
lawsuit against Bradesco" - " Brazilian
prosecutors are considering a civil lawsuit
against Banco Bradesco SA , as they believe the
country’s second-largest private-sector bank may
have failed to prevent corruption schemes, Valor
Econômico reported on Thursday. Earlier
this week, prosecutors asked a court to issue an
arrest warrant for two Bradesco bank managers,
saying they had been part of a complex scheme
involving shell companies, fraudulent checks and
bank slips that helped launder nearly 1 billion
reais ($252 million). Eduardo El Hage, the
prosecutor heading the Rio de Janeiro part of
the massive “Car Wash” corruption investigation,
told the Brazilian newspaper he believes
Bradesco should have caught on to those
financial transactions. Bradesco declined
to comment on the
matter." On
the current record, Banco Bradesco's
applications should be denied."
On September 6, the Federal Reserve asked
Bradesco questions including "Based on our
review of the current record, the following
additional information is requested. Please
provide responses to all of the following items,
including those in the Confidential Annex.
Supporting documentation should be provided, as
appropriate. Proposal 1. The filing states that
Lecce will be a Brazilian holding company over
BAC. Discuss the role and purpose of Lecce and
how it will be integrated into the governance,
operating, and reporting structure of Bradesco.
2. Provide a summary of the findings of the due
diligence review by Shearman & Sterling LLP,
KPMG, and CRMa, LLC., and discuss whether any
findings had a bearing on Bradesco's strategy
for BAC or would result in changes to BAC's risk
management framework and internal controls. 3.
Discuss whether the U.S. securities
broker-dealers of BAC and Bradesco will maintain
separate operations and customer bases, or
whether their operations and customers are
expected to be integrated. 4. Provide an updated
list of the proposed directors and senior
executive officers of BAC indicating which of
the current BAC directors and senior executive
officers are expected to remain with BAC. For
any of the proposed directors and senior
executive officers who currently have positions
with Bradesco, provide their roles in the chart.
By Matthew Russell Lee, Patreon
FEDERAL
COURTHOUSE, August 19 – The Bangladeshi Central
Bank which was hacked for $81 million in
February 2016, on January 31 sued in the US
District Court for the Southern District of New
York. The first pre-trial conference in the case
was held on May 21; on July 19 Bangladesh Bank
opposed the defendant's motions to dismiss for forum
non conveniens and lack of subject matter
jurisdiction.
On
related obstruction news, in a letter dated
August 20 the US Federal Reserve Board upheld
its own denial of documents about Bangladesh
Bank with Inner City Press requested under the
Freedom of Information Act. More here including
the Fed's letter on Patreon, here.
We'll have more on this.
Rizal Commercial Banking Corporation's Ismael
Reyes has started a separate ex parte
action in the SDNY, seeking discovery against
Bank of New York Mellon. That case has been
assigned a separate number: 19-cv-7219.
Bangladesh Bank responded on August 19, telling
SDNY Judge Lorna G. Schofield that "Defendants
did not clarify that the 1782 procedure does not
work against crucial governmental discovery
sources, like the FBI and possibly the New York
Fed, pointing instead to the vastly more limited
FOIA process." So it is apparently unclear
if Section 1782 applies to the Fed; that the
Federal Reserve limits - and delays - FOIA,
Inner City Press can attest to. We'll have more
on this.
Earlier, Bangladesh Bank wrote that "[t]he
robbery was in New York City, not a foreign
country, attacking a decades-old account in the
New York. It involved the New York Fed, perhaps
the most critically important bank in New York
City. The conspirators also needed New
York-based correspondence accounts to accomplish
the theft." In its other brief it adds, "Since
1973, the Bank has held its foreign reserves at
the New York Fed in order to conduct
Bangladesh’s international transactions in U.S.
dollars. Id. ¶¶ 37-40. Today, the Bank conducts
85% of its international transactions in the
U.S. dollar, through its New York Fed account,
that holds a daily average of $1.5 billion."
Back in March Inner City Press submitted a
request under the US Freedom of Information Act
to the US Federal Reserve about its role in and
action on the Bangladesh Bank heist. After four
months of delay from the Fed, and an appeal by
Inner City Press of their constructive denial,
the Fed finally ruled on June 27 - releasing
only one page, a two paragraph cover letter.
By
Matthew R. Lee, Exclusive
SOUTH
BRONX, SDNY, August 10 – Amid attacks on the
U.S. Community Reinvestment Act this month Inner
City Press / Fair Finance Watch has filed
comments under the CRA opposing Banco Bradesco's
application to acquire BAC Florida. Here's
some of it: "This is a timely first comment
opposing and requesting documents about and an
extension of the FRB's public comment period on
the Application by Banco Bradesco to acquire BAC
Florida.
This is a proposal by a bank in Brazil where
authorities are reviewing the bank for
corruption, to buy a US bank with a disparate
lending record in order to use it to serve
disproportionately the affluent. There is no
public benefit; the application should be
denied. Fair
Finance Watch has been reviewing the Home
Mortgage Disclosure Act (HMDA) data for 2017 for
BAC Florida and finds, troublingly, that for
home purchase loans in the New York City MSA it
made 13 such loans to Asians, and none to
African Americans or Latinos. For Latinos it
hada 100% denial
rate. In the
Miama MSA in 2017, BAC Florida made 68 home
puchase loans to whites and none to African
Americans. Now see,
for the record, "Brazil's Bradesco to buy
Florida bank to focus on wealthy individuals" -
"Banco Bradesco SA has embarked on its
first-ever international acquisition by paying
approximately $500 million to buy BAC Florida
Bank, which focuses on high-net-worth
individuals in a move intended to close the gap
with Brazilian rivals. Based in Coral
Gables, BAC Florida is controlled by Grupo
Pellas, which was founded in 1877 in
Nicaragua. After the deal closes, Bradesco
said its main goal is to provide a wide range of
financial services in the United States to
Bradesco clients and lure new customers to BAC
Florida. Bradesco Chief Executive Officer
Octavio de Lazari said on a call with
journalists that the Brazilian bank’s private
banking clients have increasingly demanded
diversification and greater access to global
products. “This move underscores our
expansion not only in the U.S., but also in
Latin America as a whole, as BAC has clients all
over the region,” he said. Around 20 percent of
BAC Florida’s clients are Brazilian and 9
percent are American. Still, Lazari said
Bradesco is not seeking to build a retail base
outside Brazil, but wants to boost its private
banking business." Where is the
CRA?
By
Matthew Russell Lee, Patreon
SDNY
COURTHOUSE, August 4 – Three years
after Capital One Bank was sued for its
overdraft fees on debit card transactions for
which there were sufficient funds available in
the customers' accounts, on June 25 the bank's
motion for summary judgment was denied by U.S.
District Court for the Southern District of New
York Judge Lorna G. Schofield.
On July 29 Capital One belatedly disclosed that
it was "compromised," including 140,000 social
security numbers, 80,000 linked bank account
numbers, and “personal information” from credit
card applications from 2005 through early 2019.
This hacking began on March 12, but Capital One
didn’t do anything about it until 127 days
later. And where were and are the
regulators, who approved Capital One's mergers
rebuffing detailed Press comments?
By
Matthew R. Lee, FOIA
docs, BB&T
denial
NEW
YORK CITY, August 2 – When BB&T
announced a $66 billion proposal to
take over Suntrust Bank, to
form a
subsequently
named Truist, many
linked it to
deregulatory
moves in
Washington. Then two
days after
Federal
Reserve Governor
Lael Brainard
was asked
by Inner
City Press
about the
Fed's lax
review of previous
mergers,
including WSFS
on which the
Fed still
hasn't ruled
on the bank's
withholding of
information
after rubber
stamping the
deal, the Fed
announced
public
hearings. But
the fix it
seems it still
in. On
April 18,
conveniently,
the Fed "announce[d]
termination of
enforcement
action with
BB&T
Corporation" for
money
laundering. So
there's a
public comment
period on the
merger, but
none on the
Fed's dubious
move while the
application is
pending. Meanwhile
as Inner City
Press has
exclusively reported,
BB&T has
been named in
connection
with sleazy
debt
collections in
a case
in the SDNY
- more on all
this to come.
On April 29,
Inner City
Press
submitted a
FOIA request
about the
dubious termination of
enforcement
action, and a
comment to the
Fed and
FDIC, below.
On
August 2
the FDIC
belatedly gave
Inner City
Press only the
June 2019
Order ending
without
explanation
the money
laundering
enforcement
action against
BB&T. The FDIC
redacted
John P.
Henrie's
signature as
private
information. What
else are they
withholding? Watch
this site.
By
Matthew R. Lee, FOIA
docs, BB&T
denial
NEW
YORK CITY, July 20 – When BB&T
announced a $66 billion proposal to
take over Suntrust Bank, to
form a
subsequently
named Truist, many
linked it to
deregulatory
moves in
Washington. Then two
days after
Federal
Reserve Governor
Lael Brainard
was asked
by Inner
City Press
about the
Fed's lax
review of previous
mergers,
including WSFS
on which the
Fed still
hasn't ruled
on the bank's
withholding of
information
after rubber
stamping the
deal, the Fed
announced
public
hearings. But
the fix it
seems it still
in. On
April 18,
conveniently,
the Fed "announce[d]
termination of
enforcement
action with
BB&T
Corporation" for
money
laundering. So
there's a
public comment
period on the
merger, but
none on the
Fed's dubious
move while the
application is
pending. Meanwhile
as Inner City
Press has
exclusively reported,
BB&T has
been named in
connection
with sleazy
debt
collections in
a case
in the SDNY
- more on all
this to come.
On April 29,
Inner City
Press
submitted a
FOIA request
about the
dubious termination of
enforcement
action, and a
comment to the
Fed and
FDIC, below.
On the
afternoon of
May 2, before
seeking to
close the comment
period on
BB&T - Suntrust
on May 3, the
Federal
Reserve wrote
to Inner City
Press that
only ONE PAGE
about its
BB&T money
laundering enforcement
termination
would be
provided, and
133 pages withheld in
full, no even
subject to the
type of
partial
redaction that
is required
under FOIA. FRB 99%
denial letter
here.
By
Matthew R. Lee, Video,
7/31
story
SOUTH
BRONX, July 5 – Cadence Bancorporation which has
a disparate lending record while apply to buy
State Bank in Georgia and urging faster
regulatory approvals, seemingly jumped the gun
before having the required Federal Reserve Board
approval. That was six months ago, when a letter
that Cadence and its outside counsel, former
Federal Reserve lawyer Patricia Robinson, were
required to provide a copy to Inner City Press /
Fair Finance Watch they on purpose only sent by
mail (rather than e-mail), then delayed weeks in
resending. Photo here.
By Matthew Russell Lee, Patreon
FEDERAL
COURTHOUSE, June 29 – The Bangladeshi Central
Bank which was hacked for $81 million in
February 2016, on January 31 sued in the US
District Court for the Southern District of New
York. The first pre-trial conference in the case
was held on May 21, see below.
Back in March Inner City Press submitted a
request under the US Freedom of Information Act
to the US Federal Reserve about its role in and
action on the Bangladesh Bank heist. After four
months of delay from the Fed, and an appeal by
Inner City Press of their constructive denial,
the Fed finally ruled on June 27 - releasing
only one page, a two paragraph cover letter.
This is the opposite of transparency. Inner City
Press on June 29 submitted an appeal: "Dear
Governor in charge of FOIA Appeals: On
behalf of Inner City Press / Fair Finance Watch
(ICP), this is a near immediate FOIA appeal of
FRB absurd denial by providing only one page, a
two paragraph cover letter, in response to Inner
City Press' FOIA request four months ago
regarding the Federal Reserve's role in and
action on the Bangladesh Bank
heist As you must
know, agencies are request to provided all
reasonably segregable information and are not
allow mass withhold, as here. Beyond the
Bangladesh Bank, to withhold in full records
about the oversight by the Board over the
Reserve Bank is an outrage. See also Inner City
Press' timely comments
on the FRB's current proposals to modify - and
weaken - its FOIA
responsibilities.
By Matthew Russell Lee
SOUTH
BRONX, SDNY COURT, June 15 – The U.S. Federal
Reserve Board, while still withholding
documents about the Bangladeshi Central Bank
hack and its role in it requested months ago by
Inner City Press under the Freedom of
Information Act, has put out for comment a proposal
to further weaken its duties under FOIA. The
proposal does not even address an obvious
disrespect by the Fed to public commenters which
Inner City Press raised to a Fed Governor
earlier this year. Now as a first comment, this
has been submitted:
June
15, 2019
Via
e-mail to regs.comments [at] federalreserve
[dot] gov
Board
of Governors of the Federal Reserve System Attn:
Governors, Ann E. Misback, Secretary 20th Street
and Constitution Avenue NW Washington, DC
20551
Re: First Comment on Docket No. R–1665 and RIN
No. 7100 AF 51
Dear
Governors and Ann E. Misback,
Secretary:
On
behalf of Inner City Press, a frequent requester
to the Federal Reserve Board (FRB) and other
agencies under the Freedom of Information Act
(FOIA), and in my personal capacity, this is a
first comment on the proposed revisions to the
FRB's proposed rulemaking (proposal) that would
amend the Board’s Rules Regarding Availability
of Information (Board’s
Rules).
As a
practitioner what is most disappointing about
this rulemaking is that the FRB has not even
proposed to address a major problem raised to
it, including to Governor Lael Brainard earlier
this year: that the FRB routinely delays
responding to FOIA requests and even frivolous
requests for confidential treatment by
applicants for regulator approval under AFTER
the Board has approved contested merger
applications. As Inner
City Press asked Governor Brainard, how does
this FRB failure not incentivize applicant banks
to make overbroad requests for confidential
treatment of their applications, responses to
public comment and response to FRB Additional
Information requests, knowing that there is no
repercussion nor commitment by the FRB to
address the overbroad withholding request until
after their applications are
approved? Given the FRB's
legal duty to consider public comments on
mergers, including comments informed by what the
applicant banks actually submit, the FRB must
address this problem in this
rulemaking.
Overall,
the FRB not only denied expedited processing of
Inner City Press' request for FRB records
concerning its actions and role in the
Bangladesh Bank hack and case - it has refused
to respond to an appeal of its constructive
denial of access to any records, after months,
see below incorporated herein by reference. This
too must be addressed.
For now, we also note the potential abuse, shown
most recently by the FRB's sister agency the
OCC, that allowing the agency to do nothing to
begin collecting records as long as it disputes
a fee waiver request. The OCC is still disputing
a fee waiver request for the submissions of WSFS
for approval to acquire Beneficial in
Philadelphia, long after the OCC (like the FRB)
approved the
Application. We may have
further comment but wished the raise the above
at the earliest possible time in the process to
ensure that the FRB belatedly address the
issue(s).
Thank
you for your attention. Matthew Lee,
Executive Director Inner City Press / Fair
Finance Watch
Incorporated
by reference along with underlying request(s) in
the FRB's possession:
From: Matthew R. Lee, Inner City Press Date:
Tue, May 21, 2019 at 2:05 PM Subject: FOIA
appeal of FRB's constructive denial of Feb 17
FOIA request about Bangladesh Bank, nothing
since April 2, SDNY today
May
21, 2019
FRB
Governor covering FOIA appeals: Information
Disclosure Section, Board of Governors of the
Federal Reserve 20th & Constitution Avenue,
NW, Washington, DC 20551 FOIA APPEAL of
constructive denial of FOIA Request No.
F-2019-00095 Dear FRB Governor covering
FOIA appeals: This is an appeal of
what is now the constructive denial of Inner
City Press' and my Feb 17, 2019 FOIA request for
"records regarding the Federal Reserve System's
[role] including the FRBNY's role in what is
known as the Bangladesh Bank hack or cyber heist
and assistance provided to Bangladesh Bank and
investigative authorities since the heist,
including but limited to in connection with the
SDNY case Bangladesh Bank v Rizal Commercial
Banking Corp et al, U.S. District Court,
Southern District of New York, No.
19-00983." First, the FRB
denied the request for expedited processing,
finding no threat of physical harm (??) and also
reciting and presumably denying under this
standard: "[t]he
requester is a representative of the news media
... and there is urgency to inform the public
concerning actual or alleged Board
activity.” Still, the Fed in
further extending its time said there would be
response by April 2. There has been none,
nothing at all. Today in the SDNY
counsel for Bangladesh Bank directly referred to
the Federal Reserve. The Fed's delay, contrasted
to the fast if bad faith turn around on Inner
City Press' BB&T money laundering
enforcement action termination FOIA, is in this
context unacceptable, even a cover
up. This is an appeal. The FRB
should provide an explanation of nothing since
April 2, and the long ago requested
documents. Please confirm receipt, thank
you in advance,
Matthew Lee, Inner City Press/Fair Finance
Watch"
By
Matthew R. Lee, Patreon
NEW
YORK CITY, May 30 – Barclays applied
to the U.S. Federal Reserve in early 2018 for regulatory approval for a Cayman
Islands holding
company to become the
parent of its
U.S. bank. Inner
City Press / Fair
Finance Watch, as
dubious then as
now about such
moves, requested
documents and a
delay or denial
of the proposal.
Now on May 29, 2019, fifteen months later, the Federal Reserve has informed Inner City Press that Barclays has "withdrawn" its Cayman Islands application. Federal Reserve's May 29 Barclays letter and more on Patreon, here.
This comes, for example, the day after a proceeding in the U.S. District Court for the Southern District of New York in the first U.S. Panama Papers prosecution, which Inner City Press attended and reported on here, and amid renewed focus on the activities of non U.S. banks like Deutsche Bank in the US. Here's from Inner City Press' 16 February 2018 filing with the Federal Reserve: "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 of Barclays PLC and Barclays US Holdings Ltd., organized under the laws of the Cayman Islands to acquire Barclays Bank. It is noteworthy that on the very final day of the comment period of this Barclays Bank Cayman Islands application, the Federal Reserve has announced “The Federal Reserve Board on Friday announced that it is seeking to permanently bar Peter Little, the former head of the foreign exchange (FX) spot desk at Barclays Bank PLC in New York, from employment in the banking industry and to impose a $487,500 fine on him. Little is alleged to have engaged in unsafe and unsound practices by using electronic chat rooms to coordinate with traders at competitor banks to influence FX pricing benchmarks and by engaging in manipulative trading. Little is also alleged to have failed to adequately supervise subordinate traders at Barclays who coordinated with and disclosed confidential information to competitors on Little's behalf.” Those problems are about the institution, which is here applying to interpose a Cayman Islands subsidiary. Is this to evade taxes? To evade disclosure? Barclays is associated with using tax havens to avoid taxes: for example in Ireland paying a mere 2%, versus a statutory rate of 12%.
By Matthew Russell Lee, Patreon
FEDERAL
COURTHOUSE, May 21 – The Bangladeshi Central
Bank which was hacked for $81 million in
February 2016, on January 31 sued in the US
District Court for the Southern District of New
York. The first pre-trial conference in the case
was held on May 21, and at it SDNY Judge Lorna
G. Schofield expressed serious concern if she
has subject matter jurisdiction.
Judge
Schofield encouraged the defendants to jointly
file two briefs supporting a motion to dismiss
by June 14. The first is to be on subject matter
jurisdiction, the second on "forum
non conveniens."
Rizal
Commercial
Banking Corp (RCBC),
through its
counsel Tai-Heng
Cheng of
Sidley Austin
on May 21
marveled that
Bangladesh
Bank has still not succeeded
with service
of process of
the complaint -
actually handing the
document to
those charged, in
essence - for
example failing to
use a sheriff under
provisions of
Philippines law.
There
also remain questions
about service
on the other
named
defendants,
one of whom
(Mr. Go) is
now deceased.
The others include:
"MAIA SANTOS
DEGUITO,
ANGELA RUTH
TORRES,
LORENZO V.
TAN, RAUL
VICTOR B. TAN,
ISMAEL S.
REYES,
BRIGITTE R.
CAPIÑA, NESTOR
O. PINEDA,
ROMUALDO S.
AGARRADO,
PHILREM
SERVICE CORP.,
SALUD
BAUTISTA,
MICHAEL
BAUTISTA,
CENTURYTEX
TRADING,
WILLIAM SO GO,
BLOOMBERRY
RESORTS AND
HOTELS, INC.
D/B/A SOLAIRE
RESORT &
CASINO [represented on
May 21 by
Daniel M.
Perry of Milbank],
EASTERN HAWAII LEISURE COMPANY, LTD. D/B/A MIDAS HOTEL &
CASINO, KAM SIN WONG A/K/A KIM WONG, WEIKANG XU, DING ZHIZE, GAO
SHUHUA, and JOHN DOES 1-25."
Judge
Schofield
encouraged
Bangladesh
Bank to try to
perfect
service, but
remained
focused on
whether she and
the SDNY
court havesubject
matter
jurisdiction.
She asked, as
to the RICO
claim in the
complaint,
when the
alleged
conspiracy
began and
ended. Bangladesh
Bank's response referred
to US
government
complaints,
including in the
U.S. District
Court for the
District of
Central California, against
North Korea for the
SONY hack
in 2014.
Afterward Inner City Press asked Bangladesh
Bank's lead lawyer, John J. Sullivan of Cozen
O'Connor, if he had been surprised by Judge
Schofield's approach. He said he had expected
it, and argued that the judge is considering
whether the case is best placed in Federal court
or New York State Supreme Court on the other
side of Pearl Street.
Inner
City Press asked him, Doesn't forum non
conveniens in this case point to the
Philippines? And why hasn't Bangladesh Bank also
sued North Korea? Sullivan said he was not at
liberty to answer. We'll have more on this - for
now, more on Patreon, here.
Inner City Press has appealed the Fed's
constructive denial of its FOIA request on
this - without response...
By
Matthew R. Lee, Video,
story,
FOIA
docs
SOUTH
BRONX, May 2 – Federal Reserve Board
chairman Jay Powell told Congress he will run
transparent reviews of mergers like BB&T -
Suntrust, and announced two public hearings as
if to prove it. But on February 27 while still
not acting on Inner City Press' Freedom of
Information Act request for withheld
information, his Fed Board rubber stamped the
application by WSFS to buy Beneficial and close
at least 25 branches. Until May 2 the Fed has
directly portended to become even more of a
rubber stamp, with the now withdrawn nomination
to the Board of Stephen Moore, even after his
characterization as "armpits" of Cleveland
- host to the Federal Reserve Bank of Cleveland
- and Cincinnati. Moore said it was due to
stress on is family but earlier on May 2 was
bragging to finance reporters that he would go
forward. No more. (No Moore).
But the Federal Reserve remains problematic. It
has only today an hour after Moore's nomination
ended produced only a single page of the "all
records" Inner City Press has requested
under the Freedom of Information Act about the
Fed's dubious decision to terminate its money
laundering enforcement order against BB&T
just before the comment period on its proposed
merger with Suntrust is set to expire on May 3.
We'll have more on this.
Nomination post-mortem: apparently in an attempt
to keep his candidacy alive, Moore appeared
without taking audience questions on the Brian
Lehrer radio show on WNYC in New York on Sunday
APril 28 appeared on ABC This Week. He was not
asked about his substantive anti-CRA views, but
was asked about his writing on gender and the
closing the pay gap might be disruptive to the
family. His evasive answer was about the current
economy. Will it work? Senator Susan Collins was
cited. We'll have more on this.
By
Matthew R. Lee, FOIA
docs
NEW
YORK CITY, April 19 – When BB&T
announced a $66 billion proposal to
take over Suntrust Bank, which would
close a still
undisclosed number
of branches and
extend BB&T
disparate lending
patterns, many
linked it to
deregulatory
moves in
Washington. Then two
days after
Federal
Reserve Governor
Lael Brainard
was asked
by Inner
City Press
about the
Fed's lax
review of previous
mergers,
including WSFS
on which the
Fed still
hasn't ruled
on the bank's
withholding of
information
after rubber
stamping the
deal, the Fed
announced
public
hearings. But
the fix it
seems it still
in. On
April 18,
conveniently,
the Fed "announce[d]
termination of
enforcement
action with
BB&T
Corporation" for
money
laundering. So
there's a
public comment
period on the
merger, but
none on the
Fed's dubious
move while the
application is
pending. Meanwhile
as Inner City
Press has
exclusively reported,
BB&T has
been named in
connection
with sleazy
debt
collections in
a case in the
SDNY - more on
all
this to come.
By
Matthew R. Lee, Video,
story,
FOIA
docs
By
Matthew R. Lee, Video,
story,
FOIA
docs
By Matthew Russell Lee
FEDERAL
COURTHOUSE, March 23 – The Bangladeshi Central
Bank which was hacked for $81 million in
February 2016, on January 31 sued in the US
District Court for the Southern District of New
York. Now the first pre-trial conference in the
case has been set, for 2 April 2019 before SDNY
Judge Lorna G. Schofield. Inner City Press will
be there.
To the Federal
Reserve, Inner City Press
requested records relating to
the Fed's role with response
officially due in 20 working
days. But now this from the
Federal Reserve:
"Re:
Freedom of Information Act
Request No.
F-2019-00095
Dear Mr.
Lee,
On February 19, 2019, the
Board of Governors (“Board”)
received your electronic
message dated February 17,
pursuant to the Freedom of
Information Act (“FOIA”), 5
U.S.C. § 552, for records
regarding the Federal Reserve
System's [role] including the
FRBNY's role in what is known
as the Bangladesh Bank hack or
cyber heist and assistance
provided to Bangladesh Bank
and investigative authorities
since the heist, including but
limited to in connection with
the SDNY case Bangladesh Bank
v Rizal Commercial Banking
Corp et al, U.S. District
Court, Southern District of
New York, No.
19-00983.
Pursuant to section
(a)(6)(B)(i) of the FOIA, we
are extending the period for
our response until April 2,
2019, 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 2, 2019, 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." And April
2 is the day of the SDNY
hearing. We'll have more on
this.
In
Dhaka, the Criminal Investigation Department
which failed to submit its probe report into the
heist on time has now been ordered by Metropolitan
Magistrate Sadbir Yasir Ahsan
Chowdhury to
do so by March 13 in Bangladesh Bank cyber heist
case.
In
the U.S. District Court for Central California,
the unsealed criminal complaint against Park Jin
Hyuk lists four email addresses involved in
spear-phishing Bangladesh Bank and among others
an unnamed "African Bank;" one of these
addresses is said to also have communicated with
an individual in Australia about importing
commodities to North Korea in violations of UN
sanctions.
By
Matthew R. Lee, FOIA
docs
SOUTH
BRONX, March 6 – When BB&T
announced a $66 billion proposal to
take over Suntrust Bank, which would
close a still
undisclosed number
of branches and
extend BB&T
disparate lending
patterns, many
linked it to
deregulatory
moves in
Washington.
These include
an assault on
the
Community
Reinvestment Act, being
led by Comptroller of the
Currency Joseph Otting, who while at OneWest Bank led a false
commenting process to
push through a merger
with CIT Group. (Otting
is trying to change the
OCC's practices on FOIA
fee waivers and is
even refusing to
consider comments on some Business
Combinations. But
this BB&T
proposal will go
to
the Fed whose
Jerome Powell
has vowed,
credibly or
not, to
conduct a full
review.
And so consider
this:
BB&T has
been ordered to
return $5.2
million to
investors,
according to
the Securities
and Exchange
Commission,
over charges it
it acquired
misled clients
about the cost
of advisory
services.
The SEC said
the firm that
BB&T
acquired with
Susquehanna
Bancshares, known
then as Valley
Forge Asset
Management,
misled about
1,200 clients
into believing
they were
receiving full
service
brokerage
services at a
discount.
We'll have
more on this.
Fair
Finance Watch, which
has
been tracking
BB&T as well
as Otting's and
the Federal
Reserve's anti-CRA
moves, finds that
for example in the
Atlanta Metropolitan
Statistical Area
in 2017 BB&T
denied the home
purchase
mortgage
applications of
African
Americans 2.2
times more
frequently than
whites, while
making only 50
such loans to
African
Americans, and
23 to Latinos,
compared to
458 to whites,
all more
disparate that
other lenders
in the
market.
By
Matthew R. Lee, Video,
story,
FOIA
docs
By
Matthew R. Lee, Video,
7/31
story
By
Matthew R. Lee, Video,
story,
FOIA
docs
Amid Targeting of
Community Reinvestment Act
Centerstate Bank NCC
Takeover and Withholding
Challenged on Disparate
Lending
By
Matthew R. Lee, Video,
story,
FOIA
docs
January 7, 2019
As Federal
Reserve Chair Powell Says
Would Not Resign If Asked Contrast to
FOIA Denials and
Merger Rubber Stamping
By
Matthew R. Lee, Video,
story,
FOIA
docs
December 31,
2018
To
Federal
Reserve
Cadence Bank
Redacts 80% of
Letter Urging
Fast Approval
and Withholds
from Inner
City Press
By
Matthew R. Lee, Video,
7/31
story
December 24,
2018
An absurdity, or
contempt by the Fed for the public and
process: AFTER the Fed on Dec 7 approved
Synovus' application, this:
Re:
Freedom of Information Act Request No.
F-2019-00031
Dear Mr. Lee,
On November 13, 2018, the Board of Governors
(“Board”) received your electronic message
dated November 10, pursuant to the Freedom of
Information Act (“FOIA”), 5 U.S.C. § 552, for
all withheld portions of the applications and
applications additional information submitted
by Synovus to acquire FCB Financil including
but not limited to presumptively mis-labeled
“Confidential” exhibits as “Confidential”
Exhibit 1 to Synovus' October 31 response,
which appears to be personnel to be integrated
into fair lending, while Synovus discloses its
own staff's names, and for all records
reflecting FRS communications with Synovus or
FCB Financial or their affiliates 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 December 27, 2018, 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 December
27, 2018, 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.
Yeah, the
law...
December
17, 2018
Targeting of
Community Reinvestment Act by Otting Includes
Excluding Comment on 25 Branch Closings by
WSFS
By
Matthew R. Lee, Video,
story,
FOIA
docs
December 3, 2018
The Federal Reserve, it seems, doesn't review banks' requests for confidential treatment. So "This is a FOIA request for the all withheld portions of the applications by WSFS to acquire Beneficial, including but not limited to presumptively mis-labeled “Confidential” exhibits about WSFS's CRA program (“Confidential” Exhibit 9), (Beneficial's subsidiaries (“Confidential” Exhibit 3), Board of Directors resolutions, due diligence (“Confidential” Exhibit 10), operating economy / cost savings (there are branch closings projected), names of prospective managers (ages, requested on application, apparently not provided)"
November 26,
2018
Cadence Bank
Urges OCC To Speed Regulatory Approvals While
Withholding Info on State Bank in Georgia
By
Matthew R. Lee, Video,
7/31
story
November
19, 2018
Step by
step from the
Fed on Synovus:
"In connection
with the
application
filed under
Section 3 of
the Bank
Holding
Company Act by
Synovus
Financial
Corp.,
Columbus,
Georgia, to
merge with FCB
Financial
Holdings, Inc.
and thereby
indirectly
acquire
Florida
Community
Bank, N.A.,
both of
Weston,
Florida, and
the
application
filed under
section 18(c)
of the Federal
Deposit
Insurance Act
by Synovus
Bank,
Columbus,
Georgia, to
merge with
Florida
Community
Bank, please
respond to the
additional
question
below.
Provide
updated pro
forma
consolidated
financial
statements and
capital ratios
as of
September 30,
2018.
In accordance
with the
Board’s
procedures
regarding ex
parte
communications,
a copy of the
attached
request will
be sent to the
commenters in
this
case.
Please provide
a copy of the
public portion
of your
response
(together with
any
attachments)
directly to
the
commenters.
Any
information
for which you
desire
confidential
treatment
should be so
labeled and
separately
bound in
accordance
with the
Board’s rules
regarding
confidential
treatment of
information at
12 CFR 261.15.
"
November
12, 2018
Inner City Press
has had to
FOIA the Fed:
"This is a
FOIA request
for the all
withheld
portions of
the
applications
and
applications
additional
information
submitted by
Synovus to
acquire FCB
Financil
including but
not limited to
presumptively
mis-labeled
“Confidential”
exhibits as as
“Confidential”
Exhibit 1 to
Synovus'
October 31
response,
which appears
to be
personnel to
be integrated
into fair
lending, while
Synovus
discloses its
own staff's
names..".
This is scam.
November
5, 2018
Synovus has
told the Fed,
after Fair Finance Watch's
protest,
that "since
the 2017 CRA
Performance
Evaluation, a
Nashville
area branch
that was
previously
classified as
being located in
a middle
income area was reclassified
to
being located
in a moderate
income
branch." Wow,
that is some
great
performance.
October
29, 2018
The Fed
has written to
Synovus again:
"In connection
with the
application
filed under
section 3 of
the Bank
Holding
Company Act by
Synovus
Financial
Corp.
(“Synovus
Financial”),
Columbus,
Georgia, to
merge with FCB
Financial
Holdings, Inc.
(“FCB
Financial
Holdings”) and
thereby
indirectly
acquire
Florida
Community
Bank, N.A.
(“Florida
Community
Bank”), both
of Weston,
Florida, and
the
application
filed under
section 18(c)
of the Federal
Deposit
Insurance Act
by Synovus
Bank,
Columbus,
Georgia, to
merge with
Florida
Community
Bank, the
following
additional
information is
requested.
Supporting
documentation
should be
provided as
appropriate.
1. In the
submission
dated October
19, 2018 (“AI
Response”), in
response to
question 6 of
the Board’s
October 16,
2018
additional
information
request (“AI
Request”),
Synovus
Financial
represented
that the CRA
and consumer
compliance-related
(including
fair
lending)
governance and
oversight
systems
described in
the AI
Response would
be
adopted by the
combined bank
upon
consummation.
Indicate on a
pro forma
basis, the
key
individuals
who would be
responsible
for providing
such
oversight,
including
management, of
these
programs, and
their
qualifications.
For each key
individual,
specify the
organization
he or she
currently
works for
(e.g., Synovus
Bank, Florida
Community
Bank, or
another
entity), as
well as his or
her current
position and
title at that
organization.
Finally,
indicate to
what extent
Synovus Bank’s
consumer
compliance
(including
fair lending)
program would
be adopted at
the merged
bank following
consummation
of the
proposed
transaction.
2. Question 1
of the AI
Request
included a
request for an
“update on
Synovus Bank’s
[CRA]
activities
since its
November 2017
CRA
Performance
Evaluation and
Florida
Community
Bank’s CRA
activities
since its
March 2017 CRA
Performance
Evaluation,
in general,
and in
particular
with respect
to the
assessment
areas listed
as a concern
by
either
commenter” to
the extent
that
information
had not
already been
provided in
the
application or
in any other
submission.
Provide this
update with
respect to
small business
lending in the
following
areas (and
their
corresponding
assessment
areas) raised
as a
concern "
October 22,
2018
Cadence
Bank Bid For
State Bank in
Georgia
Challenged by
Fair Finance
Watch to Fed
Revolving Door
By
Matthew R. Lee, Video,
7/31
story
October
15, 2018
From a Fed approval order last week : "The HHI in this market would increase by 261 points, from 1604 to 1865."
October
8, 2018
Allan
Kamensky
Synovus
Financial
Corporation
General
Counsel &
Secretary
1111 Bay
Avenue, Suite
500
Columbus,
Georgia 31901
Dear Mr.
Kamensky:
This refers to
the
application by
(1) Synovus
Financial
Corp.,
Columbus,
Georgia to
acquire
FCB Financial
Holdings, Inc.
and thereby
acquire
Florida
Community
Bank, N.A.,
both of
Weston,
Florida
(Bank),
pursuant to
section
3(a)(3) and
3(a)(5) of the
Bank Holding
Company
Act; and (2)
Synovus Bank,
Columbus,
Georgia to
merge with
Bank, pursuant
to section
18(c) of
the Federal
Deposit
Insurance Act.
Enclosed is a
copy of a
letter
received from
Fair Finance
Watch and
Inner City
Press
commenting on
the
application.
Neither the
Bank Holding
Company Act
nor the
Board's
Regulation Y
requires a
response from
Applicant.
However, if
you wish to
respond, your
comments
should be
received by
this Reserve
Bank within
eight business
days from the
date of this
letter.
October
1, 2018
Now
The Federal Reserve Board on Thursday announced the termination of the enforcement action listed below:
Presidential Holdings,
Inc., Bethesda, Maryland
Supervisory
Agreement, issued by the Office of Thrift Supervision, dated May
3, 2010 (PDF)
Terminated September 25, 2018
September
24, 2018
President
Donald J.
Trump today
announced his
intent to
nominate the
following
individuals to
key positions
in his
Administration:
Jean Nellie
Liang of
Illinois, to
be a Member of
the Board of
Governors of
the Federal
Reserve System
for the
remainder of a
14-year term
expiring
January 31,
2024. Ms.
Liang is a
Senior Fellow
in Economic
Studies at the
Brookings
Institution
and a Visiting
Scholar at the
International
Monetary
Fund’s
Monetary and
Capital
Markets
Department.
Previously,
Ms. Liang
served as
Director of
the Division
of Financial
Stability at
the Board of
Governors of
the Federal
Reserve
System.
Ms. Liang is a
member of the
Congressional
Budget
Office’s Panel
of Economic
Advisors and
was a lecturer
at the Yale
School of
Management.
She earned her
B.A. in
economics from
the University
of Notre Dame
and Ph.D. from
the University
of
Maryland.
She wrote about
subprime...
September
17, 2018
The Federal
Reserve is,
for now,
withholding
CRA
information
under this
statement,
"Exhibit H
include
information
not disclosed
to the general
public.
Competitors of
Applicant
should not be
allowed access
to this
information
because
Applicant
cannot access
its
competitors'
strategic
practices.
This
information
could provide
competitors
with valuable
insights into
Applicant's
business focus
and plan of
operations."
We'll have
more on this.
September
10, 2018
From Fed Reserve Bank: If you seek any “confidential” information regarding the application under the Freedom of Information Act (“FOIA”), you must submit a request to the Board’s Freedom of Information Office.
Inner
City Press:
Thanks. While
I'm thinking
it's why you
put quotation
marks around
"Confidential,"
we'd be
seeking all
information
that the
applicant
mis-characterized
as
withholdable
under FOIA.
Does your
Federve Bank
review the
propriety of
the
applicant's
argument that
portions are
withholdable
under FOIA,
such as in
this case
"Confidential"
Exhibits D and
E in their
entirety?
Fed: Dear Mr. Lee: Applications staff reviewed the exhibits designated as “confidential” by the applicant and considered these exhibits to contain nonpublic information. If you seek copies of confidential information under the Freedom of Information Act, you must submit a request to the Board’s Freedom of Information Office, as described in my earlier email.
"Contain"?
So segregable
information is
not released?
FOIA-lite?
September
3, 2018
So will the
Federal
Reserve end up
following Joe
Otting
in trashing
community
reinvestment?
Does the
Fed remember
how
Otting gamed their
system when
his OneWest
Bank was
selling itself
to CIT? We'll
see.
August
27, 2018
Bloomberg says
"Have U.S.
companies
gotten too big
and too
powerful? Does
growing
concentration
-- more market
share in fewer
corporate
hands --
explain why
wage growth
has stagnated,
income
inequality has
gotten worse
and investment
and innovation
have fallen
behind? These
are some of
the hottest
questions in
economic
circles these
days, and the
U.S. Federal
Reserve is
looking for
answers. As
central
bankers start
to meet in
Jackson Hole,
Wyoming, for
the Federal
Reserve Bank
of Kansas
City’s annual
symposium, it
will be the
main topic."
But the Fed
has allowed and
encouraged the
"concentration"
in the
financial services
sector...
August
20, 2018
Last
straw: The
Federal
Reserve has
ended its "enforcement
action"
against HSBC
for money
laundering -
which included
for murderous drug
gangs. Plus ca
change...
August
13, 2018
From
the Fed,
Aug 10: "The
Federal
Reserve Board
on Friday
announced an
$8.6 million
fine against
Citigroup for
the improper
execution of
residential
mortgage-related
documents.
The $8.6
million
penalty
addresses the
deficient
execution and
notarization
of certain
mortgage-related
affidavits
prepared by a
subsidiary,
CitiFinancial.
The improper
practices
occurred in
2015 and were
corrected.
CitiFinancial
exited the
mortgage
servicing
business in
2017.
Also on
Friday, the
Board
announced the
termination of
an enforcement
action from
2011 against
Citigroup and
CitiFinancial
related to
residential
mortgage loan
servicing. The
termination of
this action
was based on
evidence of
sustainable
improvements."
What improvements?
August
6, 2018
On
August 3 the Fed
went Finnish:
"Nordea Bank
Sweden has
established
controls and
procedures for
the proposed
branch to
ensure
compliance
with U.S. law
and for its
operations in
general, and
these will be continued
at Nordea
Finland
following the
Merger.
Finland is a
member of the
Financial
Action Task
Force and
subscribes to its
recommendations
on measures to
combat money
laundering and
international terrorism.
"
July
30, 2018
The Fed
says,
"The Federal
Reserve
recognizes
that most
banks want to
serve all
consumers and
few
would
intentionally
choose to
avoid minority
areas.
Nonetheless,
some banks
treat minority
neighborhoods
less
favorably.
For example,
redlining risk
may increase
because of a
failure to
market
products or
locate
branches in
the minority
areas in the
bank’s market,
or because of
changes in the
bank’s
business
model, such as
through
mergers,
acquisitions,
or new lending
patterns. The
Federal
Reserve
conducts a
risk-focused
review of
potential
redlining
risk,
consistent
with the
2009
Interagency
Fair Lending
Examination
Procedures.5
Below are the
key risk
factors
considered by
the Federal
Reserve in the
redlining
review as
well as some
practical
steps controls
for mitigating
risk.
Community
Reinvestment
Act (CRA)
assessment
area. Federal
Reserve
examiners
review whether
the bank’s
assessment
areas appear
to
inappropriately
exclude
majority
minority
census tracts.
Lending
record.
Federal
Reserve
examiners
review whether
the bank’s
record of Home
Mortgage
Disclosure Act
(HMDA)
mortgage
lending and/or
CRA small
business
lending
shows
statistically
significant
disparities in
majority
minority
census tracts
when compared
with similar
lenders.
Branching
strategy.
Federal
Reserve
examiners
review whether
the bank’s
strategy for
branch or loan
production
office
locations
appears to
exclude
majority
minority
census
tracts.
Marketing and
outreach
strategy.
Federal
Reserve
examiners
review whether
the
bank’s
marketing and
outreach
strategy
appears to
treat majority
minority
census tracts
less
favorably.
Complaints.
Federal
Reserve
examiners
review whether
any complaints
by consumers
or consumer
advocates
raise concerns
that the bank
treats certain
geographies
differently
on a
prohibited
basis."
we'll see...
July
23, 2018
On July
19, the
Federal
Reserve Board
announced the
termination of
the
enforcement
action
against Community
Banks of
Georgia, Inc.,
Jasper, Georgia...
July
16, 2018
Now the
Fed has
terminated its
enforcement
action against
UNITED BANK
LIMITED, Karachi,
Pakistan and
UNITED BANK
LIMITED's NY
branch..
Speaking of NY
branches,
see here...
July
9, 2018
So
the Fed last
week ended an
enforcement
against Amboy
Bancorporation
- from 2009...
July 2,
2018
Even
the Federal
Reserve had to
admit that Deutsche Bank again
failed the stress
test. Now what
- Commerzbank?
Watch this
site.
June
25, 2018
Check
out the stress
tests: https://www.federalreserve.gov/publications/files/2018-dfast-methodology-results-20180621.pdf
June
18, 2018
As
Federal
Reserve Rubber
Stamps Merger
By Ameris
Jerome Powell
Omits
Regulatory
Duties
By
Matthew R. Lee, Patreon
June
11, 2018
Now there's
a 60 day
comment period on
what's called
the "proposal
to simplify
and tailor 'Volcker
rule,'" here.
June 4, 2018
Weakening
of Volcker
Rule Promoted
By Fed's
Powell and
Quarles
Without Wells
Fargo Recusal
By
Matthew R. Lee, Audio
We
note that in
Federal
Reserve
governor
Brainard's speech
on CRA there
is no mention
of enforcement
of CRA, or of
the word
"merger" or
"expansion" or
"application"
-- we'll have
more on this.
https://www.federalreserve.gov/newsevents/speech/brainard20180518a.htm
By
Matthew R. Lee, Audio
By
Matthew R. Lee, Patreon
March
26, 2018
Fed-speak / Fed - spun “A commenter objected to the proposal alleging that, based on data reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”), Charles Schwab Bank lent only to white borrowers with incomes above 120 percent of the area median income in the Reno, Nevada, Metropolitan Statistical Area..The commenter also criticized the workplace benefit plans of Charles Schwab, noting that employees of Charles Schwab had filed a lawsuit alleging that the 401(k) plans of Charles Schwab have expensive fees and poor performance that have benefited Charles Schwab at the expense of its employees. See Severson v. Charles Schwab Corp., No. 4:17-cv-00285-CW (N.D. Cal. 2017). Charles Schwab has denied any wrongdoing. The allegations regarding the performance of 401(k) plans and fees charged by plan sponsors are matters that are reviewed under the Employee Retirement Income Security Act of 1974. See 29 U.S.C. § 1001 et seq. The allegations are currently under review in the appropriate legal forum, and action on this proposal would not interfere with the court’s ability to resolve the pending litigation. See Natcom Bancshares Inc., FRB Order No. 2017-37 at 6 n.18 (December 18, 2017); M&P Community Bancshares, Inc., 92 Federal Reserve Bulletin C156, C156 n.7 (2006).”
March 19, 2018Tthe bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, has applied to the Federal Reserve to buy Hamilton State Bancshares - which, in the Atlanta MSA in 2016 for home purchase loans received 52 applications from whites, originated 37 of those as loans, denying only 12 applications. But for African Americans for home purchase loans, Hamilton State Bank denied every single on of the five applications that, based on its disparate marketing, it received or acknowledged. This is outrageous as is Ameris' record, and mis-statements. Ameris when it applied to buy Atlantic Coast Financial Corporation, and thereby directly acquire shares of Atlantic Coast Bank, falsely stated in its application that it would continue the CRA policies of Atlantic - see response to AI question 3, incorporated herein by reference. On the current record, public evidentiary hearings are needed on Ameris' Hamilton (and Atlanic) applications....
March
12, 2018
All
you need in a
crazen
headline
"Federal
Reserve Board
announces it
will not
object to the
capital plan
resubmitted by
Capital One
Financial
Corporation"
March
5, 2018
So new Fed
chairman Jay
Powell was
questioned
about the
Community
Reinvestment
Act in the
House
Financial
Services
Committee last
week - as if
he were coming
in fresh, and
hadn't for
some time been
rubber-stamping
contested
mergers and
denying FOIA
appeals to get
more
information...
February
26, 2018
After
ICP Protest to
Ameris Bank
Merger With
Atlantic
Coast, Ameris
Admits
Application
False
By
Matthew R. Lee, Patreon
February
19, 2018
US Bancorp Slapped by Federal Reserve for Money Laundering, Fee Gouger Ameris Still Silent
By
Matthew R. Lee
February
12, 2018
Something remains wrong with the Federal Reserve's website https://www.federalreserve.gov/apps/h2a/h2a.aspx - when searched by end of comment period, as of February 10 the most recent end is February 6. This hides applications and excludes the public. Inner City Press wrote to the Fed, without response or improvement. We'll have more on this.
February
5, 2018
After US OCC
Apologized to
Wells
Fargo, Fed
Imposes Cap on
Growth For
Abusing Consumers
By Matthew R. Lee
NEW YORK, February 2 – More than ten months after Wells Fargo Bank's Community Reinvestment Act rating was dropped two levels to "Needs to Improve," barring it from acquisitions, on February 2 the Federal Reserve said this: "Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls.. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017." By contrast the Office of the Comptroller of the Currency has quietly said, in a footnote to a Bulletin issued on October 12, that "The OCC’s policy is not to lower a bank’s CRA composite or component rating by more than one rating level." See here, footnote 8. So when did this become the OCC's policy, after it dropped Wells by two levels? Call it a stealth sop to Wells Fargo - and seemingly a violation of the Administrative Procedures Act. We'll have more on thisJanuary
29. 2018
Fed
Asks Schwab
About
Community
Reinvestment
Act After Fair
Finance Watch
Protest
By Matthew R. Lee
WASHINGTON, January 24 – Earlier this month Inner City Press / Fair Finance Watch filed with the Federal Reserve for evidentiary hearings on the application by Charles Schwab Corporation to set up Charles Schwab Trust Bank in Henderson, Nevada, noting that Schwab has been sued by its own employees, about 401k plans. See, e.g., Severson v. Charles Schwab Corp. , N.D. Cal., No. 3:17-cv-00285-JCS, complaint filed 1/19/17. It is also noteworthy that, Inner City Press wrote to the Fed, despite the issues there, Schwab reportedly held merger talks with SoFi earlier this year. Now the Federal Reserve has written to Schwab, on January 24, with these three questions: "Provide a summary regarding the current status of litigation in Severson v. Charles Schwab Corp., No. 4:17-cv-00285-CW (N.D. Cal. 2017). 2. Provide the “home state” of CSC as that term is defined in section 10(e)(7)(B)(iv) ofJanuary
22, 2018
The Federal Reserve Board last week took up the application of Huron Community Bank (“Huron Bank”), the state member bank subsidiary of Huron Community Financial Services, Inc. (“Huron Financial”), both of East Tawas, Michigan, has requested the Board’s approval under section 18(c) of the Federal Deposit Insurance Act (“Bank Merger Act”)1 to acquire certain assets and assume certain liabilities of a branch of First Federal of Northern Michigan. Don't blame it on CRA...
January
15, 2018
In DC,
Fed Ends
Enforcement
Actions on 10
Including Citi
& Chase
After
Micro-Fine of
GS
By Matthew R. Lee
NEW YORK, January 12 – After the Federal Reserve let Goldman Sachs set up a bank, without any public comment, during the financial meltdown, today the Fed has announced it has fined Goldman Sachs Bank USA for violating the National Flood Insurance Act. But the fine is for only $90,000. Some wondered about this announcement - and then two minutes later, perhaps explaining, this: "The Federal Reserve Board on Friday announced the termination of enforcement actions related to residential mortgage loan servicing and foreclosure processing issued in 2011 and 2012 against 10 banking organizations: Ally Financial Inc.; Bank of America Corporation; CIT Group, Inc. (as successor to IMB HoldCo LLC); The Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; Morgan Stanley; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; and U.S. Bancorp." Wag the dog. In the battle for the US Consumer Financial Protection Bureau, on January 10 US District Judge Timothy Kelly ruled that Leandra English lacks a likelihood of success on the merits in removing Mick Mulvaney as acting director. Meanwhile Mulvaney is putting under “strictest review” the CFPB's fund to compensate victims of fraud. And fraud is more and more pervasive. Last week Inner City Press / Fair Finance Watch filed with the Federal Reserve for evidentiary hearings on the application by Charles Schwab Corporation to set up Charles Schwab Trust Bank in Henderson, Nevada. It has been reported that this bank would “focus on Schwab’s workplace benefit plan clients, such as employers who offer 401k plans, and the intermediaries who serve them.” But Schwab has been sued by its own employees, about 401k plans. See, e.g., Severson v. Charles Schwab Corp. , N.D. Cal., No. 3:17-cv-00285-JCS, complaint filed 1/19/17 ). Schwab “larded” its own 401(k) plan with expensive and poorly performing investment funds and services that earned fees for the company at the expense of workers’ retirement savings, according to the new lawsuit, filed Jan. 19. The lawsuit also targets the performance of Schwab’s stable value fund and claims that Schwab executives allowed the plan’s trustee to profit from the unallocated plan assets it held. It is also noteworthy that, Inner City Press wrote to the Fed, despite the issues there, Schwab reportedly held merger talks with SoFi earlier this year. Fair Finance Watch has also reviewed, in Nevada, Charles Schwab Bank's lending in the Reno MSA. For home purchase loans, all of the loans were to whites (none to Latinos or African Americans), all to applicants over 120% of MSA median income. The same is true of refinance lending. On the current record, these applications should not be approved." We'll have more on this.January
8, 2018
Something
to watch: "The
Federal
Reserve Board
on Thursday
requested
comment on
proposed
guidance that
would clarify
the Board's
supervisory
expectations
related to
risk
management for
large
financial
institutions.
The guidance
is part of a
broader
initiative to
develop a new
rating system
for large
financial
institutions
that will
align with the
post-crisis
supervisory
program. The
proposed
guidance would
apply to large
financial
institutions,
including:
domestic bank
holding
companies and
savings and
loan holding
companies with
$50 billion or
more in total
consolidated
assets;
foreign banks
operating in
the United
States with
$50 billion or
more in
combined U.S.
assets; and
nonbank
financial
companies
designated by
the Financial
Stability
Oversight
Council for
supervision by
the Board.
Comments on
this proposal
will be
accepted until
March 15,
2018." Watch
this site.
January
1, 2018
The Federal
Reserve, Inner
City Press
learned on
December 27,
held a
conference
call with the
OCC about
Sterling's
unreliable CRA
data. Too much
information is
being
withheld, and
Inner City
Press is
pursuing it.
For
transparency,
in 2018.
December
25, 2017
BrokenViews:
Powell has
already made
moves to relax
crisis-era
regulations,
which will
accelerate
under his new
vice chair,
Randal
Quarles. The
Fed is looking
to ease major
constraints on
banks,
including the
annual stress
tests, the
living wills
exercise and
the Volcker
Rule limiting
proprietary
trading....
December
18, 2017
Well
well well:
"The Federal
Reserve Board
on Friday
announced that
Vice Chairman
Randal K.
Quarles will
recuse himself
from
participating
in matters
specific to
Wells Fargo
& Company.
While this
action is
voluntary and
is not legally
required, it
is being taken
to avoid even
the potential
appearance of
a conflict of
interest.
Upon his
confirmation
as a Board
Member, Vice
Chairman
Quarles
divested all
applicable
stock holdings
related to
Wells Fargo.
However, in
light of his
extended
family's prior
sale of their
interest in a
bank to Wells
Fargo, he has
chosen to
recuse himself
from matters
specifically
involving the
firm.
As a result,
Vice Chairman
Quarles will
not vote on,
or participate
by decision or
recommendation
in, matters
specifically
involving
Wells Fargo.
He will
continue to
oversee the
Board's
supervision
and regulation
responsibilities
as Vice
Chairman for
Supervision,
including the
development of
supervisory
policies and
rules
applicable to
banking
organizations
generally."
December
11, 2017
On
Basel III:
"The federal
banking
agencies on
Thursday
announced
their support
for the
conclusion of
efforts to
reform the
international
bank capital
standards
initiated in
response to
the global
financial
crisis.
The Governors
and Heads of
Supervision
and the Basel
Committee on
Banking
Supervision
Thursday
announced the
finalization
of the reforms
to the "Basel
III" agreement
on bank
capital
standards.
With this
agreement, the
Basel
Committee will
bring to
conclusion the
international
reforms
initiated in
response to
the global
financial
crisis.
The Basel III
agreement,
which was
designed for
internationally
active banks,
was introduced
in 2010 and
was
instrumental
in
establishing
revised
minimum
standards that
increased both
the quality
and quantity
of regulatory
capital. The
reforms
finalized
today are
intended to
improve risk
sensitivity,
reduce
regulatory
capital
variability,
and level the
playing field
among
internationally
active banks.
The agencies
will consider
how to
appropriately
apply these
revisions to
the Basel III
reform package
in the United
States and any
proposed
changes based
on this
agreement will
be made
through the
standard
notice-and-comment
rulemaking
process."
And
we'll be
there.
December
4, 2017
So after Inner City Press' letter to the Fed, they "fixed" their online listing of mergers - but did not extend any of the flawed comment periods, nor explain...
November
27, 2017
Fair Finance Watch (and Inner City Press) has sent this to the Fed: Re: Formal request / complaint concerning FRB's failure to update its public notice of pending applications website, that it be corrected and comment periods extended
Dear
Chair Yellen,
Secretary
Misback and
others in the
FRS:
This is a
formal request
/ complaint
concerning
FRB's failure
to update its
public notice
of pending
applications
website, that
it be
corrected and
comment
periods
extended.
As of today
November 24,
the Fed's
online H2A
https://www.federalreserve.gov/apps/h2a/h2a.aspx
says that it
has not been
updated at all
since November
17 - a full
week ago.
But it's worse
- a search of
the database
today finds no
application
with a comment
period running
past November
28, putting
the date at
which the Fed
stopped
updating even
further back.
Please
explain,
correct, and
extend the
comment
periods.
November
20, 2017
When the Fed
approved South
State - Park
Sterling it
recited that
Fair Finance
Watch as "A
commenter
objected to
the proposal
on the basis
of alleged
disparities in
South State
Bank’s lending
to African
Americans and
Hispanics, as
compared to
whites, in the
Columbia,
South Carolina
Metropolitan
Statistical
Area
(“Columbia
MSA”), the
Charlotte,
North Carolina
MSA
(“Charlotte
MSA”), and the
Atlanta,
Georgia MSA
(“Atlanta
MSA”), as
reflected in
data reported
under the Home
Mortgage
Disclosure Act
(“HMDA”) for
2015." Here's
what FFW
provided to
the Fed:
" In the
Atlanta,
Georgia MSA in
2015 for home
purchase
loans, South
State denied
the
applications
of African
Americans and
Latinos 4.23
times more
frequently
than the
applications
of whites. Its
lending did
not reflect
the market or
other lenders:
54 home
purchase loans
to whites,
only two to
Latinos, and
only ONE to an
African
American
applicant.
This is
disparate. In
the Colombia
SC MSA in 2015
for home
purchase
loans, South
State denied
the
applications
of African
Americans 2.79
times more
frequently
than the
applications
of whites, and
denied the
applications
of Latinos'
3.75 times
more
frequently
than whites.
Its lending
did not
reflect the
market or
other lenders:
179 home
purchase loans
to whites,
only ten to
African
Americans and
only one to a
Latino
applicant.
This is
disparate. In
the Charlotte
NC MSA for
home purchase
loans in 2015,
South State
denied the
applications
of African
Americans 2.22
times more
frequently
than the
applications
of whites, and
denied the
applications
of Latinos'
6.58 times
more
frequently
than whites.
Its lending
did not
reflect the
market or
other lenders:
382 home
purchase loans
to whites,
only thirteen
to African
Americans and
only four to
Latino
applicants.
This is
disparate, and
a pattern
militating for
evidentiary
hearings and
the denial of
this
application."
But today's
Fed cares less
and less about
such
disparities...
November
13, 2017
Jay Powell. Capitol Hill. November 28. Be there.
November
6, 2017
Would Jay
Powell stay in
charge of
(denying) FOIA
appeals, as
Chairman of
the Fed?
BancorpSouth,
after settling
redlining
charges, has
escaped
Federal
Reserve
regulation,
announcing on
Oct 31 it has
approvals from
the "Federal
Deposit
Insurance
Corporation
and the
Mississippi
Department of
Banking and
Consumer
Finance... to
improve
efficiency
through the
elimination of
redundant
corporate
infrastructure
and
duplicative
regulatory
oversight."
October
30, 2017
Shameful: Mid America Bank and Trust Company has a Needs to Improve CRA rating but was allowed to pay $5 million and get acquired by Reliable Community Bancshares. Impunity.
October
23, 2017
On Associated
- Bank Mutual,
the Fed
e-mailed Inner
City Press
part of the
application
but not, it
seems, the
rest of the
file including
the multiple
protests.
Maybe we're
missing
something...
Meanwhile,
Bank Mutual
Corp. reported
third quarter
net income of
$3.8 million,
or 8 cents per
share, down
from $4.5
million, or 10
cents per
share, in the
third quarter
of 2016.
October
16, 2017
Inner
City Press /
Fair Finance
Watch filed:
"This is a
timely first
comment
opposing and
requesting an
extension of
the FRB's
public comment
period on the
Applications
by Associated
Banc-Corp to
merge with
Bank Mutual
Corporation,
Milwaukee,
Wisconsin and
acquire Bank
Mutual. The
Fed has
received many
substantive
comments on
this
application
and should
hold public
hearings,
including on
the
prospective
impacts of the
36 branches
that
Associated
would close or
consolidate.
See,
http://www.jsonline.com/story/money/2017/09/01/branch-network-pared-36-locations-associated-bank-takes-over-bank-mutual/624805001/
Fair Finance Watch has reviewed applicant Associated's home purchase lending in the just-out 2016 HMDA data in the Milwaukee MSA and finds serious disparities militating for evidentiary hearings and the denial of this application. For conventional home purchase loans, Associated denied the applications of African Americans 4.16 times more frequently than those of whites; it made 807 such loans to whites and only 41 to African Americans. Even cumulating Table 4-1 loans with Table 4-2, Associated's denial rate disparity in 2016 was 3.71; it made 861 loans to whites and only 48 to African Americans. This is outrageous. On the current record, these applications should not be approved."
October
9, 2017
It is
an outrage
that former
Fed governor
Duke cashes
out to the
Wells Fargo
board, while
Wells is
"regulated" by
the Fed...
October
2, 2017
While there are many toxic proposed bank mergers across the USA, the proposed in-market Wisconsin combination of Associated and Bank Mutual which would close branches is our focus this week - more than 300 comments filed, with the Federal Reserve comment period open until October 11 -- fire away!
September
25, 2017
South State Corporation, to the Federal Reserve, is making excuses for its record in the Atlanta MSA, and trying to withhold obviously public information. We'll have more on this.
September 18, 2017Sen.
Amy Klobuchar
(D-Minn.)
Sept. 14
introduced two
bills intended
to “modernize”
antitrust
enforcement,
including a
proposal to
require big
merging
companies to
prove their
tie-ups won’t
harm
competition...
One of
Klobuchar’s
proposals
would shift
the burden of
proof for
companies
involved in
“mega-mergers,”
a term that
the bill
doesn’t
define.
Merging
companies
would have to
prove to
regulators
that their
deal doesn’t
harm
competition.
Currently, it
works the
opposite way.
Regulators are
required to
prove that a
proposed
merger is
likely to harm
competition to
stop it....
The measure
also would add
the term
“monopsony” to
the Clayton
Antitrust Act
so that single
buyers
controlling a
market would
be illegal.
The bill would
create an
“Office of the
Competition
Advocate” to
help consumers
with
complaints,
encourage
antitrust
investigations,
and analyze
and publish
reports on
merger
activity.
September
11, 2017
UNreal that he was portrayed as a strong regulator... "Stanley Fischer submitted his resignation Wednesday as Vice Chairman and as a member of the Board of Governors of the Federal Reserve System, effective on or around October 13, 2017. He has been a member of the Board since May 28, 2014."
September
4, 2017
By
Matthew R. Lee, New
Platform
August
28, 2017
Watchdogging
Fair Lending
Evasion, FFW
Challenges
Redliner
BancorpSouth
at FDIC
By Matthew Russell Lee
South Bronx, New York, August 26 – The lack of seriousness in US bank regulation, the mechanical repeating of whatever a challanged bank says, is exemplified by the application by BancorpSouth, which Inner City Press / Fair Finance Watch challenged on disparities and which settled racial redlining charges, to drop its Federal Reserve charter and evade regulation. Now ICP/FFW has timely protested that application to the FDIC: "Dear Regional Director Elmquist, Ass't Regional Director Finnegan and others at the FDIC: "This is a first timely comment opposing, requesting hearings and an extension of the comment period on BancorpSouth's cynical application to evade regulation after its redlining and settlement. Inner City Press / Fair Finance Watch protested the applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas. - based on racial discrimination in lending... Now BancorpSouth makes this application, and its CEO Dan Rollins states that it wants to “alleviate... regulatory oversight,” and become the “only state-chartered bank not a part of the Federal Reserve system.” We oppose this cynical evasion, particularly by one of the few banks having settled redlining charges. Let's compare: reviewing the 2015 HMDA data released by the FFIEC, ICP examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi and Baton Rouge, Louisiana and finds them troubling. In 2015 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 346 loans to whites, only 53 to African Americans. BancorpSouth's denial rate for whites was 7% while for African Americans it was 19% -- 2.71 times higher. This was troubling. In 2015 in the Baton Rouge LA MSA for conventional home purchase loans, BancorpSouth made 47 such loans to whites and NONE to African Americans, even less than the three it made in 2012. BancorpSouth has grown more disparate. ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit."
August
21, 2017
Inner
City Press /
Fair Finance
Watch has
filed this: This
is a timely
first comment
opposing and
requesting an
extension of
the FRS's
public comment
period on the
Application by
South State
Corporation to
acquire Park
Sterling
Corporation,
and thereby
indirectly
acquire Park
Sterling Bank.
Fair Finance
Watch has
reviewed
applicant
South State's
home purchase
lending in
three MSAs in
three states -
its
heardquarters
in Colombia
SC, the
targets
Charlotte NC,
and Atlanta GA
- and finds
serious
disparities
militating for
evidentiary
hearings and
the denial of
this
application.
And,
significantly,
the specifics
of which
branches would
be closed have
not been
publicized.
In the
Atlanta,
Georgia MSA in
2015 for home
purchase
loans, South
State denied
the
applications
of African
Americans and
Latinos 4.23
times more
frequently
than the
applications
of whites. Its
lending did
not reflect
the market or
other lenders:
54 home
purchase loans
to whites,
only two to
Latinos, and
only ONE to an
African
American
applicant.
This is
disparate.
In the
Colombia SC
MSA in 2015
for home
purchase
loans, South
State denied
the
applications
of African
Americans 2.79
times more
frequently
than the
applications
of whites, and
denied the
applications
of Latinos'
3.75 times
more
frequently
than whites.
Its lending
did not
reflect the
market or
other lenders:
179 home
purchase loans
to whites,
only ten to
African
Americans and
only one to a
Latino
applicant.
This is
disparate.
In the
Charlotte NC
MSA for home
purchase loans
in 2015, South
State denied
the
applications
of African
Americans 2.22
times more
frequently
than the
applications
of whites, and
denied the
applications
of Latinos'
6.58 times
more
frequently
than whites.
Its lending
did not
reflect the
market or
other lenders:
382 home
purchase loans
to whites,
only thirteen
to African
Americans and
only four to
Latino
applicants.
This is
disparate, and
a pattern
militating for
evidentiary
hearings and
the denial of
this
application.
Meanwhile, see
http://www.gastongazette.com/news/20170728/park-sterling-bank-head-says-merger-will-bring-little-fallout-for-gaston-employees:
“employees in
any branch
that closes or
is affected
might have to
relocate to
keep their
job, to
places, for
example, such
as Charleston,
South
Carolina...
Since last
year, Park
Sterling had
been carrying
out a local
expansion that
involved
consolidating
back-office
operations and
bringing jobs
from South
Carolina to
Gastonia.
Cherry said
their branches
on Main Avenue
and South New
Hope Road have
seen the
effects of
that, and one
of the
decisions
essentially
made prior to
the announced
merger was to
close the Main
Avenue branch.
'It has
limited hours
and is really
just handling
commercial
customers,'
said Cherry.
'That was
likely going
to be closed
as a result of
our moves
beforehand.'”
South State
should be
asked for
information
and criteria
about the
closings and
the comment
period must be
extended to
allow entry of
this
information
into the
record and to
allow comment
thereon.
On the current
record,
hearings
should be held
and the
application(s)
should not be
approved. The
comment period
must be
extended.
August
14, 2017
Passing
the buck? "A
proposed
guidance
addressing
supervisory
expectations
for boards of
directors at
banks and
holding
companies,
published by
the Federal
Reserve Board
this week,
suggests that
expectations
for boards and
senior
management
have become
increasingly
difficult to
distinguish"
August
7, 2017
Inner City
Press / Fair
Finance Watch
last week
filed this:
"This is a
timely first
comment
opposing and
requesting an
extension of
the FRS's
public comment
period on the
Application by
Sandy Springs
Sandy Spring
Bancorp to
acquire
WashingtonFirst
Bankshares,
WashingtonFirst
Bank and lst
Portfolio,
Inc., Fairfax,
Virginia.
These
transaction
raises
troubling
Community
Reinvestment
Act issues.
Sandy Spring
has a
disparate
lending
record, as
does
WashingtonFirst.
And,
significantly,
the specifics
of which
branches would
be closed have
not been made
public, see
below. The
comment period
must be
extended.
In the
Baltimore MSA
in 2015 for
home purchase
loans, Sandy
Spring denied
the
applications
of African
Americans
TWENTY TWO
times more
frequently
than the
applications
of whites. For
refinance
loans in the
Washington
MSA, Sandy
Spring denied
the
applications
of African
Americans 8.8
times more
frequently
than the
applications
of whites. In
the Washington
DC MSA in 2015
for home
purchase
loans, Sandy
Spring denied
the
applications
of African
Americans 2.8
times more
frequently
than the
applications
of whites.
In the
Washington DC
MSA for home
purchase loans
in 2015,
WashingtonFirst
made 13 loans
to whites and
NONE to
African
Americans or
Latinos (there
were similar
zeroes for
people of
people for
home
improvement
loans).
Meanwhile, see
http://wtop.com/business-finance/2017/05/sandy-spring-buying-washingtonfirst-becoming-largest-locally-based-community-bank/:
“Sandy Spring
said there
will be branch
closings as
part of the
merger, though
it says it is
too soon to
determine
where overlap
will require
closings.”
That is not
acceptable:
Sandy Springs
should be
asked for
information
and criteria
about the
closings and
the comment
period must be
extended to
allow entry of
this
information
into the
record and to
allow comment
thereon."
July
31, 2017
Fed
and Synovus
Talked
"Confidential
Supervisory
Matter" July 21, on
Cabela
Application
By
Matthew R. Lee, Full Doc on Patreon Here
NEW
YORK, July 28 – Two months after Inner City
Press reported
Capital One failing in its proposal to acquire
Cabela's "World's Foremost Bank," a way to try
to avoid the regulators and Capital One's
Community Reinvestment Act record emerged. The
scam involves Synovus buying the bank then
passing one the credit card receivables to
Capital One, while keeping the deposits, so
Capital One wouldn't be reviewed under CRA. The
Fair Finance Watch has now opposed this, in a
filing to the Federal Reserve, below. And now
the Federal Reserve has, with all formality,
informed Fair Finance Watch and Inner City Press
of a July 21 meeting with Synovus, to discuss a
"confidential supervisory matter," Fed "memo to
file, on Patreon here.
Date:
July 27, 2017
To: File
From: Federal Reserve staff
Subject: Telephone Conversation with Clifford S.
Stanford, Esq. and Synovus Bank Representatives
re: Application by Synovus
Bank to Acquire Substantially All of the Assets
and Liabilities of World’s Foremost Bank
On
July 21, 2017, staff of the Board of Governors
of the Federal Reserve System (Alison Thro, Jon
Stoloff, Andrew Hartlage, Brian Phillips, Betsy
HowesBean, and Donald Arrington) and the Federal
Reserve Bank of Atlanta (Jordan Light, Juan
Sanchez, Sabrina Francis, Dwight Blackwood,
Steve Wise, and
Kathryn Hinton) had a telephone conversation
with representatives of Synovus Bank (Kessel
Stelling, Kevin Blair, Mary Maurice Young, and
Allan E. Kamensky), Columbus, Georgia, and
Clifford S. Stanford and Mark Kanaly, counsel
for Synovus Bank, in connection with the
application filed by Synovus Bank to acquire
substantially all of assets and liabilities of
World’s Foremost Bank, Sidney, Nebraska,
pursuant to section 18(c) of the Federal Deposit
Insurance Act.
Staff discussed a confidential supervisory matter with Mr. Stanford and the Synovus Bank representatives." See here.
July
24, 2017
While
Fed & OCC
Paper Over
Sterling's CRA
Scam, Otting
& Quarles
In Senate July
27
By
Matthew R. Lee, New
Platform
July
17, 2017
While
Federal
Reserve Papers
Over
Sterling's CRA
Scam, Quarles
Nominated as
to Board
By
Matthew R. Lee, New
Platform
July
10, 2017
Regulators
Said
Sterling's CRA
Data
Unreliable,
Under FOIA Fed
Blacks-Out
Most of 400
Pages
By
Matthew R. Lee, New
Platform
NEW YORK, July 8 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, was picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Inner City Press immediately on May 13 submitted a Freedom of Information Act request to the Federal Reserve. The Fed repeatedly extended its time to respond then finally on July 7 provided more than 400 pages - almost entirely redacted. All references to the unreliable CRA data (and needs to improve rating) have been redacted. Sample here; the rest on Patreon, here. Inner City Press immediately submitted a FOIA appeal: "Amazingly, despite taking seven weeks to respond to ICP's immediate FOIA request, all information about this consumer compliance / CRA issue has been redacted from the records produced. CRA and CRA data are presumptively of public interest and public impact. The redacted response implies that the public could be entirely excluded from the FRS' review of this important CRA issues. It is unacceptable and inconsistent with the purpose, spirit and letter of FOIA. ICP is hereby appealing each and every redaction in the records belated provided to ICP on July 7. This should be ruled on before the comment period closed; the comment period should be extended." Watch this site.
July
3, 2017
Regulators
Said
Sterling's CRA
Data
Unreliable,
Now Admits
Needs to
Improve 2017,
Denial?
By Matthew R.
Lee, New
Platform
NEW YORK, July
1 – Sterling Bank, which is applying for
approvals to acquire Astoria Bank, is known by
its regulators to have filed unreliable
Community Reinvestment Act data from at least
2014 through 2016, a documentobtained
by Inner City Press shows. The story, and
outrage, has been picked
up by the American
Banker newspaper here,
by Paul Davis and Allison Prang, crediting Inner
City Press - and Sterling Bank had no comment.
Instead, Sterling's outside counsel Wachtel
Lipton chose to snail-mail its response to the
wrong address, and not e-mail it to Fair Finance
Watch. Via here, with
envelope re-submitted to Fed and OCC. Now
another snail-mailed response from Sterling's
Wachtel, which we've put online here
on Patreon: "Please see Exhibit 1 and
Confidential Exhibit C" -- Inner City Press has
now requested it under FOIA, but the agencies
have already repeatedly extended their time.
This is a scam. But crucially, even Wachtel says
"Sterling did receive a Needs to Improve rating
for the State of New York in Sterling Bank's
most recent CRA Performance Evaluation dated
January 18, 2017." We'll have more on this - the
application must be denied. The OCC has now put
up a roadblock to releasing the records Inner
City Press has requested under the Freedom of
Information Act, writing: "The purpose of this
letter is to seek additional information
pertaining to your recent request for
information from the Office of the Comptroller
of the Currency. Your request dated May 13, 2017
was received in my office on May 15, 2017. You
requested any and all records related to
Sterling Bank's application(s) to acquire
Astoria and Sterling Bank's CRA data. Upon
further review, we determined that we need
clarification on the date range for search of
Sterling Bank’s CRA data. If I have not received
this information by COB June 19th I will assume
that you no longer seek this information and
consider your request closed." Inner City Press
has responded: " In response to
Inner City Press' now month-old FOIA request
concerning the CRA data the OCC knew and knows
to be unreliable, you have asked that by June 19
ICP specify the date range for the request.
While not understanding the OCC's delay in
requesting this, we hereby timely specify that
the date range is from three years ago to the
date of your response. Please confirm receipt of
this (including explaining your letter since you
wrote “we need clarification on the date range
for search”) and please provide the records as
we intend to comment on them, for obvious
reasons. Thank you." Meanwhile, Sterling's
lawyers at Wachtell Lipton chose to snail mail
their response to Fair Finance Watch, putting it
in the mail three days after it was dated (now
online via Patreon here.)
How did it take the OCC a full MONTH to come up
with its request? Why was the response snail
mailed? This while the Federal Reserve has
granted Inner City Press' request for expedited
treatment of its FOIA request for all records,
promising the responsive documents by June 1.
But then the Fed, in a June 1 letter,
unilaterally extended its time to June 22. First
Fed letter on Scribd, here.
June
26, 2017
Amazingly,
the Federal
Reserve has
for the second
time extended
its time to
respond - to
provide a
single
document - on
Inner City
Press' FOIA
request about
Sterling
Bank's
unreliable CRA
data. We'll
have more on
this.
June 19, 2017
Regulators Said
Sterling's CRA Data Unreliable, ICP
on FOIA Games, Sterling
Response Here
By
Matthew R. Lee, New
Platform
June 12, 2017
On
Brazil Land
Grabs & CRA Flaws,
Fed Parrots
TIAA, Which
Alludes To
Confidential
Info
By Matthew Russell Lee
UNITED NATIONS, June 8 – The lack of seriousness in US bank regulation, the mechanical repeating of whatever a challanged bank says, is exemplified by the Federal Reserve Board's June 7 approval of TIAA's application to acquire Everbank of Florida, which Inner City Press / Fair Finance Watch on October 29, 2016 challenged. After Inner City Press' challenge, the Fed asked some questions, and TIAA defended its investments in land grabs in Brazil. On this, the Fed's approval order repeats word for word, apparently without inquiry, the bank's law firm's defense. The bank wrote: "We are grateful for this opportunity to respond to the comment letter filed by Inner City Press / Fair Finance Watch on 29 October 2016 regarding the application submitted by TCT Holdings, Inc., Teachers Insurance and Annuity Association of America (“TIAA”)... that TIAA has engaged in improper business practices in Brazil should be considered by the Federal Reserve Board as a factor when considering the managerial resources of the Applicants. The news article cited in the Comment Letter does not provide a complete or accurate portrayal of how TIAA conducts business in Brazil and other markets... TIAA is a signatory to the U.N. Principles for Responsible Investment." The Fed's approval order also cites these UN "principles." On June 1, just before the approval, TIAA's law firm David Polk wrote in: You have asked us to supplement our responses to certain allegations made in protests by Inner City Press/Fair Finance Watch regarding the lending practices of TIAA-CREF Trust Company, FSB (“TIAA FSB”) and EverBank. As you are aware, we have provided substantial information in response to the allegations. We have received the following information from TIAA FSB: While the allegation of discriminatory lending focuses on the St. Louis MSA by TIAA FSB, we wish to make three important points in response. First, the allegation, using HMDA data for the St. Louis MSA, focuses on a small number of loans made in the MSA. We do not think the small sample, when analyzed, demonstrates a pattern or practice of discrimination. Second, TIAA, FSB operates no brick and mortar branches in the St. Louis MSA. Its participation in the MSA primarily results from the use of internet offerings as well as other broader-based channels. To focus on the results in the St. Louis MSA where there are no physical locations does not fairly reflect the nature of TIAA, FSB’s business strategy or its overall record of non-discriminatory lending. Third, as reflected above, the TIAA FSB mortgage offerings are nationwide in scope using the internet and other broad-based distribution channels. Focusing on a single market, regardless of its location, does not fairly reflect or represent TIAA FSB’s business strategy or its overall record. On May 25, 2017, TIAA FSB received the results from its Fair Lending Examination by the OCC. While the results of that examination constitute confidential supervisory information, it would be useful for the Federal Reserve to obtain a copy of the results of the examination. If you wish, TIAA FSB would be pleased to seek approval to share the results of the examination with you." How cozy. We'll have more on this.June
5, 2017
Regulators
Said
Sterling's CRA Data
Unreliable, Fed
Expedites Now
Delays ICPs
FOIA, OCC
Cover Up
By Matthew R.
Lee, New
Platform
NEW YORK, June 3 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a documentobtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. But now the Fed, in a June 1 letter, has unilaterally extended its time to June 22: "Dear Mr. Lee, This correspondence is to provide you with an update on the status of your FOIA request. The search for records is being completed and staff is beginning to review the search results for responsiveness and releasability. We will continue to process your request as quickly as possible. Accordingly, the Board hopes to be able to respond to your request, or provide a status update, on or before June 22, 2017. Very truly yours, Jeanne M. McLaughlin Manager, Freedom of Information Office." Why expedite and then extend? Why did the OCC rush a cover-up "Satisfactory" rating? We'll have more on this. First Fed letter on Scribd, here.
May
29, 2017
After
Fair Finance
Watch
Protested
Synovus -
Cabela,
Federal
Reserve Asks
Synovus 7
Questions
By Matthew R. Lee
NEW YORK, May 22 – The Federal Reserve has asked Synovus more than a half dozen questions on May 22, on its (straw-man) application to acquire Cabela's World's Foremost Bank, the questions annexed on May 22 here. Two months after Inner City Press reported Capital One failing in its proposal to acquire this "World's Foremost Bank," a way to try to avoid the regulators and Capital One's Community Reinvestment Act record emerged. The scam involves Synovus buying the bank then passing one the credit card receivables to Capital One, while keeping the deposits, so Capital One wouldn't be reviewed under CRA. The Fair Finance Watch has now opposed this, in a filing to the Federal Reserve. NCRC has commented as well. We'll have more on this.
May
22, 2017
Regulators
Said
Sterling's CRA Data
Unreliable, Sterling
Mis-Sends
Response, Fed
Expedites ICPs
FOIA
By
Matthew R. Lee, New
Platform
NEW YORK, May 20 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. Fed letter on Scribd, here.
Regulators Said Sterling's CRA Data Unreliable, Sterling Mis-Sends Response, Fed Expedites ICPs FOIA, Here by Matthew Russell Lee on Scribd
Fair Finance Watch has asked both the Fed and OCC to extend their comment periods past this date. Watch this site. Sterling has issued a press release ("covered" without any analysis by Reuters) that "the Federal Reserve inadvertently made public confidential supervisory information.. Because of the legal constraints relating to disclosure of confidential supervisory information, we are working closely with our regulators to craft a more detailed public response." Sterling is working WITH the regulators - the judges in this case - to spin its inaccurate data? After on its last acquisition, challenged by ICP, having to make a CRA compliance plan? Inner City Press has submitted Freedom of Information Act requests (a response here) and Fair Finance Watch has filed additional comments to the Federal Reserve and OCC, demanding public hearings into the unreliable data AND into how the regulators were dealing with (or covering up) the issue, in stealth. We'll have more on this: the US Federal Reserve denied Fair Finance Watch's request to extend the comment period on Sterling's application, in which even the Fed suspects there is incorrect CRA data.On
May 11, the Federal Reserve Bank of New York
along with questions about about branch closures
and a CRA plan required after Fair Finance
Watch's previous challenge to Sterling asked:
"In a letter dated December 23, 2016, from the
OCC to Sterling Bank regarding the OCC's data
integrity review, the OCC stated that Sterling
Bank's 2014-2016 CRA data is not reliable and
that Sterling Bank lacks an effective process
for collecting, verifying and reporting such
data. To the extent that any of the CRA data in
the notice is incorrect, submit the corrected
data. In addition, describe Sterling Bank's
efforts to address its CRA data compliance
management deficiencies."
May
15, 2017
Regulators
Said Sterling
Bank's CRA Data
Unreliable, ICP
Exposed It, FFW
Demands
Hearing
By
Matthew R. Lee, New
Platform
NEW
YORK, May 12 – Sterling Bank, which is applying
for approvals to acquire Astoria Bank, is known
by its regulators to have filed unreliable
Community Reinvestment Act data from at least
2014 through 2016, a document
obtained by Inner City Press shows. The story,
and outrage, has been picked
up by the American Banker newspaper here,
by Paul Davis and Allison Prang, crediting Inner
City Press - and Sterling Bank has "no comment."
But Fair Finance Watch has filed additional
comments to the Federal Reserve and OCC,
demanding public hearings into the unreliable
data AND into how the regulators were dealing
with (or covering up) the issue, in stealth.
We'll have more on this: the US Federal Reserve
denied Fair Finance Watch's request to extend
the comment period on Sterling's application, in
which even the Fed suspects there is incorrect
CRA data.
On
May 11, the Federal Reserve Bank of New York
along with questions about about branch closures
and a CRA plan required after Fair Finance
Watch's previous challenge to Sterling asked:
"In a letter dated December 23, 2016, from the
OCC to Sterling Bank regarding the OCC's data
integrity review, the OCC stated that Sterling
Bank's 2014-2016 CRA data is not reliable and
that Sterling Bank lacks an effective process
for collecting, verifying and reporting such
data. To the extent that any of the CRA data in
the notice is incorrect, submit the corrected
data. In addition, describe Sterling Bank's
efforts to address its CRA data compliance
management deficiencies."
May 8,
2017
After
Capital
One Failed on
Cabela, Synovus Applies &
FFW Protests
to Federal
Reserve, Here
By Matthew R. Lee
NEW YORK, May 6 – Two months after Inner City Press reported Capital One failing in its proposal to acquire Cabela's "World's Foremost Bank," a way to try to avoid the regulators and Capital One's Community Reinvestment Act record emerged. The scam involves Synovus buying the bank then passing one the credit card receivables to Capital One, while keeping the deposits, so Capital One wouldn't be reviewed under CRA. The Fair Finance Watch has now opposed this, in a filing to the Federal Reserve: "On behalf of Inner City Press / Fair Finance Watch (FFW), this is a timely first comment opposing and requesting an extension of the FRS' public comment period on the Application by Synovus - and, we contend, CAPITAL ONE NA, to acquire the “WORLD'S FOREMOST BANK.”This comment is timely. For the record, there was initially filed with the OCC an application by Capital One to buy this “Foremost Bank.” When the compliance problems of that proposal became clear, this sham transaction was devised: for Synovus (also dubious) to make the initial acquistion, and then pass much of it on to Capital One, thereby evading review of Capital One, including but not limited to CRA review. This should not be countenanced. This applications is not even listed in the FRB's H2A, but only the H2, thusly: “* 18C Not applicable Synovus Bank, Columbus, Georgia, to acquire 05/19/2017 certain assets and to assume the deposits of World's Foremost Bank Sidney, Nebraska” It does not mention the role of Capital One. In the New York City MSA in 2015, the most recent year for which HMDA data is available, for conventional home purchase loans Capital One denied the applications of whites 23% of the time, while denying African Africans fully 45% of the time, and Latinos even more, 46% of the time. This is unacceptable.May 1,
2017
After
FFW Protest,
Fed Cites
Community Bank OCC
Deal &
Disparities,
Rubber-stamps
Merger
By Matthew R. Lee
NEW YORK, April 26 – At what point does bank executives' spin to investors and the media become more than misleading? Take Community Bank System (NYSE: CBU), which received on March 13 consumer lending questions on top of the nine earlier questions from the Federal Reserve on its proposal to acquire Merchants, after its CEO derided issues Fair Finance Watch raised about the proposal. Despite scanty responses and records, the Federal Reserve six weeks later on April 26 approved the application, reciting that "a commenter objected to the proposal on the basis of alleged disparities in the number of conventional home purchase loans, refinance home purchase loans, or home improvement loans offered to African American or Hispanic borrowers, as compared to white borrowers, by Community Bank in the Buffalo-Cheektowaga Niagara Falls, New York, Metropolitan Statistical Area (“Buffalo/Niagara MSA”) andApril
24, 2017
Better late than never: "The Federal Reserve on Thursday announced two enforcement actions against Deutsche Bank AG that will require the bank to pay a combined $156.6 million in civil money penalties."
April
17, 2017
Following the protest by Fair Finance Watch, the Federal Reserve has asked TIAA-CREF a fifth round of questions: "Provide an update on EverBank’s CRA activities since its last publicly available CRA Performance Evaluation. Your response should include any significant CRA initiatives undertaken, particularly with respect to credit and deposit products and retail banking services targeted toward low-to-moderate income geographies and individuals. In addition, provide information regarding community development lending, investments, and services in EverBank’s CRA assessment area since the last evaluation period, including the total number and dollar amount (except for community development services) and a brief description of the most significant community development loans, investments, and services." We'll have more on this.
April
10, 2017
How
sleazy is
today's
Federal
Reserve? After
they slipped a
major
reduction in
merger reviews
into a bank
merger
approval
order, when
Inner City
Press / Fair
Finance Watch
formally
challenged it
in a Request
for
Reconsideration,
the response
was a voice
mail that the
Board has
voted against
the request. A
phone call to
ask what that
meant was not
returned.
We'll have
more on this.
April
3, 2017
ICP
Timely
Requests
Reconsideration
of Federal
Reserve
Loosening
Merger Reviews
Without
Comment
By Matthew R. Lee
MAIN
STREET, March 27 – The US Federal Reserve Board,
which bears more than a little responsibility
for the global financial crash from 2008 due to
inattention to predatory lending including on
mergers, has now further reduced its scrutiny of
bank mergers, with little notice to date. Now
Fair Finance Watch and Inner City Press has
timely challenged the Federal Reserve's stealth
reduction of scrutiny, in a timely request for
reconsideration filed with the Federal Reserve
on the evening of March 27, below. FFW and
others including NCRC protested, and Inner City
Press has Freedom of Information Act requests
pending regarding, the application by People's
United to acquire Suffolk County National Bank.
FFW
showed that in the the New York City MSA,
"People's United made 82 home purchase loans to
whites and NONE to African Americans or Latinos.
This is redlining; this proposed acquisition
could not legitimately be approved and People's
United should be referred for prosecution for
redlining by the Department of Justice and
CFPB."
March
27, 2017
The Federal Reserve has chosen to make it nearly impossible to track open comment periods, still listing as pending such applications as that by NY Community Bank to acquire Astoria (since superseded by Sterling). We'll have more on this.
March
20, 2017
From
the Fed: "This
will
acknowledge
receipt of
your
electronic
message dated
and received
by the Board's
Freedom of
Information
Office on
March 7, 2017,
in which you
request,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, the
entirety of
the March 7,
2017
submission in
connection
with the
application by
Community Bank
System to
acquire
Merchants
Bank. 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."
And
nothing since.
March
13, 2017
The
Federal
Reserve has
asked Simmons:
"1.
The preamble
to the
Agreement and
Plan of Merger
by and between
Simmons and
Hardeman dated
November 17,
2016
(“Agreement”),
provides that
certain
directors and
executive
officers of
Hardeman have
entered into
voting
agreements in
connection
with the
merger.
Provide copies
of the voting
agreements
referenced as
Exhibit A to
the
Agreement.
2.
Provide the
Target’s
Disclosure
Memorandum and
the Buyer’s
Disclosure
Memorandum as
referenced in
the Agreement.
3.
Page 1 of
Simmons’s
additional
information
response dated
February 22,
2017, provide
that, upon
consummation
of the holding
company
merger,
Messrs. Ed
Woodside,
Hunter
Simmons, Mike
McGregor, and
Kirk Goehring
would join the
Simmons
organization
as senior
management
officials.
Discuss
whether, upon
joining the
Simmons
organization,
any of these
individuals
would also
serve as a
director or
senior
management
official at
any other
banking
organization,
and if so,
indicate the
position(s)
and
organization(s)
at
which the
individual
would serve. "
March
6, 2017
We
note long time
Board
Secretary Robert
deV. Frierson,
with whom
Inner City
Press has
exchanged many
FOIA and
merger comment
letters, is
retiring -
enjoy and
Ann Misback
taking over
April 2, 2017.
The FOIAs and
comments will
continue!
After FFW
Protest, Fed Sends Community Bank System 9 Questions, CEO
Tryniski Trashes CRA
By Matthew R. Lee
NEW
YORK, March 2 – At what point does bank
executives' spin to investors and the media
become more than misleading? Take Community Bank
System (NYSE: CBU), which has now received nine
additional questions from the Federal
Reserve on its proposal to acquire Merchants,
after its CEO
derided issues Fair Finance Watch raised
about the proposal.
On its last proposal, CBSI bad-mouthed a
Community Reinvestment Act protest even as it
had to delay its Oneida deal. First, CBSI's "Hal
Wentworth 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.'" Then the deal was
significantly delayed, with CBSI pushing the
date back.
More spin: CFO Scott Kingsley told
the media that FFW's protest "is not the sole
reason. We have other things that have to
sequentially happen to get to the technological
conversion in July. When we did not have a
definitive answer from the Fed or other parties
last week, that put the technological conversion
at risk, so we opted not to go ahead.”
February
27, 2017
The Federal
Reserve,
confronted
even with
court
settlements by
banks, says it
was without
admission of
guilt. From
February 24:
"FNB’s
overdraft
practices were
found to be
unfair trade
practices
resulting in
unjust
enrichment as
part of a
class-action
litigation,
Ord v. First
National Bank
of
Pennsylvania,
No.
2:12-cv-00766-AJS
(W.D. Pa.
dismissed June
21,
2013). The
case was
settled
without any
admission of
wrongdoing by
the parties.
Final Judgment
& Order of
Dismissal with
Prejudice at
4–5, Ord (No.
2:12-cv-00766-AJS).
" We'll have
more on this.
February
20, 2017
Coulda
shoultd woulda
will; the Fed
barely reviews
unless
comments
received.
So...
"First
Bancorp
(NASDAQ -
FBNC), the
parent company
of First Bank,
reports that
it has
received
notification
from the
Federal
Reserve Bank
of Richmond
that the
Company's
merger
application to
acquire
Carolina Bank
Holdings, Inc.
("Carolina
Bank
Holdings") has
been approved.
All regulatory
approvals have
now been
received, and
the holding
company merger
date is
expected to be
March 3,
2017."
February
13, 2017
Governor
Tarullo will
leave the Fed
by April 5.
And who will
take his
place? There
are still FOIA
improvements
needed...
February
6, 2017
The
Federal
Reserve has
asked United
Bankshares, on
its protested
application to
buy Cardinal,
"In
its January
13, 2017,
Letter
Responding to
the Request
for Additional
Information,
United
indicates
there are
currently two
pending
litigation
matters
against UB WV
in which
allegations
have been made
involving
consumer
protection
laws. Please
provide
additional
information
about these
matters,
including, at
a minimum, the
identity of
the parties,
the nature of
the claims,
the specific
consumer
protection
laws
implicated,
the current
posture of the
litigation,
and the
anticipated
time frame for
disposition."
January
30, 2017
The
Federal
Reserve's
anti-money
laundering
enforcement
action against
BB&T is
far to vague.
We'll have
more on this.
January
23, 2017
Among other
comments, Fair
Finance Watch
has filed
this:
On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application of Community Bank System to acquire Merchants Bancshares, Inc. and Merchants Bank. This first comment is timely:
Community Bank System proposes to acquire Merchants. But in the the Buffalo and Syracuse MSAs in 2015, the most recent year for which Home Mortgage Disclosure Act data is publicly available, Community Bank NA dramatically excluded people of color.
For conventional home purchase loans in the Buffalo MSA in 2015, Community Bank NA made 58 such loans to whites and NONE to African Americans. It denied the only application it received from an African American.
For refinance home purchase loans in the Buffalo MSA in 2015, Community Bank NA made 19 such loans to whites and NONE to African Americans or Latinos.
For home improvement loans in the Buffalo MSA in 2015, Community Bank NA made 100 such loans to whites and NONE to African Americans or Latinos.
This is outrageous.
In the Syracuse MSA in 2015, Community Bank NA made 155 conventional home purchase loans to whites and NONE to African Americans.
For refinance loans in the Syracuse MSA in 2015, Community Bank NA made 121 such loans to whites and NONE to African Americans. It denied the only application it received from an African American.
This is outrageous.
Also, “Vermont still has 6 other state-chartered banks, but they all serve small regions of the state.... The last state-chartered bank to merge with a federally-chartered bank was Chittenden Bank, which became part of the Connecticut-based People’s United Bank on Jan. 1, 2008.”
In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied.
Nor should Community Bank Systems be permitted to acquire Northeast Retirement Services...
January
16, 2017
This
was some
questioning to
/ of the
Federal
Reserve...
January
9, 2017
The
Federal
Reserve has
asked, after
comments,
about branches
closings and
consolidations:
"In
response to
Question 10 of
the Bank
Merger Act
application,
United
indicates that
it anticipates
consolidating
six UBVA
branches into
six Cardinal
Bank branches
and six
Cardinal Bank
branches into
six UBVA
branches, and
is considering
consolidating
two additional
branches.
Exhibit L to
Form 2070
indicates that
United plans
to consolidate
six UBVA
branches into
six Cardinal
Bank branches
and seven
Cardinal Bank
branches into
seven UBVA
branches, and
is considering
consolidating
two additional
branches.
Please provide
clarification
as to the
number and
location of
branches to be
consolidated
or closed
following the
merger."
We'll
have more on
this.
January
2, 2017
After
Inner City
Press / Fair
Finance Watch
requested
TIAA's
withheld fair
lending
exhibits under
FOIA, the Fed
between
Christmas and
New Years
emailed a
document -
with the
entire fair
plan
redacted...
December
26, 2016
This
is
UNacceptable:
December
22, 2016
Mr. Matthew R.
Lee
Inner City
Press / Fair
Finance Watch
Re:
Freedom of
Information
Act Request
No.
F-2017-0058
Dear Mr. Lee,
This will
acknowledge
receipt of
your
electronic
message dated
December 10,
2016, and
received by
the Board's
Freedom of
Information
Office on
December 12,
in which you
request,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, the
entirety of
the December
9, 2016
submission in
connection
with the
Application by
TIAA et al to
acquire
EverBank.
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.
The
FFW-challenged
application is
still
pending...
December
19, 2016
These are ones to watch:
Federal
Reserve:
Chair: Janet
L. Yellen,
Term Expires
February 3,
2018 (as
Chair),
January 31,
2024 (as Gov.)
Vice Chair:
Stanley
Fischer, Term
Expires June
12, 2018 (as
Vice Chair),
January 31,
2020 (as Gov.)
Governor:
Daniel K.
Tarullo, Term
Expires
January 31,
2022
Governor:
Jerome H.
Powell, Term
Expires
January 31,
2028
Governor: Lael
Brainard, Term
Expires
January 31,
2026
2 Governor
Seats
Currently
Vacant
December
12, 2016
The TIAA fight
goes on - now
they are
trying to
withhold fair
lending
information,
which on
December 10 we
challeged:
or the entirety of the December 9, 2016 submission in connection with the Application by TIAA et al to acquire EverBank. As provided under the FRB's ex parte rules, the submission refers to “confidential” portions the withholding of which we are challenging with this FOIA request on, for example, “consumer compliance and fair lending compliance, as well as the Resultant Institution’s Fair and Responsible Practices Program.”
December
5, 2016
After ICP
Challenges TIAA-Everbank, Fed's 3d
Round of Qs, CRA Included
By Matthew
R. Lee
NEW YORK,
November 29 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York.
Then there are
cross-industry proposals like TIAA's attempt to acquire Everbank
of Florida, which Inner City Press / Fair Finance Watch on
October 29 challenged, and attempts from overseas to buy
Genworth.
The Federal Reserve has asked a
third round of questions of TIAA, which we publish here in full,
including one on CRA:
"In connection with the request for the Board’s prior approval pursuant to section 10(e)(1)(A)(iii) of the Home Owners’ Loan Act, as amended, 12 U.S.C. 1467a(e)(1)(A)(iii), and 12 CFR 238.11(e) by TIAA Board of Overseers, Teachers Insurance and Annuity Association of America (“TIAA”), and TCT Holdings, Inc., each of New York, New York, to acquire control of EverBank Financial Corp., a savings and loan holding company, and EverBank, a federal stock savings association, both of Jacksonville, Florida, the following information is requested. Supporting documentation should be provided as appropriate.
1. If the transaction is consummated as proposed, describe in detail any authority that the New York Department of Financial Services (“DFS”) or any other regulatory entity (apart from the Federal Reserve Board) may have to:
a. Prevent TIAA from down streaming funds or otherwise acting as a source of financial strength to a subsidiary, including a subsidiary depository institution;
b. Directly or indirectly prevent the Surviving Intermediate HoldCo (as that term is defined and used in the application) from down streaming funds or otherwise serving as a source of financial strength to the resultant subsidiary depository institution;
c. Directly or indirectly require Surviving Intermediate HoldCo to dividend or otherwise distribute funds to TIAA; or
d. Directly or indirectly require a subsidiary depository institution to dividend or otherwise distribute funds to TIAA. For each of the scenarios described above, include a detailed discussion of the circumstances in which the regulator could exercise such authority, and include citations as appropriate.
2. Indicate any dollar amount or percentage thresholds or limitations on transactions that TIAA may conduct with a subsidiary or affiliate, including with the Surviving Intermediate HoldCo, without prior approval of DFS, and provide any statutory or regulatory authority that addresses this limitation.
3. To the extent not previously disclosed in the application, and to the extent known with respect to EverBank, discuss any pending or recently resolved litigation with or investigations by regulators, including, but not limited to, those pertaining to consumer protection laws and regulations, against TIAA-CREF Trust Company, FSB (“TIAA FSB”) or EverBank.
4. Clarify the extent to which the
consumer compliance, fair lending compliance, and Community
Reinvestment Act programs of the resultant depository
institution will consist of the current programs of TIAA FSB or
EverBank. Discuss any aspects of these programs that differ from
those currently in place at TIAA FSB or EverBank."
Earlier, some of TIAA's answers were
provided to Inner City Press on November 10 and are published
here (here
and embedded below in full)
"We are grateful for this
opportunity to respond to the comment letter filed by Inner City
Press /Fair Finance Watch on 29 October 2016 (the “Comment
Letter”), regarding the application submitted by TCT Holdings,
Inc., Teachers Insurance and Annuity Association of America
(“TIAA”)... The Comment Letter makes a series of assertions
regarding the lending practices of TIAA-CREF Trust Company, FSB
(“TIAA FSB”) and EverBank by referencing certain Home Mortgage
Disclosure Act (“HMDA”) data for 2015. It also suggests that
TIAA does not satisfy the requisite managerial standards
consistent with approval. Finally, the Comment Letter requests
an extension of the public comment period and a public hearing
on the Application...
EverBank has advised the Applicants
that it has carefully evaluated and investigated the allegations
and it has provided the Applicants with information following
its manual review of each of the eight declined applications
underlying the data cited in the Comment Letter...
The commenter also suggests that
allegations in a dated news article that TIAA has engaged in
improper business practices in Brazil should be considered by
the Federal Reserve Board as a factor when considering the
managerial resources of the Applicants. The news article cited
in the Comment Letter does not provide a complete or accurate
portrayal of how TIAA conducts business in Brazil and other
markets... TIAA is a signatory to the U.N. Principles for
Responsible Investment."
November
28, 2016
Inner
City Press has
just filed:
"This is a
FOIA request
for the
entirety of
the November
22, 2016
submission in
connection
with the
Application by
TIAA et al to
acquire
EverBank. As
provided under
the FRB's ex
parte rules,
the submission
refers to
“confidential”
exhibits the
withholding of
which we are
challenging
with this FOIA
request for,
for example,
“Please see
Confidential
Exhibit 7 for
an explanation
of the
uncommitted
$300 million
credit line;”
“the Resultant
Institution
will continue
to satisfy the
QTL test under
prong (iv), as
demonstrated
in
Confidential
Exhibit 2;”"
etc...
November
21, 2016
Of
BOK, the Fed
said last week
of ICP's
comment, " a
commenter
objected to
the proposal
on the basis
of alleged
disparities in
the number of
residential
real estate
loans made to
minority
borrowers, as
compared to
white
borrowers, by
BOK Bank in
the Kansas
City,
Missouri-Kansas,
Metropolitan
Statistical
Area (“Kansas
City MSA”);
the Houston,
Texas, MSA
(“Houston
MSA”); and the
Phoenix,
Arizona, MSA
(“Phoenix
MSA”), as
reflected in
data reported
under the Home
Mortgage
Disclosure Act
(“HMDA”) for
2014.25 The
commenter
further
alleged that
BOK Bank
confined
African
American and
Hispanic
borrowers to
government
loan programs
instead of
conventional
loan products
in the
Kansas City
MSA. Also, the
commenter
criticized the
rate at which
BOK Bank
denied
applications
by African
Americans
and/or
Hispanics,
compared to
the rate of
denials for
whites, for
home refinance
loans in the
Houston and
Phoenix MSAs,
as reported
under HMDA for
2014. In
addition, the
commenter
generally
alleged that
BOK Bank has a
weak record of
lending to
people of
color and
low-income
individuals
and a weak
record of
consumer
compliance."
And we
maintain that
- and note the
Fed accepting
that "On
September 9,
2016, the
Securities and
Exchange
Commission
(“SEC”)
announced that
it had settled
charges
against BOK
regarding
allegations
that BOK
Bank’s
Corporate
Trust
Department,
primarily
through a
senior
executive,
concealed
problems and
red flags from
investors in
certain bond
offerings for
which BOK Bank
served as
indenture
trustee and
dissemination
agent between
2007 and 2015.
See BOK Bank,
SEC Order
Instituting
Cease-and-Desist
Proceedings,
File No.
3-17533
(September 9,
2016)"
November
14, 2016
After ICP
Challenges TIAA-Everbank, Defense of
Lending, Land Grabs
By Matthew
R. Lee
NEW YORK,
November 10 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York.
Then there are
cross-industry proposals like TIAA's attempt to acquire Everbank
of Florida, which Inner City Press / Fair Finance Watch on
October 29 challenged, and attempts from overseas to buy
Genworth.
The Federal Reserve has asked
questions of TIAA, some of whose answers were provided to Inner
City Press on November 10 and are published here (here
and embedded below in full)
"We are grateful for this
opportunity to respond to the comment letter filed by Inner City
Press /Fair Finance Watch on 29 October 2016 (the “Comment
Letter”), regarding the application submitted by TCT Holdings,
Inc., Teachers Insurance and Annuity Association of America
(“TIAA”)... The Comment Letter makes a series of assertions
regarding the lending practices of TIAA-CREF Trust Company, FSB
(“TIAA FSB”) and EverBank by referencing certain Home Mortgage
Disclosure Act (“HMDA”) data for 2015. It also suggests that
TIAA does not satisfy the requisite managerial standards
consistent with approval. Finally, the Comment Letter requests
an extension of the public comment period and a public hearing
on the Application...
EverBank has advised the Applicants
that it has carefully evaluated and investigated the allegations
and it has provided the Applicants with information following
its manual review of each of the eight declined applications
underlying the data cited in the Comment Letter...
The commenter also suggests that
allegations in a dated news article that TIAA has engaged in
improper business practices in Brazil should be considered by
the Federal Reserve Board as a factor when considering the
managerial resources of the Applicants. The news article cited
in the Comment Letter does not provide a complete or accurate
portrayal of how TIAA conducts business in Brazil and other
markets... TIAA is a signatory to the U.N. Principles for
Responsible Investment."
Ah, the United Nations...
We'll have more on this.
After ICP Challenges TIAA-Everbank, Here's TIAA's Defense to Federal Reserve of Lending Disparities, Land G... by Matthew Russell Lee on Scribd
November
7, 2016
After ICP
Challenges People's United Bank's
Suffolk Bid, Fed Asks 13 More
Questions
By Matthew
R. Lee
NEW YORK,
October 31 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York. Inner City Press /
Fair Finance Watch on August 13
challenged this application and
People's United, as it did Bancorp
South in 2014, which led to redlining
charges by the Department of Justice
and Consumer Financial Protection
Bureau.
October
31, 2016
Challenge
to TIAA's Attempt To Buy Everbank,
Citing Landgrab in Brazil
By Matthew
R. Lee
NEW YORK,
October 29 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York.
Then there are
cross-industry proposals like TIAA's attempt to acquire Everbank
of Florida, which Inner City Press / Fair Finance Watch on
October 29 has challenged. Inner City Press / Fair
Finance Watch has written to the Federal Reserve:
On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting public hearings and an extension of the FRB's public comment period on the Applications of TCT Holdings Inc., Teachers Insurance and Annuity Association of America and TIAA Board of Overseers, all of New York, New York; to acquire EverBank Financial Corp and thereby indirectly acquire EverBank. This first comment is timely.
This is in essence a proposal for a major cross-industry acquisition, in which TIAA (accused among other things of land grabs in Brazil, see below), which has limited experience in banking and a limited and highly disparate record in mortgage lending, seeks to acquire the largest Florida-based bank, with its own issues. Public hearings are needed.
In the St. Louis MSA, TIAA-CREF Trust in 2015, the most recent year for which Home Mortgage Disclosure Act data is available, reported data but lent only to whites.
Meanwhile Everbank, in the Miami MSA in 2015 for home mortgage loans in HMDA Table 4-1 had a 77% denial rate for African Americans, versus a 36% denial rate for whites. In Tampa for Table 4-1 it had a 100% denial rate for African Americans. Public hearings are required.
For the record, under the Managerial Resources and integrity factors, consider this:
“TIAA-CREF, U.S. Investment Giant, Accused of Land Grabs in Brazil NOV. 16, 2015
SÃO PAULO, Brazil — As an American investment giant that manages the retirement savings of millions of university administrators, public school teachers and others, TIAA-CREF prides itself on upholding socially responsible values, even celebrating its role in drafting United Nations principles for buying farmland that promote transparency, environmental sustainability and respect for land rights.
But documents show that TIAA-CREF’s forays into the Brazilian agricultural frontier may have gone in another direction.
The American financial giant and its Brazilian partners have plowed hundreds of millions of dollars into farmland deals in the cerrado, a huge region on the edge of the Amazon rain forest where wooded savannas are being razed to make way for agricultural expansion, fueling environmental concerns.
In a labyrinthine endeavor, the American financial group and its partners amassed vast new holdings of farmland despite a move by Brazil’s government in 2010 to effectively ban such large-scale deals by foreigners.”
For obvious reasons anticipating regulatory push-back against this proposal, TIAA got a clause to withdraw if too much questions are asked or restrictions proposed.
What is the public benefit? The fact that TIAA is run by a former FRB vice chairman militates even more strongly for the requested public hearings."October
24, 2016
Lending
Discrimination Kills Mergers as
BancorpSouth Withdraws, ICP Proceeds
on People's United
By Matthew
R. Lee
NEW YORK,
October 22 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York. Inner City Press /
Fair Finance Watch on August 13
challenged this application and
People's United, as it did
BancorpSouth in 2014, which led to
redlining charges by the Department of
Justice and Consumer Financial
Protection Bureau.
After
BancorpSouth settled the redlining
charges, Inner City Press / Fair
Finance Watch immediately wrote to the
Federal Reserve urging that its
pending merger applications be denied
or withdrawn. Now the latter has
happened. The Fed has informed Inner
City Press of the formal withdrawal of
BancorpSouth's application; we've published
the letter here, and will stay
on this, to December 2017, as long as
it takes.
As to
People's United, using the
just-released 2015 Home Mortgage
Disclosure Act data. Inner City Press
has now commented to the Federal
Reserve:
"in 2015 in the New York City MSA, People's United made 110 home purchase loans to whites and only ONE to an African American and only four to Latinos... In 2015, for refinance loans in the New York City MSA, People's United made 103 loans to whites, only five to African Americans and only two to Hispanics.
People's United record is scarcely
better on Long Island, where it
snapped up Bank of Smithtown and
Citizen's Bank as it now proposes to
do to Suffolk County National Bank. In
2015 for home purchase loans on Long
Island People's United made 49 home
purchase loans to whites, only four to
African Americans and only four to
Latinos. For refinance loans it mad 70
loans to whties, only one to an
African American and only four to
Latinos. Again, this is systematic
redlining; this proposed acquisition
could not legitimately be approved and
People's United should be referred for
prosecution for redlining by the
Department of Justice and CFPB."
October
17, 2016
ICP
Challenges FNB's Reach into the
Carolinas for Yadkin Bank, Disparities
in Baltimore & Ohio, Insiders
By Matthew
R. Lee
NEW YORK,
October 15 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to FNB
/ First National Bank of Pennsylvania
now trying to buy Yadkin Bank in the
Carolinas while barely lending to
people of color in Baltimore,
Cleveland or Akron.
Inner
City Press / Fair Finance Watch on
October 15 challenged this application
and FNB, as it did Bancorp South in
2014, which led to redlining charges
by the Department of Justice and
Consumer Financial Protection Bureau.
Using the
just-released 2015 Home Mortgage
Disclosure Act data, Inner City Press
has commented to the Federal Reserve
in Washington and Cleveland:
"On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application of F.N.B. Corporation to acquire Yadkin Financial and Yadkin Bank. This first comment is timely.
F.N.B. Corporation's lead bank, First National Bank of PA, has a disparate record of lending, for example in the Baltimore and Cleveland MSAs, below. Yadkin is an amalgam of banks slapped together by private equity investors, who would be the primary beneficiaries of this proposed deal. But what is the public benefit?October
10, 2016
After ICP
Challenges Its Suffolk Bid, People's
United 2015 Data Even Worse
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 like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York. Inner City Press /
Fair Finance Watch on August 13
challenged this application and
People's United, as it did Bancorp
South in 2014, which led to redlining
charges by the Department of Justice
and Consumer Financial Protection
Bureau.
This is
even more true upon review of the
just-released 2015 Home Mortgage
Disclosure Act data. Inner City Press
has now commented to the Federal
Reserve:
"in 2015 in the New York City MSA, People's United made 110 home purchase loans to whites and only ONE to an African American and only four to Latinos... In 2015, for refinance loans in the New York City MSA, People's United made 103 loans to whites, only five to African Americans and only two to Hispanics.
People's United record is scarcely
better on Long Island, where it
snapped up Bank of Smithtown and
Citizen's Bank as it now proposes to
do to Suffolk County National Bank. In
2015 for home purchase loans on Long
Island People's United made 49 home
purchase loans to whites, only four to
African Americans and only four to
Latinos. For refinance loans it mad 70
loans to whties, only one to an
African American and only four to
Latinos. Again, this is systematic
redlining; this proposed acquisition
could not legitimately be approved and
People's United should be referred for
prosecution for redlining by the
Department of Justice and CFPB."
October
3, 2016
The
Fed on
September 30
said, "Of the
42 proposals
withdrawn in
the first half
of 2016, 20
proposals were
withdrawn at
the initiative
of the
applicant. The
remainder were
withdrawn
after
consultation
with staff for
technical or
procedural
reasons or
because the
proposals
raised
significant
issues
regarding the
statutory
factors that
must be
considered by
the Federal
Reserve.
Specifically,
13 of these
proposals
raised
financial and
managerial
issues as well
as regulatory
compliance and
CRA and fair
lending
issues."
So what
about
BancorpSouth?
Or a Spanish
bank down the
pike?The Fed
on September
30 said, "Of
the 42
proposals
withdrawn in
the first half
of 2016, 20
proposals were
withdrawn at
the initiative
of the
applicant. The
remainder were
withdrawn
after
consultation
with staff for
technical or
procedural
reasons or
because the
proposals
raised
significant
issues
regarding the
statutory
factors that
must be
considered by
the Federal
Reserve.
Specifically,
13 of these
proposals
raised
financial and
managerial
issues as well
as regulatory
compliance and
CRA and fair
lending
issues."
So what
about
BancorpSouth?
Or a Spanish
bank down the
pike?
The
Federal
Reserve has
responded to
Inner City
Press' FOIA
request about
BNC - but has,
tellingly,
redacted
everything
about
"Enforcement
Actions." We
are not
convinced.
September
26, 2016
And now more
questions from
the Fed to
BNC:
"on Bank of
North
Carolina,
Thomasville,
North Carolina
(“BNC Bank”),
to acquire
High Point
Bank
Corporation
(“HPBC”),
parent of High
Point Bank and
Trust Company
(“High Point
Bank”), both
of High Point,
North
Carolina,
pursuant to
section
3(a)(5) of the
Bank Holding
Company Act of
1956, as
amended (“BHC
Act”), the
following
additional
information,
including the
information in
the
confidential
appendix, is
requested.
Supporting
documentation
should be
provided as
appropriate.
1. Given BNC’s
rapid
expansion,
describe in
detail BNC’s
merger and
acquisition
processes for
targeting,
acquiring, and
integrating
acquired
businesses.
Include the
level of board
and senior
management
oversight and
reporting, due
diligence
activities,
audit
coverage, and
the
involvement of
risk control
groups as
appropriate.
2. Describe
how BNC
governs
significant
project
activities and
whether there
is an
independent
oversight
function that
oversees
project
changes that
occur when BNC
makes an
acquisition.
3. Regarding
BNC’s current
enterprise
risk
management,
respond to the
following:
a. Discuss the
impact that
the
integration of
Southcoast has
had to BNC’s
risk
management
framework.
b. Indicate
whether risk
reporting
includes
information
regarding
integration
activities. If
so, describe
how this
information
could be used
by senior
management to
allocate the
necessary
resources to
address
integration
concerns,
should any
arise.
c. Describe
how BNC’s risk
management
framework
would change
upon
consummation
of the
proposed
transaction.
4. Provide a
pro forma list
of
shareholders
who will own,
control, or
hold with the
power to vote
5 percent or
more of the
voting shares
of BNC upon
consummation
of the
proposed
transaction.
Your response
should
indicate
whether any
identified
shareholder is
a bank or bank
holding
company. In
calculating
the voting
ownership,
include any
warrants,
options, and
other
convertible
instruments,
and show all
levels of
ownership on
both a fully
diluted and on
an
individually
diluted basis.
Aggregate the
interests of
any related
shareholders."September
19, 2016
So
Bank of
Oklahoma,
after Inner
City Press'
protest, was
asked by the
OCC in what
markets it
will improve.
It has now
named cities
in six states.
But will the
Federal
Reserve even
take note of
this? Watch
this site.
September
12, 2016
The
Fed wrote to
ICP: "Please
see the
attached
letter and
non-confidential
enclosure
submitted to
the Federal
Reserve by
BancorpSouth,
Inc., Tupelo,
Mississippi,
as additional
information
related to its
applications
to acquire,
through
merger,
Ouachita
Bancshares
Corporation,
Monroe,
Louisiana, and
Central
Community
Corporation,
Temple,
Texas.
This
information is
being provided
to you in
accordance
with the
Federal
Reserve’s
policies on ex
parte
communications."
ICP
replied: "We
contest
whether some
of the
withheld
information is
not subject to
the ex parte
rules / exempt
from
disclosure
under FOIA" -
and after
being so
directed,
filed a FOIA
request. Watch
this site....
September
5, 2016
Now Bank of New Carolina has acknowledged to the Fed being below average in fair lending in, for example, Charleston - but then cites to still-withheld Compliance Plan and Supplement. This is a scam.
ICP
Protested BNC - High Point, Now Fed
Asks Questions, Here
By Matthew
R. Lee
NEW YORK,
August 24 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
Bank of North Carolina (BNC), whose
proposed acquisition of High Point
Bank Corporation Inner City Press has
challenged and the Federal Reserve has
asked questions on, and BancorpSouth,
which Inner City Press protested for
discrimination in 2014, and has now
been charged by the Department of
Justice and CFPB.
On the
evening of August 24, the Federal
Reserve asked BNC questions about
Inner City Press' protest, including:
"The public
comment submitted on the proposed
merger includes assertions that Home
Mortgage Disclosure Act data from
several metropolitan areas indicate
that both BNC Bank and High Point Bank
had unfavorable levels of mortgage
lending to African American and
Hispanic individuals as compared to
white individuals.
-Directly
address the assertions of unfavorable
levels of mortgage lending to those
population segments identified by the
commenter in each relevant geographic
area referenced in the comments;
-Discuss in
detail the outreach and marketing
activities by BNC Bank and High Point
Bank, including any contemplated
changes to those activities after
consummation of the proposal; and
-Describe
in detail the fair lending risk
management policies and procedures of
BNC Bank and High Point Bank,
including any contemplated changes to
these policies and procedures after
consummation of the proposal...
Discuss
any plans to open, close, or
consolidate any bank branches in
connection with the proposal, or
separately from the proposal,
particularly in low- and
moderate-income (“LMI”) areas. To the
extent that any branches in LMI areas
would be closed, discuss management’s
plans to mitigate the impact of such
closures on the affected communities."
On BNC,
Inner City Press / 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)."
August
22, 2016
How inattentive
is the Fed?
Well in its end
of the week Form H2A
listing
pending
application,
it simply jammed
five
applications,
not in alphabetical
order, at the
top.
But this same
Fed takes
Goldman Sachs'
telephone
calls on
Sunday, to
expedite its
applications...
August 15,
2016
Citing
Redlining, ICP Challenges People's
United Bid For Suffolk County National
Bank
By Matthew
R. Lee
NEW YORK,
August 8 -- The lack of seriousness in
US bank regulation grows from the
relatively smaller to the largest
banks like Goldman Sachs - down to
People's United Bank now trying to buy
Suffolk County National Bank while
barely lending to people of color in
New York. Inner City Press /
Fair Finance Watch has now challenged
this application and People's United,
as it did Bancorp South in 2014, which
led to redlining charges by the
Department of Justice and Consumer
Financial Protection Bureau.
Inner City Press / Fair Finance Watch
has filed with the US Office of the
Comptroller of the Currency:
"a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by People's United to buy The Suffolk County National Bank of Riverhead, NY. The newspaper notice says the comment period runs at least through August 16; this comment is timely.
People's United proposes to buy Suffolk County National Bank and its 27 branches in New York. But in the the New York City MSA in 2014, the most recent year for which Home Mortgage Disclosure Act data is publicly available, People's United made 82 home purchase loans to whites and NONE to African Americans or Latinos. This is redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB.August
8, 2016
After
Taking Goldman Sachs Calls on Sunday,
Fed Fines It $36M, Denies FOIA
By Matthew
R. Lee
NEW YORK,
August 3 -- The lack of seriousness in
US bank regulation grows from the
largest banks like Goldman Sachs -
which gets weekend service from the
Federal Reserve's top lawyer - down to
the Bank of North Carolina, for which
it hides the "compliance plan" that
ostensibly rebuts Fair Finance Watch.
On August 3
after earlier in the year doling out
an approval for Goldman Sachs on GE,
the Fed announced it has
"ordered
Goldman Sachs Group to pay a $36.3
million civil money penalty for its
unauthorized use and disclosure of
confidential supervisory information
and to implement an enhanced program
to ensure the proper use of
confidential supervisory information.
Additionally, the Board announced that
it is instituting enforcement
proceedings against Joseph Jiampietro,
a former managing director at Goldman
Sachs, seeking to impose a fine and
permanently bar him from the banking
industry."
Goldman
Sachs on January 14, 2016 withheld
basic information from the response it
was required to send to Inner City
Press, see below.
But on
March 21, after the Fed was notified
of extensive irregularities in its
processing of the Goldman Sachs - GE
application, the Board hauled off and
approved it, saying, in footnote 49,
that
"Two
commenters express concerns about GS
Bank’s use of the Board’s prefiling
process, suggesting that commenters
could not participate in the
resolution of substantive issues
raised by the proposal because these
issues were resolved before the filing
of this application. One of these
commenters withdrew its comments in
full following its discussions with GS
Bank.
The Federal Reserve has
established a prefiling process to
provide potential applicants with
information about the procedural
requirements, such as timing and the
applicable forms, associated with a
proposal. See SR Letter 12-12. This
process also helps to identify
information that may be needed in
connection with issues that the Board
typically considers in connection with
a particular type of application or
notice, such as
competition or financial stability.
The prefiling process is not used, and
was not used in this case, to resolve
or predetermine the outcome of any
substantive issues. As in every case,
the substantive issues involved in
this case were considered and resolved
as part ofthe processing of GS Bank’s
formal application. In doing so, the
Board considered all public comments
on the proposal.
Voting for this action: Chair Yellen,
Vice Chairman Fischer, and Governors
Tarullo, Powell, and Brainard."
August
1, 2016
Here is
the fraud of
US Community
Reinvestment
Act "enforcement"
- detailed
challenges are
deemed
rebutted by
"Compliance
Plans" a bank
submits --
which are then
deemed
confidential in
full, no
reasonably segregable information,
under FOIA
exemption 8.
This is from
the FDIC this
week, but
concerns the
Federal Reserve:
Dear
Mr. Lee:
This is our
final response
to your July
8, 2016
Freedom of
Information
Act (FOIA) request
for
information
that you
described as
follows:
This is a
request for
the Bank of
North Carolina
submission to
the FDIC in connection
with Inner
City Press /
Fair Finance
Watch's CRA
protest,
referred to
(and relied
on) by the
Federal
Reserve in
this order:
"BNC
further
represents
that BNC Bank
is committed
to continually
improving its performance
in the
Greenville and
Charleston
MSAs and to
meeting the
needs of
all members of
the
communities.
BNC notes that
the commenter
filed similar comments
with the FDIC
on an
application
for an
unrelated
acquisition,
which was
approved on
the condition
that BNC Bank
develop and
submit a
supplement to
its existing
compliance
plan that
would
strengthen the
bank’s fair
lending compliance
program. BNC
asserts that
the supplement
to BNC Bank’s compliance
plan, which
has been
approved by
the FDIC and
implemented by
the
bank,
adequately
addresses the
concerns
raised by the
commenter on
this proposal."
ICP's
June 18, 2016
comments on
Bank of North
Carolina's
application to
acquire High
Point Bank and
Trust
requested this
plan. The FDIC
extended the
comment period
to July 8 -
but still,
none of the
plan has been
received.
Hence this
formalFOIA
request (and
request for
further
extension of
the BNC - High
Point Bank and
Trust comment
period).
Our
records search
has been
completed, and
the record
that you
requested
(Record) was
located. We
have
determined
that the
Record does
not contain
any reasonably
segregable
non-exempt information.
Therefore,
your FOIA
request is
being denied.
The
Record is
exempt from
disclosure in
its entirety
under FOIA
Exemptions 4
and 8, 5
U.S.C. §552(b)(4)
and (b)(8),
and is being
withheld in
full.
Exemption 4
permits the
withholding of trade
secrets, and
confidential
or privileged
commercial or
financial
information
obtained from
a person.
Exemption 8
permits the
withholding of
information
contained in,
or related to,
the examination,
operating, or
condition
reports
prepared by,
on behalf of,
or for the use
of the FDIC in
its regulation
or supervision
of financial
institutions.
This completes
the processing
of your
request.
We'll have more on this.
July
25, 2016
In January
of this year, Inner City Press
submitted a protest to the Federal
Reserve to NYCB's application to
acquire Astoria, see below. Now on
July 20, the Fed has asked NYCB this:
"Based on
staff’s review of the current record,
the following additional information
is requested. Supporting
documentation, as appropriate, should
be provided.
"In its
February 13, 2016, comment on the
proposal, Inner City Press/Fair
Finance Watch (“ICP”) alleges that New
York Community Bank’s and Astoria’s
branch patterns disproportionately
exclude Upper Manhattan and
particularly the Bronx, which ICP
states is the most predominately
minority and low-income community in
the state of New York. Please respond
to these allegations. Please provide a
copy of the public portion of your
response directly to Matthew Lee of
ICP. Any information for which you
desire confidential treatment should
be so labeled and separately bound in
accordance with section 261.15 of the
Board’s Rules Regarding Availability
of Information"
We'll
see - is this like on a recent merger
where the Fed withheld its FOIA
response until the day before they
approved the merger? This is a
scam....
July
18, 2016
Wanna get to know you: The Federal Reserve has asked, "Please provide summaries of the existing business activities of BOK (including BOKF, National Association) and MBT (including MBT Bank). Your response should include a description of the geographic areas in which the banking organizations engage in their respective activities and the products and services that each organization currently provides. Regarding BOK, please also include details about the various banking organization acquisitions that BOK has made over the years and the subsequent consolidation of each acquired banking organization into BOKF, National Association."
July
11, 2016
The Fed
has asked on
Chemical -
Talmer this,
about branches:
"demonstrate
that Talmer
B&T is
using the
branch primarily
for the
business of
banking. Your
answer should
include the
following, if
a. Date on
which the
branch was
acquired or
opened by
Talmer
B&T.
b. Explanation
for the low
branch
occupancy
percentage at
the branch
location
c. Description
of any plans
of Chemical to
increase
occupancy of
the property
d. Description
of the
revenues and
deposits
associated
with the
branch
relative
e. Description
of any
features of
the branch
that make it a
marquee
location of
f. Discussion
of whether
Talmer
B&T’s
ownership of
the property
housing
Branches for
which
information is
requested:
? Boardman
Financial
Center, 724
Boardman-Poland
Road,
Boardman, Ohio
? Dublin
Financial
Center, 6033
Perimeter
Drive, Dublin,
Ohio
? Elyria –
Downtown, 200
Middle Avenue,
Elyria, Ohio
? Muskegon,
281 Seminole
Road, Norton
Shores,
Michigan
? Port Huron
Round, 525
Water Street,
Port Huron,
Michigan
? Portage, 800
East Milham,
Portage,
Michigan
? Ravenna
Financial
Center, 999
East Main
Street,
Ravenna Ohio"
July
4, 2016
The Fed
says Bank of
the Ozarks'
(or BOTO's)
overdraft fees don't
have to be considered
because
the Bank says
they changed
them after
being sued....
June
27, 2016
After Brexit, the Fed on June 24 announced "The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union. The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."
June
20, 2016
And now
this:
"Huntington
seeks to
exclude
certain
collateralized
public funds
from the
competitive assessment
that are
booked to
headquarters
offices in two
markets,
Akron, OH and
Canton, OH."
Then a bunch
of redactions
that the Fed
must rule on,
it cannot
require a FOIA
request of the
type the Fed
now leaves
unresponded to
...
June
13, 2016
And
this from the
Fed, under the
ex-parte
rules:
In
connection
with the
application
submitted by
Huntington
Bancshares
Incorporated (“Huntington”),
Columbus, to
acquire all
the voting
shares of, and
to merge with, FirstMerit
Corporation
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 (“BHC
Act”), as amended,
the following
information is
requested.
Supporting
documentation,
as
appropriate, should
be provided.
Further
information
may be
required as
staff
continues its
review of the proposal.
1. As provided
in the
Introductory
Statement and
Memorandum on
Competitive Considerations,
Huntington
seeks to
exclude
certain public
funds from the
assessment of
competitive
considerations
in the Akron
and Canton,
Ohio, banking
markets. For
the public-fund
exclusions
sought in each
market,
provide the
dollar amount
of the
deposits to
be excluded
that were
deposited by
public
entities
located in the
respective
markets. Show
the
calculations
made to
compute the
dollar amount,
and provide
the data used
to determine
whether a
public entity
is located
inside a
banking market
(e.g.,
depositor zip codes).
Watch this
site.
June
6, 2016
Federal
Reserve Gives BNC An Approval Based on
Secret Compliance Plan - and doesn't
call ICP/FFW until the next day
By Matthew
R. Lee
NEW YORK,
June 2 -- 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, seeking to acquire
Southcoast Financial in South
Carolina and, after that, High Point
Bank & Trust.
On June 2
after a long delay, including delay in
providing basic information to Inner
City Press, the Federal Reserve
approved the Southcoast deal. But the
Fed didn't even call ICP/FFW until the
next day: it's come to this. The Fed
approval over said, "In this case, the
Board received comments from a
commenter who objects to the proposal
on the basis of alleged disparities in
the number of conventional home
purchase loans made to African
Americans and Hispanics, as compared
to whites, by BNC Bank."
Then
the Fed says, "BNC further represents
that BNC Bank is committed to
continually improving its performance
in the Greenville and Charleston MSAs
and to meeting the needs of all
members of the communities. BNC notes
that the commenter
filed similar comments with the FDIC
on an application for an unrelated
acquisition, which was approved on the
condition that BNC Bank develop and
submit a supplement to its existing
compliance plan that would strengthen
the bank’s fair lending compliance
program. BNC asserts that the
supplement to BNC Bank’s compliance
plan, which has been approved by the
FDIC and implemented by the bank,
adequately addresses the concerns
raised by the commenter on this
proposal."
But that's been withheld. We'll have
more on this.
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.
May 30,
2016
May 23,
2016
How can it
be, that the
Fed has STILL
not provided
the documents
long ago
requested under
FOIA about
Huntington - FirstMerit?
Things are
getting
worse...
May
16, 2016
Last week
Inner City
Press asked an
economist from
UN DESA about
the likelihood
of a Fed rate
hike in June,
here:
https://youtu.be/HjmZSDhHjF4
May 9,
2016
The Fed
on Republic ruled
that Inner
City Press / Fair Finance Watch
"contends that
Republic
Bank’s past
tax refund
anticipation
loan product
is an example
of problems
with Republic
Bank’s lending record....
Through
partnerships
with tax
preparers and
tax software
preparation
companies, Republic
Bank offered
tax refund
anticipation
loans whereby
the bank
extended tax
refund
advances to
taxpayers
shortly after
they filed
their tax
returns. The
advances were secured
by the
taxpayers’
refunds. In
response to
safety and
soundness and
consumer
compliance
concerns
raised by the
FDIC regarding
this tax
refund
anticipation
loan product
offered by
Republic Bank,
the product
was
discontinued
in 2012
pursuant to an
agreement
between the
FDIC and
Republic Bank.
Republic Bank
recently
launched a new
product that
offers
advances of
taxpayers’
refunds;
however, as
discussed in
more
detail below,
Republic
represents
that the new
product has
significantly
different
terms and
protections
that address
the FDIC’s
concerns
regarding the
prior product."
We'll
have more on
this...
May
2, 2016
Inner
City Press /
Fair Finance
Watch has
asked the Fed
this:
"We
note that the
FRB of
Chicago, until
Reserve Banks
in New York,
Philadelphia,
Cleveland,
Richmond and
Atlanta, does
not list an
email address
for comments -
this should be
acted on and
improved."
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
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
Goldman
Sachs ultimately on March 21 obtained
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... 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.
On
April 2, Inner City Press submitted a
timely request for reconsideration:
"While
there are many portions of the
approval order crying for
reconsidering, to be clear ICP will
herein have the the following focus,
because it goes to the heart of a
major flaw with today's Federal
Reserve: the Approval Order states
"Two commenters express concerns about
GS Bank’s use of the Board’s prefiling
process, suggesting that commenters
could not participate in the
resolution of substantive issues
raised by the proposal because these
issues were resolved before the filing
of this application. One of these
commenters withdrew its comments in
full following its discussions with GS
Bank.
“The Federal Reserve has established a
prefiling process to provide potential
applicants with information about the
procedural requirements, such as
timing and the applicable forms,
associated with a proposal. See SR
Letter 12-12. This process also helps
to identify information that may be
needed in connection with issues that
the Board typically considers in
connection with a particular type of
application or notice, such as
competition or financial stability.
The prefiling process is not used, and
was not used in this case, to resolve
or predetermine the outcome of any
substantive issues. As in every case,
the substantive issues involved in
this case were considered and resolved
as part ofthe processing of GS Bank’s
formal application. In doing so, the
Board considered all public comments
on the proposal.”
This misrepresents ICP's comments, and
more importantly the Fed's actual
process as reflected by documents the
Fed belatedly released in response to
ICP's FOIA requests.
To emphasize: the FRB's General
Counsel 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.
Specifically, 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." The proposed
transaction was not publicly announced
until August 13, and Goldman did not
submitted its (pre-vetted) application
until August 18.
How can this too-early Additional
Information letter be consider
consistent with the Order's statement
that “the prefiling process is not
used, and was not used in this case,
to resolve or predetermine the outcome
of any substantive issues”?
It cannot be.
Even as redacted, the belatedly
released documents show that on May 14
and May 18, Goldman Sachs and its
outside counsel Rodgin 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.
Likewise, the redactions from
“Rodge's” May 29, 2015 letter are
outrageous, and appealed.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, redactions from which
also appealed.
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." This evasion of FOIA
and of the Fed' stated process should
be addressed in your ruling on this
request for reconsideration.
On June 26, the Fed's 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"? And by
conducting this “review” prior to any
public notice, the Fed is evading the
ex-parte rules. This too should be
addressed - and corrected - in
connection with this.
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." Why was this sent BEFORE ANY
APPLICATION or public notice? This
must be addressed.
On Friday, July 17 the Fed's Thomas
Baxter wrote to Scott Alvarez that the
transaction would be publicly
announced the next Monday -- AFTER the
Fed's "additional information request"
-- based on a long voice-mail 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 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-vetted
application. This was contrary to law,
and now to the Order.
While our focus is on the above, we
note for this that (March 30) “An
ex-Goldman Sachs Group Inc. banker,
Rohit Bahal, was ordered on probation,
after having his former co-worker,
Jason Gross, steal documents from the
Federal Reserve Bank of New York.
Judge Gabriel Gorenstein stated that
Bahal's two-year probation time was
sufficient because his reputation has
already been ruined on social media.
Prosecutors were displeased with the
outcome as they Bahal's should have
received tougher, punishment for
stealing about 35 documents on 20
separate occasions.”
ICP said that a hearing was needed,
and reiterates that.
March
28, 2016
After
Taking Goldman Sachs Calls on Sunday,
Fed Approves GE, ICP FOIAs
By Matthew
R. Lee
NEW YORK,
March 21 -- The lack of seriousness in
US bank regulation grows from the
largest banks like Goldman Sachs -
which gets weekend service from the
Federal Reserve's top lawyer - down to
Huntington, trying to close 106
branches.
Goldman
Sachs on January 14, 2016 withheld
basic information from the response it
was required to send to Inner City
Press, see below.
But on
March 21, after the Fed was notified
of extensive irregularities in its
processing of the Goldman Sachs - GE
application, the Board hauled off and
approved it, saying, in footnote 49,
that
March
21, 2016
Inner
City Press /
Fair Finance
Watch has
filed with the
Federal
Reserve 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
Sandy, we hardly knew ye: Sandra Braunstein, formerly of the Federal Reserve Board, at the Wolters Kluwer CRA and Fair Lending Colloquium: "I am suggesting that the agencies consider requiring that internal analysis, and a public CRA plan be part of the application process. This requirement would increase bank transparency and accountability to the community and the regulators."
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.
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
ICP
Challenged Republic Bank, Fed Qs, No
FOIA Response on Key - First Niagara
By Matthew
R. Lee
NEW YORK,
February 16 -- 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.
On
Republic, Inner City Press / Fair
Finance Watch in late 2015 challenged
its proposal to acquire Cornerstone
Bank, stating among other things:
" 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.
“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."
And,
in fact, Inner City Press has
photographed Republic's high cost tax
loan posters in New York City. Now the
Fed has asked:
In
Republic’s letter to the Federal
Reserve Bank of St. Louis dated
December 17, 2015 (the “Letter”),
Republic asserted that,
“[RepublicBank] no longer offers
refund anticipation loans and will not
provide tax refund anticipation loans
as a result of the proposed
transaction. The fact that
[RepublicBank] previously provided
refund anticipation loans does not
relate to the
competitive effects of the
transactions contemplated by the
[a]pplication, does notrelate to
Republic’s financial and managerial
resources, does not have any bearing
on Republic’s ability to meet
community needs, does not relate to
compliance with the Bank Secrecy Act,
and does not affect the financial
stability of the United States.
Consequently, we respectfully submit
that the fact that [Republic Bank]
previously provided refund
anticipation loans is simply not
relevant to any of the
statutory factors the FRB is required
to consider under the Bank Holding
Company Act.”
But
now it does...
So
the Fed asks, "consumer advocates have
expressed
concern that tax preparers may pass
along RAL fees to customers. Please
respond to this concern. Your response
should include a description of
Republic Bank’s monitoring and
auditing plans."
Back on
December 16, Inner City Press filed a
Freedom of Information Act request
with the Federal Reserve about the Key
/ First Niagara proposal. On January
20, the Fed extended its time to reply
-- to February 2, AFTER the comment
period was set to expire on January
31.
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.February 8, 2016
Just another Friday: “The Federal Reserve Board on [Feb 5] announced a $131 million penalty against HSBC North America Holdings, Inc. and HSBC Finance Corporation for deficiencies in residential mortgage loan servicing and foreclosure processing.”
February 1, 2016Now,
based on Inner City Press' comments, the
Fed has asked:
This letter refers to the application filed by Republic Bancorp, Inc. (“Republic”), Louisville, Kentucky, to merge with Cornerstone Bancorp, Inc., and thereby indirectly acquire its subsidiary bank, Cornerstone Community Bank, both of St. Petersburg, Florida, pursuant to section 3 of the Bank Holding Company Act of 1956 (“BHC Act”), as amended. Based on staff’s review of the current record, the following information is requested. Supporting documentation, as appropriate, should be provided.
1. In a comment letter dated December 3, 2015, Matthew Lee of Inner City Press/Fair Finance Watch alleges that Republic Bank & Trust Company engaged in low levels of lending to African Americans and Latinos in the Louisville market in 2014 compared to its lending to whites. Specifically, Mr. Lee alleges that Republic Bank & Trust Company made 651 home purchase loans to whites, 22 to African Americans and 13 to Latinos, 215 refinance loans to whites and 10 to African Americans, and 129 home improvement loans to whites and one to an African American. Please provide information that is responsive to these allegations.
2. In
responding to Mr. Lee’s allegations
regarding disparate denial rates between
white and African American loan
applicants in the Louisville market,
Republic represented in its January 14,
2016 letter to the Federal Reserve
(“Republic Letter”) that “[t]he
applicants fairly represented the
population and presented a myriad of
individual application characteristics
that were significant hurdles in the
credit process.” Please clarify the
meaning of Republic’s representation
that “the applicants fairly represented
the population.”
January
25, 2016
Goldman
Sachs Blacks Out Most of Its Jan 18
Fed Submission, ICP FOIAs
By Matthew
R. Lee
NEW YORK,
January 22 -- 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.
Goldman
Sachs on January 14 withheld basic
information from the response it was
required to send to Inner City Press,
see below.
Absurdly,
when on January 22 Goldman Sachs sent
Inner City Press a copy of its January
18 answer to the Fed, it withheld
whole pages and exhibits. Inner City
Press has already FOIA-ed:
"the entirety of the January 18, 2016 submission in connection with the Application by Goldman Sachs with regard to GE Capital Bank of which a heavily redacted copy was sent to Inner City Press on January 22, as a timely commenter, by Goldman Sachs.
"Goldman Sachs' submission is largely blacked-out, with many exhibits withheld -- all of which we are hereby requesting under FOIA. Simply as examples: Page 1 has some redactions, which we challenge, but page 2 is almost entirely redacted. On Page 3, only twelve words are NOT redacted -- and three of those are 'Confidential Exhibit 2,' which ICP is requesting, along with all else.
"Nearly all of “Notices and
Disclosures” is redacted --- some
disclosure -- as is “Policies” and
“Procedures” -- Inner City Press is
challenging these redactions and
requesting the entire submission under
FOIA."
January
18, 2016
Goldman
Sachs Tries to Withhold GE's Deposits
by State, ICP FOIAs Fed
By Matthew
R. Lee
NEW YORK,
January 14 -- 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.
Goldman
Sachs on January 14 withheld basic
information from the response it was
required to send to Inner City Press
and others. GE Capital Bank's deposits
by state is presumptive public, but
Goldman Sachs said:
"FRB Q: With respect to the retail online certificates of deposit and the retail online savings accounts to be assumed from GE Bank, a. provide the number of deposit customers and amount of deposits by state based on the address of the deposit customer...
Goldman
Sachs Response: "A list of GE Bank’s
retail deposit customers by state and
U.S. territories as of January 7, 2016
is included as Confidential Exhibit
A."
This
is not the names of any customer, but
how much in insured deposits Goldman
Sachs is seeking to acquire, by state:
basic information. Inner City Press
immediately submitted a FOIA request.
Earlier on
January 14, the Federal Reserve asked
one more question, referring to a
Confidential Exhibit, below -- while
belatedly releasing in response to
Inner City Press' December 2 Freedom
of Information Act request a heavily
reacted submission, still withholding
even its own Questions 6 and 7.
This is
today's Fed; this is today's Fed
question to Goldman:
"Below is
an additional information request in
connection with the application filed
by Goldman Sachs Bank USA, New York,
New York, for prior approval of the
Board of Governors of the Federal
Reserve System, to acquire by purchase
and assumption certain deposit
liabilities and certain non-financial
assets of GE Capital Bank, Holladay,
Utah, pursuant to Section 18(c) of the
Federal Deposit Insurance Act.
"1.
Provide balance sheet and income
statements for GS Bank as of December
31, 2015. If unaudited
statements are only available, then
that is sufficient. Otherwise
provide statements as of September 30,
2015. These statements should be
provided on an actual and proforma
basis, with adjustments and relevant
explanatory footnotes. In
addition, provide actual and proforma
regulatory capital ratios as of
December 31, 2015, if available,
otherwise, as of September 30,
2015. This request updates
Confidential Exhibit 2 of the
Application dated August 19, 2015."
January
11, 2016
After ICP's
Protest of NYCB - Astoria Bank, Fed
Asks 14 Questions
By Matthew
R. Lee
NEW YORK,
January 8 -- 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.
Now,
after Inner City Press / Fair Finance
Watch filed a timely protest, the
Federal Reserve has 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.
January
4, 2016
Inner
City Press / Fair Finance Watch has
commented to the Federal Reserve, 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 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.
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/
“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/
"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/
“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.
November
16, 2015
The Fed has STILL not ruled on Inner City Press' October 24 FOIA appeal... And 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/
“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/
“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.”
November
9, 2015
The Fed's said
this: "The
Federal
Reserve Board
on Thursday
permanently
barred Rohit
Bansal, a
former
investment
banker at
Goldman Sachs
& Co.,
from
participating
in the banking
industry
following his
guilty plea
for
misdemeanor
theft of
confidential
information
from the
Federal
Reserve.
Bansal agreed
to enter into
a consent
order with the
Federal
Reserve Board
barring him
from the
banking
industry and
requiring him
to cooperate
in the Board's
ongoing
investigation.
Bansal had
obtained
confidential
information
from Jason
Gross, a
former
employee of
the Federal
Reserve Bank
of New York.
On Wednesday,
Gross also
pled guilty to
misdemeanor
theft of
confidential
information of
the Federal
Reserve. As
part of
Gross's plea
agreement,
Gross is
barred from
participating
in the affairs
of any insured
depository
institution."
But no
extension or
hearing on
Goldman Sachs
- GE Capital?
November
2, 2015
On Goldman Sachs, ICP / FFW timely commented to the Fed: "The comment period must be extended. This is particularly the case given that even in the past week, Goldman Sachs entered yet another settlement agreement, this time concerning a former Federal Reserve employee giving them information."
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
Fed
Rubber-Stamps RBC - City National
Which Bragged of Collusion, FOIA Finds
By Matthew
R. Lee
NEW YORK,
October 7 -- The largest US bank
merger proposed so far in 2015, 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.
On
October 7, a week after belatedly
releasing hundreds of pages of
documents of its communication with
RBC, and after the banks bragged of
working together on a loan, the Fed
approved the application, ruling on
the latter that
"A
commenter alleged that RBC and City
National collaborated to extend credit
to a customer during the pendency of
these applications. The BHC Act
prohibits an applicant from
exercising, or attempting to exercise,
a controlling influence over the
management or policies of a bank or
bank holding company, without prior
approval of the Board. C-B-G, Inc., 91
Federal Reserve Bulletin 421, 421–22
(2005). RBC represents that after
announcing RBC’s proposed acquisition
of City National, RBC and City
National established internal controls
and processes designed to ensure
compliance with the applicable
limitations of the BHC Act and sent
notifications and reminders of such
controls to their respective
employees. RBC also represents that it
did not extend credit to the customer
at issue in view of the BHC Act’s
limitations. "
October
5, 2015
As Fed
Blesses Hudson City Discrimination,
Silent on Goldman Sachs
By Matthew
R. Lee
NEW YORK,
October 1 -- The lack of seriousness
in US bank regulation grows from the
relatively smaller to the largest
banks, with Hudson City, trying to be
bought by M&T, and Goldman Sachs
trying to buy GE Capital Bank the most
recent examples.
The
Federal Reserve's September 30 M&T
approval order exemplifies this lack
of seriousness. Less than a week after
Hudson City settled racial
discrimination changes, the Fed
approved the application, declining to
compare fair lending with the M&T
money laundering in which it engaged
in this
dicta:
"The Board
expects that a banking organization
will resolve all material weaknesses
identified by examiners before
applying to engage in expansionary
activity. See, e.g., SR Letters 14-2
and 13-7. As noted, M&T’s issues
largely arose during processing of
this application, and the Board took
the highly unusual step of permitting
the case to pend while M&T
addressed its weaknesses. The Board
does not expect to take such action in
future cases. Rather, in the future,
if issues arise during processing of
an application, the Board expects that
a banking organization will withdraw
its application pending resolution of
any supervisory concerns."
Fair
Finance Watch raised Hudson
City's disparate lending record to the
Federal Reserve throughout the stalled
review of the M&T proposal,
stating to the Fed that "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."
Hudson City on September 24 announced
a $32 million settlement with the
Justice Department and Consumer
Financial Protection Bureau. But Fair
Finance Watch and Inner City Press,
reviewing the just-released 2014 data,
found that Hudson City did WORSE in
2014, even while it knew its deal was
stalled.
In
2014 in the New York City MSA, Hudson
City made 233 home purchase loans to
whites - and only ONE to an African
American, denying African Americans'
application 4.16 times more frequently
than those of whites.
September
28, 2015
Goldman
Sachs - GE Comment Period Extended by
NYS, Fed Silent
By Matthew
R. Lee
NEW YORK,
September 25 -- 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 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.
Inner City Press made a similar
request to the New York State
Department of Financial Services and
on September 25, some information was
released -- not enough -- and the NYS
comment period was extended for 30
days.
NYSDFS
Senior Attorney George Bogdan wrote:
"Dear Mr.
Matthew Lee: Your FOIL request has
been granted in part. My response
letter and 2 Goldman Sachs documents
are attached to this e mail. Also note
that the comment period for the
Goldman Sachs application has been
extended by 30 days. An official
notice for the extension will be
posted online in the DFS Weekly
Bulletin for the week ending September
25, 2015."
While Inner City Press prepares a FOIL
appeal, why hasn't the Federal Reserve
even ruled on its FOIA request, and
extended the comment period like its
state counterpart? We'll have more on
this.
On
September 22, 2015, the Federal
Reserve belatedly released the 2014
Home Mortgage Disclosure Act data. A
quick review of the lending of Goldman
Sachs Bank USA in the New York City
Metropolitan Statistical Area shows
the Goldman Sachs focus which should
require publish hearings in this case.
Fair
Finance Watch, hours after the data
was released, has commented to the
Federal Reserve at the highest level
that "in the New York City MSA in
2014, for conventional home purchase
loans (Table 4-2), Goldman Sachs Bank
USA made 45 such loans to whites, only
two to African Americans and only one
to a Latino. For refinance loans
(Table 4-3), Goldman Sachs Bank USA
made 16 loans to whites and NONE to
African American or Latinos. This is
inconsistent with the demographics of
the New York City MSA and with other
lenders' records; it further militate
for the timely requested public
hearings."
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."
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."
September 14, 2015
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...
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.
September 7, 2015Even 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.
The
answer, it seems, is to be found in
the audio
leaked by Carmen Segarra of the
Federal Reserve, showing further Fed
favors for Goldman Sachs.
With
this history, and Goldman's history in
predatory lending with Litton
Servicing and as an underwriter, see
Occupy Wall Street video here,
and UN
/ migration connection here, it
seems clear that the Fed must hold
public hearings on Goldman Sachs' GE
Capital application, when it is filed.
But with the Federal Reserve, you can never be too sure, or too careful.
August 31, 2015
So the Federal Reserve produces a video purporting to say what the Community Reinvestment Act is - without any description of the public comment on merger process. Hmm...
August 24, 2015Why would the Fed pick yet another Goldman Sachs alumni to head the Federal Reserve Bank of Dallas? We'll have more on this.
August 17, 2015When the FRBNY's William Dudley spoke in Rochester NY, apparently the Goldman Sachs - Carmen Segarra scandal did not come up...
August 10, 2015Federal
Reserve 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.
August 3,
2015
Fed Rejects
Community Bank System - Oneida
Withholding 8 of 9 Responses - but Gov
Powell Rubber-Stamps on FOIA Appeals
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.
Meanwhile, Fed governor Jay Powell
continues rubber-stamping on FOIA appeals - on this, we'll have
more.
July 27,
2015
To Federal
Reserve Board, Community Bank System -
Oneida Withhold 8 of 9 Responses - ICP
Challenges Under FOIA
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."
July 13,
2015
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."
June 29,
2015
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, 2015With all due respect, are there any applicable Federal Reserve revolving door rules? "Wolters Kluwer Financial Services recently announced that former federal regulator Sandra Braunstein will provide compliance management and Community Reinvestment Act consulting services to the company’s U.S. banking clients. 'The deep insight and experience that Sandy brings not only to Wolters Kluwer Financial Services’ consulting practice and clients but to our executive leadership team is truly unique and extraordinary,' said Timothy Burniston, EVP of Wolters Kluwer Financial Services' Consulting Practice in the US"...
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
Here's a scam: Royal Bank of Canada and City National wrongfully withheld basic information like their list of subsidiaries during the comment period, now after Inner City Press' FOIA request they release some of the information -- but with the Fed having closed the comment period. This is a scam.
May 25, 2015Now belatedly the Fed replies on FOIA on CIT - and DOJ comes through, much later, FDIC on BB&T.
May 18, 2015
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
On the
application of
Royal Bank of
Canada and City
National Bank,
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
In
a new low, the
Federal Reserve
waited until the
absolute
deadline of the
RBC - City
National Bank
comment
period... to
extend its time
to even respond
to Inner City
Press' FOIA
request about
the application.
UNacceptable.
April
20, 2015
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.
April 13, 2015
Not only has the Federal Reserve not told its bank holding companies not to speciously request confidential treatment for their CRA plans - when the request is made, the Fed sends copies of merger applications without the CRA plan, thereby granting the specious request. We'll have more on this.
April 6, 2015You'd think the Federal Reserve would automatically revive CRA comments that were filed on an application that got withdrawn, if that application is re-submitted. But you'd be wrong. The Fed wrote to Inner City Press / Fair Finance Watch last week:
“You have requested that the comments that you filed previously on these cases that were withdrawn be incorporated into these proposals. Because of your specific request in this case, you earlier comments will be incorporated. Staff asks, however, that you resend a copy of those earlier comments to us so we can ensure that staff has all the relevant comments so they can be reviewed as part of the new applications.”
So we send this reply:
“Inner City Press / Fair Finance Watch continues to believe that the Federal Reserve System should have some policy on reviving timely submitted, substantive CRA comments if an application is withdrawn then resubmitted in say, one or two years: some period of time.”
The answer? “Thanks you.” We'll have more on this.
March 30, 2015The Federal Reserve says it is doing a better job ensuring that the public and the public interest are represented on the boards of directors of its Reserve Banks. But consider the “Class C” - public interest -- directors of the Federal Reserve Bank of Cleveland: representatives of U.S. Steel, Smuckers and Sherwin - Williams. Corporations are the public interest? We'll have more on this.
March 23, 2015Should the Fed be more transparent? It should. Will this be raised? It will. Watch this site.
March 16, 2015The Federal Reserve has asked Sterling Bank, who attempt to buy Hudson Valley has been protested by Inner City Press / Fair Finance Watch, these questions:
Answer
in more detail
the following
portions of
question 9 of
the February 4
information
request
relating to
the proposed
merger and
integration of
Hudson
Valley's
subsidiary
bank, Hudson
Valley Bank,
N.A., Yonkers,
New York
("HVB") into
Sterling' s
subsidiary
bank, Sterling
National Bank,
Montebello,
New York
("SNB"), and
the potential
impact on the
target bank' s
products,
services,
lending,
branching and
CRA program:
Indicate any
changes
contemplated
in HVB's home
mortgage,
small
business,
consumer
(other than
home
mortgage), and
community
development
lending;
retail banking
products;
community
development
investments
and services;
or branching.
Also indicate
any
contemplated
changes in CRA
program
administration,
staffing,
resources,
policies,
procedures,
and training.
Indicate how
the applicant
will provide
effective
oversight of
the CRA
program and
the relevant
experience of
the
individual(s)
to be charged
with such
oversight.
... Provide an
explanation
for the
decrease in
SNB's number
and dollar
amount of
community
development
lending from 3
1 to 23 and
from about $83
million to $77
million.
Watch
this site -
there's more.
March 9, 2015
While in the WSJ's piece on the Fed in Washington reigning in the New York Fed Governor Tarullo comes out looking good, we note former Comptroller Eugene Ludwig, complaining about how complicated it is - or bragging, and telling banks, come hire me, I can navigate this for you...
March 2, 2015Beyond Inner City Press / Fair Finance Watch testimony read into the record in Los Angeles by CRC on February 26, here is its second FOIA appeal on this:
On behalf of Inner City Press / Fair Finance Watch (ICP), this is a timely appeal under the Freedom of Information Act of the Federal Reserve Board's (the “FRB's”) February 23, 2015 Denials of ICP's October 18, 2014 FOIA Request regarding the Application of CIT' Group to acquire OneWest and for the Federal Reserve's communications with or about the companies.
After MORE THAN FOUR MONTHS, the Fed e-mailed Inner City Press a heavily redacted file of documents and denial letter which described referrals to other agencies and the right to appeal. This is a timely appeal.
The Fed waited until three days before what is for now its one and only public hearing on this proposal to release, heavily redacted, records requested more than four months ago. Inner City Press is hereby appealing the redactions.
Simply as
one example, the Fed
redacts after this
sentence: “Clawback
provisions exist for
the First Fed and La
Jolla portfolios
[REDACTION.” This
information should
be released, along
with other withheld
information in the
pages after, about
the Consent Orders,
liquidity risk and
Risk Appetite,
Resolution Plan,
Prepaid cards
(“Confidential”
question 2, and 3 -
and response to
Question 10, 11, 1,
etc), Integration
Governance -- and
the redacted portion
of “Confidential”
Question 2, and all
of “Confidential”
question 3...
The Federal
Reserve, which
meets with
insiders then
withholds the
records for
seven months
even after a
FOIA request,
here, last
week bragged
for approving
four
mergers...
February 16,
2015
On First Horizon's application to acquire TrustAtlantic Financial Corporation of Raleigh NC, the Fed has asked a series of questions on CRA and fair lending, and there may be new public notice - watch this site.
M&T, with its long pending application to acquire Hudson City protested by Fair Finance Watch, NCRC and others, has a mandatory pre-trial conference in the fair lending case against it scheduled for April 7. Will the Federal Reserve take note? Inner City Press submitted the complaint in the case to the Fed...
February 9, 2015From a (much) belated Fed FOIA response:
“In one Fed market, Martinsburg, WV, the parties are proposing a divestiture to bring the market to safe harbor levels. In the Cumberland, MD-WV-PA market, the parties believe that certain factors in the market mitigate the need for a divestiture, as discussed below in detail.”
This, of course, is only given out AFTER the Fed closes the public comment period. We'll have more on this.
February 2, 2015Here is a problem with the Federal Reserve - they call whatever portion of an application an applicant tries to withhold under FOIA the “confidential portion” - presuming thereby that applicants don't make requests to withhold which don't comply with FOIA, essentially privatizing FOIA. This is the case on a current application, and we oppose it. Watch this site.
January 26, 2015Last week we asked if the Federal Reserve would allow a comment period to expire when it had not responded to FOIA request, after the applicant bank through its outside counsel wouldn't provide the application - now, we'll find out...
January 19, 2015 So this month we have
an experiment. Actually it started
last month, with a request to a
Reserve Bank for an application. It
hadn't yet been filed - but when it
was, no follow up was given. Despite a
request to the applicant's counsel,
the applicant did not come in that way
either. Finally a request to the
Board, which gave portions but with
key parts withheld, improperly, at the
request of the applicant. Does the Fed
just let a comment period expire on
this basis? Watch this site.
January 12, 2015
For
Fed, Obama Taps Landon,
Evader of HMDA, Impropriety
at FHLB
By Matthew Russell Lee
SOUTH BRONX,
January 6 -- The
US Federal Reserve,
already accused of being
too close to industry
and playing hide the
ball on CIT - OneWest
and other proposed
mergers, will receive
under President Barack
Obama another banker,
Allan Landon -- one
forced to resign from
the Federal Home Loan
Bank of Seattle after
the "appearance
of impropriety."
Predatory bender
continues?
Landon
headed Bank of Hawaii
which as Inner City
Press previously
reported - and re-upped
earlier today -
was one of the few bank
to try to evade
the Home Mortgage
Disclosure Act by
providing it data not
electronically in a form
it could be analyzed,
but only in paper form.
The
Federal Reserve told Fair Finance Watch such
evasion was permitted
due to the regulation's
lack of specificity. Now
today Bank of Hawaii's
Landon is nominated to
join this Federal
Reserve Board. Fox
guarding the hen house?
Here is
the SEC
settlement
concerning Landon and
the FHLB fo Seattle -
which is being allowed,
without public input, to
merge with the FLHB of
Des Moines.
What does the Federal Reserve System do, when it through a Reserve Bank is asked about a merger proposal and whether or not an application has been filed yet? Nothing, apparently – no notice, no copy, nothing. We'll have more on this.
December 29, 2014As
CIT Says Wait
For Its CRA
Plan, Federal
Reserve's New
Precedent?
By Matthew Russell Lee
UNITED
NATIONS, December
23 -- 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 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.
The
Fed had asked CIT
to "provide the
final version of
the document 'CIT
Bank N.A.
Community
Reinvestment Act
Plan,' the draft
of which was
included as Annex
C to the letter
responding to the
public comments
submitted to the
Federal Reserve
Bank of New York."
One question is, will the Federal Reserve Board in this case and in others coming up, and fast, require the actual submission for CRA plans and allow for public comment on them?
December 22, 2014Something is strange at the Federal Reserve. Its public notices for pending merges includes those on which the comment period has closed. But in the December 19 version, a particular pending application has simply disappeared. It was previously disclosed this way:
BB&T Corporation, Winston-Salem, North Carolina to merge with The Bank of Kentucky Financial Corporation, and thereby indirectly acquire The Bank of Kentucky, Incorporated, both in Crestview Hills, Kentucky 3 Richmond 11/10/2014
And now it is gone. It has not been approved; it has simply disappeared, with the effect that those interested in commenting, even after the formal expiration of the period, won't. BB&T's applications to the Federal Reserve, as Fair Finance Watch has noted and complained, are by a former supervisor of the Fed's Legal Division. So now what will be done?
December 15, 2014
On Midland -
Heartland, on which
ICP commented, the
Federal Reserve last
week
said "In
addition, in
response to the
public comments on
the proposal, the
Reserve Bank
conducted a fair
lending examination
during the pendency
of this application,
including a
redlining review
across Midland
Bank’s assessment
areas."
Redlining review?
We'll have more on
this.
December 8, 2014
As CIT
Tells Fed OneWest Will Apply to GSEs
By Matthew Russell Lee
UNITED
NATIONS, December 5 -- Four days before
a rare Senate hearing on the regulatory
capture of the Federal Reserve, on
November 17 the Federal Reserve Bank of
New York posed a series of questions to
CIT Group, trying to buy OneWest.
Today,
CIT provided Inner City Press with a
copy of its answer to the Fed's November
17 questions (answers to the Fed's
November 25 questions have not yet been
provided.)
CIT
says "OneWest has discussed the
Transaction with staff of each of
FannieMae and FreddieMac (the 'GSEs')
and will be filing an application in
connection with the change of control of
OWB in order for OWB to continue as a
seller/servicer for the respective GSE.
OneWest is now in the process of
preparing the appropriate applications,
which it expects to submit as soon as
possible, and no later than year-end."
But will OneWest provide notice of these applications to the GSEs to the groups which have timely protested its applications to the Fed and OCC? The OCC heard much about OneWest, and CIT, at a December 2 EGRPRA hearing in Los Angeles. Why not just hold public hearings on this proposed mega-merger? And on another one, announced but not yet applied for?
December
1, 2014
Fed Asks
CIT of Repos & Risk, Dudley's Spin
By Matthew Russell Lee
UNITED
NATIONS, November 25 -- At the end of a
week that began with a rare Senate
hearing on the regulatory capture of the
Federal Reserve on November 21, the
Federal Reserve posed a few more
questions to CIT Group, trying to buy
OneWest:
Based on staff’s
review of the applications, the following
information is requested. Please provide a
complete, detailed response to each of the
following questions. Provide
supporting documentation as appropriate.
1. From the following activities, identify those in which either CIT Group, Inc. or its subsidiaries (“CIT”) or IMB Holdco LLC or its subsidiaries (“IMB”) is involved. To the extent not already provided in the applications, describe the nature of the activities and provide dollar volumes for CIT and IMB, and include any available information relating to the national market share of CIT and IMB, along with a brief description of other firms that engage in the same activity in the United States. You may confine your responses to information that is maintained in the regular course of business.
a. Holding assets
under custody;
b. Provision of short-term funding through
bilateral repurchase
agreements;
c. Provision of short-term funding in the
tri-party repo market;
d. Provision of prime brokerage services;
e. Provision of short-term lines of credit
to financial firms;
f. Securities lending;
g. Lending in the Fed funds market;
h. Provision of
bond and equity underwriting services in any
of the following markets:
i. Commercial paper;
ii. Asset-backed commercial paper;
iii. Corporate bonds;
iv. High-yield bonds;
v. Municipal bonds;
vi. U.S. Agency debt;
vii. U.S. Agency mortgage backed securities;
viii. Private label asset backed securities;
ix. Seasoned offerings; or
x. Initial public offerings;
i. Tri-party repo dealing;
j. Clearing and settlement;
k. Provision of business credit in any of
the following markets:
i. Commercial and industrial lending;
ii. Commercial real estate lending;
iii. Construction loans;
iv. Middle market lending;
v. Small business lending;
vi. Receivables factoring;
vii. Equipment financing/leasing; or
viii. Syndicated lending;
l. Direct dollar
lending to foreign institutions and dollar
lending
through foreign exchange swaps;
m. Trade letters of credit;
n. Interest rate and credit derivatives
trading;
o. Commodities trading;
p. Credit card lending;
q. Mortgage servicing;
r. Corporate trust;
s. Correspondent banking; and
t. Reinsurance.
2. Describe any financial markets (trading-type activities) in which either CIT or IMB is a “market-maker.”
3. Report the
current market value, gross and net of
collateral, and other risk mitigants for the
three largest OTC derivatives counterparties
of each of CIT and IMB as measured by the
following metrics:
a. by positive
current market value (after netting
arrangements); and
b. by
negative current market value (after
netting arrangements).
We'll see.
November
24, 2014
As Fed's
Dudley Spins Regulatory Capture, Of CIT, BB&T,
Susquehanna Next
By Matthew Russell Lee
UNITED
NATIONS, November 21 -- In a rare Senate
hearing on the regulatory capture of the
Federal Reserve on November 21, Federal
Reserve Bank of New York President
Dudley described anti revolving door
safeguards and a desire for "good
culture" at banks.
Good
culture? How then did the predatory
lending meltdown take place? And
anti-revolving door? How can it be,
then, that a former Federal Reserve
Legal Division supervisor is writing for
BB&T's deals to those who used to
work under her?
As
soon as Dudley left the stand, a more
serious anti revolving door protection
was proposed.
Dudley
was asked about Goldman Sachs'
warehouses, and JPM Chase's abuse of the
energy markets, but didn't directly
answer.
The
Fed on November 17 itself asked from
answers to four questions it sent to the
CIT Group, with a copy to Inner City
Press.
Inner
City Press and others have challenged
CIT's application to acquire OneWest; as
set forth below, Inner City Press / Fair
Finance Watch has been challenging
BB&T even before its November 12
proposal to acquire Susquehanna Bank for
$2.5 billion. What questions will
the Federal Reserve have on that one?
As to
CIT - OneWest, the Fed on November 17
has asked:
Based on staff’s review of the applications, the following information is requested. Please provide a complete, detailed response to each of the following questions. Provide supporting documentation as appropriate.
1. Provide a pro
forma shareholders list that identifies any
shareholder or group of shareholders that
would own or control, directly or
indirectly, five percent or more of any
class of voting securities, or 10 percent or
more of the total equity, of the combined
organization. Your response should indicate
whether any identified shareholder is a bank
or bank holding company. In calculating the
voting ownership, include any warrants,
options, and other convertible instruments,
and show all levels of voting ownership on
both a fully diluted and an individually
diluted
basis. Aggregate the interests of any
related shareholders, including, for
example, shareholders that are acting in
concert (pursuant to definitions and
presumptions in 12 CFR 225.41) and
shareholders that are commonly controlled or
advised.
2. Your October
8, 2014, letter responding to staff’s
request for additional information (the
“Response”) states that while “CIT and
OneWest do not believe the proposed
Transaction requires the consent of the GSEs
. . . [t]he parties will provide the GSEs
with formal notice of the transaction and
engage with them as appropriate.” Provide
the specific timeframes in which the parties
will file a formal notice and consult with
the GSEs about this proposed transaction.
3. The Response indicates that several integration planning decisions and actions have already been made or taken with respect to the integration of the CIT and IMB organizations. Confirm or clarify our understandin that the decisions and actions identified in the Response will not apply to the companies and their operations prior to the Board’s approval of the proposed transactions.
4. The
Response also indicates that the
parties will execute a number of
actions prior to the closing of the
proposed transaction “to ensure that,
on ‘Legal Day One’, the combined
institution operates in manner
consistent with . . . expectations.”
To the extent not already provided,
identify all pre-closing actions that
will be executed in connection with
the integration of the CIT and IMB
organizations.
We
will report on the responses, upon
receipt.
On
BB&T, well before the bank's
November 12 mega-merger announcement
seeking to buy Susquehanna Bancshares
for $2.5 billion, Inner City Press /
Fair Finance Watch has been showing the
disparities in BB&T's lending
record.
On
BB&T's application to acquire 41
branches in Texas from Citibank, Fair
Finance Watch showed the FDIC for
example that for conventional home
purchase loans in the Houston
Metropolitan Statistical Area in 2013,
BB&T made 65 such loans to whites,
and NONE to African Americans.
The FDIC's Acting Deputy Regional
Director for Compliance replied that
"the FDIC deems your correspondence to
constitute a protest."
BB&T through law firm Wachtell,
Lipton, Rosen & Katz submitted a
response which admitted that in Houston
“the percentage of Mortgage Loans made
to low and moderate income borrowers
during the first six months of 2014 was
also below the 2013 aggregate industry
average.” BB&T Response at Page 11,
which also notes at 10 that at least one
of the Citibank branches BB&T seeks
to acquire, it would shutter.
And so
on November 10 Fair Finance Watch
submitted more extensive comment
opposing BB&T's application to
acquire Bank of Kentucky, including that
bank's disparities in the Cincinnati
regional area and BB&T's in the
Louisville MSA, where in 2013 BB&T
made 229 conventional home purchase
loans to whites, and only 12 to African
Americans and only six to Latinos, while
denying 41.7% of applications from
Latinos versus only 17.5 of application
from whites, a disparity of 2.38 to 1.
Now BB&T announces a much larger
proposal, to buy Susquehanna and its 245
branches in Pennsylvania, New Jersey,
Maryland and West Virginia. Such an
application requires approval, after a
comment period and possible public
hearings, by the Federal Reserve. We'll
have more on this.
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. Their hearing will now occur on November 21. Relatedly, BB&T's response from the law firm of Wachtell, Lipton, Rosen & Katz is penned by a former Federal Reserve Board Legal Division supervisor.
November 17, 2014
The Senate hearings on regulatory capture of the Federal Reserve, triggered by whistleblower Carmen Segarra's 46 hours of taped audio, are set for November 21. We'll be covering it.
November 10, 2014 After CIT
Is Forced To Release Cash Flow &
Risk Mgmt, ICP Slams Both
By Matthew Russell Lee
UNITED
NATIONS, November 7 -- 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
November 7, Inner City Press was sent a
redacted copy of CIT Group's "Cash Flow
Projections" and "Risk Management" from
its application to acquire OneWest and
go above the $50 billion, Too Big Too
Fail threshold. Inner City Press
immediately put
the partially redacted document online
on its website, here.
First,
how could such information be withheld
for a bank seeking to become Too Big To
Fail?
Second, how could the Federal Reserve
insist that the comment period is
closed, while information that was
improperly withheld is belatedly
released?
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
November 3, 2014
Now CIT says, “In a comment letter, dated October 18, 2014, from Inner City Press/Fair Finance Watch, [FFW] states that CITB’s assessment area is improper. CITB’s assessment area was designated in accordance with the federal banking agencies’ CRA regulations and guidelines.” They are referring to limited their CRA assessment area to Utah, while admitting their business in New York, New Jersey, Florida and elsewhere. #RegulatoryFail
CIT also cites the Fed's previously laxity as precedent: “Letter from William W. Wiles, Secretary of the Board, to Inner City Press/Community on the Move, 1995 Fed. Res. Interp. Ltr LEXIS 240 (August 29, 1995).”
October 27, 2014 While the
Federal Reserve lists contacts
for its Reserve Banks, they are
only phone numbers, not email.
And most Reserve Banks don't
make it clear to the public and
community groups how to submitte
comments by email. Why not?
We'll have more on this.
October 20, 2014
The Federal Reserve extended its CIT comment period one week, but it still withholding. ICP has submitted:
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 to
the Federal Reserve. Watch this
site.
October 13, 2014
After Fed
Exposed, CIT Gives ICP Redacted
Letters to FRBNY, Captured
By Matthew Russell Lee
UNITED
NATIONS, October 10 -- 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 to the Federal
Reserve Bank of New York, supposedly in
compliance with the Freedom of
Information Act - now uploaded
to Scribd here and here.
Inner City Press / Fair Finance Watch has asked the Fed to extended / re-open the comment period.
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.
October 6, 2014
After the Federal Reserve / Goldman Sachs audio leaks by whistleblower Carmen Segarra, Senators Elizabeth Warren and Sherrod Brown have called for hearings. But will they be held? We're ready -- regulatory capture is widespread...
September 29, 2014As Whistleblower Exposes Fed & Goldman, FOIA Requests Show CIT Capture
By Matthew Russell Lee
UNITED
NATIONS, September 26 -- The secret
recordings of then
Federal Reserve examiner Carmen
Segarra about Goldman Sachs and
regulatory capture should trigger
oversight hearings in Congress, and the
break-up of Goldman Sachs and its peers.
But this type of sleaze is the rule, not the exception. Inner City Press routinely submits Freedom of Information Act requests for communication between the Fed and banks applying for mergers.
Most recently, the Fed has extended its deadline for responding to Inner City Press' request on CIT - OneWest, on which it purported to close its public comment period on September 24:
FOIA Request No. F-2014-00380
Dear Mr. Lee,
On August 27, 2014, the Board of Governors ("Board") received your electronic message dated August 26, pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552... On August 28, 2014, the Board’s Freedom of Information Office made an interim production of responsive documents consisting of the public portion of the application by CIT Group Inc. and Carbon Merger Sub LLC to acquire and merge with IMB HoldCo LLC, and thereby indirectly acquire voting shares of OneWest Bank... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until October 9, 2014, 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 9, 2014, we will respond to you promptly.
How can the public be shut out before it has the basic information it has requested?
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.
So here's
hoping that Carmen Segarra's courage, in
secretly making the recordings and then
releasing them, leads to increased
oversight of and reform at the Fed.
The problem is, while some in Congress are willing to criticize the Fed, the real parties in interest here are the largest banks and investment banks in the country. Who in Congress will directly challenge those? Watch this site.
September 22, 2014
How can the Federal Reserve Board take until September 18 to respond to a FOIA request from May 28 on a pending application? We'll have more on this.
September 15, 2014Fed Governor Tarullo's testimony to Congress last week was widely viewed as a call to shink the size of the US mega-banks. But the Fed has been so solicitous to them, can they be believed?
September 8, 2014Here's what the Fed said, more than 10 days ago, without providing the bank's CRA Plans:
Dear Mr. Lee,
This is in reference to your electronic message dated August 26, 2014, and received by the Board’s Freedom of Information Office August 27. Attached is the public portion of the application by CIT Group Inc. and Carbon Merger Sub LLC to acquire and merge with IMB HoldCo LLC, and thereby indirectly acquire voting shares of OneWest Bank, N.A., including Carbon Merger Sub LLC’s application to become a bank holding company.
Board staff are currently processing the remainder of the FOIA request, which seeks the confidential portions of the application and all records reflecting FRS communications with or about the two entities (or their affiliates) regarding the proposal since January 1, 2014.
Freedom of Information Office, Federal Reserve Board
September 1, 2014So Inner City Press / Fair Finance Watch requested from the Federal Reserve Board, under the Freedom of Information Act no less, the application by CIT Group to buy OneWest. As provided, the Fed has for now allowed CIT and its outside counsel to withhold from the public CIT's and OneWest's Community Reinvestment Act plans. We'll have more on this.
August 25, 2014Noteworthy: on August 22, the Federal Reserve Board “requested comment on a proposal to repeal its Regulation AA (Unfair or Deceptive Acts or Practices).”
August 18, 2014How can Fed vice chair Stanley Fischer give a long speech in Sweden about the “Great Recession” and not once in it mention “subprime,” much less Citigroup?
August 11, 2014On August 6 the Fed announced “it has not objected to a resubmitted capital plan from Bank of America Corporation. The Federal Reserve in April required Bank of America to resubmit its capital plan and to suspend planned increases in capital distributions. The action followed the disclosure by Bank of America that it incorrectly reported data used in the calculation of regulatory capital ratios and submitted as inputs for the stress tests conducted by the Federal Reserve in 2014.”
But what about disclosing, census tract, any predatory lending settlement it reaches?
August 4, 2014The Fed and official corruption: On July 23 Thomas Baxter, General Counsel for the New York Federal Reserve Bank questioned the FCPA’s “exception for ‘facilitating or expediting payments’ made in furtherance of routine government action.” Baxter stated that “official corruption is a problem that some U.S. financial institutions have found challenging during the last year.”
Ya don't say...
July 28, 2014The CFPB is “proposing that financial institutions provide more information about underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan.” Good - but what about the small business data?
July 21, 2014The Federal Reserve Board's website claims that it will be updated on pending mergers every three days. But on July 19, there had been no update since July 9 -- ten days...
July 14, 2014Fed Vice Chairman Stanley Fischer gave a long speech at the National Bureau of Economic Research in Cambridge on July 10 about Financial Sector Reform -- and didn't mention the words “subprime” much less “predatory” lending even once. Ah, Citigroup...
July 7, 2014 IMF's
Lagarde Lauds Yellen, After Urging Fed
to Communicate More, FOIA Qs
By Matthew Russell Lee
UNITED
NATIONS, July 2 -- When the
International Monetary Fund's Christine
Lagarde introduced Federal Reserve chair
Janet Yellen to give the first Michel
Camdessus Central Banking Lecture on
July 2, she did not repeated what she
said only two weeks earlier, that the
Fed should communicate more
frequently.
In
laying out lessons learned from the
subprime financial meltdown of 2008,
Lagarde did not question the role of the
Federal Reserve in failing to take
action on the predatory lending by the
Big Four banks, or the pooling and
pitching by investment banks of
predatory mortgages by Ameriquest, New
Century, et al.
So
what, really, was learned?
On July 2, Lagarde compared central bankers to mountaineers, and told Yellen, "Janet, you may not be surprised to know that when you give your press conferences a group of passionate staff here at the IMF get together to watch you live on screen. I am told they even bring pop corn to the meetings!"
June 30, 2014
The Federal Reserve has rubber stamped a number of Regions Bank mergers. But on June 25, the Fed “announced that Regions Bank, Birmingham, Alabama, will pay a $46 million penalty for misconduct related to the process followed by the bank in the first quarter of 2009 for identifying and reporting non-accrual loans. The Federal Reserve also issued a consent order requiring Regions Bank to continue to improve its relevant policies and procedures. The Federal Reserve's consent order is being issued jointly with the Alabama Department of Banking, which is assessing Regions Bank a $5 million penalty, and in conjunction with actions by the Securities and Exchange Commission.”
June 23, 2014The name "RAYS Act" is a nod to its intellectual godfather - Ray Boshara, director of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis...
And in San Francisco, kids enrolled in school are shunted into bank accounts at... Citibank.
June 16, 2014On June 9 in DC, Fed Governor Tarullo said “Mergers and acquisitions involving banking organizations are subject to review, and possible disapproval, on a broad range of grounds beyond the antitrust considerations relevant in all industries. These include an assessment of the adequacy of the financial resources of the firms, the "competence, experience, and integrity" of the officers and directors, and the impact of the acquisition on systemic risk. [FN3] Bank Holding Company Act of 1956 §3, 12 U.S.C. §1842(c). The Bank Merger Act requires consideration of a roughly comparable set of factors. Acquisitions are also subject to special scrutiny where an acquiring firm has less-than-satisfactory supervisory ratings.”
What about the Community Reinvestment Act?
June 9, 2014The majority of applications at the Federal Reserve with comment periods open are under the Change in Bank Control Act - which makes this a test case: “Mr. Lee, Attached you will find a letter acknowledging your May 30 comments on the change in control notice filed by Mr. Love, as well as our transmittal letter to Notificant counsel.” We'll see.
June 2, 2014 ICP
/ Fair Finance Watch filed
this with the Fed:
Dear Chair Yellen, Secretary deV. Frierson and others in the FRS:
Since 2013 Inner City Press / Fair Finance Watch (ICP) has been watching with interest and concern the protested Midlands - Heartland proposal (see sample HMDA analysis below). Then it became aware of a related Change in Bank Control Act notice, which has given rise to public concern and confusion, for example:
Midland States Bank Acquisition of St. Louis Bank Continues
Published on May 16 2014 5:41 am
The previously-announced acquisition of Heartland Bank in St. Louis by Midland States Bank of Effingham is moving ahead with the formal request by the owners of Heartland to the Federal Reserve Board to acquire 10% or more of the shares of Midland States Bancorp.
Midland States Bancorp, based in Effingham, controls Midland States Bank. Midland announced last year that it was acquiring Heartland Bank, which has 13 locations in St. Louis as well as one in Denver, Colorado. As part of the transaction, the Love family, which currently owns Heartland, will be acquiring Midland States Bancorp stock.
Midland States Bancorp President and CEO Leon Holschbach said the acquisition is proceeding as planned. Holschbach said no one should be concerned that a legal notice about the Love family acquiring stock in Midland means a change in control of Midland. He said the term "control" in the legal notice means that the Loves will have as much say in the bank as their share of stock gives them. Holschbach said the vast majority of Midland States stock is still in the hands of Effingham families.
Holschbach said the acquisition of Heartland Bank by Midland States Bancorp should close early in the third quarter. He said the Heartland Bank locations will be changed to Midland States Bank locations, while a credit lending firm in St. Louis will remain Heartland Business Credit, but will be listed as a subsidiary of Midland States Bank.
That even the applicants saw confusion among the public which they sought to assuage - without, of course, saying there is a public review and comment process -- is indicative. Inner City Press filed a Freedom of Information Act request and yesterday, May 29, received this:
Dear Mr. Lee,
This is in reference to your electronic message dated and received by the Board’s Freedom of Information Office on May 28, 2014, in which you request the following:
the Change in Bank Control Notice by Andrew Sproule Love, Jr., St. Louis, Missouri, acting individually, and in concert with a control group, which consists of Andrew Sproule Love, Jr.; Trust Established U/T/W of Andrew Sproule Love FBO Andrew Sproule Love, Jr., Andrew Sproule Love, Jr., and Bank of America, N.A., as co-trustees; Inter Vivos Trust created by Andrew Sproule Love U/I/T dated December 30, 1941, as amended by instrument dated August 3, 1959, Andrew Sproule Love, Jr., and Bank of America, N.A., as cotrustees; Love Group, LLC; Love Investment Company; Love Real Estate Company; and Sarah Otto Love, all of St. Louis, Missouri; Daniel Sproule Love, New York, New York; Laura Kate Love, Bozeman, Montana; Martha Farr Love, and John Overton Robertson, both of Portland, Maine; Amy Farr Robertson, Denver, Colorado; Bruce Clendenin Robertson, Rockville, Maryland; Caroline Bill Robertson Evans, Jacksonville, North Carolina, and Laurence Arnold Schiffer, St. Louis, Missouri; to acquire voting shares of Midland States Bancorp, Inc., and thereby indirectly acquire voting shares of Midland States Bank, both in Effingham, Illinois.
Attached is the public portion of the Change in Bank Control Notice. The remainder of the FOIA request, which seeks the confidential portions of the application and seeks FRS communications with the Notificants and/or Target regarding the proposal since January 1, 2014 is currently being processed by Board staff.
Thank you,
Freedom of Information Office
Federal Reserve Board
While the turn-around time on the “public” portion of the notices is appreciated, we are concerned at how much the applicants have asked the Fed to withhold, for example “Confidential” Attachment 3, “further discussion of the merger terms.”
ICP cannot yet submit a FOIA appeal, since the FRS has yet to rule on its FOIA request. ICP hereby requests that the information be released and / or the comment period on these notices extended -- and on the proposed (now amended) merger reopened -- until the information is released.
For the record, in 2012 Midland States Bank in the St Louis MSA for refinance loans made 197 such loans to whites and only two to African Americans, none to Latinos.
For conventional home purchase loans in the St Louis MSA in 2012, Midland State made 43 such loans to whites, none to African Americans or Latinos (which received one each in Table 4-1).
For home improvement loans in the St Louis MSA, Midland State made eight such loans to whites, none to African Americans or Latinos.
On the current record, including those raised by NCRC members incorporated herein by referecne, hearings should be held and the applications / notices should not be approved.
May 26, 2014
Federal Reserve Bank of San Francisco President John Williams said May 22 that he's surprised by weakness in the housing sector. He said, "While home construction and sales showed substantial momentum in 2012 and the first half of 2013, the wind has been taken out of the sails since then.” Sail away.
May 19, 2014With Governor Stein in his way on May 28, how can the Federal Reserve legitimately function with only three Governors? Inner City Press / Fair Finance Watch raised the question in a recent filing. What will Congress say? Watch this site.
May 12, 2014On rogue bank Mercantile the follow has been filed with the Federal Reserve:
This is a timely request for reconsideration of the Board's May 8, 2014 approval of the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank
Starting in October 2013, Inner City Press / Fair Finance Watch on fair lending grounds protested the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank. For example, in 2012 in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 42 such loans to whites, NONE to African Americans or Latinos.
To assess in Mercantile's record is improving or further deteriorating, ICP asked Mercantile through counsel for its 2013 HMDA-LAR. Amazingly and tellingly, Mercantile provided its LAR only in paper form, so that it could not be computer analyzed. This contrasts to other banks' timely responses to ICP with their LAR in the requested .DAT format in which it is filed.
This is outrageous. Even with only four Governors, for the Board to allow this is a dereliction of the Board's duty under HMDA, under CRA and the BHC Act. While there are numerous other problems with Mercantile and its proposals, we are limited this request for reconsideration to this issue so that the Board must squarely face this issue and shoulder its responsibilities.
To date, the Board's inaction on Mercantile's lawless behavior is reflected by this:
“Mike Price, Mercantile’s chairman and CEO, maintained Mercantile complied with the letter of the law when it emailed the documents to Lee’s organization several weeks ago. 'Mercantile Bank has complied with everything it’s supposed to have complied with,' Price said. 'He may want electronic forms, but that’s the form we delivered it in'... Mr. Lee can interpret data anyway he wants,' Price said.. 'I know what the bank stands for and what it’s concern for the community is and its pretty darn strong.'”
In 2012 in the Grand Rapids MSA for refinance loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 159 such loans to whites. It had a 100% denial rate for African American applicants. That's strong evidence of discrimination - followed by an attempt to conceal its 2013 record.
After that quote, in connection with Mercantile's shareholders' meeting, Price predicted the Board's rubber-stamp:
"'We have a pretty strong feeling that we’re very close to the end of the process and that we will have an answer fairly soon,” Price said this morning during the annual meeting of Mercantile Bank shareholders... Inner City Press/Fair Finance Watch claims that Mercantile Bank has a poor record of residential mortgage lending to minorities. The objections triggered a higher level review of the deal and 'it takes a longer time to walk through the process,' said Price, who anticipates an affirmative decision from the Federal Reserve. Price said Lee is 'cherry-picking data.'”
There are simply no loans to people of color to pick: In 2012 in the Grand Rapids MSA for home improvement loans, both Mercantile's bank and mortgage company lent only to whites.
After the Board's four-Governor order
“Mike Price said, 'This approval validates our history of community involvement and outstanding performance under the Community Reinvestment Act, and follows a thorough analysis of our lending practices.'”
With Price's knowledge and presumably at his initial direction, Mercantile sought to and did conceal its 2013 record from the public.
This issue must be
directly presented to each Governor, not only the FRS
staff, the issue should be addressed and ruled on in
writing, and the approval should be reconsidered and
rescinded.
May
5, 2014
So Fed
Chair Yellen
went to the
White House
Correspondents
Dinner - but
didn't
reconsider
Umpqua -
Sterling
approval or
explain why
under CRA is
it now ok to
"commit to
commit"
later...
So the Fed asked Old National, or its outside counsel at Krief DeVault LLP in Indianapolis, what the public benefit of acquiring United Bancorp in Ann Arbor might be, telling them to send a copy to Inner City Press / Fair Finance Watch. But there's a problem: despite the clear instructions in ICP's comment letters, Old National / Krief DeVault send a previous submission to the wrong place, then resent, late, And this one?
April 21, 2014Inner City Press / Fair Finance Watch has filed a timely request for reconsideration:
Board
of Governors of the
Federal Reserve System
Attn: Chair Janet Yellen,
Secretary Robert deV.
Frierson
20th Street and
Constitution Avenue, N.W.,
Washington, DC 20551
Re: Timely Request for Reconsideration of the Board's April 1 "Conditional" Approval of the the Applications of Umpqua Holdings Corporation to merge with Sterling Financial Corporation and thereby indirectly acquire Sterling Savings Bank
Dear Chair Yellen, Secretary Robert deV. Frierson, General Counsel and others in the FRS:
This is a timely request for reconsideration of the Board's April 1, 2014 "conditional" approval of the Applications of Umpqua Holdings Corporation to merge with Sterling Financial Corporation and thereby indirectly acquire Sterling Savings Bank.
Inner City Press / Fair Finance Watch and others, including other members of NCRC, submitted comments weaknesses in the lending records of Umpqua and Sterling, weaknesses confirmed by the FDIC and the Board. The conditional approval order states that
"the Board’s review indicates that low volume of loan applications is a key factor in Umpqua Bank’s relatively low volume of lending to LMI individuals, to African American, Asian, and Hispanic individuals, and to small businesses in predominantly minority census tracts, in certain of its assessment areas, as compared with the aggregate. To that end, Umpqua has committed that, within 60 days following consummation of the merger with Sterling, Umpqua will develop a plan consistent with the combined organization’s size and complexity, to assist the combined organization in continuing to help meet the credit needs of its communities, in accordance with the CRA. The plan will establish specific performance goals and measures to assist the combined organization in helping to meet community credit needs, including through outreach and marketing of its products and services to LMI and underserved individuals and communities and by identifying opportunities for community development–related investments in its communities."
While the only enforcement mechanism of the Community Reinvestment Act is in connection with merger and expansion applications, the above impermissibly grants approval for a later, unspecified plan.
It is not even stated that the plan will be public. That should be confirmed in connection with this request for reconsideration.
Since April 1, consider also:
Blank Rome LLP | Target Data Breach Suit By Banks Extends To ...Linex Legal (press release) (registration)-Apr 10, 2014 0:14-cv-00643, by Umpqua Bank, Steinhafel's statement “omits” the fact that “it is the nation's financial institutions—and not Target—ensuring that this is the case ...
and
April 9, Courthouse News, "As their trial date approached, a class has settled claims that Umpqua Bank uses special software to maximize the amount of overdraft fees it charges. The parties have until May 19 to move for preliminary approval of the settlement, U.S. District Judge Jon Tigar said in a Friday order vacating the trial schedule."
The Order, referring to ICP's comments, states that
"A commenter also suggested that a conflict of interest exists because a former Secretary of the Treasury will be affiliated with a shareholder of the combined organization. No evidence of a conflict was presented, and the Board expects that the parties involved will abide by all laws governing conflicts of interest."
For example, the OCC has anti revolving door rules for transfer between itself and national banks. Here, former Treasury Secretary Geithner through Warburg Pincus colorably engaged in the same thing. ICP said that a hearing was needed, and reiterates that.
April 14, 2014 Inner City Press / Fair Finance
Watch has been challenging BancorpSouth, now this:
April 12, 2014
Board of
Governors of the Federal Reserve System
Attn: Chairman Janet Yellen, Secretary Robert deV.
Frierson
20th Street and Constitution Avenue, N.W.
Washington, DC 20551
Re: The Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas
Dear Chairman Yellen, Secretary Robert deV. Frierson and others in the FRS:
This concerns the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas.
Back on March 24, ICP submitted comments on BancorpSouth's Ouachita / Louisiana application on March 24, receiving in the two week after only this:
From: Juanetta Price <juanetta.price@frb.gov>
Date: Mon, Mar 24, 2014 at 4:18 PM
Subject: Automatic reply: Request for Full Copy of, & Timely Comments On, Requesting Hearings & an Extension of the Comment Period On the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independ...
To: "Matthew R.
Lee" at InnerCityPress.org
I am out of the office until March 31.
As noted in ICP's timely April 7 comments on BancorpSouth's Central Community Corporation proposal, the public portions of applications should be given on a timely basis, and timely comments acknowledged.
Then, on April 8 -- two weeks after ICP's March 24 request -- this arrived:
Subject: Public Portion of
Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Tue, Apr 8, 2014 at 5:53 PM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: "Sparks, Yvonne S [at] stls.frb.org,Blase, Dennis [at]
stls.frb.org, Goldberg, Amory R (Board) [at] frb.gov
Dear Mr. Lee:
Attached is the public portion of the application by BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank.
There was no explanation of the two week delay. The next day, April 9, this arrived:
Subject: Revised Public
Portion of Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Wed, Apr 9, 2014 at 11:48 AM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: Sparks, Yvonne S [at] stls.frb.org
Dear Mr. Lee:
Please disregard the public portion of the application sent to you yesterday for BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation. It appears that pages 1-32 were left out.
Leaving out pages, it happens. But what of the two week gap in providing any of the public portion of the application? Inner City Press asserts and request that the comment periods be extended. ICP also notes that on April 10 BancorpSouth announced yet another proposed acquisition, of Lafayette, La.-based Knox Insurance Group, LLC.
Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi, Baton Rouge, Louisiana and Memphis, Tennessee MSAs and finds them troubling.
In 2012 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 258 loans to whites, only 17 to African Americans and five to Latinos. BancorpSouth's denial rate for whites was 7.4% while for African Americans it was 25.8% -- 3.49 times higher. This is troubling.
In 2012 in the Baton Rouge LA MSA for conventional home purchase loans in 2012, BancorpSouth made 60 such loans to whites; only three to African Americans and one to a Latino.
On March 24 we stated: next time we will analysis next-door Texas. But for now, in 2012 in the Memphis TN MSA for conventional home purchase loans, BancorpSouth made 243 loans to whites, only 14 to African Americans and four to Latinos. BancorpSouth's denial rate for whites was 4.2% while for African Americans it was 22.7% -- 5.4 times higher. This is outrageous.
On April 7 we stated: BancorpSouth in 2012 did not report any data in the Austin, Texas MSA. First State Bank Central Texas, for home purchase loans there, made 13 such loans to whites, NONE to African Americans or Latinos. Likewise, it made no refinance loans to African Americans or Latinos.
Now we note that BancorpSouth in the Lafayette, Louisiana MSA in 2012 for conventional home purchase loans, BancorpSouth made 37 loans to whites, NONE to African Americans or Latinos. In Table 4-1, BancorpSouth made 15 loans to whites and ONE to an African American applicant. That is, ALL of its home purchase loans to people of color were in Table 4-1, none in Table 4-2. This is troubling, and a pattern. The comment periods must be extended.
BancorpSouth should be required to fully disclose all branches it would close, and other changes, before the comment period closed. After for example the precedent of Huntington (and, in the Northeast, of Rockville and United in Connecticut and Massachusetts), both of which disclosed which branches they would close during the comment period, Huntington even re-starting the comment period to do so, to not extend this comment period on these five or more branches would be a major step backward for the Federal Reserve.
ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit.
If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.
Very Truly Yours,
Matthew Lee, Executive Director, Inner City Press/Fair Finance Watch
April 7, 2014
From the Federal Reserve's Umpqua - Sterling order:
"The Board’s review indicates that low volume of loan applications is a key factor in Umpqua Bank’s relatively low volume of lending to LMI individuals, to African American, Asian, and Hispanic individuals, and to small businesses in predominantly minority census tracts, in certain of its assessment areas, as compared with the aggregate. To that end, Umpqua has committed that, within 60 days following consummation of the merger with Sterling, Umpqua will develop a plan consistent with the combined organization’ size and complexity, to assist the combined organization in continuing to help meet the credit needs of its communities, in accordance with the CRA. The plan will establish specific performance goals and measures to assist the combined organization in helping to meet community credit needs, including through outreach and marketing of its products and services to LMI and underserved individuals and communities and by identifying opportunities for community development–related investments in its communities."
But will it be public? It should be. Watch this site.
March 31, 2014The Fed last week banned the "U.S. units of HSBC Holdings PLC, Royal Bank of Scotland Group PLC, and Banco Santander SA from increasing the dividends they send overseas after their "stress test" results didn't meet the Fed's standards." We'll have more on this.
March 24, 2014The Federal Reserve has hit a new low: in its "public record" on M&T's stalled-out application to acquire Hudson City Savings Bank, the Fed has only 2012 HMDA data. So last week Inner City Press / Fair Finance Watch submitted analysis of the just-obtained 2013 data. But the Fed sends back essentially a form letter, you have not shown exceptional circumstances that would warrant providing additional time to comment on the proposal, cc-ing one of its former FRB Staff Counsels now representing M&T. Isn't getting up to date information, instead of data more than a year old, enough of a reason to put the comment in the record?
March 17, 2014So Umpqua Bank has committed to commit - it has told the Federal Reserve that it will (or would) submit a CRA plan sixty days after it consummates its proposed acquisition of Sterling Bank. But will Umpqua's plan be made public? And will it be able to be enforced? The Federal Reserve should answer this.
March 10, 2014 Should
the Federal Reserve really
be parading
big bank representatives
as its experts on the CRA?
In the Senate, new Fed chairperson Yellen said "there’s no intersection at all in any way between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate. So the Federal Reserve simply does not have authority to supervise or regulate Bitcoin in any way."
February 24, 2014The Fed's Eric Kollig declined to comment when asked about Mercantile Bank of Michigan, whose CFO Chuck Christmas is dismissive of the CRA questions raised not only by Inner City Press / Fair Finance Watch, but also by the Fed (and FDIC), saying "there's nothing that has come up as far as we know in our communications that could cause us any angst." That's part of the problem, that Mercantile doesn't care or is in denial... But is the Fed enabling it?
February 17, 2014On February 11, Senator Elizabeth Warren (D-MA) and Representative Elijah Cummings (D-MD) sent a letter to new Fed Chairman Janet Yellen, asking that she reverse Bernanke's policy of delegating supervisory and enforcement powers to staff. In the last 10 years, the Board voted on only 11 of nearly 1,000 enforcement actions, and that under current application of the Federal Reserve’s enforcement delegation policy, the Fed can enter into consent orders without ever receiving formal approval of senior staff. The letter urges that (i) the Board vote on any consent order that involves $1 million or more or that requires a bank officer to be removed and/or new management installed; (ii) staff formally notify the Board before entering into a consent order under delegated authority; (iii) each Board member be provided with the necessary staffing capacity to review and analyze pending enforcement actions; and (iv) all Board members receive a copy of all letters sent to the Chairman or another Board member by a committee or member of Congress.
But what about the Governors getting more involved in merger review, including CRA?
February 10, 2014And now on Umpqua's application to acquire Sterling, the Federal Reserve has asked Umpqua if it has a CRA plan, first tweeted from @FinanceWatchOrg, and if it has one, to submitted a copy. We'll see.
February 3, 2014So now the Fed has asked Umpqua and Sterling which branches they would close...
January 27, 2014
Is the Federal Reserve watching the Off Shore Leaks series? They should be. We'll see. Watch this site.
January 20, 2014The Federal Reserve on January 17 asked Umpqua Bank a series of questions in connection with its proposal to acquire Sterling, challenged by Inner City Press / Fair Finance Watch, which has put the Fed's "Additional Information" letter online, first via @FinanceWatchOrg here: http://www.innercitypress.org/umpqua1frbicp011714.pdf
January 13, 2014
One thing that
should be expected
from the Federal
Reserve is to answer
its mail -- on
Huntington, for
example. How can a
bank holding company
try to buy another
(Camco) without
submitting an
application for
review by (and
public comment to)
the Fed? Especially
given the issues
that have arisen? We
will have more on
this.
January 6, 2014
On January 3, the Federal Reserve announced that "the Board has enlisted the services of executive recruiting firm DiversifiedSearch to assemble a broad and diverse pool of candidates, both internal and external, from which to select Ms. [Sandra] Braunstein's successor." Given the financial industry's domination of the rest of the Federal Reserve System including several Governors, we believe that consumers and community groups should play a role in the selection process. Watch this site.
December 30, 2013Another step at the Fed, on United: United has committed that, at the next CRA examination following consummation of the merger with VCB and consistent with the combined organization’s capacity and opportunities for making qualified lending and investments, the combined organization will demonstrate that it has engaged in levels of qualified lending and investments, home mortgage lending, small business lending, and community development lending and investments in low- and moderate-income communities in the Northern Virginia portion of United’s Multistate CSA assessment area, that exceed United’s improved performance in 2012. In addition, within thirty (30) days of consummation, United will develop a program, to apply across all assessment areas of the combined organization, with the objective of producing results exceeding United’s improved performance in 2012. United will submit the program to the Reserve Bank for review and implement the program across the combined organization’s assessment areas."
December 23, 2013There are those who wonder, rightly, whether a Vice Chair of the Federal Reserve should be one who worked at Citigroup....
December 16, 2013Asked about Inner City Press / Fair Finance Watch's commebts to the Federal Reserve about the lending record of Michigan's Mercantile Bank and its proposed acquisition of FirstBank, Fed spokesperson Susan Stawick replied, "I’m afraid I’m not able to speak specifically about the status of the timetable for this application. But I can tell you that Federal Reserve staff is performing due diligence regarding the concerns that have been expressed about the merger.”
Now, Mercantile has gone low. Its submissions to the Fed have gotten shrill; it has reached out to individual borrowers of color (and to ostensible civil rights and even religious groupings) asking them for letters to CEO Michael Price to give the Fed about how they never felt discriminated against. Click here for one sample letter: http://www.innercitypress.org/mercbankasia120213.pdf
This approach cannot be allowed to prevail. Watch this site.
December 9, 2013The Fed's Investors - Roma order says that
"as a condition of its approval, the Board has determined that the audit committee of the board of directors of Investors Bancorp must issue a written report to the board of directors of Investors Bancorp that shall include: an assessment of Investors Bank’s consumer compliance risk systems, processes, and procedures; an assessment of compliance with any reports or recommendations made by any state or federal agency issued in the last five years with respect to consumer compliance; and recommendations for improving the consumer compliance risk program, if necessary."
This is a rare condition for the Federal Reserve to impose, at least on consumer compliance. But as Inner City Press' March 1 comment set forth, in the New York City Metropolitan Statistical Area in 2011, Investors made 220 home purchase loans to whites, and only two such loans to African Americans. That's hard to do in New York.
But will the Fed follow up on compliance? Will there be transparency? Watch this site.
December 2, 2013The Federal Reserve and Wal-Mart: the Fed last week approved that "Green Dot Bank proposes to acquire assets and assume liabilities related to GPR cards issued by GECRB, sold at U.S.-based Wal-Mart stores and online through a website for the prepaid debit cards, and serviced by Green Dot pursuant to an agreement among the parties initially entered into in 2006. As a result of the proposed transaction, Green Dot Bank would replace GECRB as the issuer of Wal-Mart Cards." Abuse?
November 25, 2013Inner City Press / Fair Finance Watch commented on Mercantile Bank's application to the Fed to acquire First Bank, based on disparate lending in Michigan. Now (November 20) Mercantile argues against the Fed having extended its review, arguing that to go beyond December 31 might mean First Bank would have have file an SEC Form 10-K for 2013. But what would giving in to this kind of argument mean for CRA? Does the Fed give in to these kind of arguments?
November 18, 2013Michigan's Mercantile, trying to buy FirstBank, has responded to the Federal Reserve but withheld from Inner City Press three exhibits in their entirety, while telling the Fed they want to close the deal so to set up a conference call. Inner City Press contests the withholding, and any "ex parte" call, having now formally asked to be be notified of and allowed to be on any such call.
Meanwhile ex-regulator Tim Geithner is cashing out to private equity firm Warburg Pincus -- which has at least a 20% stake in Sterling, the Spokane-based bank that Umpqua has applied to the Federal Reserve to acquire for $2 billion. So $400 million of that would go to Warburg Pincus. This insider deal, Inner City Press / Fair Finance Watch has commented on, including on Home Mortgage Disclosure Act disparities and prospective branch closings. Watch this site.
November 11, 2013Two weeks after Inner City Press / Fair Finance Watch filed comments on the proposed acquisition by Mercantile or FirstBank, the Federal Reserve on November 6 asked Mercantile some questions, including about CRA and fair lending, here: http://www.innercitypress.org/frb1mercbank110613.pdf
They were given eight business days to answer (and send a copy); their shareholders meet on the proposal on December 12...
Another challenge we're watching is to to application of Midland States Bancorp of Effingham, Illinois, to acquire Heartland Bank, filed from St. Louis, Missouri....
November 4, 2013So Goldman Sachs' bank has been given an "Outstanding" CRA rating by the Federal Reserve and NYDFS, trumpeted in the Wall Street Journal. GS is given CRA credit for lending to the CitiBank program. But since the bike racks are all below 60th Street in Manhattan and in gentrified or gentrifying parts of Brooklyn -- a veritable redlining map -- why does this get CRA credit? It's a scam...
October 28, 2013This has caught our eye: Carmen Segarra, a former senior examiner at the New York Fed filed a wrongful termination lawsuit saying she was fired after her supervisors asked her to change her findings on Goldman Sachs and she refused. "The New York Fed is now asking the judge to seal the case, arguing that the Fed is not a public institution and therefore not bound by the Freedom of Information Act." What? The Fed responds to FOIA requests all the time...
October 21, 2013Last week's Intelligence Squared debate on breaking up the big banks featured "one of America's most outspoken Federal Reserve presidents, Richard Fisher"- on the side of breaking banks up. So what's he doing about it?
October 14, 2013Yellen is the pick. Hopefully unlike Bernanke she understands that enforcing the Community Reinvestment Act ON merger applications is the law...
October 7, 2013Even amid the government shutdown, the Fed keeps going -- it raises its funds independently...
September 30, 2013The Federal Reserve Board seems to not know much about how banks in Chile -- like Banco de Creditor e Inversiones, trying to buy City National Bank of Florida -- are regulated. So why let them in?
September 23, 2013So for JPMorgan Chase's sleaze, the Fed fines them only $200 million out of $920 million. And the beat goes on.
September 16, 2013How can Larry Summers be considered to head the Fed? Questions will be asked. Watch this site.
September 9, 2013Blast from the past: when Adams Bank and Trust applied to open a new branch in Nebraska, the Federal Reserve Board got "public comments received from prospective competing banks in Colby and from residents of the surrounding areas. The commenters assert that their community’s demographic and economic characteristics would not profitably support another branch and that the area’s financial services needs are adequately met by the financial institutions currently operating there." Saying "we don't want more banks" was one of the bases for the "convenience and needs" concept in US banking law...
September 2, 2013The Federal Reserve has belatedly sent Inner City Press / Fair Finance Watch copies of letters it sent to M&T about its Hudson City Savings Bank -- the letters are directed to former Fed legal staffer Patricia Robinson, now representing M&T (and others) at Wachtell Lipton....
August 26, 2013Inner City Press / Fair Finance Watch has raised to the Federal Reserve: How is the public to know of this newspaper notice, if they do not happen to buy and closely read the particular newspaper the Banks publish the notice?
We note that the Fed's H2A could and should but does not include the actual comment period. In this way, the public is being unnecessarily misled.
In the past when the Federal Reserve System published Reserve Bank's Weekly Bulletins, they would list the Federal Register AND the newspaper notice period. While we understand that Federal Register notice could not easily be re-published in cases like this, there is no reason that the Fed cannot keep its online H2A website current.
Watch this site.
August 19, 2013Despite being bailed out by the public and some now waning populist rhetoric from Washington, the continuing bank merger proposals show no concern for the public or for job loss. Why should they, when President Obama considers Larry Summer, on the Board of Directors of the no-doc (and thus subprime) Lending Club, to head the Federal Reserve?
August 12, 2013
When Inner City Press / Fair Finance Watch submitted a comment to the Federal Reserve Board in Washington on August 8, so far the only response is an "out of office" message from Juanetta Price. We know things are slow, but come on...
August 5, 2013So it's down to Larry Summers, Janet Yellen and Donald Kohn...
July 29, 2013So Larry Summers has been "speaking at internal meetings at Citi beginning in 2012, Mr. Summers attended small gatherings of clients 'where he provides insight on a broad range of topics, including the domestic and global economy,' a Citigroup spokesman said. The bank wouldn't say how much it is paying him," per Damian Paletta. Next!
It's worth noting, as Inner City Press / Fair Finance Watch did, that Fed Governor Jerome Powell, denier of FOIA appeals, was previously with Deutsche Bank and the Carlyle Group...
July 22, 2013So the Fed belatedly says it "is reviewing the 2003 determination that certain commodity activities are complementary to financial activities and thus permissible for bank holding companies." It all goes back to Citigroup and Phibro in 2003, or really to the Fed's lawless 2008 approval of Citi - Travelers. Full circle?
July 15, 2013Governor Elizabeth “Betsy” Duke is leaving the Fed at the end of August. Back on May 28, 2007 we reported that “Duke listed major holdings of a previous employer, Wachovia Corp., in financial disclosure forms filed in conjunction with her nomination to join the Fed Board. According to the disclosure forms, released Friday by the Office of Government Ethics, Duke reported holdings of Wachovia stock valued at between $5,000,001 and $25 million. She also reported holding Wachovia stock options.”
July 8, 2013
So Governor Jerome H. Powell gave a speech in New York last Tuesday at the reception for Deutsche Bundesbank. No surprised - he used to work for Deutsche Bank.... Bundes, indeed.
Deutsche Bank, which got involved as a direct subprime lender and as a trustee, has been accused by the City of Los Angeles of facilitating illegal evictions. Its attempts to get the case dismissed were rejected in April by the court.
And so now a settlement for a mere $10 million, of which Deutsche Bank brags it is not paying anything, that would be the services and the securitization trusts. When does immunity become impunity?
July 1, 2013Does the Federal Reserve have a typo, or is there another Investors Bancorp application?
Investors Bancorp, Inc. and Investors Bancorp, MHC., both of Short Hills, New Jersey (2 of 2) and thereby engage in operating a savings association pursuant to Section 225.28(b)(ii) of Regulation Y. 4 New York 07/08/2013
Investors Bancorp, MHC and Investors Bancorp, Inc., both in Short Hills, New Jersey to acquire Roma Financial Corporation MHC, & Roma Financial Corporation, Robbinsville, NJ, & indirectly acquire Roma Bank, Robbinsville, NJ, &d RomAsia Bank, South Brunswick Township, NJ & engage in operating savings associations -- 225.28(b)(4)(ii) 4 New York 03/01/2013
June 24, 2013M&T's (cheap) anti money laundering deal with the Fed will probably move the deal along faster -- but the deal makes it pretty clear that the money laundering loophole is in Wilmington Trust, which the Fed let M&T buy in 2011.
So what does it say about the Fed's merger reviews? The Fed should come up with a plan to improve itself, in 60 days (and approve no merger during that time.) Compare the Fed not even fining M&T, while state regulators last week fined even an accounting firm which helped a bank (Standard Chartered) conceal money laundering...
June 17, 2013How can it be that the third most recent "News" on the Federal Reserve's web site is a presentation by Ben Bernanke in March 2012 -- yes, 2012? http://www.federalreserve.gov/newsevents/default.htm
June 10, 2013Fed governor Sarah Bloom Raskin went to Ohio, spoke of growing up in a town without a bank, then said "Let's talk about the importance of timely implementation of rules based on one set of international agreements--the Basel III framework... I fully support this goal, because the financial crisis demonstrated, among other things, the need for robust capital at banks of all sizes... Since Basel III sets a final deadline for implementation of 2019, one might ask why it is so imperative to act sooner."
Click here for Inner City Press' review of Tower of Basel.
June 3, 2013So Guido Hinojosa Cardosa now tells the Fed that Anchor Bank would NOT be included in any reporting to the Bolivian regulators. What ever happened to comprehensive, consolidated HOME COUNTRY supervision?
May 27, 2013So the Federal Reserve has belatedly on May 22 auto-confirmed receipt of ICP's May 17 comments on the CRA Q&A. Now what?
May 20, 2013Check this out - more delay:
"On April 18, 2013, the Board of Governors (Board) received your electronic message dated April 17, 2013, pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, for records pertaining to the following:
all records related to the M&T - Hudson proceeding, which ICP timely protested, which have not yet been provided to ICP under the FRS' rules against ex parte communications. . . this new FOIA request [is] for all records concerning the proceeding and the FRS' review, including all non-exempt portions of communications between the FRS and M&T, since the date ICP protested the application until the date of the FRS' response to this FOIA request.
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response "
May 13, 2013Oops! Rust Consulting short-changed those already ripped off on servicing by Goldman Sachs and Morgan Stanley. Hear the Fed scramble: http://www.federalreserve.gov/newsevents/press/bcreg/20130508a.htm
May 6, 2013The Fed's hi-falutin predators:
"Payments to more than 220,000 borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley are scheduled to begin on Friday, May 3 following an agreement announced earlier this year by the Federal Reserve Board. Under the agreement, $247 million will be made in direct payments to borrowers whose homes were at any stage of the foreclosure process in 2009 and 2010 with the former subsidiaries of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.)."
April 29, 2013Investors Bank tries to explain its weak lending to African Americans and Latinos to the Fed's Helen Troy, as it tried to Brian Steffey, by saying it does not originate loans -- Investors Home Mortgage does. But isn't it responsible?
Meanwhile the FDIC has unilaterally extended its time to respond under FOIA, to May 10.
April 22, 2013Given that Inner City Press / Fair Finance Watch has challenged M&T - Hudson City Savings Bank since last Fall, how can it be that the Fed didn't give it documents about the regulatory issues in the applications process? Now Inner City Press has filed a separate FOIA request, beyond the rules against ex parte communications which the Fed, it seems, doesn't comply with...
April 15, 2013After Inner City Press challenged the application of Guido Hinojosa to gain control of Anchor Commercial Bank, the Fed did ask Hinojosa some questions about his resignation from Banco de la Paz, which then fell apart. The response, just in, calls it a family affair. Indeed...
April 8, 2013The Federal Reserve, as of April 5, lists on 78 pending applications subject to public comment under the BHCA, CIBC Act and HOLA -- a near record low. And some that are still listed have already been rubber stamps -- like First Merit....
April 1, 2013On FirstMerit, the Fed said “The commenter referred to press releases issued by two rating agencies raising concerns regarding possible integration difficulties and FirstMerit’s entry into new markets. The commenter also referred to outstanding litigation associated with the proposed transaction.” The commenter was ICP Fair Finance Watch. But as the Fed was asked recently at the Capital Hilton, why doesn't the Fed name commenters? Is it only to try to deny standing?
March 25, 2013When Federal Reserve Board Governor Sarah Bloom Raskin cited the “broken windows” theory, it hearkened back to James Q. Wilson and yes, Rudy Giuliani. But she took it in a different direction: what about when it's the banks who're breaking windows? Well what about it? If Bronxites get arrested to jumping the subway turnstile, what about destroying the world economy?
On March 22 an NCRC discussion ranged from the Federal Reserve withholding too much information under the Freedom of Information Act to allowing former Legal Division staffers to re-appear advocating before the people they used to work with, or under.
While we've always liked her, the case in point was Patricia Robinson, formerly of Fed legal, now representing banks on mergers. Is it appropriate? How to know, given the redactions? We will continue on this.
March 18, 2013When the Federal Reserve granted a public hearing on Bank of Hawaii's plan to close its branches in American Samoa, leaving it in the hands of ANZ, it looks like the Fed did not provide correct public notice. A search on FederalReserve.gov press releases for Samoa finds nothing. For shame...
March 11, 2013
Ah, Investors... A response from the Federal Reserve “Board’s Freedom of Information office on March 1, 2013. Board staff are currently processing the remainder of your FOIA request, which seeks the confidential portions of the Notice and seeks any and all records reflecting FRS communications with the applicant regarding the proposal. The Office of the Secretary will send you a separate response addressing the remainder of the FOIA request."
March 4, 2013
With Bank of Hawaii trying to close over 50% of the branches in American Samoa, why would the Federal Reserve Bank of San Francisco gave a post to Bank of Hawaii chairman Peter Ho. We say, to remove taint of conflict of interest, now MUST hold public hearing on the planned American Samoa branch closures....
February 25, 2013
The Federal Reserve tells Inner City Press that
“To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link that contain instructions for registering with the Zix e-mail system. The web address is
https:// [THE WEB ADDRESS IS NOT RESPONSIVE TO YOUR FOIA REQUEST]”
Yes it is...
February 18, 2013
Hitting a new low, Customers Bancorp on its application to the Federal Reserve to acquire Acacia Federal Savings Bank has tried to withhold from Inner City Press the entirety of its response to Fed questions. We will be pursuing - the documents, and Customers Bancorp.
Meanwhile the Fed has reportedly sent a February 11 Q&A to Live Oak, with a confidential attachment -- but none of it, even the non-confidential portion, was sent to Inner City Press. Watch this site.
February 11, 2013
And now we know: while the Federal Reserve told community groups that the comment period on Live Oak – Government Loan Solutions, published in the Federal Register, had been in error, internally the lawyer for Live Oak asked the Fed on December 21, “Are we close on the Live Oak notice? I know the comment period has not closed quite yet, but I will be out of the office most of next week, so I thought I would check in this morning.”
The comment period still open, but the Fed “close” to deciding and approving anyway. This is shameful. An appeal is being filed with the withheld information, presumably even more shameful.
February 4, 2013
Talk about grading of the curve: last Fall Inner City Press / Fair Finance Watch began challenging Customers Bancorp, then on its proposal to buy Acacia. Now, Customers tells the Federal Reserve that "Fair Lending training is required annually of all employees with customer contact. It is administered via an online, self-paced course through the Edcomm Learning Management System. The employee is required to demonstrate adequate mastery of the course materials by completing a test at the conclusion of the course and obtaining a passing grade (minimum 80% correct).
80% is good enough for fair lending? For the
Federal Reserve?
January 28, 2013
More Fed FOIA shenanigans:
This is a timely FOIA appeal to the Federal Reserve Board's January 11 partial denial of my FOIA request of some 11 weeks earlier for all portions of the applications / notices by Guido Hinojoso to acquire control of Anchor Commercial Bank for which Guido Hinojosa and his outside counsel improperly requested confidential treatment.
Some of these arrived some eleven weeks later, but with redactions to basic managerial information such as the answer to "have you ever been dismissed from past employment" including in the banking field. Biographical, 2b. Similarly, the FRB has redacted all answers about past bank merger applications, if they were denied (Biographical 5) including a paragraph answer about Change in Control (5b) and lawsuits (5e). All such information must be released.
Still partially redacted Exhibit 1G lists $500,000 purchase of shares in Sunrise Bank in 2011, and $5,500,000 for Anchor Commercial Bank in 2012. But it is now 2013. Was the gun jumped? Has this plan changed? The rest of the page is blacked out and must be released, and the comment period extended.
The "relationship to Notificant" column for both Patricio Hinojosa Jimenez and Jorge Hinojosa Jimenez is redacted - why? A member of CBIFSA's board of directors is redacted in full -- why? These must be released.
The Recitals, Definitions and much of "Subscription" of the Subscription Agreement are redacted - why? This must be released.
In "Turnaround," the "Summary of the Bank's Condition" is redacted - this must be released.
The "Commitments" (Confidential Exhibit 3) are withheld - but must be released. ICP is appealing this and all other redactions and withholdings.
The Deputy Secretary's letter (the "Denial") cites exemptions 4 and 6 and says their application to the heavily redacted pages provided is clear. It is not. Nor does the Denial state how many pages have been withheld in full.
January 21, 2013
Richmond Fed President Jeffrey Lacker has reiterated his claim that then-New York Federal Reserve President Timothy Geithner in 2007 notified Bank of America and other financial institutions that the U.S. central bank was considering lowering a critical interest rate.
January 21, 2013
Richmond Fed President Jeffrey Lacker has reiterated his claim that then-New York Federal Reserve President Timothy Geithner in 2007 notified Bank of America and other financial institutions that the U.S. central bank was considering lowering a critical interest rate.
January 14, 2013
Inner City Press has submitted a FOIA request to the Federal Reserve for all records related to the Federal Reserve System's comment period on Live Oak Bancshares' application to acquire Government Loan Solutions, Inc., of Cleveland, Ohio -- the initial comment period on which was said by the Fed to be January 4: http://www.ftc.gov/os/fedreg/2012/12/121210agencycollectionfrn.pdf
However at some later stage the Fed decided to shorten the comment period. We are specifically requesting all records concerning the change in comment date, as well as a full copy of Live Oak's application and all records reflecting the Federal Reserve System's communcations with or about Live Oak Bancshares or Government Loan Solutions for the past six months.
Watch this site.
January 7, 2013
The total lack of accountability of the Federal Reserve Board and of those it purports to regulate, for example Capital One which was fined $150 million in July 2012 for predatory practices, is on display in a Freedom of Information Act appeal denial issued on January 2 by Governor Jerome Powell, to Inner City Press.
Upholding in full the withholding of over 2000 pages of records related to Capital One's compliance or non-compliance with commitments it made during its NCRC protested purchases of ING DIRECT and HSBC's subprime credit card operations, Powell ruled that not one page, or even a portion of a page, would be released.
This is at odds, for example, with FOIA appeal responses obtained this year by Inner City Press from other Federal agencies. In other FOIA news, Inner City Press is a media amicus in this just filed brief in McBurney v. Young, No. 12-17 of the US Supreme Court.
But the Federal Reserve, along with Capital One, will have to be addressed in 2013. Watch this site.
December 31, 2012
The Federal Reserve and its Governor Jerome H. Powell have hit new lows. After delaying more than 40 days to rule on Inner City Press' FOIA appeal of withholdings about M&T - Hudson City Bancorp, Powell in a seven page ruling finds that the Fed mis-invoked FOIA exemptions 6 and 8 -- but then refuses to release the information, now invoking exemption 4. This is much worse even than previous FOIA appeal rulings -- a new low. We'll have more on this.
December 24, 2012
Back in August, Inner City Press / Fair Finance Watch wrote to Customers Bancorp for its mortgage data, expressing some concerns. A month later, at the deadline, some data was provided. It was disparate and Inner City Press comments on Customers' Acacia application. There were questions from the Federal Reserve, some FOIA requests. Now, Customer's has passed back the drop-dead date from December 31 to January 31. But how do they know it will be approved by then?
December 17, 2012
The Federal Reserve has responded thusly to a Freedom of Information Act request from Inner City Press:
To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link that
contain instructions for registering with the Zix e-mail system. The web address is
https:// WITHHELD
For shame... Also From FirstMerit's submission to the Federal Reserve about Citizens Republic, the entire "Environmental Matters" section is blacked out, in response to Inner City Press' FOIA request...
December 10, 2012
Sometimes credit has to be given where it's due. The Federal Reserve increasingly grants large banks insider status, discussing their merger ideas with them before they are announced, allowing the large banks to be represented by recent Federal Reserve Board lawyers.
But now on the smaller Customers Bancorp - Acacia proposal, the Federal Reserve left Inner City Press a voice mail before they called Customers, then had information that the Fed requested sent to Inner City Press. Customers has another merger application coming up -- we'll see if the disparities and weakness in their record can be made to change.
Meanwhile, Inner City Press has filed this;
This is a formal request under FOIA for the portions of FirstMerit's November 30 response to FRS questions which were not sent to Inner City Press.
To virtually every FRS question about its proposal to acquire Citizens Republic, which ICP timely challenged and made a still pending FOIA request about, FirstMerit states, See Confidential Exhibit. For example, to FRS Question 1, FirstMerit says only, "See Confidential Exhibit 1."
To FRS Question 2, FirstMerit says only, "See Confidential Exhibit 2."
To FRS Question 3, FirstMerit says, "See Confidential Exhibit 3."
To FRS Question 5, FirstMerit says, "See Confidential Exhibit 4."
To FRS Question 6, FirstMerit says, "See Confidential Exhibit 6."
To FRS Question 7, FirstMerit says only, "See Confidential Exhibit 6."
To FRS Question 8 and 9, FirstMerit says only, "See Confidential Exhibit 7."
To FRS Question 10, FirstMerit says only, "See Confidential Exhibit 8."
To FRS Question 11, FirstMerit says only, "See Confidential Exhibit 9."
To FRS Question 12, FirstMerit says only, "See Confidential Exhibit 10."
To FRS Question 14, FirstMerit says only, "See Confidential Exhibit 11."
This is outrageous, and makes a mockery of the FRS' stated Rules against Ex Parte Communications. This is a timely challenge to all of the withholdings.
December 3, 2012
What is it about the Federal Reserve System, that one submits comments on a merger by e-mail, then awaits for snail mail confirmation? See, FirstMerit, Cleveland Fed.
November 26, 2012
Hudson City Savings Bank, which M&T is trying to buy, is in New Jersey but not of it. When ICP / Fair Finance Watch challenged the deal, highlighting disparities in Hudson City's record, Hudson City had no response at all. Now it has been challenged from New Jersey as well. Meanwhile the Fed has had no response to the absurdity of it providing heavily redacted records of its pre-announcement meetings with M&T, an hour before the comment period was set to expire. This is not transparency. Watch this site.
November 19, 2012
So the Fed hauled off and approved Mitsubishi UFJ to acquire UnionBanCal -- in footnote 22 it recites that ICP / Fair Finance Watch timely raise the issue of the ongoing LIBOR scandal. The Fed says that "the Board is monitoring the course of the investigations and will consider, to the extent of the Board's authority, the findings in those investigations as they develop."
To the extent of the Fed's authority??
In in footnote 44, it says that the issue ICP raised about Tax Refund Loans is a thing of the past. If so, no thanks to the Fed...
November 12, 2012
Fed Met M&T 10 Days Before
Hudson Deal, FOIA Shows, Appeal & Protest
By Matthew R. Lee, Exclusive
SOUTH BRONX, November 9 -- When M&T on August 27 announced biggest bank merger deal of the year, a $3.81 billion proposal to buy Hudson City Savings Bank, it was not the first time the Federal Reserve had heard about.
Inner City Press, which has challenged M&T's application under the Community Reinvestment Act, on November 9 got a belated Freedom of Information Act response from the Federal Reserve Board, less than two hours before the Fed said the extended comment period would close.
The documents released to Inner City Press show that on August 17, a full ten days before the public announcement, Federal Reserve Bank of New York official John Ricketti wrote to five others within the Fed:
"Wilmers called me this afternoon to inform me that M&T is looking to acquire M&T. [sic] He will be talking to his board about the acquisition at next Tuesday's board meeting and asked to come in Wednesday to talk to us (we're setting something up for late Wednesday afternoon). I'll be up in Buffalo for the board meeting to discuss the [REDACTED] and expect to learn more from him Monday night (I have a one-on-one meeting with him)."
After that, much is redacted. Click
here to view.
The Fed advised M&T that its application to buy Hudson would probably be protested -- accurately, given that Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans.
Of this, a Fed memo of August 24 said "this will
require review of any issues that are raised and [REDACTED].
To view, click on cover
email, and talking
points One and Two.
After the August 17 contact but before the proposal was announced, the Fed met on August 22 from 4:30 to 5:30 with "Wilmers" and Rene Jones, Michael Pinto and outside council Rodgin Cohen.
A slide presentation was made, much of which including on Due Diligence and Complexity has been withheld.
After the meeting, the New York Fed's Ivan Hurwitz sent a memo to the Fed in Washington, most of which has been blacked out.
On August 24, the Fed's John Ricketti wrote another memo, with talking points, about his meeting with Rodgin Cohen and Rene Jones, much of its redacted.
Then on August 27, Cohen [Rodge] called the Fed's Tom Baxter, and Wilmer called "Dudley," both summaries redacted.
After the deal was announced, M&T had more meetings with the Fed on September 7. Only after they submitted an application did Inner City Press submitted a FOIA request on October 2, and an initial protest, on October 7.
Now Inner City Press has timely requested a further extension of the comment period, to review the documents so belatedly released, and to appeal what is being withheld.
Withheld is the substantive part of "Confidential" Exhibit O, what M&T will actually PAY to Merger Sub, and nearly all of the anti-money laundering program, material changes and due diligence findings. The Board Resolutions and Agreement and Plan of Merger are all blacked out, which is ridiculous.
November 5, 2012
So why hasn't the Fed asked, or M&T answered, questions about its application to acquire Hudson City Savings Bank? We are waiting...
October 29, 2012
The Fed has yet to address its revolving door. The response from M&T's outside counsel to ICP's October 7 protest was signed by a former FRB staff attorney who worked on mergers, with those still there. With all due respect, how is this appropriate? ICP has asked. Watch this site.
October 22, 2012
So when push comes to shove, the Federal Reserve doesn't even enforce the HHI Index. In Madison, Indiana last week, the Fed approved: "On consummation of the proposed merger, the resulting institution would remain the largest insured depository institution in the market, controlling deposits of approximately $249.7 million, which would represent approximately 46.3 percent of the market deposits. The HHI would increase by 234 points to 3284."
It fails the stated test, but the Fed approved it...
October 15, 2012
On October 5, Trustmark wrote to the Federal Reserve and said is was extending the planned closing date of the merger into 2013, because it has rightfully not obtained regulatory approval. Trustmark's lawyers mailed Inner City Press a copy of their email to the Fed -- we'll put it online here -- and then four days after the email, put out a press release about the extension (but not the protest).
On October 11, after its press release and uninformed reports of it, Trustmark answered another round of questions from the Federal Reserve. But the Fed has yet to extend the comment period. Watch this site.
October 8, 2012
Ah, if only Bernanke would apply his baseball paean to Davey Johnson to CRA, and see fit to deny a merger on CRA grounds from time to time, not least to "help in the long run"...
October 1, 2012
On appeal, and only on appeal, the Fed through Governor Jay Powell has deigned to belatedly release Trustmark's market share of deposits in Jackson, Mississippi and basic information about its anti money laundering program. Why was it withheld? What accountability is there for that?
September 24, 2012
From the troubling department of the revolving door: "Patrick M. Parkinson, former director of supervision for the Federal Reserve board, has joined Promontory Financial Group. After 31 years at the central bank, he will serve as a managing director at Promontory, consulting on regulatory and risk management issues in Washington.As the director of banking supervision and regulation from 2009 to 2011."
This should not be permitted.
September 17, 2012
So after the Fed handed out an approval without any mention or consideration of it, now it's reported that BB&T will close 21 branches in South Florida as it swallows BankAtlantic -- nine from BB&T and 12 from BankAtlantic. And, 365 jobs will be cut by Feb. 1, 2013...
Meanwhile Fed Governor Jerome H. Powell, formerly of Deutsche Bank and the Carlyle Group, has belatedly ruled on Inner City Press' June 30 FOIA appeal about Mitsubishi UFJ, largely rubber stamping the withholding but saying that some additional pages mis-withheld under Exemption 8 will be released. But these wrongfully withheld pages weren't included with Powell's letter, and haven't been e-mailed.
The Fed did belatedly send a copy of its August 27 to Trustmark, after it was raised. Better late than never.
September 10, 2012
After Inner City Press / Fair Finance Watch commented on Trustmark's application to acquire BankTrust, its law firm Wachtell Lipton replied, saying that a six to one denial rate disparity was okay. Now the Federal Reserve has asked Trustmark and Wachtell Lipton questions about the reply, including about Somerville Bank & Trust, who reviewed and claimed no discrimination? The responses are not convincing - and one wonders why the Fed didn't send ICP a copy of the questions, when they were asked...
September 3, 2012
The House Financial Services Committee has given the NY Fed a one-month extension, from September 1, to hand over thousands of documents related to the interest rate manipulation scandal. Many mega-banks including Citigroup, JPMorgan Chase, Barclays, UBS, Bank of America and Royal Bank of Scotland Group have been under investigation from regulators around the world over colluding to manipulate LIBOR.
Meanwhile the Federal Reserve Board has tried to withhold from Inner City Press information about the LIBOR scandal and Mitsubishi UFJ -- but Inner City Press has appealed under the Freedom of Information Act....
August 27, 2012: in its
headquarters Metropolitan Statistical Area of Jackson,
Mississippli in 2010, Trustmark for conventional home
purchase loans had a denial rate for African Americans
more than SIX TIMES HIGHER than for whites: 44.7%
denial rate for African Americans, versus 7.3% for
whites. It had a 100% denial rate for these and
refinance loans for Latinos.
MEANWHILE, the Federal Reserve in an August 22 FOIA
response blacks out even Trustmark's market share of
deposits in Jackson -- clearly public information. The
Fed has hit a new low.
August 20, 2012
Based on troubling disparities in mortgage lending in the Deep South,ICP Fair Finance Watch has filed Community Reinvestment Act comments with the Federal Reserve on Mississippi-based Trustmark's application to acquire Mobile, Alabama based BankTrust.
In its headquarters Metropolitan Statistical Area of Jackson, Mississippli in 2010, Trustmark for conventional home purchase loans had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.
In the Gulfport - Biloxi MSA in 2010, for conventional home purchase loans Trustmark made 40 loans to whites and only four to African Americans.
In the Memphis MSA in 2010, for conventional home purchase loans Trustmark made 34 loans to whites and only two to African Americans.
In the Houston MSA in 2010, for conventional home purchase loans Trustmark made 35 loans to whites and NONE to African Americans.
ICP Fair Finance Watch has requested an evidentiary hearing into these lending patterns. The Federal Reserve Bank of Atlanta has confirmed receipt and asked the Fed's Freedom of Information Act unit and more importantly Trustmark and its outside counsel for responses. Watch this site.
August 13, 2012
So what WAS the Federal Reserve System doing about Standard Chartered for all this time?
August 6, 2012
Ah, impunity. The Fed's BB&T - BankAtlantic order, issued days after Governor Jerome Powell withheld yet more information from ICP on FOIA appeal, notes its protest
"referenced an SEC lawsuit alleging that the chairman of BA Bancorp had engaged in a pattern of misleading BA Bancorp’s investors through selective and untimely disclosures with respect to problem loans. The individuals named in the lawsuit will not be associated with BB&T or BankAtlantic after consummation of the proposed transaction."
So after untold scandals and the financial meltdown, the Fed's response? "Bygones."
July 30, 2012
Federal Reserve Seems to Pre-Approve Mergers, BB&T FOIA Release to Inner City Press Shows
By Matthew Russell Lee, Exclusive
SOUTH
BRONX,
July 29 -- This month the Federal
Reserve Board quietly announced a willingness to
pre-approve, or to indicate a willingness to approve, bank
mergers proposals even before the public is made aware of
them.
To some, this shows how little the regulator has learned from the financial meltdown.
Inner City Press has also just learned, via a
Freedom of Information Act request and appeal, that the Fed
has even this year been entertaining bank merger proposals
under code names such as "Project Palm," assigned to
BB&T's proposal with BankAtlantic.
Click here
for Governer Jerome Powell's response to Inner City
Press' FOIA Appeal. Click here
for some of the documents released.
The deal is still pending.
When the Fed on July 11 announced the policy by a "Supervisory
Letter," its press
release provided a telephone number in Washington for
media inquiries. Inner City Press called the number and
asked among other things how it would impact review under
the Community Reinvestment Act, which involves public notice
and comment.
Inner City Press will not here report the name of the person answering, because it was insisted that no name could be given.
Rather Inner City Press was directed to the FOIA footnote of the Supervisory Letter, that some records about the pre-approvals will be available, after the fact, under FOIA.
But while the Fed is pre-approving, the public will have no way to know what records to request. This can be called false transparency.
Even on BB&T's "Project Palm," it is only now that the Fed releases records half-showing its response to Inner City Press' February 2012 comment on and against the proposal.
The just-released records show that on February 7, Claudia A. VonPervieux of Fed staff was "working on a draft rejection letter for M.Lee" of Inner City Press when the Fed belatedly realized that the Press was right: public notice had disappeared such that one couldn't know what to comment on.
And so a brief extension of the comment period was granted, but only for Inner City Press, which did not cure the problem of lack of notice to the public at large. See released e-mails, attached. And so it goes at the Fed. Watch this site.
July 23, 2012
The Fed has done it again: improperly withheld basic information about an application, as admitted even by the pro-bank Governor now in charge of ruling on FOIA appeals. Governor Jay Powell, recently withholding ING - Capital One information, now finds on another application (BB&T) that information was improperly withheld under Exemption 5 and can now be released including records that "describe transaction filings and discuss comment period timings and news articles." The rest -- at least 156 full pages -- he withholds.
Meanwhile one of Governor Powell's ex employers has decided to hold onto its stake in a bank in Taiwan, Ta Chong. How does or will Powell recuse himself? Watch this site.
July 16, 2012
Last week, the Federal Reserve put out a letter offering "pre-filing" review of merger applications to banks. Inner City Press decided to call the number on the Fed's press release with a "media inquiry."
At first they said they'd give an on the record answer. Then they offered only "deep background" not attributable to the Fed -- and even then, only directed ICP to the FOIA part of the letter. This... is what lets scandals like LIBOR and predatory lending happen.
July 9, 2012
Just filed with the Fed:
This is a FOIA appeal to the Federal Reserve Board's "reconsideration" and partial denial, dated June 29, of my FOIA request of February 17 regarding BB&T's proposal to acquire BankAtlantic.
First, I note that I submitted an appeal -- now, rather than acknowledge the improper withholdings appealed from (and have that recorded for example in the FRB's annual FOIA report), the FRB decides to call it a "reconsideration," from which I now submit this second appeal. This record below must be addressed in the response to this (second) appeal.
The Associate Secretary's June 29 letter (the "Denial") outright withholds 53 pages, saying it's clear why. Again, it's not - this is an appeal of all those withholdings.
Why is the October 28, 2011 "update on Project Palm" being withheld? Also, information about the 12/02/2011 call, and the E-Apps notifications of 12/13/2011 and 12/16/2011, and the Thro to Seld e-mail of the latter date. Also the Cox to Smith e-mail of 01/25/2012.
ICP is explicitly challenging all withholdings concerning the extension of the comment period, including but not limited to the 02/06/2012 and 02/07/2012 emails.
July 2, 2012
The Federal Reserve's FOIA response to Inner City Press about the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust outright withholds 634 pages, and we have appealed.
But what's provided points to more. For example:
Subject: Unionbancal/Pacific Capital
BC transaction - call Wed?
From: Elisa Johnson
To: Kenneth Binning; Cynthia Holbrook; Steven Takizawa Cc: Jose
Alonso
Date: 02/21/2012 04:53 PM
Hello everyone -
I just took a call from Mark Gillett of Union Bank wanting to have a preliminary call tomorrow at 11am to discuss the filing requirements for Unionbancal's acquisition of Pacific Capital BC, Santa Barbara. Union is in the midst of conducting their due diligence . This will be an all cash transaction. FYI: the code name for this deal is Pebble Beach. The structure of the deal has "gelled"
But no earlier records are provided. And many records are withheld as "not responsive" -- with "also b(5)" added later in a different font. The Fed continues to abuse FOIA - we have appealed. Watch this site.
June 25, 2012
After Inner City Press / Fair Finance Watch challenged the applications of Mitsubishi UFJ Financial Group to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust, the applicants decided to withhold basic information about their Community Reinvestment Act programs.
Then Inner City Press filed Freedom of Information Act requests and appeals. Now, Mitsubishi related some information, while blacking out columns and columns, and most of its response on the CRA. Meanwhile, the Fed by letter dated June 18 says it is withholding 634 pages, but is providing other information, which we've yet to receive. We'll have more on this.
June 18, 2012
So the Federal Reserve, belatedly ruling on June 6 on Inner City Press / Fair Finance Watch FOIA request of February 17 regarding BB&T and BankAtlantic, says "156 full pages and portions of other pages (as will be apparent to you from the face of the documents to which redactions have been made) will be withheld from you." We aim to appeal - watch this site.
June 11, 2012
The Federal Reserve has issued a flurry of FOIA denials and extensions of time. Then comes a heavily redacted submission TO the Fed from Sullivan & Cromwell, on Mitsubishi UFJ Financial Group's application to buy Pacific Capital Bancorp and long time RALs rogue Santa Barbara Bank & Trust.
Asked about its due diligence on the RALs rogue, Sullivan & Cromwell say "see Confidential Exhibit 1" -- but do not provide it. Well, we DO want to see it. Watch this site.
June 4, 2012
The Federal Reserve Bank of San Francisco has confirmed receipt of the comments of Inner City Press / Fair Finance Watch. While the letter of Kenneth R. Binning of the FRBSF is dated May 9, it wasn't mailed until May 29. Maybe THIS is one of the reasons the Federal Reserve didn't stop the subprime meltdown...
May 29, 2012
Last week Inner City Press RSVP-ed for and went to cover a speech by the President of the Federal Reserve Bank of New York William Dudley. But from CFR's overflow run to which the media was confined, ICP was not able to ask any questions, whether about bank accounts for UN member states or why it is appropriate for JPMorgan Chase CEO to be on the Federal Reserve Bank of NY board of directors, given that the FRBNY directly regulated JPMC, which has recently gambled and lost $3 billion and counting. This last question, Inner City Press submitted twice by email, but it was not posed. Nor has it been answered since.
Months after the Federal Reserve approved the applications of Capital One and ING DIRECT, now the Fed admits it improperly withheld information in response to Freedom of Information Act requests and appeals by Inner City Press / Fair Finance Watch. A little late, isn't it? We need new regulators. Watch this site.
May 21, 2012
When the Federal Reserve approved on May 9 the applications to acquire 80% of Bank of East Asia, it did NOT require an application from or review the real party in interest: the Chinese government. Inner City Press / Fair Finance Watch raised the issue, this loophole created by the Fed, under which government's like the DPRK or Syria or Bahrain could acquire a bank in the US without any review of the risks created. The Fed merely cites the loophole it opened up itself (that governments are not companies -- an exception intended for US-based governments like states), then says that "Congress has provided other US agencies the authority to review national security issues in proposals by foreign companies to acquire US companies."
The Fed is missing, intentionally, the point: ownership of an insured bank by a foreign government that might even be subject to regime change by the US or its allies is a risk that the Fed must consider. Watch this site.
May 14, 2012
So sleazy Deutsche Bank, AFTER de-certifying with the Fed, now pays out a governmental settlement for predatory loans defrauding FHA. Wouldn't it seem like time for the Fed to reconsider that decertification?
May 7, 2012
As
Deutsche Bank Evades Fed, Tarullo Alludes to "Some Private
Actors," Blurs FOIA & Volcker Rulemaking
By Matthew Russell Lee
UNITED NATIONS, May 2 -- When the Federal Reserve's Daniel Tarullo spoke Wednesday at the Council on Foreign Relations about regulatory reform, he did not mention a single bank or financial institution.
Inner City Press asked him about Deutsche Bank, which earlier this year split off its investment banking business so as to avoid Fed regulation. Tarullo on March 22 told the Senate the Fed would have to "respond" to this, that it had some impact on this thinking on regulation.
Tarullo replied, "Matthew, what I said was it effected my thinking, not change, that implies a dramatic shift." Then he answered, six minutes in all, without once mentioning Deutsche Bank. He said that "the kind of changes some private actors are engaged in will have to effect the scope of our regulations."
These regulations, he said, will be "under 165... to make sure we can implement Congressional concern."
Inner City Press also asked Tarullo if he claimed the Fed has
gotten more transparent since the financial meltdown, noting the
Fed's recent denial in full of access to over 2000 pages
responses to an Inner City Press FOIA request.
Here
now is an online copy of the Fed's FOIA denial
Tarullo, which has previously heard of FOIA problems at the Fed, said he didn't know which FOIA request was referred to, then answered about administrative rule making. He said "for rule making, we get comments" and now distinguish "unique comments -- that is, not form letters."
He said there have been "17,000 Volcker Rule submissions... Absorbing all the comments is a substantial undertaking. If it takes longer to give due respect to comments," so be it.
The FOIA request referred to was about Capital One's compliance, since the Fed's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.
Amazingly, the Fed found 2200 pages responsive but provided not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations.
Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.
Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:
"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012
Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."
Just because it SOUNDS like the responsive records might include
some withholdable information, it is outrageous to withheld each
and every responsive record, citing the catch-all Exemption 8.
The Fed is increasingly abusing and evading FOIA. Watch this
site.
April 30, 2012
The Federal Reserve just continues to hit new lows, leading to this FOIA appeal by ICP:
This is an immediate FOIA appeal to the Federal Reserve Board's denial dated April 26, 2012 of my FOIA request of April 10, 2012 for "all records in the possession of the FRS concerning Capital One's compliance, since the FRB's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.
Amazingly, the Fed provides not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations. This is a new low.
Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.
Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:
"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012
Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."
Just because it SOUNDS like the responsive records might include some withholdable information, it is outrageous to withheld each and every responsive record, citing the catch-all Exemption 8. The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.
April 23, 2012
Who knew? The Federal Reserve, which barely enforces the Community Reinvestment Act in the US where it is the law, last week told a group of visitors from Central America that perhaps they could assist in rating banks' performance in countries outside the US. We'll see.
April 16, 2012
MetLife is one of the largest financial institutions in the world, but now it seeks to escape Federal Reserve regulation by selling its deposits to GE Capital Financial. Inner City Press / Fair Finance Watch has now opposed the transaction - watch this site.
April 9, 2012
The Fed has, so far, allowed BB&T to amend its application to acquire BankAtlantic, to tell ICP about its application late, and not yet to extend the comment period. ICP has complained:
This is a third comment on the applications by BB&T to acquire scandal-plagued BankAtlantic. BB&T has significantly amended the proposal after an adverse court ruling -- the changed structure should trigger a new public comment period.
Troublingly, while BB&T outside law firm Wachtell, Lipton send the amendments to the Fed on March 19 by courier, they were only sent to Inner City Press the follow (this) month. So Inner City Pres is requesting an extension of the comment period.
It would be ludicrous to argue that the changes to the proposal, the result of a court order, are not substantial. As such, it is unclear to ICP why no new public notice appears to have been published.
As described, BB&T would assume about $285 million of BankAtlantic Bancorp TruPS obligations in exchange for a 95% preferred interest in a newly established limited liability company, which will comprise about $423 million of loans and $17 million of other net assets. BB&T has estimated $350 million of recoverable preference value in the limited liability company. Once BB&T recovers $285 million in preference amount from the limited liability company, its interest in the company will terminate. BB&T would also have an incremental $35 million guarantee to assure BB&T's recovering within seven years of the $285 million preference amount.
ICP has recently obtained BB&T 2011 HMDA-LAR and will be commenting on its, in a week's time. The comment period must be extended.
April 2, 2012
In the first study of the just-released 2011 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that banking behemoths Citigroup, JPMorgan Chase and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.
2011 is the eighth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.
The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 3.38 times more frequently than whites in 2010, worse that its 2.25 disparity in 2009, Fair Finance Watch has found.
Citigroup confined Latinos to higher-cost loans above the rate spread 2.42 times more frequently than whites in 2010, worse that its 1.72 disparity in 2009, the data show.
“Even after the bailouts, lending disparities grew worse and not better," said Fair Finance Watch. "Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by predatory lending."
For JPMorgan Chase, the disparity for African Americans in 2011 was 2.21; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was 2.28.
"The Federal Reserve is becoming more and more bank-friendly, including with the recent nomination of former hedge funder and Deutsche Bank official Jay Powell for a seat on the Federal Reserve Board. It is still not clear if the new Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2011 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."
Growing Southern bank BB&T, even absent its subprime unit Lendmark, in 2011 confined African Americans to higher-cost loans above the rate spread 2.59 times more frequently than whites
Fair Finance Watch has continued its enforcement project in the South, most recently raising issues under the Community Reinvestment Act on BB&T's proposal to acquire BankAtlantic. In response, the Federal Reserve Board extended the comment period. Much of BB&T's application has been blacked out or withheld in full, which Inner City Press is challenging under the Freedom of Information Act.
Inner City Press & FFW have also joined others concerned with Deutsche Bank's decertification as a financial services holding company to escape Dodd Frank including its capital adequacy rules -- particularly given Deutsche Bank's role in the subprime scandal, as lender, securitizer and now major forecloser.
The law required that the 2011 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline, most notably Capital One and Bank of America, despite confirming receipt of the request. Further studies will follow: watch this site.
March 26, 2012
Deutsche Bank was big into subprime, as lender, securitizing and foreclosing trustee. But now that the Dodd-Frank law is coming into effect, Deutsche Bank is restructuring to avoid the law's requirements. Fed Governor Tarullo has said this gives pause. And what will he and the Fed do?
March 19, 2012
So the FRB stiffly and belated went on Twitter and was greeted by... the CFPB, already there.
March 12, 2012
"The Federal Reserve is reportedly stalling some banks' proposals to pay dividends and repurchase shares, after it determined that the firms are miscalculating the potential losses on consumer debt in an event of a financial crisis." A little late, isn't it?
March 5, 2012
On the Volcker Rule, Fed board members and staff members met with JPMorgan Chase 16 times, Bank of America 10 times, Goldman Sachs 9 times, Barclays 9 times & Morgan Stanley 9 times -- what about Citigroup?
Even as requests for reconsideration of Capital One - ING DIRECT pend at the Federal Reserve, in Europe, the terms of ING’s bailout by the Dutch government are being questioned by a European Union court in the first case challenging EU conditions on more than $1.3 trillion of bank rescues throughout the region. ING was ordered by the European Commission to sell units to shrink its balance sheet by 45 percent by the end of 2013 and avoid undercutting rivals on prices for some banking products for three years or until it repaid the aid. The EU must approve large state subsidies and can impose conditions on the aid. There have beeen challenges by ING and the Dutch government to the terms of the EU’s approval, which the bank says punished it too harshly for state help in 2008 and 2009. ING said the regulator miscalculated the amount of aid and imposed excessive restructuring demands. We'll see.
February 27, 2012
ICP has now requested reconsideration, following the Federal Reserve Board's February 14 approval of the proposed acquisition by Capital One Financial Corporation (“Capital One”) to acquire ING Bank, FSB and its affiliates (“ING”), to form what would be the fifth largest bank in the country.
One of the FRB's sleights of hand is in footnote 27, where after reciting ICP's objections the FRB says "the Board has determined in a separate action that ING Groep would not control Capital One as a result of this proposal. See Board letter to Mark Menting, Esq. (February 14, 2012)."
So a major contested issue was confined to a side letter on the same day at the approval. Amazingly, the Board has yet to provide even a copy of this letter to ICP, which commented extensively on this part of the proposal, including on ING being under investigation for violating sanctions.
While the Order says the charges are against ING, not ING Direct, in the side letter the Board was addressing ING owning a substantial percentage of Capital One. This segmentation is the type of legal legeredemain by which the FRB allowed the financial meltdown. This Order should be reconsidered, including in light of Capital One's dramatic drop in mortgage lending and did not adequately explain its findings - for example, the FRB asserts that Capital One’s credit card small business lending is minimal in contrast to findings by NCRC and others.
Footnote 10 of the FRB's approval order says
"One commenter expressed concern about ex parte communications and the opportunity for the public to rebut all information that was provided by Capital One. On review, the Board found that the public had a full opportunity to provide the Board with any information related to the factors that the Board must consider in acting on the notice. The information submitted by Capital One, and the release of that information to the public, was in accordance with the Board’s regulations and policies. The Board confirmed that all contacts between Capital One and staff were in accordance with the Board’s rules on ex parte communications."
The FRB should void and reconsider its Order, inter alia following its now appealed under the Freedom of Information Act denial of February 7, 2011 -- emailed to ICP after 5 pm on Feb 7 -- of ICP's FOIA request of October 29, 2011. This document dump was and is beneath the Federal Reserve.
Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:
Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;
On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov
"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).
With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.
As noted in ICP's Feb 7 FOIA appeal, as simply one example, the Fed held ex parte communications with Capital One on November 21, writing a memo ostensibly as a tip of the hat to the rules against ex parte communications. Then the Fed withhold the summary under Exemption 4.
The Fed has even made withholdings from its own August 29, 2011 questions to Capital One. This is an outrage and has been appealed from.
The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in connection with this request for reconsideration.
February 20, 2012
Fed Approves Capital One - ING After Delay &
Data Dump, Reconsideration?
By Matthew R. Lee
SOUTH BRONX, February 14, updated -- Some Valentine: the day after the Federal Reserve for the second time postponed decision on the Capital One - ING bank merger, a Fed legal staffer called Inner City Press at 5:15 pm on Valentine's Day to say the deal was approved, but not in the normal way.
Inner
City Press asked for an explanation of the February 8
postponement, and the February 13 deferral of decision, but none
was provided. Reconsideration will be requested.
One of the Fed's sleights of hand is in footnote 27, where after
reciting Inner City Press' objections the Fed says "the Board
has determined in a separate action that ING Groep would not
control Capital One as a result of this proposal. See Board
letter to Mark Menting, Esq. (February 14, 2012)."
So a major contest issue was confined to a side letter on the
same day at the approval. Footnote 10 of the Fed's
approval order says
"One commenter
expressed concern about ex parte communications and the
opportunity for the public to rebut all information that was
provided by Capital One. On review, the Board found that the
public had a full opportunity to provide the Board with any
information related to the factors that the Board must consider
in acting on the notice. The information submitted by Capital
One, and the release of that information to the public, was in
accordance with the Board’s regulations and policies. The Board
confirmed that all contacts between Capital One and staff were
in accordance with the Board’s rules on ex parte
communications."
Consider: on the night of February 7, the Fed issued a document dump of some 1040 pages responding to a Freedom of Information Act request Inner City Press filed in October.
Among the 1040 pages provided (more than 200 have been withheld in full, from ICP and other commenters, NCRC and others), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7, and which ICP commented on to the Fed in the run-up to its February 13 meeting:
Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;
On November 7, 2011, Patricia A. Robinson at Capital One's law firm – presumably the same Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to Michael Sexton and Stanlyn Clark at the Federal Reserve:
"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).
As ICP commented, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.
The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to ICP's pending appeal.
For the reasons of record, and as argued by NCRC, the Federal Reserve should reconsider the ING approval...February 13, 2012
Why did the Federal Reserve postpone its meeting on Capital One - ING from Wednesday afternoon for five days until Monday, February 13? Capital One's spokeswoman said “The board has informed us that the planned meeting for this afternoon has been rescheduled for Monday, February 13th. We understand that the delay is due to a scheduling conflict, and we look forward to their decision early next week."
But there's a problem with this spin, that scheduling made it impossible. At 3:05 pm on Wednesday, Inner City Press got a voice mail from the Federal Reserve's Legal Division, Michael Waldron, about an application that ICP Fair Finance Watch had commented on some time ago: Hawa - Korea Exchange Bank. The Board had just approved the application, Waldron said (without also stating any right to request reconsideration.)
In that Order Inner City Press / Fair Finance Watch is, yes, "the commenter."
So if the Fed could approve applications on Wednesday afternoon but chose not to do so for Capital One, why not?
One can hope that the outrageous "document dump" of hundreds of pages on the eve of the Fed's scheduled February 8 meeting, which Inner City Press immediately raised to the highest levels of the Fed, combined with calls Wednesday from NCRC members to open the meeting, caught the Fed's attention.
Then this should, too: Inner City Press, reviewing the documents dumped, has now commented to the Fed that
Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:
Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;
On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov
"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).
With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011...
The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.
This information must be reviewed, and released and comment allowed thereon, by ICP, NCRC and others, before the Fed considers approving the Capital One - ING proposals.
February 6, 2012
The fight on Capital One - ING continues, as more and more information is withheld. Inner City Press filed this FOIA appeal on February 4:
This is a timely FOIA appeal to the Federal Reserve Board's denial of February 3, 2012 of my FOIA request of January 6, 2012, for all of Capital One's January 3, 2012 submission to the Fed, etc..
The Fed has provide a document with redactions which ICP is hereby appealing. From Capital One's response to the Fed's December 15, 2011 questions, the Fed has blacked out the entirety of Footnote 1, which seemingly explains Capital One's lending in California.
The Fed has blacked out on the top of Page 6 some Capital One argument about how and why it will improve the fairness of its lending.
On Pages 11 and 12, Capital One makes representations to the Fed about with whom it will partner, representations clearly meant to argue for approval of Capital One's applications - but Capital One, and now the Fed, withheld the names and the argument. ICP is appealing.
The bottom of Page 16 is entirely redacted; there is no way to know what type of information it contains, and ICP appeals from the invocation of Exemption 8 (bank supervision) and Exemption 4, including the many redactions from the Exhibits to Capital One's submission.
The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.
This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals, protested by NCRC, ICP and others
January 30, 2012
Fifty days after Inner City Press filed a Freedom of Information Act request for Capital One's withholdings from its November 15, 2011 submission to the Federal Reserve, the Fed responded to ICP: withholding 590 pages in full, and providing to ICP and other commenters a mostly redacted 34 page document.
ICP has nearly immediately appealed, and commented to the Fed:
This is a sixteenth comment from Inner City Press / Fair Finance Watch ("ICP") opposing the proposed acquisition by Capital One Financial Corporation (“Capital One”) to acquire ING Bank, FSB and its affiliates (“ING”), to form what would be the fifth largest bank in the country.
The Federal Reserve should re-open its comment period, inter alia following its now appealed under the Freedom of Information Act denial of January 24, 2012 of ICP's FOIA request of December 4, 2011, for "all withheld portions of Capital One's November 15, 2011 submission to the Fed on the pending ING DIRECT application."
It took 50 days for the Fed to respond. Worse, 590 pages are being withheld in full, and of the single 35 page document subsequently sent to Inner City Press -- this appeal is timely -- much has been redacted, including how Capital One would pay for the acquisition,
weaknesses in ING DIRECT (page 3);
all information about Capital One's credit card lending to people with FICO scores below 660, and subprime card lending (page 4);
small business lending (page 5);
due diligence on HSBC's card platform, previously of the predatory lender Household (page 13);
forward sale agreements (page 14 - even the Fed's question is withheld, we appeal that);
mortgage lending (page 16); swaps (page17);
and the entirety of pages 19 through 34, including the Fed's questions. This is outrageous.
The Fed cites Exemption 5, but it how an "intra-agency" exemption could be cited for what Capital One submitted is unclear. ICP opposes the invocation, too, of exemption 8 without explaining in detail the type of information in the 590 pages withheld in full. It is hard or impossible to argue about this black hole of information: the Governor charged with ruling on this appeal should review all of the information in camera, and release all portions that are not strictly exempt.
The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.
This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.
For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.
January 23, 2012
When in September the Federal Reserve held a public meeting on Capital One - ING in Chicago, Fed legal division official Ms. Thro replied, on camera, to Inner City Press / Fair Finance Watch's comments by saying ICP should submit a Freedom of Information Act request. ICP immediately did.
Among other things, ING is reportedly under investigation for violating sanctions, on Sudan, Iran and other elsewhere - topics which deserve a public airing before ING is considered to be allowed to own 9.9% of what would become the fifth largest US financial institution.
Inner City Press returned a telephone call to another Fed Legal Division staffer and voluntarily narrowed its FOIA request, for specific adverse ING information such as the above. The Fed identified responsive information but forwarded the request to the OCC, they say on December 20.
Now, more than three months later, the information is withheld in full by OCC denial on Friday. The OCC's denial does not provide a speck of information, does not give any idea of what is being withheld, and does not even state how many pages are being withheld.
There is no way to assess the propriety of these withholdings in full, ostensibly under Exemption 4. ICP has immediately appealed the withholding(s).
This information about ING must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.
For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.
January 16, 2012
Responding to the Federal Reserve to allegations that Capital One violates bankruptcy laws, COF's law firm Wachtell, Lipton, Rosen & Katz in a January 11 submission wroted that it "was unaware of the debtor's bankruptcy because [REDACTION, Pages 3 - 4]." Inner City Press on January 14 challenged this redaction under the Freedom of Information Act, sating that as before and on the still pending requests, all information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT, protected by ICP, NCRC and others.
* * *
It is argued that Obama "had" to nominate a Deutsche Bank and Carlyle Group hedge fund insider, Jay Powell, to the Federal Reserve as a condition of getting a Democrat also confirmed.
Meanwhile Democratic representatives are urging Obama to offer a recess appointment for a new head of the Federal Housing Finance Agency. Twenty eight congressmembers from California signed a January 10 letter, which argued that Obama should use the same legal justification for appointing a new director at the agency that he applied to Cordray and the CFPB.
"As the fiduciary of government-backed entities, there are steps that the FHFA can take to help prevent foreclosures while also protecting taxpayers," they wrote. "Installing a permanent Director of the FHFA will allow the FHFA to move forward to make key decisions that will help keep families in their homes and improve our economy."
Some wonder why this logic isn't applied to
the Federal Reserve Board, where Obama supporters argue that he
"had" to nominate a hedge fund insider Jay Powell in order to
get any confirmation.
The Fed is reportedly preparing to rubber stamp Capital One's application to acquire ING DIRECT, protested by NCRC, Fair Finance Watch and others, even as Capital One's lawyers try to withhold the most substantial portions of their responses to the Fed, including on Capital One's related application to the Office of the Comptroller of the Currency to buy from HSBC the subprime credit card platform of the former Household International, charged with nationside predatory lending. Why?
January 9, 2012
In remarks following a speech in Chicago, St. Louis Federal Reserve Bank President James Bullard called it unlikely that the central bank will need to buy more bonds to stimulate the economy, in view of recent data on holiday sales and labor market conditions. Bullard also repeated support for an explicit inflation target, which is expected to be a subject of the Fed's meeting later this month.
Capital One put in another submission to the Federal Reserve on its ING DIRECT application -- but then withheld large parts of it as sent to Inner City Press and other commenters. ICP has challenged under the Freedom of Information Act, and submitted the below to the Fed:
The Federal Reserve should re-open its comment period, inter alia following improper withholdings, now challenged under the Freedom of Information Act, from Capital One's (COF's) submissions to the Federal Reserve System dated January 3, 2012, with those improperly redacted by COF's law firm Wachtell, Lipton, Rosen & Katz.
All redacted information should be reviewed and provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT. We refer most pressingly to the redacted response to the FRS' December 16 questions, sent to us by email on January 6 by WLRK under cover lever dated January 3, 2012.
COF is required to send us their submission under the FRS' ex parte rules, but has sent us significantly redacted versions.
Under the headings “Mortgage Lending," "Community Development Lending," "Other Lending" and the like, COF makes claims about policies and loans made and then redacts line after line. This also takes place when COF is asked in 1d about its lending geographically: contrary to the spirit and letter of CRA, geographical identifiers are redacted, even footnotes. We challenge each and every one of these absurd redactions, as well as the withholding of purported confidential exhibits 1, 2 and 3.
This should be treated as a FOIA appeal but was submitted through the FRS' FOIA form on January 6 to gain expedited treatment. All information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT.
Even as redacted, the submission make clear that Capital One's ING proposal is related to its proposal to buy the HSBC (ex-Household) credit card platform. HSBC put out a press release bragging about accounts renewed that would to go to Capital One: even regarding this, there are issues. For inclusion in the record: http://big-lots.pissedconsumer.com/lied-to-by-racist-big-lots-worker-20080308114996.html
For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.
December 26, 2011
Bank of
America & Federal Reserve Let Off Hook by DOJ Settlement, As
BofA Bluewashed by UN
By Matthew R. Lee
SOUTH BRONX, December 22 -- The $335 million "Countrywide" fair lending settlement, as announced by the Department of Justice on December 21, went out of its way to let off the hook Bank of America and its regulator the Federal Reserve Board.
The paper of record, without further comment, reported that the settlement was based on a referral by the Federal Reserve, covering a period before Bank of America owned Countrywide.
But more than three years ago, over the detailed objections of Bronx-based Fair Finance Watch and others, the Federal Reserve allowed Bank of America to buy Countrywide and continue to run its predatory programs, which were slowed only by the subprime financial meltdown.
Fair Finance Watch found, and Inner City Press reported, that "in 2006, at Countrywide and its higher-cost Full Spectrum, upper income African Americans were confined to higher cost loans over the rate spread 1.92 times more frequently than whites. In 2006, 24.70% of Countrywide's total mortgages were subprime.
"In 2007, Countrywide Financial, which Bank of America had applied to buy, confined African Americans to higher-cost loans 1.95 times more frequently than whites, and denied the applications of Latinos 1.53 times more frequently than whites."
The Federal Reserve approved
Bank of America's acquisition of Countrywide without any
conditions, despite this testimony. The disparities continues at
Bank of America after the acquisition, without any action by the
Fed.
Years later comes a settlement that is, in context, a pittance, a smoke screen for a company which has received far more in government bailouts. For shame.
Footnote: Bank of America is also
engaged in "blue washing," getting its chairman Charles
Holliday named the co-chair of UN Secretary General Ban
Ki-moon's High Level Panel on Sustainable Energy for All,
despite B of
A being protested as the number one funder of mountain top
removeal coal mining. Now that B of A has settled charges
of racial discrimination, will the UN take note?
* * *
As the Federal Reserve (and OCC, which will be a separate story) try to shield the Capital One - ING - HSBC deals, Inner City Press / Fair Finance Watch has submitted to the Fed a FOIA appeal of the Fed's FOIA denial the the FOIA request of September 28, which stated:
This is a request under FOIA for the entirety of ING's request for a non-control determination to own up to 9.9% of Capital One, and all records reflecting any FRS communications regarding the request or ING from January 1, 2011 to the date of your final response to this request.
Background: at yesterday's public meeting in Chicago on Capital One - ING DIRECT, Ms. Thro of the Legal Division commented on Inner City Press' testimony, that ICP "can file a FOIA request" for ING's request. This is that request, and for communications, and response should be expedited before October 12, or Capital One - ING DIRECT comment period should be extended. Thank you.
Despite Ms. Thro's public comment about the ability to file a FOIA request and implication what one would thereby receive the requested documents, on a timely basis, it took two and a half months for the Fed to respond. This constructive denial should be explained and acted on in response to this appeal.
Worse, among the documents subsequently sent to Inner City Press nearly everything is redacted.
Of the August 15 submission by Sullivan & Cromwel (S&C), the letter requesting confidential treatment is provide: but the entirety of the referenced "Annex A" is withheld.
The denial letter claimed that "the nature and amount of information being withheld will be evident from the face of the documents being provided." This is not true, and should be reversed, explained and acted on in connection with this appeal.
From the September 29 S&C cover letter, the area under Mark Menting's signature is blacked out, with the notation "N/R." Since ICP requested "all" documents, it is absurd to call this portion of the submission, whatever it is, "non responsive." If it is the people who the letter is cc-ed to, the Fed has hit a new low that must be reversed, explained and acted on in connection with this appeal.
Also, the entirely of the September 29 Annex A, including its footnote, is redacted.
Getting even worse, of the November 18 submissions, even a portion of the request for confidential treatment is redacted, as well as the entire annex.
Of the November 23 submission, two and a half paragraphs of S&C's letter to Ms. Thro are redacted - each and every redaction is hereby being appealed, including again the absurd blacking out of the area under Mr. Menting's signature.
From the November 29 submission, the blacked out "N/R" is on a separate page. It is absurd to claim, in response to the request -- invited by Ms. Thro -- for information related to the any non-control determination that this material, which S&C's letter says is related to the requested non-control determination, is "not responsive." The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.
Here is another just filed FOIA appeal:
This is a timely FOIA appeal to the Federal Reserve Board's partial denial of my FOIA request and letter of October 23, 2011 related to the proposed acquisition of US-based Bank of East Asia by the China Investment Corporation, and Central Huijin Investment Limited and Industrial and Commercial Bank of China (ICBC), owned by the Chinese government.
The Fed's response, regular mailed on December 9 -- this appeal is timely -- decides to limit ICP's FOIA request to only the portion related to the Community Reinvestment Act, because Inner City Press mentioned the CRA. And so the White & Case submission of October 17, which ICP was supposed to get under the Fed's rules against ex parte communication, has the responses to items 4, 5 and 6 withheld as "not responsive."
This makes a mockery both of FOIA and of the Fed's rules against ex parte communication. On October 23, Inner City Press submitted including to the Office of the Secretary of the FRB a letter stating in part that
"I filed a timely challenge to the applications involving Industrial and Commercial Bank of China (and its ultimate parent the Chinese government -- since the PRC government is the ultimate controlling shareholder, this letter timely questions why the PRC government is not an applicant here) to acquire 80% of Bank of East Asia. The FRB on October 6 asked ICBC three questions, including one CRA and consumer compliance, and told ICBC to send us a copy, under the rules against ex parte communications... We note that the signatory counsel for the Industrial and Commercial Bank of Bank is the former general counsel of the Federal Reserve Bank of New York, and believe that in this context it is particularly important that the information be provided and a public hearing held. Please send all of the improperly withheld information"
Because ICP gave the example of the withheld CRA response, the Fed decided to ignore ICP's right to the rest of the submission, despite the statement about "all of the improperly withheld information" -- that is, any part of the information ICP should have gotten under the rules against ex parte communication, minus that part explicitly exempt under FOIA.
The Fed is now trying to use "non-responsive" as a way about FOIA, to withhold without even citing a FOIA exemption. It is an outrage, and on appeal ALL of the applicants' October 17 submission should be released.
December 19, 2011
The Fed governors on December 16 approved an application with the boilerplate statement that they are concerned when there are disparities in HMDA data. Well, in the Miami Metropolitan Area, Eurobank in 2009 made NONE of its conventional home purchase and home improvement mortgage loans to African Americans. And the Fed has whitewashed and given its blessing to this exclusion...
December 12, 2011
What a scam: a challenged bank, required to send a copy of its submission to the Federal Reserve to Inner City Press / Fair Finance Watch, told the Fed on November that it was forwarding a copy of its response to ICP. But despite a November 14 cover letter, it wasn't actually put in the mail to ICP until December 5. What will the Fed do? Watch this site...
December 5, 2011
Amid the Federal Reserve's delay of FOIA requests, and abuse of FOIA, Capital One was required to send a copy of its November 15, 2011 submission to the Federal Reserve to ICP. But under the heading "Community Reinvestment Act," Capital One says "for additional responsive information, please see Capital One's... Confidential Responses enclosure." ICP has now submitted a request challenging the withholding of CRA responses, as well as Capital One's submissions on the key question of how much of its and HSBC's business is subprime, and the connection between ING DIRECT's loans and depositors. Watch this site.
November 28, 2011
The fraudulence of the Fed's appointment of "community" representatives to its Reserve Bank board has been made clear in New York. On a recent WNYC radio debate about Occupy Wall Street, defense of banks was left up to one Kathryn Wilde of the David Rockefeller-founded NYC Partnership. Once she fell under attack, host Brian Lehrer added to her c.v., saying she is on the board of the Federal Reserve Bank of New York. Why?
November 21, 2011
...Not only about community groups and supporters of Ron Paul or Bernie Sanders, but also on personal experience, down at Occupy Wall Street, there is a lot of criticism of the Federal Reserve and its accountability, some of it fair and some unfair. The best way to distinguish the two is by being transparent.
But when we submit FOIA requests to the Fed, the responses are often delayed, often heavily redacted, and sometimes don't come at all.
Without mentioning any particular pending applications -- I've been told we can't, even though FOIA responses show that the Fed meets with applicants, and outside counsel who used to work in the Federal Reserve System, all the time -- be aware that most community groups make FOIA requests in connection with application they want to comment on.
So to receive responsive documents after the comment period is closed, or even after the application is decided, I mean, approved, is an abuse of FOIA.
While the Federal Reserve Banks often provide the portions of application for which the applicant has not requested confidential treatment, the Fed seems to have no way or commitment to review the propriety of applicants' requests for confidential treatment. There are no repercussions for making over-broad requests for confidential treatment, and so many applicants do, even for submissions that are explicitly label "CRA" submissions.
I'd suggest that comment period not be allowed to close until at least the portions of an application which are not entitled to confidential treatment under FOIA have been provided to the public.
Then there is the matter of what the Fed withholds. The Fed overuses exemption 8 as a blanket - anything to do with regulation - and makes its own processing opaque by overusing exemption 5. Tellingly, the Fed has taken to redacting things that are not exempt from FOIA from the pages it gives out, if the material was "not responsive to the request."
This brings me to the new low the Fed has hit: denying or "rejecting" requests allegedly because the Fed doesn't know what's being requested. I asked for Fed communications by a particular Reserve Bank president -- I won't say who, but he's nominated for the FDIC -- and the response was that searching for his common first name, even with less common last name, would be to burdensome. So NO record were provided.
Each of these things can be fixed, if you and the Governors provide a minimum of oversight. And the Fed, as well as the public, would benefit.
November 14, 2011
The Federal Reserve should re-open its comment period, as while Capital One would presumptively become a global systemically important bank under Basel III, subject to loss absorbency requirements ranging from 1% to 3.5% of risk-weighted assets, Capital One is publicly said it is assuming this will NOT be the case, and has premised its application to the FRB on this dubious assumption.
Also, according to its Form 10-Q filed November 7, Capital One Financial Corp. increased its mortgage repurchase reserves for uninsured securitizations. For the reasons of record, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC.
Meanwhile the FRB is again and again extending its time to respond to FOIA requests related to these applications. The comment period must be extended.
November 7, 2011
Capital One's October 28 submission to the Federal Reserve -- sent to ICP by regular mail on October 31 -- states at the top of page 9 that subprime lending is good -- in direct contrast with Capital One's (first) response which said that NCRC urging it to do FHA lending down to 580 FICO scores "would qualify as subprime lending" and "put taxpayers dollars at risk" -- which is it? Maybe buying the ex-Household predatory lending platform from HSBC has change Capital One's position on subprime.
October 31, 2011
And so most recently the Federal Reserve "rejected" a Freedom of Information request about Capital One - ING DIRECT based on fees. Why not just start processing the request -- the Fed often extends its time anyway -- and ASK the requester about fees? Unless of course the fee issue is just a pretext not to give information...
October 24,
2011
In the continuing saga of Industrial and Commercial Bank of China (and its ultimate parent the Chinese government) to acquire 80% of Bank of East Asia, the Federal Reserve on October 6 asked ICBC three questions, including one on CRA and consumer compliance. But ICBC's counsel's letter dated October 17 say as to CRA, "please see the confidential response separately provided." It is outrageous to withhold the entirety of a response about CRA, totally out of keeping with what other banks do. The information should be released and be allowed to be commented on. Watch this site.
October 17, 2011
The Fed closed its comment period on Capital One - ING DIRECT with more than 300 comments in opposition in the record, and while evading and outright ignoring and refusing to respond to FOIA requests. We'll have more on this.
October 10, 2011
The Federal Reserve continues to hit new lows, now refusing to process Freedom of Information Act requests even as, on camera at their public meeting in Chicago about Capital One - ING DIRECT, Fed official Thro said Inner City Press can submit a new FOIA request. Now dated October 6 comes to letter refusing to process a request, the first time the Fed has done this. And what a time to do this it is. Watch this site.
October 3, 2011--
At the second of the Federal Reserve Board's
three public meetings on Capital One's application to
acquire ING DIRECT, the Federal Reserve's Allison
Thro decided to "comment" on the testimony, telling
Inner City Press to submit a new Freedom of
Information Act request for ING's "request for a
non-control determination" for its proposal to own
9.8% of Capital One. Inner
City Press has said ING should apply, to allow comment
on issues like ING being under investigation for
violating sanctions and doing business in Sudan and
Syria. Now the Fed says to request a copy of ING's
"request for a non-control determination" -- on which
no public comment is accepted. And the Fed has delayed
responding ICP's pending FOIA requests.
Nevertheless, ICP the next day submitted a new FOIA
request, which has yet to even be acknowledged by the Fed. Watch
this site.
September 26, 2011
As of September 25, it appears that the Fed has yet to put online the transcript of the public meeting on Capital One - ING Direct held 5 days previous, much slower than the UN, IMF and other agencies work.
September 19, 2011
After Gov. Tarullo's unprecedented speech, Inner City Press / Fair Finance Watch put in an eighth comment to the Federal Reserve on Capital One, including
"ICP has received an FRB letter of September 12, responding to ICP's August 19 FOIA request by saying "there may be delays." The comment period should, in that case, be extended. In this context it is unreasonable to expect new FOIA requests, for example for the withheld portions of the September 9 response Capital One was supposed to send. The improperly withheld portions from be provided forthwith."
September 12, 2011
So the Fed asked Capital One to respond to some questions by September 9 and send a copy to commenters. So where is the response? Watch this site.
September 5, 2011
After the Federal Reserve's belated announcement of three public meetings on Capital One - ING Direct, Inner City Press has commented as follows to the Fed:
It is reported that "[a]lthough Federal Reserve Board officials promised to unveil a long-awaited package of key Dodd-Frank rules by the end of the summer, the central bank is likely to need more time to complete them. The rules, which implement Section 165 of the regulatory reform law, cover some of the biggest issues in financial services, including risk-based capital requirements, leverage, resolution planning and concentration limits."
Given the issues raised, including by Federal Reserve official Thomas Hoenig and NCRC and others, about this proposal, it is imperative that the Fed either finalize these regulations before the public meetings, or further extend the comment period...
As noted, on August 11, the day after Capital One announced a related proposal to acquire HSBC's largely subprime credit card business (much of which HSBC acquired along with the scandal tainted Household International), ICP asked that the comment periods should be extended specifically to allow comment on the proposals together, to avoid a segmented and illegitimately limited review.
ICP has yet to receive documents or even a confirmation of receipt of its FOIA Appeal of the improperly withheld records concerning Capital One, ING and the FRS. It is also still not clear what the FRS has done in response to ING's request for a ruling -- without any public comment -- that it would not control Capital One while owning up to 9.9% of the company.
August
29, 2011
On August 25, three days after the Fed allowed the comment period to close on the application, the Fed admitted in writing to improperly withholding under the Freedom of Information Act some of Capital One's many communications with the Fed, writing to Inner City Press that
"subsequent to the Secretary's response of August 3, 2011, Board staff was informed that an employee at the Federal Reserve Bank of Richmond located additional responsive material. The employee had been traveling between the date of your request on July 22, 2011 and the date of the Secretary's response on August 3, 2011. Accordingly, Board staff was not aware that these additional responsive material existed until after the Secretary had responded to your request on August 3, 2011."
With Fed chairman Ben Bernanke out in Jackson Hole, Wyoming, long time Fed official Tom Hoenig became on his way out a whistleblower, saying on camera that he has
"serious doubts about Capital One's proposed purchase of ING Direct. 'I have very grave concerns about allowing these amalgamations of institutions that by their very structure are too big to fail, too interconnected to fail and I think the burden should be very heavily against that,' Hoenig said."
We nominate Hoenig as an honest Fed officials, at least on
this... Watch this site.
August 22, 2011
The Fed has withhold copious amounts of information from Capital One and ING, including the Fed's response to a stealth request by ING to have even have to apply to come to own up to 9.8% of Capital One. Inner City Press has submitted FOIA requests and appeals, asking for a ruling before the Fed's (initial?) comment period expires on August 22. But the information, and a ruling, have not be received. Arrogance or incompetence?
August 15, 2011
...Currently, the Federal Reserve says that the public has only until August 22 to comment on Capital One, and only on the ING Direct proposal. This is akin to segmenting a destructive project into separate pieces so the overall impact is never acknowledged or reviewed.
In initial comments to the Fed, prior to today's HSBC announcement, less has been said about ING, in part because ING's US business had been directed at a more affluent clientele, and because ING was not viewed as the applicant.
But after Inner City Press filed a Freedom of Information Act request with the Federal Reserve Board on July 22, a partial response from the Federal Reserve shows that ING has quietly sought a ruling from Fed General Counsel Scott Alvarez that ING should not have submit any application subject to public comment to own up to 9.9% of Capital One. Click here to view the Fed's (first) FOIA partial denial letter, from which Inner City Press has already appealed.
This would exclude public comment and
consideration of ING doing business with the likes of
Sudan, Iran, Cuba, Syria and others on the US state
sponsors of terrorism list. ING had admitted being
under investigation for, and negotiating with the US
Department of Justice about, such violations, and
there have been expressions of Congressional concern,
which the Fed could ignore by granting ING's stealth
request.
The documents obtained under FOIA show that ING, represented by the Wall Street law firm of Sullivan & Cromwell, on July 15 wrote to the Fed's Alvarez asking for "written confirmation that [ING] will not be deemed to directly or indirectly 'control' Capital One for purposes of the Bank Holding Company Act upon the consummation of the Bank Sale."
Earlier in ING's 13 page request, on which the Fed has until now not solicited or accepted any public comment, ING says that the shares with which Capital One would pay it for ING Direct would "represent between 9.7% and 9.9% of the outstanding shares of Capital One's Common Stock on the closing date." Click here to view some of the released records, including Sullivan & Cromwell's letter to the Fed for ING.
Under the Bank Holding Company Act, any holding over 4.9% can be considered control. One would think, given the issues raised, that the Fed would solicit comment and hold the requested public hearings on ING's request to own nearly 10% of Capital One. But it has only come about because of the Fed's partial FOIA response.
Inner City Press / Fair Finance Watch immediately submitted a comment to the Fed and its chairman Ben Bernanke formally demanding the ING submit an application, and joining in requests by NCRC and others for public meetings and an extension of the comment periods until at least October 22.
In a FOIA appeal already filed with but not yet even acknowledged by the Fed, Inner City Press has demanded all withheld records about ING's stealth request, as well as the withhold portions of Capital One's application, which range from exhibits about money laundering to ING's mortgage portfolio.
Amazingly, the Fed mis-read Inner
City Press' FOIA request as only asking from Fed
communications with ING and Capital One about the
proposed acquisitions, when in fact Inner City Press
requested all records reflecting Fed communications
concerning either of the two companies.
The Fed has provided such
records, including internal
Fed emails about the Industrial & Commercial
Bank of China and Governor Warsh's meeting with its
chairman, in previous responses to Inner City Press.
The Fed has also withheld records about an "ex parte" meeting as far back at May 26 between Capital One's Kevin Murray (SVP of Regulatory Relations), John Finneran and Gary Perlin with a range of Fed officials.
It seems the Fed, ING and Capital One have already had something to hide in this transaction, including seeking to exclude from public comment and consideration ING illegally doing business in and with Syria, Iran, and Sudan. Now they seek to sweep through and under the carpet Capital One's proposed acquisition of the predatory lending platform of Household International from HSBC. But it will be opposed. Watch this siteAugust 8, 2011
On July 22, Inner City Press submitted to the Fed a formal FOIA request for
"the entirety of the below-captioned applications, and for all records reflected FRS communications with the companies at issue for the past 12 months, and up until the date of your final response to this timely request. There is a comment period, currently running through August 18, and we are requesting that you response as quickly as possible to allow any necessary FOIA appeal before the comment period closes. Please advise. Here are the applications / companies:
Capital One Financial Corporation, McLean, Virginia ING Bank, FSB, Wilmington, DE, & indirectly acquire voting shares of Sharebuilder Advisors, LLC, & ING Direct Investing, Inc., Seattle, Washington - operating a fsb & investment financial advisory& securities brokerage services - 225.28 4 Richmond 08/18/2011" (Emphasis added.)
Note that the request was for "all records reflecting FRS communications with the companies" -- Capital One and ING -- NOT, as mis-recited in the Fed's August 3 denial, only communications related to the application.
While we do not have to explain the reason for a FOIA request, for the record on the appeal, since we are alleging fair lending violations at Capital One, and sanctions and money laundering violations at ING, we have stated that we wish to review all non-exempt FRS communications about these companies and issues.
The Fed Denial also improperly seeks to limit the request to communications between FRS staff and the companies, excluding communications inside the FRS (or between the FRS and other parties) ABOUT the companies. This was requested, and in responses to other identically worded FOIA requests from ICP even just this year on Industrial & Commercial Bank of China, the Fed has provided intra-FRS emails about companies.
The Denial's blatant mis-quotation of the request denied access to these important records, seemingly intentionally so. Accordingly, we have immediately appealed and requested the improperly withheld records, and a rule, by the August 22 expiration of the comment period on the application, which should be extended as also requested by NCRC. We'll have more on this.
August 1, 2011
While the Federal Reserve tries to evade its duties under FOIA, most recently by claiming that it does not have to deal with request that are made in connection with comments on mergers, the Fed has for more than a week, in the face of two separate requests from Inner City Press, failed to maintain and fix its online FOIA submission form. The Fed may not want to be transparent, but the law requires it. Watch this site.
July 25, 2011
So the Federal Reserve has received Capital One's application to acquire ING, saying the comment period runs through August 18. But on July 24, the Fed's online e-FOIA form to request the application wasn't working, and the Secretary's Office didn't confirm receipt of a separately emailed request....
July 18, 2011
When the Fed hauled off and approved Comerica's Sterling application last year, it said that 2010 Home Mortgage Disclosure Act aggregate data is not available yet. This after the Fed received a timely comment that, among other things
“In 2010 for all loans, Comerica confined African Americans 6.26 times more frequently than whites to higher cost, rate spread loans. At Comerica, 11.3 percent of loans to African Americans were over the rate spread, versus only 1.9 percent of loans to whites.”
The Fed has enough 2010 HMDA data to review these disparities, but did not. For shame.
July 11, 2011
It has become clear that there is no legal basis for the government of China to have not applied. The BHC Act excludes US governments, not foreign; the Fed has simply read in an exemption. But consider: foreign governments can be subject to asset freezes, such as the one imposed by the UN Security Council and US government on Libya.
Clearly, ownership by foreign governments poses issues that ownership by US government entities does not. The Fed has been wrong to read an exemption, and should now require an application by the Chinese government. On the current record, these applications should not be approved.
After challenging withholdings, what I received behind a White & Case cover letter of June 30, 2011 is still incomplete. ICBC's counsel's letter dated June 6 says as to fair lending, “Please see Confidential Exhibit 1 (separately provided).”
Now belatedly a portion has been provided. But it refers to a interviews, then withholds the characterization. It says actions have been taken to ensure fair lending compliance - then withholds them. But
In the New York City Metropolitan Area, Bank of East Asia in 2009 made none of its conventional home purchase and refinance mortgage loans to African Americans and Latinos. Even among its Asian refinance borrowers, all had incomes over 100% of MSA median, mostly over 120% of median. In the Los Angeles MSA, all of Bank of East Asia's refinance leading was to Asians with incomes over 120% of MSA median.
Also still withheld: HMDA, second review, even future products, which make a mockery of the Fed's rules against ex parte communications. Other banks routinely provide copies of such answers, undermining any claim of competitive harm.
The comment period should be extended and no decision made until this improperly withheld information is provided. All non exempt portions of which should be released and the comment period extended, and all improperly withheld information provided.
We note that the signatory counsel for the Industrial and Commercial Bank of Bank is the former general counsel of the Federal Reserve Bank of New York, and believe that in this context it is particularly important that the information be provided and a public hearing held.
July 4, 2011
Four weeks after Industrial & Commercial Bank of China and its ultimate parent the Chinese government withheld the fair lending and future products portions of their submissions to the Federal Reserve, and Inner City Press complained, portions have now been released and the comment period on them extended though July 11. We will have more on this -- for now, consider this op-ed in the American Banker: http://www.americanbanker.com/bankthink/china-investment-corporation-bank-holding-company-act-1039482-1.html
June 27, 2011
The Federal Reserve's approval of Bank of Montreal to buy M&I, delivered the day BEFORE a public official's public hearing in Milwaukee, confines most of the issues to footnotes. Bailout? Note 16:
“Some commenters expressed concerns about the compensation to be paid to certain management at M&I Bank in light of M&I’s participation in Treasury’s Capital Purchase Program. As noted, M&I’s preferred shares held by Treasury under the program will be fully redeemed as part of this proposal. In addition, the Board has reviewed the financial and managerial factors in this proposal, including the compensation noted by commenters, in the context of the financial and managerial condition of the Applicants, M&I, and the resulting organization.”
Note 16: “Harris Central is a special-purpose bank exempt from performance evaluations under the CRA. 12 CFR 345.11(c)(3).”
For HMDA disparities, the Fed claims that the 2010 data, which it has yet to release, shows improvement. And on impacts on the community:
“A commenter expressed concern that the proposed acquisition would result in a loss of jobs. The effect of a proposed transaction on employment in a community is not among the factors that the Board is authorized to consider under the BHC Act, and the federal banking agencies, courts, and the Congress consistently have interpreted the convenience and needs factor to relate to the effect of a proposal on the availability and quality of banking services in a community.”
We'll have more, and soon, about the Fed's putative respect for what Congress says. Watch this site.
June 20, 2011
The Fed has hit a new low, saying it does not have to look at Morgan Stanley's Saxon ripping off military servicemembers because it's 24.9% of Morgan Stanley being acquired:
“A commenter asserted that recently announced losses at a joint venture between MUFG and Morgan Stanley reflect poorly on MUFG’s managerial capacity and its ability to avoid predatory lending. MUFG has reviewed management and controls at the joint venture and has strengthened its risk-management framework. In addition, MUFG has increased the amount of capital held by the joint venture. There appears to be no relationship between the losses at the joint venture, which engages in securities activities in Japan, and predatory lending, as asserted by the commenter.
“The commenter also referred to news reports regarding Morgan Stanley’s mortgage servicer, Saxon Mortgage Services, Inc., with respect to a class action lawsuit involving the Home Affordable Modification Program and a lawsuit under the Servicemembers Civil Relief Act. In addition, the commenter referred to a settlement by Morgan Stanley with the Office of the Attorney General of the Commonwealth of Massachusetts regarding allegedly unfair residential mortgage loans. As noted above, MUFG does not control the operations of Morgan Stanley and cannot exercise a controlling influence over its management. Moreover, as part of its ongoing supervision of Morgan Stanley, the Board monitors the status of government investigations, consults as needed with relevant regulatory authorities, and periodically reviews Morgan Stanley’s liability from material litigation.
“Finally, the commenter raised allegations that are outside the limited statutory factors that the Board is authorized to consider when reviewing an application under the BHC Act.”
A new low....
June 13, 2011
Industrial and Commercial Bank of China, already asking that the plain language of the Bank Holding Company Act be ignored, is now further thumbing its nose at the public and the Fed's normal process. After a CRA challenge to its application to acquire 80% of Bank of East Asia, the Fed asked ICBC six questions, including one on fair lending and another on CRA.
ICBC is required to send a copy of its answers to those who protested. But what Fair Finance Watch got is a letter that quotes the Fed's questions, then says as to fair lending, “Please see Confidential Exhibit 1 (separately provided).” As to CRA (Question 2), ICBC says “Please see Confidential Exhibit 2 (separately provided).”
ICBC's lawyer Ernest Patrikis used to be the General Counsel of the Federal Reserve Bank of NY. Other banks routinely provide answers to such questions to those who have commented. Watch this site.
June 6, 2011
So the Federal Reserve has a rule against ex parte communication, in which a protested bank is required to send copies of its communications to the Fed to the protester. But when Comerica and its law firm wrote to the Fed on May 25, the copy they sent to Fair Finance Watch by regular mail mostly referred to a separate letter that they did not provide. They wrote, in response to a question about fair lending, that “Comerica Inc has provided detailed information regarding Comerica Bank's fair lending policies, procedures and practices in the April 5, 2001 letter.” So where's that letter?
May 30, 2011
The response by former Federal Reserve Bank of New York chief counsel Ernest Patrikis to the New York Fed itself cites as authority that a foreign government need not apply to the Fed to own a bank in the US... a statement by Fed's general counsel Scott Alvarez. Talk about circular. More on this to come.
May 23, 2011
Does the Federal Reserve System have any rules about being lobbied or allowing bank representation by its previous officials? For now what we can say is that Ernest Patrikis, formerly the general counsel of the Federal Reserve Bank of New York, is sending letters to that same FRBNY, for example on May 17, 2011. It has been questioned, so far without response. Watch this site.
May 16, 2011
When the Federal Reserve hauled off and approved Hancock's application to buy Whitney, it had to ignore glaring disparities in Hancock's lending. It also had to brush over anticompetitive effects, especially but not only in the Biloxi market. Governor Tarullo issued a separate “concurring” statement, placing weight on that the institution that proposes to purchase the branches to be divested is competitive suitable. Sleight of hand? We'll see.
May 9, 2011
Thus spake Alan Greenspan: ““No one’s interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit.” Except that's Ben Bernanke, last week, in Chicago...
May 2, 2011
The Federal Reserve on April 26 approved M&T's application to acquire Wilmington Trust, with largely the same boilerplate about HMDA data not proving anything, and the Fed not requiring (or considering) CRA commitments.
Interestingly, esp. in light of the Fed's new claims of transparency exemplified by Bernanke's first press conference last week, the Fed's April 26 M&T order in footnote 39 says that Governor Sarah Raskin abstained from the vote on the application. http://www.federalreserve.gov/newsevents/press/orders/orders20110426a1.pdf
In a return phone call to the same Federal Reserve staffer who called to announce the approval, Inner City Press has asked the Fed to state the basis for the abstention, but note the report that the Obama administration is considering Raskin (as well as former Michigan governor Jennifer Granholm) to head the Consumer Financial Protection Bureau. http://www.reuters.com/article/2011/04/06/financial-regulation-consumer-idUSN0621321820110406
But days later, the Fed has not responded. Watch this site.
April 25, 2011
With Fed chairman Ben Bernanke set to take questions on April 27, it's amazing how limited it is to monetary policy. The Fed had a bank regulation role, negligence in which allowed for the financial meltdown. So how about these questions:
“Why is the Fed limiting its review of financial conglomerates' involvement in subprime lending to their retail lending, even now, and not their investment banking roles that allowed for the financial meltdown?”
This was done by the Fed, on the record in its orders, on recent applications by Japanese banks -- and prospectively, other Asian banks.
“Since the Fed allowed Goldman Sachs and Morgan Stanley in the world of commercial banking on an “emergency” basis with no public comment or review under the Community Reinvestment Act, what have you done since to review their CRA compliance?”
Watch this site.
April 18, 2011
Inner City Press / Fair Finance Watch has asked both the Federal Reserve Board and Federal Reserve Bank of New York for full copies of applications, and to rule on any needed FOIA appeal before the expiration of a comment period on May 12. We'll see.
Sleaziest response we've seen in a while: Bank of Montreal's law firm Sullivan & Cromwell argued to the Federal Reserve, in an April 13 response to Inner City Press / Fair Finance Watch's comments, that “Commenter's challenge to the redactions in the Comment Letter is misplaced and not the proper subject of the public comment process, which is focused on the statutory factors the Board must consider under the BHC Act in evaluating the Application.”
But the information Bank of Montreal has blacked out is fair lending information that the Fed requested after the Application was protested. Bank of Montreal was required to send its response to Inner City Press, but withheld most of it. To argue that it's not related to the Application is ridiculous. But this is why we resist the Fed trying to disconnection FOIA from the Application (and CRA challenge) process...
April 11, 2011
The Federal Reserve has STILL not ruled on Inner City Press' March 20 Freedom of Information challenge to Bank of Montreal withholding whole chunks of its fair lending response in connection with its CRA challenged M&I application. Meanwhile the Fed let the comment period close.
April 4, 2011
The Federal Reserve, which granted Inner City Press a one week extension of the comment period on Bank of Montreal / Harris - M&I due to withheld portions of BMO's application, has refused to rule on a simple FOIA demand for radically redacted fair lending information submitted by Bank on Montreal. The Fed is inconsistent and secretive, to put it mildly.
March 28, 2011
So while the Fed gave Inner City Press a one week extension of the comment period on Bank of Montreal's application to buy M&I, based on the withholding of information by Bank of Montreal, the Fed has yet to address Bank of Montreal's radical redaction of its fair lending responses. And the Fed explicitly denied extension request by other groups, apparently for not having requested the record early in the process. But if the Fed will wait to hear one group's comments, why not others'?
March 21, 2011
The Fed still doesn't seem to understand that predatory lending is not only attributable to retail lenders. In their order last week, the Fed Governors say Inner City Press
“asserted that both CMTH and STB have been involved in the subprime and predatory lending industries in the United States and that the proposal could increase such activities in the combined organization. Neither CMTH nor STB engages in any retail lending activities in the United States (including subprime lending). Although both Japanese banking organizations incurred losses before 2009 on subprime-related investments, current financial reports show that both CMTH and STB significantly reduced their holdings in these investments.”
And what about those “subprime-related investments”? Watch this site.
March 14, 2011
The Federal Reserve on March 11 hauled off and approved Goldman Sachs' application to take stake in Avenue Bank, then called Inner City Press / Fair Finance Watch to say that, as the commenter, ICP has two weeks to ask reconsideration. The Fed's Order recited for example that
“The commenter expressed concern about subprime loans originated by Fremont
Investment and Loan (“Fremont”) that the commenter has alleged were acquired by Litton. Fremont was a subprime lender whose parent, Fremont General, filed for bankruptcy in 2008. Litton acquired the servicing rights for loans originated by Fremont but did not acquire ownership of the loans and was not involved in originating them.”
The Order goes on to say that
“The Federal Reserve is conducting an in-depth review of practices at Litton and other large mortgage servicers, including a review of internal controls and processes related to all aspects of servicer operations. The Federal Reserve has supervisory authority over bank holding companies and their nonbank subsidiaries and may take supervisory or other actions in connection with those reviews, as the Board determines to be appropriate. In addition, as part of its supervisory process, the Board will continue to monitor the operations of Litton as well as other Goldman subsidiaries to ensure that their processes and procedures comply with applicable consumer protection laws and regulations.”
We'll see. Meanwhile on Hancock - Whitney
“Jean Tate, a spokeswoman for the Federal Reserve Bank of Atlanta, said that when the Fed receives comments that are material, it forwards them on to the applicant for a response and then shares that response with the commenter, who has a chance to respond. The process has the potential to become a lengthy back-and-forth, and the correspondence becomes part of the record that the Federal Reserve ultimately considers.Tate couldn't say how common it is for proposed mergers to elicit public comments, whether Fair Finance Watch's opposition to the Hancock-Whitney deal has been deemed material, or how long it might take to evaluate the group's fair lending concerns. 'It could be part of what's considered in the approval process,' she said.”
March 7, 2011
Note that the Connecticut Banking Department is holding hearings on First Niagara's application to acquire NewAlliance, on March 8 and 9 -- while the Federal Reserve closed its comment period with many questions unaswered, and hasn't ruled on any bank merger proposal this year, preferring to rubber stamp at the Reserve Bank level...
February 28, 2011
Here's an example of why the Federal Reserve trying to separate FOIA requests related to applications from the comment period: the Fed had extended its time to respond to Inner City Press / Fair Finance Watch's January 13 FOIA request about M&T / Wilmington Trust -- until long after the comment period. And when WILL we get the documents?
February 21, 2011
So the Federal Reserve Board hasn't ruled on a single bank merger proposal so far in 2011. The pace of mergers slowed, sure -- but also the Fed has tried to confine more and more decisions to the Reserve Banks, which can ONLY approve applications. And on the First Niagara - NewAlliance proposal, now the Connecticut regulator, unlike the Fed, has scheduled public hearings. Will the Fed send anyone? And will it grant the requests for public hearings on Bank of Montreal / Harris - M&I?
February 14, 2011
Bank of Montreal has now submitted its application to the Federal Reserve Bank of Chicago for its proposed acquisition of M&I. On February 11, Tom Naughton of the Chicago Fed left Inner City Press a message that the application had been received, and would be send out Monday. It can be requested via
Federal Reserve Bank of Chicago, Attn: S&R Applications Unit - 14 C, Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604, Fax 312-322-5894
A 30 day comment period is about to begin...
February 7, 2011
So now the Federal Reserve Bank of New York instructs “do not mix requests with comment letters.” Inner City Press replied on February 2 that
“the reason we link the FOIA request to comment on the application is that we are requesting the information in order to comment on it -- otherwise, we get FOIA responses after the comment period is close or application ruled on. Could you provide the email address (rather than form) of the Federal Reserve's FOIA office? Thanks in advance.”
But the Fed has yet to response in any way...
January 31, 2011
Several banks, and some community groups, are beefing about the Federal Reserve's Loan Officer Compensation rule, which they say may undermine CRA lending. We'll see.
January 24, 2011
Federal Reserve Bank of Kansas City President Thomas Hoenig has spoken in favor of dismantling large banks. And the other Fed officials?
January 17, 2011
M&T has now applied to the Federal Reserve to buy Wilmington Trust. Inner City Press / Fair Finance Watch has requested the application from the New York Fed, so far without response. Watch this site.
January 10, 2011
So why DID William Dudley of the New York Fed meet, during the FOMC black out period, with Jaime Dimon of JPMorgan Chase, John Mack of Morgan Stanley and Lloyd Blankfein of Goldman Sachs? Here's hoping that Congress requires answers.
January 3, 2011
Guess who has a YouTube channel? The Federal Reserve Board, of course -- but the comment function is disabled...
December 27, 2010
There's something either cheesy or endearing about the Fed putting on its website links to Bernanke's appearance on 60 Minutes, including unaired footage.
December 20, 2010
The Federal Reserve has hit a new low in the Caja Madrid case. A merger of Spanish savings banks which own, among other things, amusement parks and lenders down to the Canary Island, several banks would come to own City National Bank of Florida, whose lending to African Americans has been in decline. But the Fed rushed it through to meet a Spanish deadline, despite the lack of any response from Caja Madrid or City National Bank of Florida.
December 13, 2010
Is the Federal Reserve just a rubber stamp for mergers in other countries despite their impact in US? Caja Madrid and others are merging in Spain, including a savings bank which owns amusement parks and “other lenders... in the Canary Islands.” Meanwhile while Caja Madrid has owned City National Bank of Florida, its lending to African Americans has decreased. With this now timely raised to the Fed, and Caja claiming there's no need to response -- it wants a fast merger in Spain -- will the Fed ask the right questions?
December 6, 2010
Inner City Press / Fair Finance Watch last week commented to Federal Reserve against the applications of First Niagara to acquire and merge with NewAlliance. This followed the New York Fed delaying response to ICP's FOIA request for the application, and then trying to charge money.
First Niagara's acquisitions have resulted in a decrease in availability of credit, especially to low and moderate income people and communities of color. It has seemingly been allowed to make acquisitions, for example its still undigested entry into Pennsylvania, due to the financial meltdown (and, we assert, the regulatory agencies' concerns about their own role in allowing the business practices that led to the meltdown).
Now, it is imperative that First Niagara's actual record, including on all recent acquisitions, be fully reviewed including at the requested public hearings, before another set of communities is subjected to First Niagara's practices.
Inner City Press raised some of these concerns when First Niagara went into Pennsylvania. At that time, the target bank was so weak it arranged by stealth a loan from First Niagara before any regulatory approval had been granted: gun-jumping. While the exigencies of the financial meltdown and First Niagara's representation by a highly connected white shoe law firm got it over that hump, in the time since First Niagara has not performed anywhere near adequately in the communities which it was allowed to enter.
To the degree that First Niagara may try to emphasize the alleged performance of NewAlliance rather than its own, we note previous issues regarding NewAlliance, including extensive opposition to its formation from New Haven Savings Bank, the “golden parachute” of its top leadership and CRA issues regarding its performance, to be explored and documented at the requested public hearing.
November 29, 2010
The Federal Reserve is being sued by TCF in Minneapolis...
November 22, 2010
From Governor Duke last week: “the lack of certainty and price discovery created by the glut of foreclosures has further weakened property values and has contributed to a slowing in the recovery of the housing market more generally.” And on a moratorium?
November 15, 2010
Now First Niagara has applied to the Federal Reserve to buy NewAlliance, with a comment period running through December 3. Both in New Haven, NewAlliance's base, and in the communities ostensibly served by First Niagara, there are concerns. First Niagara has until now been allowed to grow quickly, but has barely integrated or served the areas it has move into. Its systems are weak. In terms of a CRA a single officer, based in Buffalo, runs the show. A request has been made for complete copy of the application. Watch this site.
November 8, 2010
The Federal Reserve's H2A of November 5 listed the First Niagara - New Alliance application, with comment period running through December 3:
First Niagara Financial Group, Inc., Buffalo, New York to acquire 100 percent of the voting shares of New Alliance Bancshares, Inc., and thereby indirectly acquire voting shares of New Alliance Bank, both of New Haven, Connecticut 3 New York 12/03/10
We're all over it. Watch this site.
November 1, 2010
Why isn't a Federal Reserve Board review required for this? “Citigroup Global Markets Ltd. has bought the Israeli government's entire 11.69% stake in Israel Discount Bank Ltd. (DSCT.TV) for 832 million shekels ($231 million) and will distribute those shares to other institutional investors, Discount Bank said Tuesday” of last week.
October 25, 2010
Even with new Governors installed, the Federal Reserve Board is considering fewer and fewer comments on bank expansion applications. Those protests which the Federal Reserve System does receive are increasingly bottled up at the Reserve Bank level, with cursory and incomplete summaries given to the governors. This has been raised to the new Governors. What will they do?
October 18, 2010
The six Federal Reserve Board governors were confronted last week with their failure to inquire into the facts of applications for Fed approval which are subject to protest under the Community Reinvestment Act and otherwise.
Inner City Press / Fair Finance Watch has raised the way the Federal Reserve Bank of New York has bottled up protests about Morgan Stanley and now the Middle East by rubber stamping deals at the local level, with no Board review.
Fed chairman Bernanke for the second time said that it's “perverse” that CRA is enforced on merger applications. But it is the law, and the person charged with following the law shouldn't brush it off.
Also raised was the way that, even when protested applications go to the Board, Fed staff omit from their summaries issues they think are not relevant or can be excluded - including for example involvement in predatory lending by a bank's affiliates. Even wonder why the Fed is blind?
October 11,
2010
Even District Judge Ellen Huvelle sees Citigroup's settlement with the SEC as a sell out of consumers. The SEC said in a letter to this U.S. district judge that Citigroup Inc. will be required to have stringent reforms that would ensure the bank's disclosures are adequate for investors. The judge has had expressed concerns about the $75 million proposed settlement between Citigroup and SEC, saying she needed assurance that the bank would maintain improved disclosure practices. Oh that there had been judicial oversight over CitiFinancial's $75 million settlement on the cheap with the Federal Reserve, whcih reformed near to nothing...
October 4, 2010
So Bernanke last week said the media ten to “make the good times too hot and the bad times too cold.” This from a man who, like his predecessor, ignored timely comments that Citigroup et al were predatory lenders...
September 27, 2010
From Federal Reserve Governor Elizabeth Duke's September 24 statement on the Home Mortgage Disclosure Act:
“the recent mortgage crisis has highlighted the potential ramifications of a mortgage market that is not functioning well. HMDA data do not create the market or solve all market problems, but they do help us understand what is happening in the market. The time is certainly ripe for reviewing and revising the data elements, standards, and reporting formats.”
But the Fed was presented, repeatedly, with showings based in significant part of HMDA data, of CitiFinancial, Wachovia, New Century, Ameriquest and the like, that predatory and discriminatory lending was taking off. And the Fed did nothing...
September 20, 2010
Speaking at the Federal Reserve's September 24 session on HMDA are representatives of Bank of America and the American Securitization Forum. And what might they be saying?
September 13, 2010
From helicopter Ben Bernanke: "The new financial reform law and current negotiations on new Basel capital and liquidity regulations have together set into motion a three-part strategy to address too-big-to-fail." We'll see.
September 6, 2010On July 21, the Fed met with Visa about interchange fees. After that, Bank of America Corp., J.P. Morgan Chase & Co. and American Express. Goldman Sachs Group Inc., Citigroup Inc. and others have also discussed tough rules for derivatives with government officials. Citi executives, meeting with the Fed on Aug. 18, expressed concerns about the effect of the new rules on U.S. firms. "Citigroup representatives also expressed concerns about a narrow interpretation of the definition of hedging and the importance of retaining their ability to hedge across markets," the summary prepared by the Fed said....
August 30, 2010The Federal Reserve System announced on August 26 that it “will sponsor a national summit on September 1 and 2 to discuss methods and resources for encouraging neighborhood stabilization in the aftermath of the U.S. home mortgage foreclosure crisis.” The Fed said that “summit speakers include Governor Duke; U.S. Department of Housing and Urban Development Secretary Shaun Donovan; Federal Reserve Bank Presidents Charles Evans (Chicago), Sandra Pianalto (Cleveland), and Eric Rosengren (Boston); and representatives of various sectors involved in the foreclosure process and community stabilization efforts.” And who are those?
August 23, 2010Federal Reserve Governor Elizabeth Duke said in Chicago, “Any changes we make to the regulation should retain the flexibility that has been integral to the CRA’s success” -- that is, leave things arbitrary...
August 16, 2010The Federal Reserve's agenda for its CRA hearing in Los Angeles on August 17 needs but does not have several disclosures. A former Fed official is appearing for a bank and trade association. Worse, JPMorgan Chase's former CRA officer is testifying early, listed only as a professor. This type of laxity both explains the Fed's blindness to the subprime melt-down and why many would like regulatory functions stripped from the Fed...
August 9, 2010Timothy Geithner, the former NY Fed President who didn't pay his taxes, is now thumbing his nose at the portions of the Volcker Rule that Sen. Levin and others managed to enact. Hey, if you don't like the laws --- and you don't -- maybe it's time to leave?
August 2, 2010Even as Wells Fargo is the subject of a governmental charge of predatory lending, by the Pennsylvania Human Relations Commission, the Federal Reserve has put David Moskowitz, Deputy General Counsel, Wells Fargo & Company on its formal panel on the Home Mortgage Disclosure Act on August 5... Discuss this: Inner City Press / Fair Finance Watch has analyzed the 2009 data, which it obtained from Wells Fargo, and has found that in 2009, Wells Fargo Bank NA confined African Americans to high cost mortgages 2.40 more frequently than whites. Its disparatiy for Latinos was 2.09. For its subprime affiliate Wells Fargo Funding, the disparities in 2009 were even worse that the bank, and those cited by the Pennsylvania Human Relations Commission: African Americans were confirmed to high cost loans four times more frequently than whites.
July 26, 2010Here's what the Fed said last week in considering Inner City Press / Fair Finance Watch analysis of disparities in Toronto Dominion's 2009 HMDA data:
Although the HMDA data might reflect certain disparities in the rates of loan applications, originations, denials, or pricing among members of different racial or ethnic groups in certain local areas, they provide an insufficient basis by themselves on which to conclude whether or not TD is excluding any racial or ethnic group on a prohibited basis. The Board recognizes that HMDA data alone, even with the recent addition of pricing information, provide only limited information about the covered loans.30 HMDA data, therefore, have limitations that make them an inadequate basis, absent other information, for concluding that an institution has engaged in illegal lending discrimination.
The Board is nevertheless concerned when HMDA data for an institution indicate disparities in lending and believes that all lending institutions are obligated to ensure that their lending practices are based on criteria that ensure not only safe and sound lending but also equal access to credit by creditworthy applicants regardless of their race or ethnicity. Moreover, the Board believes that all bank holding companies and their affiliates must conduct their mortgage lending operations without any abusive lending practices and in compliance with all consumer protection laws.
Because of the limitations of HMDA data, the Board has considered these data carefully and taken into account other information, including examination reports that provide on-site evaluations of compliance by TD’s subsidiary insured depository institutions with fair lending laws. The Board also has consulted with the OCC, the primary federal supervisor of TD’s subsidiary banks. In addition, the Board has considered information provided by TD about its compliance risk-management systems.
So no matter how disparate the data, the Fed will rebut it with confidential mumbo jumbo...
July 19, 2010Governor Duke, at the HMDA hearing in Atlanta on July 15, intoned
“HMDA has three purposes. One purpose is to provide the public and government officials with data that will help show whether lenders are serving the housing needs of the neighborhoods and communities in which they are located. A second is to help government officials target public investment to promote private investment where it is needed. A third purpose is to provide data to assist in identifying possible discriminatory lending patterns and facilitate the enforcement of anti-discrimination laws, such as the Equal Credit Opportunity Act.”
Why then do Fed orders on contested merger now by rote say that HMDA doesn't prove anything?
July 12, 2010The Federal Reserve Bank of New York said Friday that a broad legal release that was part of agreements in 2008 to cancel credit-derivative contracts between American International Group Inc. and various banks was put forth by lawyers for the insurer and accepted by the regional Fed bank.
This is another reason that Federal Reserve Board -- governmental -- decisions should be made by the non-government Reserve Banks. We'll have more on this, including regarding Morgan Stanley...
July 5, 2010On June 30, the Federal Reserve System approved a Morgan Stanley application which Fair Finance Watch had challenged in April, based on Morgan Stanley's subprime Saxon Mortgage subsidiary and Morgan Stanley, among other things, funding makers of cluster bombs.
Amazingly, the day AFTER the Fed sent its conclusory approval letter, it released improperly withheld information to FFW:
Date: Thu, Jul 1, 2010 at 10:08 AM
Subject: Morgan Stanley Application
From: Federal Reserve
To: fairfinancewatch.org
Good morning Mr. Lee:
Previously, you'd requested a copy of Morgan Stanley's
Section 3 application. The business plan was not
properly redacted by Morgan Stanley. I have attached
the application below for you.
Best,
Kimberly Hooks
This information should have been released during the comment period, and certainly prior to approval. In fact, “Mortgage” activities are still improperly redacted. On this basis alone, the approval should be rescinded...
Watch this site.
June 28, 2010Game on: Inner City Press / Fair Finance Watch has filed a timely challenge with the Federal Reserve to the pending applications of The Toronto-Dominion Bank to acquire The South Financial Group and its Carolina First Bank.
FFW obtained TD's 2009 HMDA-LAR, which has not been reviewed or taken into account in any regulatory review of TD. The data are troubling, showing for example that in 2009 Toronto Dominion denied fully 83% of mortgage loan applications from African Americans, versus only 42% of applications from whites. TD's denial rates for Latinos and Native Americans, both 68%, were also troubling. Public hearings should be held and the applications not approved.
TD in fact makes rate spread or subprime loans, but not in a fair manner. African Americans at TD are 1.93 times more likely to be confined to higher cost loans than whites.
While the FRB, despite the stated purpose of HMDA in helping to identify discrimination, has shifted to a dismissive approach to HMDA, it will be hearing different at its upcoming HMDA hearings, testimony at which should be considered by the FRB in connection with this application.
On a recent investors' conference call, TD bragged about its “FDIC-assisted transactions” -- which , significantly, were not reviewed for CRA, and on which there was no comment period. A public hearing is needed on this one. FFW's request in this letter for a complete copy of the applications includes also any and all information in the possession of the FRS concerning TD's “FDIC assisted transactions.”
Meanwhile, shareholders of South Financial have filed suit against the deal. See, e.g., Greenville (SC) News, June 22, 2010. TD has told its shareholders it will somehow convert fast food restaurants into bank branches. See, e.g., Globe & Mail, June 17, 2010. Before serving up its disparate lending, public hearings should be held. These issues must be explored, under managerial and financial factors, in connection with these applications. FFW has requested public hearings.
June 21, 2010So as (for now) agreed, the Presidents of the Reserve Banks would still be selected by the Reserve Bank boards, only the three bankers on each couldn't vote. But is that enough of a safeguard?
June 14, 2010Lame (duck) -- "Vice Chairman Donald L. Kohn announced on Friday that, at the request of Federal Reserve Chairman Ben S. Bernanke, he plans to remain on the Board until a new Governor is appointed but to leave no later than September 1. He had announced in March that he intended to resign at the expiration of his term as Vice Chairman on June 23, 2010. While he remains on the Board as a Governor, he will continue to participate in all Board and Federal Open Market Committee meetings."
June 7, 2010The Federal Reserve's Consumer Advisory Council will meet on June 17, about the Community Reinvestment Act. A push is on to block any Congressional expansion of the CRA by saying that much can be done by regulatory moves, by the Federal Reserve. The Fed had a long time to do this, and never never moved to examine BHC subsidiary subprime lenders. Too little, too late.
May 31, 2010So Morgan Stanley has purported to respond to comments Fair Finance Watch filed with the Federal Reserve, opposing Morgan Stanley applications subject to the Community Reinvestment Act. It is an arrogant response, largely that FFW's points about predatory mortgage servicing and "other predatory practices, including 'land grabs' and the financing of 'cluster bombs.'"
Its vague response on these last two is that "Morgan Stanley and its subsidiaries engage in corporate underwriting and lending activities for various clients, including those involved in national defense related activities. Morgan Stanley also engages in real estate investment activities on a global basis."
It's Morgan Stanley which put "cluster bombs" in quotation marks. To those impacted, air quotes will not help. Same with the victims of the predatory loans services by Morgan Stanley's Saxon, or of loans enabled by Morgan Stanley as an investment bank.
Morgan Stanley admits to a Saxon settlement in Missouri, and to not timely responding to consumer complaints. Yet it argues that none of this is relevant to the Federal Reserve. Like we said, arrogant. And to be continued.
May 24, 2010So in the Senate bill that passed, and in whatever comes out of Conference, do the clearinghouses -- "designated financial markets facilities" -- have emergency access to to Fed lending and funding programs? This we aim to find out. For now, here was
May 17, 2010
Too little, too late: After demanding last year that Citi fill its board with more financially savvy directors and improve its risk management, Fed officials in Washington pressed the New York Fed to follow up with tough oversight, people familiar with the matter said.
"The supervision program for Citigroup has been less-than-effective," the Fed board said in a draft of a review of the New York Fed's performance last year, according to documents released by the bipartisan Financial Crisis Inquiry Commission. The final review said Mr. Dudley's staff "did not take timely and appropriate action" to follow up on the Fed's demands in a memo of understanding with a big bank. A Citi representative declined to comment.
May 10, 2010
The Federal Reserve is advocating for itself:
"Charles Plosser of the Philadelphia Fed, Thomas Hoenig of the Kansas City Fed, Jeffrey Lacker of the Richmond Fed and Narayana Kocherlakota of the Minneapolis Fed have met with the Joint Economic Committee of Congress opposing the proposal under which the Federal Reserve would oversee banks with more than $100 billion in assets, while smaller institutions would be regulated by other agencies. The Fed banks also oppose a provision that would make the president of the New York Fed a presidential appointee, calling it an attempt to politicize the agency appointee, calling it an attempt to politicize the agency."
What -- so it's better to have banks, which own stock in the Federal Reserve Banks, regulate themselves?
May 3, 2010
As Goldman Sachs is belatedly grilled in Congress, so to at the Federal Reserve. Last week Inner City Press ' Fair Finance Watch put in a comment that began this way:
RE: Timely Opposition and Hearing Request on the Applications The Goldman Sachs Group to acquire, inter alia, up to 24.9 percent of SKBHC Holdings LLC, Corona del Mar, California, which is applying to become a bank holding company, & thereby indirectly acquire Starbuck Bancshares, Inc.& The First National Bank of Starbuck
Dear Chairman Bernanke and others in the FRS:
On behalf of Inner City Press' Fair Finance Watch, this is a timely comment opposing and requesting public hearings on Goldman Sachs' above captioned pending applications, which were re-noticed on the Board's H2A.
As you know, Goldman Sachs was allowed to become a bank holding company without any public comment period or consideration of the Community Reinvestment Act, which would otherwise have been required. Since then, and since 2009, Goldman Sachs has been charged with misrepresentation by the SEC. The emails which recently emerged, about the failure of little subprimes and selling toxic bonds to widows and orphans, militate for public hearings on these Goldman applications. See also, since October, the NY Times' ""Testy Conflict With Goldman Helped Push A.I.G. to Edge."
We are requesting, in connection with this application, a full disclosure of any and all assistance Goldman Sachs received from the Federal Reserve System in the past four years.
On the consumer side, Goldman Sachs has been charged with involvement in predatory lending, including for the acts of its subprime servicing subsidiary, Litton Loan Servicing. Even Goldman's settlement left the public in the dark. See, e.g., Bloomberg News, May 17, 2009, "Deal in Goldman probe leaves public in dark."
April 26, 2010
Inner City
Press / Fair Finance Watch filed timely comments with the
Federal Reserve Board opposing applications by Morgan
Stanley, moving its banking around. The grounds are its
subprime affiliate Saxon, as well as general sleaze, from
land grabs to financing cluster bombs. Will the Fed care?
Watch this site.
April 26, 2010 - click here for BloggingHeads.tv debate on Afghanistan cover up, Bhutto, Iran, Sudan and the UN's Love Boat in Haiti, by Inner City Press
April 19, 2010
In an otherwise
bland speech
in Arlington we've gone back to find, Fed
governor Tarullo said CRA "requires that we, as
regulators,, evaluate financial institutions' performance
in meeting those credit needs and to consider that
performance, as reflected in individual institutions' CRA
ratings, when reviewing applications for mergers,
acquisitions, and branches." The phrase that performance
is reflected in CRA rating -- over 98% of which are
Satisfactory or Outstanding -- makes it appear that a CRA
"safe harbor" was enacted. But it wasn't...
April 12,
2010
"Call them 'too big to be fair' --
the banks the regulators have favored, allowing emergency
takeovers like JPMorgan Chase's of Washington Mutual, Bank of
America's of Countrywide and Merrill Lynch, and Wells Fargo's of
Wachovia, were the most racially disparate lenders," said Fair
Finance Watch. "The regulators did not put any conditions on the
mergers or Troubled Assets Relief Program bailouts. As things are
going, it will be worse and more disparate in 2010. The
administration in Washington has yet to make any substantive
change to this, seems ready to accept consumer protection under
the compromised Federal Reserve. Global predatory lending seems
unlikely to be discussed at the G-20 finance ministers' meeting in
Washington later this month. The disparities in the 2009 mortgage
data of the big four militate for breaking up these banks."
The weakness of the Federal Reserve as regulator on this was highlighted by the March 24 settlement by CitiFinancial when non-reporting of loans under HMDA was discovered by Massachusetts authorities - and not the Fed, which is putatively regulating CitiFinancial.
April 5,
2010
This week the Angelides Commission will hear from Alan Greenspan, Robert Rubin and Chuck Prince. This goes back to the Citicorp - Travelers merger and teh Fed's pre-appoval, about which Inner City Press was asked this week:
When Travelers met and swallowed Citicorp in 1998, the Federal Reserve didn't just approve an illegal merger -- it illegally pre-approved an illegal merger. Sandy Weill and John Reed and their lawyers got the green light from the Alan Greenspan Fed before even announcing the merger. The group I worked and work with, Inner City Press/Fair Finance Watch, demanded all records of the meetings, but got only two cryptic letters, talking about the marriage of "Red" and "Blue." The Fed approved, and predatory lending took off. And now in the aftermath, even the Chris Dodd bill would house consumer protection inside the same Federal Reserve, a huge mistake. Red and Blue indeed...
March 29, 2010
The Fed is belatedly concerned -- but not too concerned. Following Inner City Press / Fair Finance Watch's comments, the Fed conducted an after the fact inquiry and in an approval order last week included this footnote:
A comment from the public expressed concern that FNF Group acquired control over Harleysville before obtaining Board approval of the application because of an extension of credit FNF Group made to Harleysville. In December 2009, and after FNF Group filed its application with the Board to acquire Harleysville, FNF Group loaned Harleysville $50 million, secured by the shares of Harleysville Bank. Harleysville invested the loan proceeds in Harleysville Bank to increase the bank's capital.
The Board is concerned when a banking organization seeking to acquire . another banking organization makes a loan to the acquiree in advance of the Board's approval of the acquisition. Those types of loanss raise concern thatthe transactionon would ~e, in substance, the acquisitioof af a controlling interest or would provide the acquirer with the ability to exercise a controlling influence over the management and policiof thethe bank holding company before receiving Board approval. The Board has reviewed carefully the loan to Harleysville, including the circumstances and terms of the loan, the merger agreements, the purpose of the loan, and the relationships of the organizations after the loan transaction. Based on all the facts of recordd, the Board does not believe that the loan resulted in FNF Group acquiring voting securities of, or a controlling equity interest in, Harleysville, or in FNF Group exercising, or having the ability to exercise, a controlling influence 'over Harleysville in this case. The Board continues to believe that loans made by an acquirer to a target organization before agency approval of its acquisition proposal raise important issues, and it will review these arrangements critically and carefully.
But the Fed apparently didn't know about the loan until it was raised in comments, and it let the deal go forward, after reams of arguments by banking insider H. Rodgin Cohen. This is another example of Fed lassitude, another reason that consumer protection should not be put under the Fed....
March 22, 2010
Typical Fed lack of transparency: Matthew M. Collette, a lawyer for the Fed's board of governors, argued in January that banks would be less likely to use the discount window and other lending-of-last-resort programs if they know their use would be made public. He said at the time that accessing the window carries a negative connotation if use was made public, even when a healthy bank suffering a short-term liquidity issue does it.
"The requirement of disclosure under FOIA and its proper limits are matters of congressional policy," U.S. Circuit Judge Dennis Jacobs wrote in the Bloomberg decision. "The statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it. If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute."
The 2d Circuit Court of Appeals has upheld the slap down of the Federal Reserve for withholding information about a portfolio of securities supporting a loan extended by the Fed in connection with J.P. Morgan Chase & Co.'s acquisition of Bear Stearns...
March 15, 2010
That the Federal Reserve's own consumer advisers said the agency is not qualified for consumer protection is damning. And some current CAC members who declined to sign did not only because they are just entering and don't want to immediately bite the hand that feeds, or at least flies, them. The Fed has put consumer financial protection on the agenda of the next meeting of its CAC...
March 8, 2010
And now the Federal Reserve (Bank of NY) doesn't even acknowledge the receipt of timely comments on the deals it's supposed to consider. And this is the agency that wants to be in charge of consumer protection?
March 1, 2010
While some are focusing on the personal profit of former NY Fed head Freidman from the AIG bail out, how about Corrigan re-surfacing flacking for Goldman Sachs on its paid Greek deceptions?
February 22, 2009
Speaking in Puerto Rico last week, Bill Dudley the new president of the New York Fed -- successor to Tim Geithner -- said while he'd visited La Isla del Encanto as a kid, this was his first visit in his "current role." He bragged about the Fed, "during CRA Week," highlighting "products especially suited to the Puerto Rican market." Are we -- or was he -- talking subprime?
February 8, 2010
In his February 3 speech barely claiming his second term as Fed chairman, Ben Bernanke bragged about the Fed's transparency, despite its withholding of information about mergers and consumer protection as well as bail outs. He said
"The Federal Reserve is already one of the most transparent and accountable central banks in the world, providing voluminous information and explanation concerning all of its activities. However, I believe that we should be prepared to do even more, to become even more transparent. It is essential that the public have the information it needs to understand and be assured of the integrity of all our operations."
Having had to litigate Freedom of Information Act cases with the Fed, which hid information about mergers and about banks' ownership of subprime lenders, we disagree.
February 1, 2010
While Inner City Press Fair Finance Watch has opposed and appealed Goldman Sachs' withholding of large portions of its submission to the New York Banking Department in response to ICP's protest of Goldman's branching application to the NYBD, it's worth making a comparison to the Federal Reserve.
Goldman Sachs must be relying on favoritism from the Fed -- while ICP has protested another Goldman application to the Fed, Goldman's response to the Fed was much more conclusory than to the NYBD. One can conclude that the Fed is a weak regulator -- and, relatedly, that it receives less information from the industry, as least on subprime questions, for that reason.
Citigroup jacked up its stake in the controlling shareholder of Banco de Chile, acquiring an additional 8.52% in LQ Inversiones Financieras for $511 million. Banco de Chile, the Andean nation's second largest bank, is controlled by the local Luksic family, which also controls U.K.-listed copper miner Antofagasta PLC (ANTO.LN) and U.S.-listed beverage company Compania Cervecerias Unidas SA (CCU), among other assets. In a 2007 deal Citigroup Inc. took a 10.44% stake in Banco de Chile, through LQ, and the Chilean bank acquired Citibank's local assets. Under the terms of the Banco de Chile-Citigroup deal, the Chilean bank took over all of Citibank's local clientele, while the U.S. bank retained control of Banco de Chile's operations on U.S. soil.
And where is Citigroup's home country regulator, the Federal Reserve?
January 25, 2010
With Geithner supposedly on the outs, and Bernanke facing more opposition -- though not enough -- in the Senate, it's not a happy time for the Federal Reserve right now.
January 18,
2010
As Obama's Bank Fees Under-Target Citigroup and AIG, Geithner;s Federal Reserve Days Questioned
By Matthew R. Lee
NEW YORK, January 14 -- The night before President Barack Obama was scheduled to unveil a scheme of fees on the three or four dozen largest financial firms, the Administration held a then embargoed conference call with the press.
Several questions centered around why the auto manufacturers which took TARP funds would not also be fined. Others wondered, if the fee regime yielded more than what the government and taxpayers lost through TARP before it expired in ten years, would the money still be collected and how would it be used?
The Administration representative, who the press was told could only be called a "senior administration official," replied that once the basis of calculating the fee had been decided on, car companies didn't fit it.
Before all questions were answered, the Administration signed off, noting that Obama would be making his announcement at 11:20 the next day. Among the questions not taken or answered was this, from Inner City Press: why assess all of the financial firms under the program at the same rate, fifteen basis points?
Citigroup,
for example, received much more TARP and other payouts
than other covered banks. And as South Bronx based Fair
Finance Watch and others showed at the time, the
government tried to help Citigroup scoop up Wachovia,
until another less subpsized offer won the day. Why
benefit Citigroup again by treating it like other, less
subprime heavy banks? The same holds for AIG.
The "senior Administration official" went out of his way to portray the program as a matter of principle for not only Obama but also "his" Treasury Secretary, Tim Geithner.
To some, the timing is meant to blunt renewed bipartisan criticism of Geithner, this time only only for not paying his taxes to the IRS -- which would be collecting the fees from the financial firms -- but for having told AIG not to disclose the preferential basis of the bailouts it was receiving, while he was at the Federal Reserve Bank of New York.
But it was
hard to note that his seeming favorite, AIG, and the bank
most benefited by his Federal Reserve Bank of New York,
Citigroup, are benefited by the structure of this proposed
Financial Crisis Responsibility Fee program.
In fact,
some say it has an aspect of a Tim Geithner bail out.
And that's... a question that should be asked, and answered. Watch this site.
January 11, 2010
So now for his work at the New York Fed, telling AIG to withhold information from the public, Geithner's on the grill. That's all to the good. But it also reflected on the wider Fed...
January 4, 2010
In the run up
to the Senate debate on Bernanke, see this
on mortgage(s) - click here.
December 28, 2009
While the Federal Reserve has yet to ask Goldman Sachs the questions it should, including as triggered by Inner City Press / Fair Finance Watch's comments on Goldman's application to acquire bank stakes, now the NY Banking Department will have a chance. Will the two coordinate? Watch this site.
December 21, 2009
So Bernanke passed, 16-7, the Senate Banking Committee, with further opposition pending in the full Senate in January.
December 14, 2009
The Federal Reserve has belatedly written to Inner City Press that "You previously submitted a FOIA request for the Goldman Sachs application. Additional information on the organizational chart has become available and is attached." We'll put the chart online here. We'll have more on this.
December 7, 2009
The holds placed in the Senate on President Obama's renomination of Ben Bernanke give more leverage to the move to audit the Federal Reserve.
November 30, 2009
Ben Bernanke has written that "the Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation." But what about the Fed's inattention to predatory lending and its role in TRIGGERING the crisis? The Fed's lack of scrutiny of the predatory lending and service issues raised against Goldman Sachs pending applications does not bode well.
November 23, 2009
The Federal Reserve Bank of New York, it turns out, is getting poorer or can't count. They claimed to have mailed a copy of Goldman Sachs' application to Inner City Press on November 3. But they did not arrive. When they did, it showed $7.30 of postage on November 3 -- then $1.15 extra on November 13, after the envelope had been returned to the Fed...
November 16, 2009
Ah, the arrogance of Goldman Sachs. Nearly a month after ICP Fair Finance Watch filed comments with the Federal Reserve, a response arrived from Goldman. They'd ignored the directions of how to send mail to Inner City Press, and hadn't bother to e-mail. And their response, while claiming that detailed reports of misdeeds, including by subsidiary Litton, by sample target Avenue Bank and in loans bought from Fremont are "replete with egregious mistakes and factual inaccuracies," does not identify a single error. They're just counting on the friendship or subservience of the Fed. Watch this space.
November 9, 2009
Long after Inner City Press filed comments and a FOIA request with the Federal Reserve on Goldman Sachs' application, it has yet to receive any responsive filing by Goldman. A Fed staffer called to say that the requested copy of the application was on its way, but it still has not arrived. Some process.
And under Dodd's proposed bill, what would happen to the Federal Reserve Banks?
November 2, 2009
Bank holding company CIT has declared bankruptcy. So what does being a BHC mean?
October 26, 2009
A week after Inner City Press' Fair Finance Watch filed a formal protest to Goldman Sachs' applications to the Federal Reserve for shares in several bank, and after the Fed has started the clock for Goldman's response, no defense has been offered.
October 19, 2009
Goldman Sachs was allowed to become a bank holding company without any public comment period or consideration of the Community Reinvestment Act, which would otherwise have been required. Since then, as simply one example, Goldman Sachs has been charged with involvement in predatory lending, including for the acts of its subprime servicing subsidiary, Litton Loan Servicing. Even Goldman's settlement left the public in the dark.
October 12, 2009
Hitting a new low, it took the Federal Reserve until September 30, 2009 to respond to Inner City Press / Fair Finance Watch's December 8, 2008 Freedom of Information Act request for the applications to become bank holding companies submitted by GMAC and the CIT Group. That's more than nine months, and even then, the Fed says it is withholding 182 pages. We will be appealing...
October 5, 2009
So one of the few proposed ways that the Fed might help CRA -- by taking on oversight power over large hedge funds, which would allow a related move to assess these funds under CRA -- Bernanke rejected last week in Q&A with Congress. Great...
September 28, 2009
As the legislation to require auditing of the Federal Reserve gather strength and supporters in Congress, the Fed sent its general council to argue that this type of accountability would just lead to higher rates. This sounds like JPMorgan Chase's argument when Georgia passed anti-predatory lending legislation...
September 21, 2009
Last week the Federal Reserve issued a letter saying it will belated begin examining non-bank subsidiaries like CitiFinancial. The Fed says in footnote one they have the legal authority to do these exams. Then why did they refuse to do them for so long? Iit's like the S&L regulator which stood by as the thrifts wasted taxpayer money -- at least its duty were passed along to the OTS.
On merger applications in the past, when community groups like ICP / Fair Finance Watch put in evidence of violations by bank's subsidiaries, the Fed would drop a footnote that the issues were being referred to the FTC and HUD -- implying that the Fed had no jurisdiction over them, certainly no commitment to do anything about them
The Fed says, "Supervisory activities will be planned based on the issues identified ...through the investigation of consumer complaints." So what has the Fed been doing to date with consumer complaints against non-bank BHC subsidiaries?
September 14, 2009
Fed Governor Tarullo on August 25 said, "there is a tendency in most organizations to fall into the habit of consulting with the same groups of actors each time a new issue arises." But look at the Fed's Community Advisory Council...
September 7, 2009
Having tangled repeatedly with the Federal Reserve about Freedom of Information Act compliance, we note Bloomberg LP v. Board of Governors of the Federal Reserve System, U.S. District Court, Southern District of New York (Manhattan), No. 08-9595. Chief District Judge Loretta Preska of the SDNY wrote in a 47-page opinion, "The Board essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed. Conjecture, without evidence of imminent harm, simply fails to meet the Board's burden." Preska concluded that the Fed "improperly withheld agency records in response to a FOIA request by conducting an inadequate search." Why are we not surprised?
August
31, 2009
President Obama's decision, announced from Martha's Vineyard, to re-nominate Ben Bernanke to chair the Federal Reserve represents even to some of Obama's most fervent supporters a sign that, at least on banks and the economy, his "Change We Can Believe In" may be no change at all. That Obama nominated and then stood behind the New York Fed's Tim Geithner, even after the public disclosure that the man he would put in charge of the Internal Revenue Service had himself neglected to pay his taxes, and even when caught only partially paid up, using the statute of limitations, these supporters excuse as a bittersweet decision made early on, when the economy was in crisis. That is no longer the case, according to Team Obama. So to give another term to the very same Fed chairman who presided over the predatory practices of Citigroup et al., and then bailed them and AIG out, can't be defended on crisis grounds. As we've noted, Bernanke's approach to the Community Reinvestment Act is that it needn't be enforced on mergers -- which is the law's only enforcement mechanism. This defanging of CRA is an idea that appears to be spreading. Watch this site.
August
24, 2009
Both Jackson Hole speeches put on the Fed's web site on August 21 cite Walter Bagehot ([1873] 1897), Lombard Street: A Description of the Money Market (New York: Charles Scribner's Sons)....
August 17, 2009
So now the Fed requests two reports from CIT. A little late, isn't it?
August 10, 2009
A telling omission? Gov. Tarullo's August 4 testimony did not mention the concept or even phrase "consumer" protection....
August 3,
2009
On July 31, Inner City Press asked the Western Hemisphere Division Chief of the International Monetary Fund Charles Kramer about disagreements inside the U.S. Federal Reserve:
Inner City Press: The President at the Philadelphia Federal Reserve said that he thinks that it will distract the Federal Reserve System to regulate hedge funds and other nonbanks that are called system, that it may not be a good idea. Do you have any view on that?
MR. KRAMER: Again, there are a lot of different ways to organize financial supervision and regulation. We agree that there are institutions like hedge funds or like insurance companies that can be systemic, and I would again call to the broad principle that all those system institutions need to be brought under strong supervision and regulation again just to contain the systemic risks that we can emanate from those types of institutions.
July 20, 2009
After the financial meltdown exposed the Federal Reserve's inattention to predatory lending and credit default swaps, one would expect the Fed to hold off further loosening the rules on CDS. But you'd be wrong. Last week the Fed granted an exemption to CDS dealer ICE Trust, owned by crisis loser Citigroup and predatory Goldman Sachs, among others, giving them an easier 20 percent capital treatment rather than the 100 percent applicable to uninsured banks like ICE Trust.
Bloomberg News,
notably, spun
the story the other way, claiming that "the
Federal Reserve determined that ICE Trust is as risky as
any insured bank, according to a letter posted July 14 on
the regulator’s Web site. The Fed is requiring that bank
members of ICE Trust, such as Goldman Sachs and New
York-based Citigroup Inc., set aside the same amount of
capital as parties trading as federally-backed lenders."
But this
is a story yet again of the Fed making it easy for the
dealer community-- the dealers sought 0% so at least the
Fed is imposing 20%. Those who don't learn from the past
are condemned to repeat it...
July 13, 2009
Last week Tim Geithner ham handedly telegraphed the re-appointment of Ben Bernanke at the Fed -- on a show whose poll had nearly all respondents saying that Geithner himself should go...
July 6, 2009
From the WSJ's account of Geithner's domination of the process to name his successor at the New York Fed, "The search to replace Mr. Geithner began immediately after he was tapped in late November to be Treasury secretary...By early January, the list was narrowed to six, including Kevin Warsh, a member of the Federal Reserve Board in Washington; Rodgin Cohen, who specialized in banking law at Sullivan & Cromwell LLC; and Mr. Dudley, who had been head of the New York Fed's markets division since 2007" -- and was at Goldman Sachs before that. Dudley was Geithner's choice. JPM Chase's Jaime Dimon, on the other hand, favored his lawyer Rodgin Cohen.
June 29, 2009
The June 25 hearings on Capitol Hill about the Federal Reserve's role in Bank of America's acquisition of Merrill Lynch don't auger well for Barack Obama to renominate Ben Bernanke as Fed chairman. Bernanke repeatedly said, I don't recollect that conversation. He was asked about statements by top Fed lawyer Scott Alvarez but dodged the repeated question, doesn't he work for you? He took at least some fire from the left as well as right. Even more shameful was the Fed giving away the store to GMAC, and now to PIMCO. Is this the change to be believed in?
The hearings also recounted how little confidence a Fed government had in Bank of America CFO Joe Price, who'd go on to throw the Community Reinvestment Act under the bus during the bank's April earnings call. His statements have yet to be unpacked. But Ken Lewis, and perhaps Bernanke himself, might want to start packing.
June 22,
2009 -- Obama's
Proposal By Splitting Community Reinvestment Act from
Mergers Could Cut Enforcement, Lost in (Fed) Sauce
Byline: Matthew R. Lee of Inner City Press: News Analysis
MILWAUKEE, June 17 -- The Obama administration's financial regulation proposal, on the issue of the Community Reinvestment Act, bears the fingerprints of the Federal Reserve, not only Tim Geithner but also Ben Bernanke. While quickly praised by, for example, Paul Krugman, since the proposal shifts CRA evaluation away from the regulators who review the mergers on which CRA is actually enforced, bankers will like it, and may be behind it.
CRA
is only enforced in connection with banks'
applications for regulatory approval for mergers and
expansions, as confirmed by the Department of Justice
Office of Legal Counsel. Without taking this into
account, the Obama administration is proposing that
CRA be a core function of the Consumer Financial
Protection Agency, which will not be responsible for
merger review.
Had this proposal been made under the Bush
administration, CRA advocates would have howled that
it weakened the CRA. Since it's Obama, the response
appears generally to be, let's wait and see.
But
not only did Obama appoint and fight for Tim Geithner,
who at the Federal Reserve Bank of New York oversaw
some of the most predatory moves by Citigroup and
others -- Obama also continues to praise Ben Bernanke.
In late 2008 at the Federal Reserve in
Washington, Inner City Press asked Ben Bernanke about
his decision to waive any CRA public comment period
when he allowed Goldman Sachs and Morgan Stanley to
become bank holding companies.
Bernanke
responded
that
it makes no sense to limit CRA review to regulatory
approval time -- despite that being the only legal
enforcement of CRA. Now that thinking seems to have
insidiously spread within the Obama administration.
But who will blow the whistle? Krugman for example takes
the proposal as a "poke in the eye to right-wingers."
To skeptics, it's a perfect post modern move: cheered
by ideological but ill-informed liberals, but actually
serving big business.
Postscript
--
proponents of Obama's plan have noted that the CFSA
would, among other things, hold public hearings on
(some?) mergers. But if the power to approval or deny
the mergers remains with the Federal Reserve, OCC and
FDIC, the CFSA could be just a side show. The Bank
Holding Company Act and Bank Merger Act would have to
be amended -- first.
On the other hand, a portion of Obama's
proposal, to declare hedge funds which pose systemic
risk to be bank holding companies, could easily be
expanded to put just funds under the CRA. Whether this
happens, or for now is at least quickly proposed, may
be a litmus test. Watch this site.
June 15, 2009
So while supposedly recused at the Federal Reserve Bank of New York, Tim Geithner was weighing in on Bank of America, in support of the shotgun marriage with Merrill Lynch, it emerged in Congress last week. He denies it. But didn't he initially denied not paying his taxes?
June 8, 2009
Bank of America will be saved by... ex-regulators? Now on the board of directors are former Federal Deposit Insurance Corp. Chairman Donald Powell and former Federal Reserve Governor Susan Bies, routine denier of FOIA appeals while on the Board. That is to say, regulators who failed to stop predatory lending and the meltdown now benefit from it....
June 1, 2009
What a surprise: the Committee on Capital Markets Regulation, including vulture investor Wilbur L. Ross Jr. of WL Ross & Co., is proposing that the Federal Reserve become the super-regulator....
May 25, 2009
So how did the Federal Reserve explain the lack of public notice on its H2A web site for Bank of America's application for a new bank? We don't know yet: we asked the Fed to response by email, but they have not.
May 18, 2009
On May 14, Inner City Press submitted the following to the Federal Reserve:
On behalf of Inner
City Press/Community on the Move and its members and
affiliates, and the Fair Finance Watch (collectively, "ICP"),
this is a
petition, challenge and request under the Freedom of
Information Act (5 U.S.C. § 552; "FOIA") and Community
Reinvestment Act (CRA) regarding the
application by Bank of America to acquire 100 percent of the
voting shares and thereby indirectly acquire Bank of America
North Carolina, National
Association, and for the Federal Reserve System's (the
"FRS's") communications with Bank of America in 2009 and a
demand for public notice and comment, and a
protest-in-advance.
The FRS has virtually repealed banking laws, including
the BHC Act and the CRA, by approving mergers and conversion
with no public notice or comment.
Now, on an application by the largest and most troubled US
bank, the Fed provided no notice until the last day on its H2A
web site. Yesterday, ICP
was asked about a notice seen in the Federal Register. It was
not in the H2A. The undersigned called the FRB of Richmond,
and noted that it was not in the H2A, requested an extension
of the comment period.
Today May 14, suddenly the proposal is in the updated
H2A,http://www.federalreserve.gov/releases/h2a/h2a.cfm?view=week
with the comment period ending... tomorrow. This is
unreasonable, and unwise given the issues surrounding Bank of
America. It is widely reported that B of A would have been
required to raise more capital, but that it lobbied the Fed to
knock $16 billion off what it should raise. The Fed and its
governors, and B of A until recently when its CEO was under
fire, have said that CRA did not cause the financial crisis.
But on B of A's April 20 earnings conference call by Lewis and
his Chief Financial Officer
Joe Price told analysts that the company's "Community
Reinvestment Act portfolio is seven percent of the residential
book, but 24% of the losses."
Yeah -- blame your bad decisions to invest in high falutin
asset-backed securities on the CRA... We'll have more on
this.The conference call is archived here
http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-eventDetails&EventId=2134324and
CFO Price makes his statement at Minute 26:25
ICP is requesting an evidentiary hearing to explore
this public claim by B of A.
In its (and the) first study of the just-released 2008
mortgage lending data, Inner City Press / Fair Finance Watch
has found that Bank of America
NA confined Latinos to higher-cost loans above the rate spread
1.51 times more frequently than whites. Countrywide Bank,
which B of A acquired, had a lower disparity, at 1.22. Bank of
America NA denied applications by African Americans 1.44 times
more frequently than whites, while denying Latinos fully 1.57
times more frequently than whites.
ICP Fair Finance Watch was interviewed on November 7 about the
use of funds by Bank of America --
"Bank of America Corp., largely through its political action
committees, gave candidates and parties $3.7 million this
election cycle, according to
an analysis of Federal Election Commission reports. Bank of
America spent $6.5 million lobbying federal officials over the
same period; Wachovia spent $2.7 million and Wells Fargo, $3.6
million."
There is no commitment that the bailout funds will not
be put to these uses...
There is more to be said, but first the comment period must be
extended.
May 11, 2009
So the Fed even cooked the books on the stress tests, after Wells Fargo threatened to sue. At least $16 billion was knocked off what Bank of America has to raise. Way to regulate... Same to the Fed's use of a Goldman Sachs director, Stephen Friedman, as the president of the New York Fed. No conflict of interest there, right?
May 4, 2009
The Federal Reserve Bank of San Francisco has added to its Economic Advisory Council a vulture investor and previous M&A lawyer, Jonathan Coslet. So this is where the Fed gets it advice from...
April 27, 2009
The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed. In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer. The losses on securities backed by assets such as home loans in Florida and California signal that U.S. taxpayers may be forced to reimburse the central bank through the Troubled Asset Relief Program...
April 20, 2009
Notably, thus far in 2009 the Federal Reserve's web site lists no notice and comment orders under the Bank Merger Act, one each under Sections 3 and 4 of the Bank Holding Company Act, and none under both. There's been a slow down -- that's an understatement -- and also, more things done without notice or comment...
April 13, 2009
Following up on ICP / Fair Finance Watch's first study of 2008 HMDA data, a complaint has been filed with the Federal Reserve:
Re: Need for FRB Action on Mockery Made of HMDA, by Regions and others
Dear Ms. Johnson, Mr. Alvarez and others:
This letter concerns attempts to avoid public review of Home Mortgage Disclosure Act information by Regions Financial and, prospectively, other financial institutions. As you know, under 12 CFR § 203.5, institutions are required to provide their HMDA Loan Application Registers to requesters. Virtually all banks provide the HMDA LAR in .dat or other analyable electronic format. In fact, searching the Federal Reserve Bulletin we find notation of only two institutions refusing to provide their data in useful form: AmSouth (now Regions Financial) and New York Community Bank. (Lehman Brothers and AIG also took this approach; significantly, the former went bankrupt and the latter survives only as a ward of the FRB.)
Now, Regions has continued what was AmSouth's stance as a HMDA outlier, by responding to a request for its HMDA LAR in .dat format by providing the data in a PDF file of over one thousand pages, which cannot be analyzed using SPSS or other statistical program. The effect is to make Region's 2008 lending performance unanalyzable until September, unlike nearly all other large banks...
Beyond instructing Regions, NYCB and others to move into the mainstream of HMDA reporting to the public, the FRB is encourages to revises its outmoded staff commentary on 12 CFR Part 203, Section 203.5 (which as is relevant here already encourages "mak[ing] the modified register available in census tract order... in order to enhance its utility to users." It is imperative that the Federal Reserve, given its responsibilities under HMDA, make clear to Regions and other institutions that the HMDA LARs they are required to provide to the public should be provided in analyzable electronic format to enhance its utility, particularly following the financial meltdown and the lack of oversight it has highlighted. We await your response.
April
6, 2009
Subprime
Survivors Wells, BofA and JPM Chase Were More Disparate By
Race in 2008 than Wachovia or Countrywide, Trends Will Worsen
Under Current Regulators
NEW YORK, April 2 -- In the
first study of the just-released 2008 mortgage lending data,
Inner City Press / Fair Finance Watch has found that the
seeming survivors of the banking meltdown, Wells Fargo, Bank
of America and JPMorgan Chase, had worse disparities by race
and ethnicity in denials and higher-cost lending than the
banks they acquired, Wachovia and Countrywide. Mortgage
lending in the U.S. will become more and not less disparate
because of the emergency mergers and bailouts engineered by
the regulators, the study predicts.
Fair Finance Watch notes that JPMorgan Chase's massive
closing of branches of Washington Mutual will also make credit
harder to come by, especially in poor neighborhoods. 2008 is the fifth year in which the
data distinguishes which loans are higher cost, over the
federally-defined rate spread of 3 percent over the yield on
Treasury securities of comparable duration on first lien
loans, 5 percent on subordinate liens.
Wells Fargo Bank in 2008 confined African Americans to
higher-cost loans above this rate spread 2.18 times more
frequently than whites, according to Fair Finance Watch.
Wachovia Mortgage FSB, the largest lender of Wachovia which
Wells Fargo acquired, had a lower disparity, at 1.46.
Bank of America NA in 2008 confined Latinos to
higher-cost loans above the rate spread 1.51 times more
frequently than whites, the data show. Countrywide Bank, which
B of A acquired, had a lower disparity, at 1.22.
JPMorgan Chase was even more disparate to Latinos,
confined them to higher-cost loans 2.10 times more frequently
than whites, almost as pronounced as its disparity between
African-Americans and whites, 2.26. Citigroup, perhaps due to
its shrinking, some say dying, business had disparities of
1.90 for African Americans and 1.23 for Latinos. For US
Bancorp, the disparity for African Americans was 1.55 and for
Latinos, 1.35.
"The banks the regulators favored in 2008, allowing
emergency takeovers like JPMorgan Chase's of Washington
Mutual, Bank of America's of Countrywide and Merrill Lynch,
and Wells Fargo's of Wachovia, were the most racial disparate
lenders," states the Fair Finance Watch report. "The
regulators did not put any conditions on the mergers or Troubled Assets
Relief Program bailouts, for example
allowing Chase to close dozens of Washington Mutual branches.
As things are going, it will be worse and more disparate in
2009. The new administration has yet to make any substantive
change to this."
Several lenders had worse denial rate disparities in
2008 between Latinos and whites then between African American
and whites, a change from previous years. Bank of America NA,
for example, denied applications by African Americans 1.44
times more frequently than whites, while denying Latinos fully
1.57 times more frequently than whites. Atlanta-based SunTrust
in 2008 denied applications by African Americans 1.37 times
more frequently than whites, while denying Latinos fully 1.78
times more frequently than whites.
March
30, 2009
Geithner
Promotes Megabanks' Monopoly, in DC as at Fed, 17 Cut to 7 on
Derivatives
Byline:
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, March 28 -- Seven
megabanks' renewed grab for monopoly power in the over the
counter derivatives market shows how little Wall Street's real
power has changed in the transition from the Bush to Obama
administrations.
The banks, including
Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley,
Barclays, Credit Suisse and Deutsche Bank, are paying over $1
million to p.r. firm Prism Public Affairs to "educate" the
voters weary of bonus and bailouts that those who caused the
crisis should benefit from it.
Already, Congress
members hungry for campaign contribution have submitted to
closed door briefings by Ed Rosen of the law firm Cleary
Gottlieb, who drafted the legislative language for monopoly.
The connector in
this story is Timothy Geithner, under Bush the president of
the Federal Reserve Bank of New York and now Obama's Treasury
Secretary. Geithner in June 2008 convened closed door meetings
with 17 banks, essentially allowing them to propose and draft
their own rules for the derivatives market.
This led to advocacy
by the Fair Finance Watch that Geithner's meetings were in
fact rule making that excluded the public in violation of
the Administrative Procedure Act, and by Inner City
Press, as media, to get the meetings opened to journalists and
the public.
The
Administrative
Procedures
Act
(5
U.S.C.
Section
553)
and
related
laws
require
that
when
the
government
engaged
in
rule-making,
it
must
provide
notice
to
the
public,
and
allow
and
weigh
public
comments.
The
New
York
Fed
under
Geithner
tried
to
rule-make
without
any
involvement
by
the
public,
even
the
public
most
impacted
by
the
subprime
lending
that
underlies
these
processes.
The
New
York
Fed
on
June
9,
2008 met with a group of the largest banks to discuss,
according to the Geithner himself
"Regulatory policy. These
are the incentives and constraints designed to affect the
level and concentration of risk-taking across the financial
system. You can think of these as a financial analog to
imposing speed limits and requiring air bags and antilock
brakes in cars, or establishing building codes in earthquake
zones. Regulatory structure. This is about who is
responsible for setting and enforcing those rules. Crisis
management. This is about when and how we intervene and
about the expectations we create for official intervention
in crises."
Press accounts made clear that the financial instruments and
regulatory issues discussed behind closed doors are related to
issues of public interest, which in fact are
disproportionately impacting low- and moderate- income people
and communities of color -- subprime and predatory mortgages.
The
financial
institutions invited, in mid 2008, were:
Bank of America, N.A. -
Barclays Capital - BNP Paribas - Citigroup - Credit Suisse -
Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs &
Co. - HSBC Group - JPMorgan Chase - Lehman Brothers -
Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of
Scotland Group - Societe Generale - UBS AG - Wachovia Bank,
N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital
Management LLC - Citadel Investment Group, L.L.C.
Fast
forward
to
March
2009,
with
Geithner
despite
tax
evasion
installed
as
Obama's
Secretary
of
the
Treasury,
and
with
Lehman
having
failed
and
Wachovia
been
swallowed
by
Wells
Fargo.
Now
he
is
promoting
monopoly
powers
in
the
market
for
an
even
smaller
group
of
banks,
just
seven:
Citigroup,
JPMorgan
Chase,
Goldman
Sachs,
Morgan
Stanley,
Barclays,
Credit
Suisse
and
Deutsche
Bank
--
which
despite
European
headquarters
received
billions
of
dollars
in
U.S. Troubled Assets Relief Program bailout funds through AIG.
March
23, 2009
Hate to see "we told you so,"
but... Inner City Press / Fair Finance Watch was on the record
that AIG was among the sleaziest of companies all the way back
to the 1990s. When Inner City Press filed comments against AIG's
acquisition of American General Insurance, AIG responded with
threats. AIG hired Ernest Patrikis, the top lawyer of the
Federal Reserve Bank of New York, and got its way from Timothy
Geithner when he ran the New York Fed.
March 16, 2009
In
DC,
Officials Defend Bailouts of Citigroup and AIG -- Federal
Reserve Still Refuses to Say Whom It Paid
Byline:
Matthew Russell Lee of Inner City Press: News
Analysis
WASHINGTON, March
13 -- The ongoing bailout of insurer AIG and its
counterparties was apologized for but defended by a range of
Obama administration officials this
week. Treasury Secretary Timothy
Geithner, until recently the president of the Federal
Reserve Bank of New York and before that at the IMF,
said he hated to have to bailout
AIG, but "it's systemic."
His
advisor Gene Sperling, a member of President Bill Clinton's
economic team, said the Obama administration took office only
to find AIG too big to fail, implying that this was entirely
attributable to the two terms of George W. Bush. But AIG was
allowed to grow without control under Bill Clinton, just as Citigroup
was increasingly unsupervised under the tenure at the New York
Fed of Timothy Geithner, as CitiFinancial got deeper into
predatory lending (click here for
Inner City Press reports on that.)
Friday in the White House Barack Obama met and then
faced the Press with Paul Volcker, chairman of the Federal
Reserve in the time before Bill Clinton. Volcker rarely used
his regulatory powers, at least not to protect consumers from
predatory lending. And yet now these are the people, along
with Clinton's Treasury Secretary Larry Summers, who are
defending massive transfers to Citigroup and AIG, all the
while laying blame everywhere except upon themselves.
Meanwhile, the Fed still refuses to say whom it paid on behalf
of AIG, with Geither on March 12 saying Bernanke is still
deciding. Bad instincts...
March 9, 2009
Congress during the debate about bailing out the banks decided that non-US banks should not be getting TARP funds. Now it emerges that of the $50 billion the Feds have given to AIG's counter-parties, Deutsche Bank for example has gotten a full $6 billion. Also receiving hand-outs were HSBC, Royal Bank of Scotland and Societe Generale. Worse, the Federal Reserve is trying to avoid providing a listing of the companies who've gotten the public money, as reiterated by Fed Vice Chair Don Kohn on March 5. This is a new low, to be followed up in DC this week.
March 2, 2009
Rare candor: Fed government Elizabeth Duke last week said, " As a former president of the American Bankers Association, I advocated reductions in the regulatory burden." AdvocateD?
February 23, 2009
In
the flurry of non-banking companies rushing to become financial
services holding companies or savings and loan holding companies
in order to get bailout funds, Inner City Press has put in a
number of Freedom of Information Act requests, in response to
which some very basic information has been withheld. The example
for this week is even the "Financial Holding Company
Declaration" submitted to the Federal Reserve for the CIT Group
by its outside law firm, Wachtell Lipton. The Fed followed the
requests that information be withheld from the public, even as
public bailout funds were being sought and doled out.
Citigroup's Pandit last
week said, "The future of Citi is in emerging markets, is in
Latin America, and is in Mexico with Banamex." While the last is
dubious, one thing seems true: the future of Citigroup, if it
has one, is not in the United States, although
it might be WITH the United States (government)... Even ex-Fed
Alan Greenspan is talking about nationalization...
On related
FOIA shenanigans, see 53 N.Y.L. Sch. L. Rev. 299, Critical
Mass: Restricting Advocates' Rights Under the Community
Reinvestment Act, Inner City Press v. Board of Governors of
the Federal Reserve System, 463 F.3d 239 (2d Cir. 2006). New
York Law School Law Review, 2008 / 2009
February 16, 2009
Before Congress last week, JPMorgan Chase's Jaime Dimon complained, “we have a Byzantine alphabet soup of regulators,” and that banks and lenders have to deal with the OTC, the CFTC, the SEC and so on. He pontificated that it should be a U.S. system and globally regulated, and that no one should try to create a new regulator. He suggested the Federal Reserve -- and why not, since the Fed delivered Bear Stearns to him and Chase, which then got WaMu as well... The Fed's been good to Morgan Chase.
February 9,
2009
After
Bailout, ING's Kok Blames Regulators, including Federal
Reserve, for pumping up subprime, food inflation
Byline:
Matthew Russell Lee of Inner City Press at the UN: News Analysis
UNITED NATIONS,
February 4 -- Wim Kok, the chairman of the audit committee of
Dutch bank ING, which received a $14 billion bailout,
Wednesday at the UN blamed "the institutions entrusted with
regulating" for not having "prevented financial speculation."
While Kok's criticism of the Federal Reserve -- he cited Alan
Greenspan's belated admission to Congress -- was deserved,
Inner City Press asked Kok how to allocate blame for the
crisis between the regulators and the banks and their
directors. Did the regulators make ING buy, and Kok
to presumably oversee the buying of, subprime mortgage
and other derivative securities? Video here,
from Minute 19.
Kok acknowledged that he saw the crisis and bailouts
"like all of us," but also "from a special position," then
blamed not only the U.S. regulators but also the "climate" and
the "bonus and compensation culture." Video here,
from Minute 20:02.
But
what was Kok's own compensation? Kok said that "in all
fairness, it is too early to give an accounting of how it
happened." But why then did the UN, and its Commission on
Social Development, present Kok as the one to read out the
blame-the-regulators speech? Yes,
Kok served as Dutch prime minister. But a director of a bank
receiving a multi-billion dollar bailout should not be
surprised to be questioned about it.
"In all fairness," to use Kok's own phrase, Inner City Press asked him about the role of financial speculation in driving up food prices in part of 2008. Kok replied that while prices have declined, they could rise again due to inflation caused by, yes, the bailouts. As to how speculation could be stopped by the UN system, he did not answer. Whether ING itself speculates in food or agribusiness stocks, as with Kok's compensation, is not known at deadline.
February 2, 2009
Banker
Allison of BB&T in Meltdown Misdirection, Subprime Loans
Were Shielded from CRA by Federal Reserve
Byline:
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
SOUTH BRONX,
February 1 -- Given the hundreds of billions of dollars being
thrown at banks in response to the subprime lending-triggered
meltdown, holding accountable those who turned American
finance down the subprime path would seem to be important.
Conservatives blame the Community Reinvestment Act, saying
that this law enacted in 1977 to combat the redlining of and
refusal to lend in inner city areas was something of a time
bomb, set to explode 30 years later.
But the explosive growth of subprime lending took place
in parts of financial holding companies which are not covered
by CRA, like Citigroup's CitiFinancial and similar consumer
finance subsidiary in Wells Fargo and HSBC, purchased as
Household International. The subprime loans were securitized
by investment banks not only like the defunct or swallowed
Lehman Brothers, Bear Stearns and Merrill Lynch, but also Goldman
Sachs
and Morgan Stanley, entirely outside of CRA, before they
ran
to the Federal Reserve to get their bailout money.
One tier down the world of finance, the chairman of regional bank BB&T John Allison gave a speech on January 29 in which he blamed the CRA for the financial crisis. This is more than a little ironic, given BB&T's engagement under Allison in subprime lending. When the Bronx-based Fair Finance Watch documented to the Federal Reserve that BB&T's banks referred turned-down loan applicants to their high-cost subprime affiliate Lendmark Financial Services, during the public comment period on BB&T's application for approval to acquire Georgia's Main Street Banks, the Federal Reserve ignored the issues.
Click here for the Federal Reserve approval
order,
which recited from the comments of Fair Finance Watch
"concern about referrals of loan applicants to Lendmark Financial Services ('LFS'), a nonbank subsidiary of BB&T that makes subprime loans. BB&T has represented that it might refer to LFS applications denied by a BB&T subsidiary bank that do not meet the bank's underwriting guidelines. Before making a referral, however, these applications undergo an internal second-review procedure. In addition, BB&T notes that LFS has a policy to refer applicants who meet the Freddie Mac underwriting guidelines to BB&T's subsidiary banks."
But as Inner City Press noted, BB&T's referrals up and down do not use the same standard. On fringe finance the Federal Reserve said that Fair Finance Watch
"expressed concern about BB&T's relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states where they operate. BB&T has stated that it does not focus on marketing credit services to such nontraditional providers and that it makes loans to those firms under the same terms, circumstances, and due diligence procedures applicable to BB&T's other small business borrowers."
BB&T admitted in its responses into the record before the Federal Reserve relationships with 45 payday and other fringe financiers. BB&T under Allison ran headlong into subprime -- as Fair Finance Watch and then the Fed noted, in its order
"A commenter asserted that the Board should, in the context of the current proposal, review BB&T's recently announced plans to acquire the assets of FSB Financial Ltd. ('FSB'), Arlington, Texas, a nonbanking company that purchases automobile-loan portfolios. The FSB acquisition is not related to the current proposal. Moreover, if the FSB acquisition is consummated under authority of section 4(k) of the BHC Act, the acquisition would not require prior approval of the Federal Reserve System. BB&T would require prior Federal Reserve System approval if the acquisition were proposed under sections 4(c)(8) and 4(j) of the BHC Act, and the transaction would be reviewed in light of the requirements and standards discussed above."
The
Gramm-Leach-Bliley Act of 1999 amended the Bank Holding
Company Act of 1956 and made it easier for subprime lenders to
be acquired with no prior review by the Federal Reserve, no
public comment period, no CRA review. BB&T John Allison's
fulimations notwithstanding, that deregulatory GLB Act, passed
in part to legalize after the fact the merger that created
Citigroup, is the statute investigators should be looking at.
And the acts of subprime-hungry bankers like John Allison of
BB&T. We'll have more on this meltdown misdirection, in
the spirit of accountability.
For now, consider this buzz about Lendmark in 1997, this 2006 BB&T investor relations presentation (also of its subprime Liberty Mortgage Corporation), and again, Lendmark's own website, still reciting "non-conforming mortgage loans" from "104 branch locations throughout Georgia, Tennessee, Virginia, Maryland, Florida, North Carolina, South Carolina, Kentucky, West Virginia, and Delaware."
January
26, 2009
As
JPMorgan
Chase Shutters WaMu Branches, Regulators Missing, Commitments
Gone
Byline:
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, January
23 -- JPMorgan Chase is moving to closed down dozens of the
Washington Mutual bank branches the government allowed it to
acquire last year with no public notice or comment period. In
Dallas, Chase has targeted 23 WaMu branches for closure, and
another six in Fort Worth. In the Chicago area, Chase says it
will shutter 57 WaMu locations. More branch closings will
follow across the nation.
Community and consumers groups are belated protesting
the acquisition, which was a one of a slew
of so-called emergency transactions on which no Community
Reinvestment Act comments were considered, including the
accession of Goldman Sachs and Morgan Stanley to bank
holding company status, and Bank
of America's now discredited acquisition of Merrill
Lynch.
JPMorgan Chase benefited from regulator-protected acquisitions
not only of WaMu but, before that, of Bear Stearns. As
first reported by Inner City Press, Bronx-based Fair Finance
Watch submitted to the Federal Reserve Board comments on
these transactions, but was told that emergency did not allow
consideration of the issues raised, including prospective
branches closings.
JPMorgan Chase has now told groups who have asked if it
will continue Washington Mutual's CRA programs and commitments
that since there is no more Washington Mutual, there is no
more commitment.
This
comes in the wake of JPMorgan Chase's Jaime Dimon reversing
himself from a stated commitment to mortgages through brokers
to abruptly shutting down Chase's wholesale mortgage unit.
While groups are told this will give Chase more control over
the terms of loans, brokers point out that Chase ultimately
had control in the wholesale business, too.
Commitments are made to be broken, apparently,
particularly those by companies the federal regulators bailed
out or merged out of existence. What, the question grows, is Timothy
Geithner's position on this Main Street issue?
Update: later on January 23, community groups were told that JPMorgan Chase plans to close over 40 WaMu branches in New York State...
January
19, 2009
So the Fed puts in charge of AIG
Chester Feldberg, former chairman of Barclays Americas, and
Douglas Foshee, owner of El Paso Corp. Can you say, conflict of
interest?
And
the
Fed's
purported advisor on community issued, fresh from CCC, is not
allow to talk to the press -- and he accepts it?
Geithner-gate is in this week's CRA Report...
January
12, 2009
A
new low -- as of 10:20 p.m. on Sunday, January 11, 2009, the
Federal Reserve Board's web site http://www.federalreserve.gov
was down, "This link appears broken. DNS error - cannot find
server."
January
5, 2009
To
show how unserious the Fed was about banks' transparency, before
before the Fall, we note that while New York Community Bancorp
was one of the institutions which insisted on providing Fair
Finance Watch with its Home Mortgage Disclosure Act data only in
paper or PDF form, so that it couldn't be analyzed, the Fed has
on its Thrift Institution Advisory Council the CEO of NYCB,
Joseph Ficalora. Talk about impunity...
December
29, 2008
So
let's get this straight -- the Fed didn't provide any formal
public notice or comment period on CIT's application to become a
bank holding company, but because Inner City Press wrote in for
a copy of the application and initially requesting a hearing,
the Fed's approval order was mailed to Inner City Press, with a
paragraph denying the hearing and making it appear that there
was a fair process. But there was not.... The same applies to
GMAC. The Fed has become lawless.
December
22, 2008
The
Fed's PNC - National City approval order is contemptuous of the
public, including the local member of Congress. Why favor PNC
over NatCity? It's not explained. And the Fed is trying to deny
FOIA requests for basic information about who they lend to.
Perhaps there needs to be a HMDA law for the Fed...
Who
knew?
Morgan Stanley, which the Federal Reserve let become a bank
holding company with no public comment, now applies on an
expedited basis for its Greenwich, Connecticut-based subsidiary
Frontpoint to own a stake in a start-up bank that says it will
serve Manhattan, Brooklyn and parts of Long Island: Heritage
Bank. Then, there is a China-related application by Morgan
Stanley, on which the comment period is still open. Expect more
on this.
December 15, 2008
Swept
Under the TARP by the Federal Reserve, Grabs by GMAC, PHH and
CIT, Wachovia's Sewers
Byline:
Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, December 8 --
After most big banks and even many non-banks have already
drawn down their bailout funds from the government's Troubled
Assets Relief Program, there's belated interest in Congress in
what banks have been doing. Monday afternoon on the Senate
floor, Byron Dorgon of North Dakota expressed shock at Wachovia's
purchase
and lease-back of German sewer system, just so it could use
the depreciation of the German pipes to avoid its U.S. taxes.
Now that Wachovia is being bought -- by Wells Fargo and not as Washington wanted Citigroup -- is it easy to finally criticize it and its outgoing management. But how about Citigroup and its entrenched officials Robert Rubin andVikram Pandit, who right after its second bailout serving spent eight billion Euros buying the highway business of Spanish construction firm Sacyr Vallehermoso?
The TARP
program is full of abuses. Focus only on some pending ones, the
conglomerate PHH says it is applying for TARP funds, without
owning any bank or thrift. Its application is not even on the
Office of Thrift Supervision's website. Nor, on the Federal
Reserve's website, can any notice be found for the
applications of GMAC and CIT. The Fed has sent Inner City
Press a copy of GMAC's -- but why is the required public
notice not on the Fed's web site?
December
8, 2008
Fair
Finance
Watch
has
put
in
comments
requesting
public
hearings
on
PNC's
application
to
buy
National
City,
in
a
deal
the
regulators
cooked
up
and
now
must
be
the
judge
of.
National
City
asked
for
TARP
funds
but
was
denied.
PNC
was
given
the
funds,
to
buy
National
City;
the
regulators
will
then
buy
the
troubled
assets
from
PNC.
It's
called
unexplained
favoritism:
save
Citigroup
and
AIG
but
let
Lehman
Brother go under. Turn down National City, then buy its bad
loans from PNC. Maybe Tim
Geithner will explain.
Meanwhile the subprime
bottom-feeder Ocwen is trying to line up for the Troubled
Asset Relief Program bail-out funds. Ocwen has applied to buy
Kent County State Bank in Jayton, Texas. More
on this anon.
December 1, 2008
Let's
compare
two holding company regulators. "The Office of Thrift
Supervision, which regulates savings and loans, has levied 34
cease-and-desist orders this year, with 23 coming since June.
The Federal Reserve issued two such orders this month after
issuing only one in the year through October." The Fed -- some
tough regulator... To bend over backwards to be fair, if it is
the Fed's strategy to regulate without public cease and desist
orders, the Fed has to stop being so resistant to providing
documents under the Freedom of Information Act. Bernanke knows
best? Where's the evidence of that?
November
24, 2008
The
choice
of
Tim Geithner as Treasury Secretary put a protege of Citigroup's
Robert Rubin in charge of the economy, just as Citigroup teeters
near failure due to its predatory lending. Rubin did nothing to
stop Citi's gouging practices, just as Geithner did little as
head of the Federal Reserve Bank of New York to regulate and
reign in the lenders under his jurisdiction. How, some are
asking, is this is change one can believe in?
November 17, 2008
Under the headline, "Economists offer support for Bernanke," this weekend's Wall Street Journal Europe quotes without qualification JPMorgan Chase economist Bruce Kasman that "Bernanke has done a good job." No mention that Bernanke gave Bear Stearns l and then Washington Mutual to JPM Chase, with no public comment period. Sure, if you were JPMC or Jaime Dimon, you'd lavish praise on Bernanke for these moves. But others?
November
10, 2008
AP
breathlessly reported that "the Federal Reserve says banks and
investment firms borrowed from its emergency lending program
over the past week at a slightly slower -- but still brisk --
pace. The Fed's report shows commercial banks averaged nearly
$110 billion in daily borrowing over the past week. For the week ending Wednesday,
investment firms drew $77 billion. This category was recently
broadened to include any loans that were made to the U.S. and
London-based broker-dealer subsidiaries of Goldman Sachs, Morgan
Stanley and Merrill Lynch."
So
the Fed by allowing all three in the world of bank holding
companies, in all three cases with no public comment period at
all, has creates business for itself...
November 3, 2008
At
UN,
Stiglitz Slams Chase For Misuse of Bailout, Federal Reserve
for Predatory Lending
Byline:
Matthew Russell Lee of Inner City Press at the UN: News Analysis
UNITED NATIONS, October 30
-- The $700 billion bank bailout should not be used for
mergers to increase market share, economist Joseph Stiglitz
told the Press on Thursday. Following a UN panel discussion
about the global financial crisis, Inner City Press asked
Stiglitz about predatory lending and, as an aside, if he would
consider the post of Secretary of the Treasury. While not
directly answering the latter, Stiglitz said that the current
Secretary, Henry Paulson, is ignoring the Congressional intent
of the bailout and is allowing the funds to be misused
by the banks.
Stiglitz specifically cited a conference call by JPMorgan Chase, in which an executive bragged that the $25 billion it is claiming from the bailout will make Chase "more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment." Stiglitz called that an abuse, and also took a jab at the Federal Reserve, which he said had the power to crack down on predatory lending since 1994 but did not. Video here, from Minute 19:31.
October
27, 2008
From Dow Jones on the Fed's self-approval of Wells Fargo - Wachovia: " The Fed said a commenter had requested a public meeting, but the Bank Holding Company Act does not require the board to grant that request. A Federal Reserve spokeswoman wouldn't disclose the name of the group that had requested the hearing." So now, like North Korea, the Fed tries to cover up even who has commented. For the record, ICP Fair Finance Watch made the request...
So
GE has signed up for the Fed's commercial paper program. It's
evasions of the CRA, or limitations to a single credit card bank
and Utah industrial loan company, should end... Better late than
never, we suppose, for Alan Greenspan to apologize for ignoring
evidence of predatory lending.
October
20, 2008
The
Fed's
Caja Madrid approval order is one of the most superficial
and conclusory to date, ignoring several of the adverse issued
raised, and merely pasting in a boiler plate paragraph about
fair lending concerns...
It's telling, in terms of how
sloppy the corporate giveaways have been, that the Fed did not
think through how buying warrants in the big banks would put
them in the position of reducing book value or recording a loss.
What a regulator...
October
13, 2008
Tales for a time of lawless
regulators giving rubber stamp bank merger approvals without any
public notice or comment, Chase and now Wachovia --
On October 10, the Federal
Reserve Board sent Inner City Press a partial response to a
Freedom of Information Act request made back in March, about the
Fed voting without public notice or comment to bail out JPMorgan
Chase's acquisition of Bear Stearns without even following the
law requiring the involvement of Fed governors. Six months after
the fact, the Fed releases an April letter to Congress saying
the Governor Mishkin, who has since left the Board, was in the
air on a flight from Finland to the U.S. and therefore couldn't
be involved. Click here
There
are
other
responsive records, still not given or denied, which Inner City
Press will be pursuing.
Meanwhile,
while
Inner
City
Press
/
Fair
Finance
Watch
has
already
commented
to
the
Fed
demanding
they
hold
a
comment
period
on
Wells
Fargo's
proposal
to
buy
Wachovia,
now
Wachovia
says
it
will
bypass
its
own
shareholders
--
with
the
NYSE's
rubber
stamp.
Note
to
Fed:
this
doesn't
make
it
an
emergency
to
bypass
the
public
too.
But
the
Fed
on
Friday
said,
vaguely,
that
it
will
begin
"immediate consideration" of Wells Fargo's application. But no FDIC involvement = no
emergency.
RBS is pleading for a bailout
from the UK... When Inner City Press / Fair Finance Watch
commented, at length and over years, about RBS' involvement in
and exposure to predatory subprime lending, RBS always said it
wasn't true...
October
6, 2008 -- for an angry debate by Inner City Press on
the bailout, click here
From
what
are
now the Fed's regulators, " Taiwan's
Financial Supervisory Commission said late Sunday the three
investment units of American International Group Inc. (AIG) on
the island have sound fundamentals, but it will monitor their
operations closely. 'The commission will monitor closely the
three companies' financial and operation changes, and will take
appropriate measures when needed,' the island's top financial
regulator said in a statement. AIG said Friday all of its
non-insurance businesses are for sale. Outside the U.S., AIG
said it wants to keep at least a majority stake in American
International Assurance Co., which sells life insurance and
retirement products in China, Thailand, South Korea, Australia,
New Zealand, Vietnam, Indonesia and India." Has the Fed signed
off on this?
September
28, 2008
First on the fringes and
now on Fox News, the Community Reinvestment Act is being blamed
by some for today's financial crisis. The argument is that by
encouraging FDIC-insured banks to lend in lower income
neighborhoods, the government -- read, Democrats, from Jimmy
Carter to Bill Clinton -- created the explosion in high interest
rate subprime loans.
There's a major
factual problem, though: with a single exception, no bank sought
CRA credit for its subprime loans. And the investment banks
which were purchasing, bundling and securitizing the loans were
not covered by CRA. Bear
Stearns was not covered by CRA, but was bailed
out
by the Federal Reserve Board for $30 billion dollars. AIG,
an insurance company, was not covered by CRA, but its subprime
activities have led to
a $75 billion loan from the Federal Reserve, which claimes
that it does not control AIG, despite owning warrants for 79% of
its stock...
September 22, 2008
So
with its $85 billion bailout of AIG, the Federal Reserve will
come to run a predatory lending operation. Click here
September
15, 2008
As
the Federal Reserve through the New York Fed is involved in
trying to set up yet another bail-out, the two most recent
speeches on the Fed's web site are Bernanke on historically
black colleges, and Kohn on academic articles...
September 8, 2008
Incoming Freddie Mac chief David Moffett previously served as chief financial officer of U.S. Bancorp, which beyond its own subprime lending was a 25% investor in the now-bankrupt subprime lender New Century. When Inner City Press investigated U.S. Bancorp's stake in New Century, the company argued to the Federal Reserve that despite having two seats on the board of directors it did not control the lender. The Fed dodged the question until U.S. Bancorp eventually sold the stake...
September 1, 2008
The WSJ has pegged New York Federal Reserve President Timothy Geithner to be Treasury Secretary in an Obama administration. Oh the profits of bail-outs...
How to explain Citigroup
changing former Treasury Secretary Bob Rubin's
title to Senior Counselor? Here's our guess -- as the company has
gone downhill, the finger has focused on Rubin. He doesn't like it
-- just as he denied having any role in Citigroup's predatory
lending, saying it wasn't under his "aegis" -- and so he changes
his title. But under whose aegis is it?
August 25, 2008
Bernanke's
spin
So,
the lesson learned from a bailout with no public comment is a
rulemaking with the industry with no input from the public...
August
18, 2008
Like
a
coup leader trying to ex post facto legalize their seizure of
power, the Federal Reserve has included in its "Legal
Developments 2nd Quarter 2008" publication released last week
its Orders - with no public comment allowed -- bailing out Bear
Stearns and letting JPM Chase
buy it, available at http://www.federalreserve.gov/Pubs/Bulletin/2008/pdf/legalq208.pdf
.All the patina of legality with none of the content...
August
11, 2008
So
Elizabeth Duke was sworn
in
August
4, 2008
Ah, FBSEA-- " The Federal Reserve Board on Thursday announced the approval of an application by International Bank of Azerbaijan, Baku, Azerbaijan, to establish a representative office in New York"....
July
28, 2008
So
in fairness we can note that the Fed doesn't only do favors for
JPMorgan Chase (on Bear Stearns) and Citigroup (on any and
everything, including the Group's formation) -- last week the
Fed belatedly released a ruling favoring SunTrust
in its dealings with its presumptively illegal but
"grandfathered" holdings of Coca-Cola story - click here
The
Fed
justifies
its favor as reducing the mixing of banking and commerce. Coke
as a mixer?
July
21, 2008
The Wall Street Journal.com reports
July
14, 2008
Approvals with no prior public notice, much less comment:
In a letter dated July 1, the Fed granted a request to allow JPMorgan
Chase Bank to purchase a $44 billion portfolio of Bear
Stearns derivative transactions and hedges acquired by the
holding company when it bought Bear Stearns. The portfolio
includes Bear Stearns Forex Inc. and Bear Stearns Credit
Products Inc. The Fed spun that "the proposed transaction in
this case is a byproduct of a one-time corporate reorganization
and would facilitate the integration of recently merged
companies," and granted the waiver. The Fed also granted
JPMorgan's request to exempt from Fed rules certain transactions
between the firm and Maiden Lane LLC - the limited liability
company set up with the Federal Reserve Bank of New York to hold
some Bear Stearns assets. "Although
(JPMorgan Chase) has a substantial subordinated exposure to
Maiden Lane, the (New York Fed) has the predominant economic
interest in Maiden Lane," the letter from the Fed to JPMorgan,
dated June 26, stated. "Granting
the exemption also appears to be in the public interest because
it will facilitate the consummation of the (New York Fed)
facility," the Fed letter said. So the Fed considers
consummation of its own transaction to be in the public
interest. But did they hear from the other sides?
Annals of oversight: "Bernanke said the Fed consulted Congressional leaders during the weekend in March when it decided to facilitate the Bear Stearns rescue, and that he didn't get the sense that there was any objection."
July
7, 2008
Here
is
an outrage on which action must be taken -- the purportedly "off
the record" speeches given to audiences of select investors by
Federal Reserve personnel. They are sent out by email to
journalists, but not to write about. Hedge fund artists get
insider knowledge from the Fed, and trade on it. Doesn't this
violate, at least in spirit, Reg FD, Financial Disclosure?
But
look for Ben Bernanke to on the record defend the
bailouts before Congress on July 10. Who actually questions him
will be interesting to see.
June
30, 2008
Weeks
late, the Federal Reserve has written to Inner City Press that
This is regarding
your FOIA request for documents related to the JP Morgan / Bear
Stearns transaction. We have interpreted your request to include
the Board meeting minutes from Mar. 14 and 16. The minutes are now
available online on the Board's public website:
http://www.federalreserve.gov/newsevents/press/other/20080627a.htm
We will be contacting you shortly about the scope of the remainder
of your request.
For now, as
even the Dow Jones story on the minutes reports, "four
Fed board members were involved in making the decision to come
to the rescue of Bear, the Fed's minutes show."
June 23, 2008
The
filing on June 15 by Inner City Press / Fair Finance Watch
June
16, 2008
This
week with the Federal Reserve, Inner City Press / Fair
Finance Watch filed comments against the
applications by Spain's Caja Madrid, funder of biofuel projects
and 23% owner of Iberia airlines, to acquire City National Bank
of Florida, and against the Federal Reserve Bank of New York's
secret process with banks, in essence a rule-making excluding
the public even those the topic, credit derivatives, has come up
because of the subprime lending crisis. The financial
institutions invited -- and now challenged -- are listed below.
Bank of America,
N.A., Barclays Capital - BNP Paribas - Citigroup - Credit Suisse -
Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. -
HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch
& Co. - Morgan Stanley - The Royal Bank of Scotland Group -
Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital
Management LLC - Citadel Investment Group, L.L.C.
The
Administrative
Procedures Act (5 U.S.C. Section 553) and related laws require
that when the government engaged in rule-making, it must provide
notice to the public, and allow and weigh public comments.
Here, the FRBNY has tried to rule-make without any involvement
by the public, even the public most impacted by the subprime
lending that underlies this FRBNY process. Rather, for example,
the FRBNY on June 9 met with a group of the largest banks to
discuss, according to the FRBNY's president,
"Regulatory
policy. These are the incentives and constraints designed to
affect the level and concentration of risk-taking across the
financial system. You can think of these as a financial analog
to imposing speed limits and requiring air bags and antilock
brakes in cars, or establishing building codes in earthquake
zones.
"Regulatory structure. This is about who is responsible for
setting and enforcing those rules.
"Crisis management. This is about when and how we intervene and
about the expectations we create for official intervention in
crises."
But when rules are being
set, to use Mr. Geithner's own analogies, for air bags, brakes,
speed limits or building codes, the agencies at issue are not
allowed to and do not only take input from the industry.
Press
accounts make clear that the financial instruments and
regulatory issues discussed behind closed doors are related to
issues of public interest, which in fact are disproportionately
impacting low- and moderate- income people and communities of
color -- subprime and predatory mortgages. AFP of June 9
reported that
"those
swaps
are designed to transfer the credit exposure of fixed income
products between parties and often have been linked to US
subprime, or high-risk, mortgages... Trading in derivatives,
financial securities whose value is derived from other financial
securities, was a major factor in the subprime, or high-risk,
mortgage crisis that rocked markets last August and has spread
through the global markets... Geithner defended the Fed's
decision to finance the Bear Stearns - JP Morgan Chase merger in
March, saying it was done only with great reluctance and only
because there seemed to be no other choice as Bear Stearns
reeled from soured mortgage-related investments. 'It was the
only feasible option available to avert default,' he said, and
'we did not believe we had the ability to contain the damage
that would have been caused by default.' The Fed acted only to
'facilitate an orderly transition,' not 'to preserve the
company,' Geithner said."
Here, it appears
that the FRBNY is trying to take the closed-door, no public
notice Bear Stearns - JPM Chase process several troubling steps
further, providing access to 17 mega-banks but still not the
public.
This closed-door, industry
top-heavy process is unacceptable and, Inner City Press has now
timely contended, is contrary to law, under 5 USC 553 and
otherwise. Watch this site.
June
9, 2008
So would whoever's the new President ask Bernanke to suggest four replacements on the Federal Reserve Board? Gov. Frederick Mishkin announced on May 28 that he would leave the board at the end of the summer. Two other Fed governor positions have been open since last year and Gov. Randall Kroszner has remained in his seat even though his term expired Jan. 31.
Whatever happened to checks and balances?
June 2, 2008
Econ-talk: Fed Vice Chair Kohn has been pitching the idea of giving Wall Street securities firms permanent access to Federal Reserve loans. Permanent bailout? Note to the Fed: Citigroup and JP Morgan Chase have been wildly understating their borrowing costs for LIBOR calculations, in order to hide what those in the know think of these two companies and their prospects...
May
26, 2008
In
a May 9 meeting in which he was criticized for the Bear Stearns
bail-out, the Fed's Ben Bernanke expressed interest in local
concessions from banks on interest rates, but little desire to
clamp down on predatory lending, or extend the Community
Reinvestment Act to non-banks...
May
19, 2008
In
a speech on May 15, Federal Reserve Governor Frederic
Mishkin said, “Our regulatory framework should be structured to
address failures in information or market incentives that
contribute to credit-driven bubbles." But where was he when
the other Fed governors rubber-stamped the first part of the Bear
Stearns bail-out by JPM Chase, which required unanimity?
May
12, 2008
From
Gov. Kroszner's speech last week --
"The
cost
of foreclosures is not limited to individual homeowners. Communities in which a high number of
foreclosures have occurred are increasingly faced with large
numbers of properties held by lenders or servicers as "real
estate owned," or "REO." REO is
costly to hold, and many lenders are not well equipped to handle
large REO inventories. As a result,
the number of vacant homes in some neighborhoods has increased
markedly. After averaging about 1.7
percent starting in 1990 through 2006, the home-vacancy rate
rose sharply in 2006 and hit 2.9 percent in the first quarter of
2008, according to the U.S. Census Bureau. Properties left
vacant for long periods have many negative effects on a
community. Research indicates that
foreclosures tend to reduce the value of nearby properties; the
magnitude of these price declines appears to differ, depending
on the presence of variables such as the strength of the local
housing market or the distance between a foreclosed home and
other surrounding homes."
And
that's
why cities like Baltimore and Cleveland are suing predatory
lenders, like Wells Fargo
-- click here
for a report this week to Inner City Press from a
whistleblower..
May
5, 2008
Some
savvy
April
28, 2008
From Scott Alvarez' April 24 testimony -- "Citigroup recently received a capital infusion from the Kuwait Investment Authority (KIA), the Abu Dhabi Investment Authority (ADIA), and the Government of Singapore Investment Corporation (GIC), one of Singapore's two sovereign investment funds. None of these funds acquired more than 5 percent of Citigroup's total equity. Three sovereign wealth funds, the Korea Investment Corporation (KIC), Temasek, and KIA, each made similar noncontrolling investments in convertible preferred stock in Merrill Lynch and Co. These are all passive investments that have not triggered formal review under U.S. banking law." And is that wise?
April
21, 2008
The
Federal
Reserve continues to hit new lows. In
an order dated April 1 (mailed out on April 11), the Fed
purported to review -- with no public input -- and approve JPMorgan
Chase's proposal to acquire Bear Stearns and its New
Jersey-based bank, Bear Stearns Bank & Trust. "Based on all
the facts and circumstances, the Board has determined that an
emergency exists requiring expeditious action on the proposal."
So much for CRA... To be continued.
April 14, 2008
Delaware vice-chancellor Donald Parsons has stayed litigation challenging the proposed acquisition of Bear Stearns by JPMorgan Chase, deferring to a similar court case in New York. Parsons noted that the Delaware lawsuit mirrors five lawsuits that have been consolidated on an expedited basis by the New York Supreme Court. That court has scheduled a May 8 hearing on a preliminary injunction barring a shareholder vote to approve the deal. "The judge also noted the unique circumstances of the planned government-assisted merger" -- so now, the Federal Reserve's outrageous exclusion of any public review of the deal is used by court to avoid judicial review...
And this is not even dealing yet with the Fed's sleazy deal with Blackrock, answers on which are due on April 18...
There's something positively ghoulish, in Greg Ip's Greenspan story last week, about letter extracted on his death bed from Ned Gramlich, that "I truly wish the press would stop kicking you around on this subprime supervision issue. What happened was a small incident." The reference, as Ip tells it, was to
"In 2000, then-Fed governor Edward Gramlich, who was in charge of the Fed's consumer affairs, proposed to Mr. Greenspan that the Fed's staff examiners look for abusive lending practices in banks' lightly regulated mortgage affiliates. In an interview with The Wall Street Journal last June, three months before his death, Mr. Gramlich said that at the time, he generally considered subprime loans a good thing. He didn't then know the extent to which the loans would become a problem, but he wanted the 'Fed to be a leader' in cracking down on predatory lending. Mr. Greenspan recalls that he demurred, saying that the Fed shouldn't have oversight of these lenders. Shady operations could portray their Fed-regulated status as a seal of approval, he suggested, giving them unearned credibility with customers."
But if Gramlich was pushing for exams of BANK-AFFILIATED lenders, like CitiFinancial, these were already benefiting from a bank- and FRB-affiliated status...
April 7, 2008
The U.S. Federal Reserve Board, while still trying to
avoid any public comments on or review of the controversial Bear
Stearns - JPMorgan
Chase bail-out, has agreed to hold public hearings on Bank of America's
Countrywide
application, in Los Angeles on April 22 and in Chicago on April
29. Inner City Press and Fair Finance Watch had requested the
public hearings, and in preparation are submitting to the
Federal Reserve that Countrywide in the Los Angeles MSA in 2007
confined 18.91% of its African American borrowers to higher cost
loans over the rate spread. Countrywide in the Chicago MSA in
2007 confined African Americans to higher-cost loans 1.93 times
more frequently than whites, while confining Latinos to
higher-cost loans 1.35 times more frequently than whites.
March 31, 2008
Ironic
in light of the Fed's
highly-questionable bail-out of Bear Stearns via JPM Chase,
the Minneapolis Fed's Gary Stern last week intoned "A final TBTF comment: Recent events have
likely reaffirmed and strengthened some creditors' expectations
of support, or have created those expectations for the first
time. I think one would be hard pressed to dismiss our analyses
or proposals by claiming that such expectations do not exist. On
the opposite end of the spectrum, some might dismiss our
suggestions, arguing that we cannot influence creditors'
expectations. I reject that view as equally untenable. We simply
cannot allow widespread perceptions of government support to
pervade the financial system."
So what is the Fed going to do about
it?
March 24, 2008
Since the Fed is essentially a participant in the JPM Chase-Bear Stearns deal, how can it purport to regulate it? And since the Fed is now an interested party in how Bears' portfolio of subprime loans performs, how can it be objective?
March 17, 2008 WashPost - Guardian (UK)
The day after news of the Federal Reserve's murky bailout of Bear Stearns through JPMorgan Chase, Inner City Press / Fair Finance Watch filed with the Federal Reserve Board in Washington, and the Federal Reserve Bank of New York, a petition, complaint and series of requests, portions of which are available by clicking here. So where was Gov. Mishkin?
On Fed chair Bernanke's way to the podium for his speech in DC on Friday, Inner City Press asked him if he would be taking any questions. "No," he said, remaining expressionless as Inner City Press called after him, "Bear Stearns? JPMorgan Chase? Why?" His speech, purportedly on the subprime lending crisis, did not even mention the role of securitizers. And when it was over, his entourage decamped in two large black cars, license plate BJ 3135, out onto D Street with siren lights on top...
March 10, 2008
Sources tell Inner City Press that the Federal Reserve Bank of New York placed online zip code specific foreclosure data, then quickly pulled it back. But too late, as we intend to cover, quantitatively, going forward...
March 3, 2008
As far back as February 18, the Federal Reserve Bank of Richmond said it had Bank of America's application to acquire Countrywide. But for days, no notice was published by the Federal Reserve in DC. Finally it was posted, with a comment period to March 31. Let the commenting begin!
February 25, 2008:
As the beginning of the 2007 HMDA data season approached, the Fed has let another year go by without providing simple guidance. Soon there will be requests to extend comment periods on Bank of America - Countrywide, until each institutions provides its 2007 data. And that will only be the beginning...
February 18, 2008
Last week at the UN, several states' pension funds and other institutional investors spoke of pushing the SEC to deal with companies' exposure to climate change. Inner City Press asked if they were also pushing the Federal Reserve in this regard. No, was the answer. Not YET, that is...
February 11, 2008
On Royal Bank of Canada and the pawnshops and quick cash joints, the Fed had this to say, that ICP Fair Finance Watch
"expressed concern about RBC Centura's relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states where they operate. RBC Centura has stated that it conducts substantial due diligence reviews of its customers who provide alternative financial services, including reviews of anti-money laundering and Bank Secrecy Act compliance, and that it does not play any role in the lending practices, credit review processes, or other business practices of those firms."
Sounds like the Fed's approach to subprime mortgage lending, before the fall..
February 4, 2008
In quiet Fed political news, Paul Volcker last week was reported to endorse Barack Obama. And what of Alan Greenspan, now advising Deutsche Bank?
January 28, 2008
How shameful that the Fed got spooked by Societe General's sell-off, and won't even criticize them publicly... And ex-FRBNY Ernie Patrikis, now through the revolving door a partner at Pillsbury Winthrop Shaw Pittman, was quoted last week that mortgage "servicers must act in the best interest of investors"...
January 21, 2008
On Toronto Dominion's application to buy Commerce Bank, despite an evasive purported response from TD's law firm Simpson Thatcher, TD has had to re-apply to the Federal Reserve, opening up a new comment period...
Try this on for irony -- Paulson & Co., the New York-based hedge fund which made massive money off the foreclosure frenzy in which predatory lender culminated, has put Alan Greenspan, who at the Federal Reserve allowed it all to happen, on its advisory board...
January 14, 2008
The Fed has appointed to its "Consumer" Advisory Council Kevin Rhein, a representative of Wells Fargo, which was sued last week by the City of Baltimore for predatory and discriminatory lending...
January 7, 2008
The communication policy of the Federal Reserve is currently a work in progress, Fed Vice Chair Donald Kohn told the American Economic Association. Ya don't say...
December 31, 2007
"We want consumers to make decisions about home mortgage options confidently, with assurance that unscrupulous home mortgage practices will not be tolerated," Fed chairman Bernanke said. But why then allow five year prepayment penalties, and yield spread premiums?
December 24, 2007
Speaking like a supplicant in Charlotte, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, last Wednesday defended the Fed's plans to belatedly clean up predatory lending. In a brief Q&A session, Lacker said the Fed is offering a "set of significant measures," but not banning Yield Spread Premiums, only required that they be disclosed. Eliminating such practices, Lacker said, "could raise mortgage borrowing costs." But what of the costs of predatory lending?
December 17, 2007
With the Fed slated to announce its long overdue predatory lending rules this week, as early as Tuesday, December 18, and with the rules expected to leave prepayment penalty abuse unreformed, it's worth remember this quote from Roger T. Cole, the Fed's director of banking supervision and regulation, to the Senate Banking Committee in March: "Given what we known now, yes, we could have done more sooner." Yeah....
December 10, 2007
Governor Kroszner last week told the House, "We would recommend that the amount of such civil money penalties, if imposed, be given a ceiling as well as a floor because of the market uncertainty that can be introduced by open-ended liability. We would also suggest that some discretion in the actual amount of the penalty, within such a range, be given to the enforcing agencies. This sort of flexibility in enforcement would help the agencies adjust the punishment to fit the infraction." So, the Fed wants to cap predators' liability, and to be given discretion even under the cap...
December 3, 2007
Story of the week, capturing the decade, is the Charlotte Observer's Sunday overview, "Banks fail to escape sting of subprime." The subtitle is "They pulled back from scrutinized loans, but investment arms didn't," and the two main banks covered are the Charlotte twins, Bank of America and Wachovia. Both claimed to have gotten out of subprime, BofA all the way back in 2001. Then this quarter they have announced subprime-related write-downs of $3 billion and $1.1 billion, respectively. Clearly, they were not out of subprime. And what of the Federal Reserve, which repeatedly ignored detailed comments on mergers and accepted the banks' statements, now shown to have been incorrect, about their business?
November 26, 2007
Another regional president of the Federal Reserve, which stood by while the subprime mess gathered force, has now cautioned against over-regulation. "Some reforms might impose significant costs and contribute to outcomes we would prefer to avoid. Ultimately, policymakers could find themselves relearning old lessons rather than improving social welfare," Minneapolis Fed President Gary Stern said last week in Singapore...
November 18, 2007
The Fed's defenders claim that in its Consumer Advisory Council, real work is getting done. From the outside, there's been nothing -- no enforcement action on disparities in HMDA data and high cost lending, no enforcement through the merger review process, nothing...
In the Senate, a red flag has been raised about the attempt to give Gov. Kroszner a new 14-year terms. And still not action on Elizabeth Duke of Towne Bank and Larry Klane of Capital One Financial Corp, the high-cost card and mortgage lender...
November 12, 2007
Fed Governor Randall Kroszner has focused on an molehill while the mountain of subprime sleaze collapses around him. To the Consumer Bankers Association Kroszner boldly took on lenders' failure to escrow for taxes and insurance, saying these can lead to a situation "akin to payment shock for borrowers. It is a common practice for these payments to be escrowed in the prime markets, and I see no reason that escrows should not be standard practice in the subprime markets too," he said. His Fed-chosen boosters cheered, You go, Randy! "Given the substantial number of resets from now through the end of 2008, however, I believe it would behoove the industry to join together and explore collaborative, creative efforts to develop prudent loan modification programs and other assistance to help large groups of borrower systematically," he said. A bit better...
November 5, 2007
From the WSJ last week: "On Aug. 8, Mr. Rubin called Mr. Bernanke. The Citigroup executive said he suspected a lot of people were telling Mr. Bernanke he should have cut rates. Yet Mr. Rubin said he thought the Fed had done the right thing, say people familiar with the call."
Questions: is it appropriate for the head of the largest bank's office of the chairman to just dial up the main regulator and shoot the breeze? When that largest bank has massive bets on predatory subprime? What else was said?
October 29, 2007
The Fed through Kroszner last week defended sleazy securitizers: "The securitization market is critical to increasing the resources available to fund home purchases and great care should be taken to ensure that investors in the securitization market can quickly and accurately assess and mitigate the risks, including the compliance risks, of mortgages sold in this market. Such laws should be very clearly delineated to ensure that they do not have a detrimental impact on the ability of lenders to securitize loans." Kroszner echoes the ABA's criticism that the bill "would increase costs and decrease choices for consumers."
October 22, 2007
Miller-Watt-Frank, it is reported, may exclude the Fed from rulemaking. Use it or lose, it, Rep. Frank had said. The American Banker quotes an ex-Fed lawyer spinning that the Fed's exclusion may be inadvertent. Yeah, right...
October 15, 2007
So Alan Greenspan spent $25,000 to fly himself and one staffer back and forth to London. He says he never know about the subprime problems, despite activist wagging their jaws in front of him for meeting after meeting. Maybe he was mind-dialing rich man's Travelocity while they spoke...
October 8, 2007
The Federal Reserve's general counsel Scott Alvarez, in testimony to Congress last week about Industrial Loan Companies, offered rare plug for CRA, which some say the Fed's actual practice, of review of CRA in mergers, does not justify: "The ILC exception undermines these requirements by allowing financial firms to own and operate an FDIC-insured bank without abiding by the capital, managerial, and CRA standards established in the GLB Act." But if the Fed wanted there to be CRA standards, they wouldn't rubber stamp approvals, increasingly with less and less detailed review. This point was lost amid the focus on commercial companies owning ILCs. Cynics say that the Fed just wants jurisdiction over everything -- that the Fed has no problem with loopholes, only with those that it doesn't control...
Meanwhile, south of the border approval has been procured for Banco Wal-Mart de Mexico Adelante, which Citigroup says will open 10 to 12 branches in the next year. Then again, in the 12 months to June 2007, Citigroup in Mexico opened 207 retail bank and consumer finance / Citifinancial branches.
October 1, 2007
As Capital One's Larry Klane is slated to join the august (?) Federal Reserve Board, the Detroit News of Sept. 28 lists Capital One as one of top three lenders for cosmetic surgery -- Capital One Healthcare Finance: www.capitalonehealthcarefinance -- How do you think they foreclose? Nip/Tuck, is this predatory lending? Maybe Ben Bernanke will ask...
September 24, 2007
This month has seen the spectacle of Alan Greenspan claiming he wasn't told what was happening with predatory lending. But community groups, in ceremonial (or window-dressing) meetings with Greenspan raised the issues in detail, about securitization of toxic loans and who was buying them. Greenspan nodded and did nothing. And now he sells his book, and defends his right to sell advice and access. Shameful...
September 17, 2007 -- As Fed Releases Mortgage Study, Subprime Disparities Worsen at Citigroup, HSBC, Wells
In the same week that Bank of America set a record, jacking up its surcharge for the use of ATMs to three dollars, the Federal Reserve hauled off and delivered an approval, of BofA's takeover of LaSalle. The Fed seems to have ignored most of the issues raised. For example, the Fed states that ICP and Fair Finance Watch
"expressed concerns about Bank of America’s relations with unaffiliated third parties engaged in subprime lending. The commenters provided no evidence that Bank of America has originated, purchased, or securitized 'predatory' loans or otherwise engaged in abusive lending practices."
Did the Fed even consider BofA's re-entry into originating subprime, with its propping up of Countrywide, which has settled charges of racial discrimination in its subprime lending? The Fed also makes light of BofA's mounting compliance violations:
"A commenter opposing the proposal expressed concern about Bank of America’s connection to investigations and lawsuits related to the bankruptcy of Parmalat SpA, Parma, Italy. The commenter also expressed unsubstantiated concerns about Bank of America’s student loan policies [and] the handling of certain money transfers through the New York branch of Bank of America, National Association."
To be continued.
Meanwhile, Citigroup's Mexican banking arm Banamex and a group of Mexican investors said Wednesday they plan to launch a $150.7 million counter offer for airline Consorcio Aeromexico SA (AMEXICO.MX), which is currently the target of a takeover bid by two local businessmen. Banamex said the group has requested authorization from the National Banking and Securities Commission and the Federal Competition Commission.
What about the U.S. Federal Reserve, putatively Citigroup's comprehensive supervisor? Citigroup can own airlines outside of the U.S.?
September 9, 2007
In Larry Klane's ongoing drive to join the Federal Reserve Board, now this DJNS quote: "Mr. Klane's involvement in subprimes raises questions, but we'll withhold judgment until we get answers," said Sen. Charles Schumer.
The Capital One unit at issue used to be called eSmartLoan before Cap One bought it. As previously analyzed by Inner City Press, in 2004 eSmartLoan made 144 super high cost HOEPA loans (loans subject to the Home Equity and Ownership Protection Act, in essence costing at least eight hundred basis points over comparable Treasury securities). The HMDA-LAR file included 2193 higher cost, rate spread loans (loans three hundred basis points or more over Treasuries on a first lien, five hundred on a subordinate lien). All of these high cost loans were reported, as to race, “Information Not Provided.” The originations in the file for which race was reported are predominantly in Missouri and Kansas. ICP takes these to be the retail loans of National Bank of Kansas City, from which Capital One acquired eSmartLoan, which is a subprime lender directed at many more states. Of the over 6000 race-not-reported loans, one-third of them rate spread, only four were in Kansas, and only four in Missouri. The rest were all over the country -- high cost and race not reported...
September 3, 2007
While Fed watchers make much of if and when Bernanke will move to cut the fed-funds rate, his hands-off approach to consumer protection, and even the provision of information to consumers, strike us as more indicative...
August 27, 2007
From Sen. Dodd's press conference after meeting with Fed chair Ben Bernanke:
Q You helped during the predatory lending -- (off mike) -- legislation. But why has the Senate failed to act of any of the -- (off mike)?
SEN. DODD: Well, again, look, the Fed is moving on this. We have HOEPA legislation, which passed in 1994, which mandated that the Fed assume responsibility of dealing with deceptive and fraudulent practices. I have been critical of the Fed for not acting, particularly when we're -- we know that three and a half years ago, Fed staff was becoming aware of this emerging problem. They tell me they're going to have these regulations in place by this fall. If that's the case and they're moving, then I'm satisfied that that's going to be done. But I'm also simultaneously going to be looking at the possibility of legislating this area. But I don't want it made more confusing by taking that action prematurely.
Q Why hasn't the Senate considered this legislation sooner?
SEN. DODD: Well, again, I think because of existing laws here, you could deal with it here, and it seems to me the regulatory body has the responsibility of developing the regulations in this area. So we've established the law 13 years ago. The Fed was charged 13 years ago with adopting regulations. It wasn't a request of them; it was a mandate of them to do so. And so, in a sense, the power exists there for them to do what we'd be doing with legislation, I assume, anyway.
So, according to Dodd, the Fed is "moving on this" -- we and logic disagree, but it's noteworthy that the Fed has no problem with those who meet Bernanke speaking out afterwards. Why then the off the record lunch with Reuters reporters? We'll see.
August 20, 2007
Why is it that the Federal Reserve's sudden interest rate cut has the feel of a cover-up? That is, after having allowed predatory lending to flourish, and then the resulting financial chaos (two months ago, the Fed dismissively called the subprime problem "contained), it finally acted to prop up the markets, because too many fingers were starting to point back at 20th Street and Constitution Avenues...
From the august (15) Argus Leader in South Dakota:
The court of public opinion already appears polarized on what critics call predatory lending practices - companies charging exorbitant interest rates and penalty fees. "'It's not illegal, but it's very unethical,' said Richard Cook, a former federal government analyst and author who lives in College Park, Md. 'It's legalized loan-sharking. It was one of the specialties of the Mafia. But that's one organized crime doesn't have to do now because it's legalized.' Sioux Falls Mayor Dave Munson, who worked 18 years for Citibank, calls that criticism unfair." So, from Citibank to mayor in the city Citi ran to, to export high rate, which are called "unethical" by an ex-Fed consultant...
On an entirely different note, there is the sadness of learning about Ned Gramlich's sickness, in Saturday's NY Times. Here's hoping that his decision to eschew treatment works out for the best...
August 13, 2007 -- Greenspan's Shameless Cash-Out to Deutsche Bank Is a Sub-Crime, Consumers Complain
The Federal Reserve, intent on seeming earnest, more quietly claims to be bereft of power. Case in point? The Fed, when asked about banks which refuse to provide their mortgage data in electronic format, pretends to be surprised. Later, more quietly, the Fed claims it has no authority to tell banks to be reasonable, and not opening evade the spirit of the rules. But isn't that the problem? As the House Banking Committee is saying, "use it or lose it."
August 6, 2007
Larry Klane of Capitol One, charged with fraudulent marketing by several state attorneys general, told the Senate last week that, if confirmed, he "would bring my energy, focus, and experience to vigorously fulfilling the Fed's consumer protection responsibilities." Why don't we believe that?
July 30, 2007
Banco Santander was reported last week to have continued to do business with sanctioned Bank Sepah until at least March 2007. How this might impact the Santander - RBS - Fortis bid for ABN Amro, including their pending applications before the U.S. Federal Reserve, remains to be seen. Federal Reserve, take notice...
July 23, 2007
Before the House of Representatives last week, Fed chairman Bernanke said:
"the recent rapid
expansion of the subprime market was clearly accompanied by
deterioration in underwriting standards and, in some cases, by
abusive lending practices and outright fraud.... Rising
delinquencies and foreclosures are creating personal, economic
and social distress for many homeowners and communities;
problems that likely will get worse before they get
better. The Federal Reserve is responding to these
difficulties at both the national and the local
levels.
"In coordination with other federal supervisory
agencies, we are encouraging the financial industry to work with
borrowers to arrange prudent loan modifications to avoid
unnecessary foreclosures. Federal Reserve banks around the
country are cooperating with community and industry groups that
work directly with borrowers who are having trouble meeting
their mortgage obligations."
Meanwhile,
William Poole, president of the Federal Reserve Bank of St
Louis, said that poor decisions led to the losses and the funds
that have suffered losses got what they deserved. A number of
hedge funds have suffered significant losses, including
Australian fund Basis Capital. Ben Bernanke, chair of the
Federal Reserve Board, warned that sub-prime losses could
increase to as much as $100 billion...
Bernanke also said the Fed is "conducting a
top-to-bottom review of possible actions we might take to help
prevent recurrence of these problems." An independent
review, Volker-style, as they say, should be conducted into how
and why the Fed was so hands-off as this happened....
July 16, 2007
Countdown on the Fed: Rep. Frank told Federal Reserve Board Governor Randall Kroszner at a committee hearing four weeks ago, "If the Fed doesn't start to use that authority to roll out the rules, then we'll give it to somebody who will." Now at the conference of the National Alliance to End Homelessness in Washington, Frank's said of the Fed, "If they haven't begun to spell out the rules under their authority, then we will take it away from them." Clear?
July 9, 2007
The Mortgage Bankers Association's SVP for president for government affairs and public policy last week said that the Fed has "been doing exactly what it should be doing." The mortgage bankers would say that...
This week, an ex-Fed regulator who monetize his expertise and access, first at Citi and now GE: "If it's now 2007 and the control failure occurred in 2005, 2004 ... is there going to be any value to law enforcement, any value to the government in finding things that happened two or three years ago and reporting it now?" The speaker of these words was identified by the American Banker newspaper as "Richard Small, the global anti-money-laundering leader at GE Money, the consumer and small-business financial services division of General Electric Co., and a former top anti-laundering official at Citigroup Inc. and the Federal Reserve Board, where he was a deputy associate director in the division of banking supervision."
Then again, the American Banker newspaper also has a revolving door. From North Carolina, Citi's live checks: "a 78-year-old resident of Carolina Spring Apartments received a notice in the mail... appeared to be a real check from CitiFinancial Auto Corporation in Irving, Texas, a company that lends money for car loans over the Internet. Rob Julavits, spokesman for CitiFinancial Auto, saw a copy of the check that the Carolina Spring resident received, and said it was a fake. 'It is not a legitimate CitiFinancial Auto check,' he said. 'We are looking into the matter.'" Whether the check was authentic or not does not answer whether CitiFinancial continuing to send live checks to senior citizens is legitimate. And Julavitz... used to report on Citigroup for the American Banker, until Citigroup hired him...
On the fortieth anniversary of FOIA implementation, a bill to restore some vitality to the law has been subject to a secret block -- by Arizona's Senator Kyle, media watcher can now report. For shame...
July 2, 2007
From Fed Governor Randall Kroszner: "The guidance on adjustable-rate mortgages underscores that the Federal Reserve and other banking regulators expect lenders to make sure subprime borrowers not only can afford their monthly payments while the introductory rate is in effect but also after the interest rate resets." We note that at the latest Fed Consumer Advisory Council, Bernanke skipped, while Kroszner attended. Meanwhile, Bernanke is slated for an "off the record" lunch at a wire service this coming week. Priorities, priorities...
Just after the Federal Reserve's rubber stamp approval, Mellon Bank has agreed to pay $16.5 million to the federal government to settle claims that it allowed overwhelmed employees to destroy thousands of federal tax returns and payments in 2001. Mellon had a contract with the Internal Revenue Service to process income tax returns and tax-payment checks. Mellon employees, feeling overworked and unable to meet deadlines imposed by the contract, destroyed more than 77,000 returns and checks totaling $1.3 billion ....
Treasury's Paulson defense last week of using the Federal Reserve System to get around the Patriot Act was that "in April, the Macanese made the decision to release the funds. The Treasury supported that as a way to move the six-party talks forward." Now the Government Accountability Office is going to evaluate whether the U.S. government ran afoul of its own anti-money-laundering rules. Paul Anderson, a spokesman for the GAO, said Congress's investigative arm will decide whether to proceed with an investigation within the next week to 10 days. Molly Millerwise, Treasury spokeswoman, said, "we appreciate Congress's interest in safeguarding the U.S. financial system from abuse. The transaction the U.S. government helped to facilitate is fully consistent with all applicable laws and regulations." We'll see...
June 25, 2007
At the Federal Reserve Bank of Cleveland, which has been protested, President Sandra Pianalto acknowledged that in "the fourth quarter of 2006, Ohio had the highest foreclosure rate of any state in the nation. We know that Cuyahoga County itself has been particularly hard hit. It is unfortunate that at a time when many people are rediscovering the hidden potential of our urban neighborhoods, the current trend in foreclosures might compromise some of the real progress that has been made." Then she said -- "Please understand that the Federal Reserve Banks are not rule-makers; that authority rests with the Board of Governors in Washington."
In Washington, the Chairman and a Governor made a point of sitting down with flown-in activists, but committing to nothing. "It's very politically savvy on the part of the Fed" to hold such a meeting, even mortgage industry analyst Howard Glaser questioned. "Whether it translates into action remains to be seen."
June 18, 2007
A new low for the Federal Reserve, it prosecutes money laundering while allegedly engaging in it, since unlike banks it is not subject the USA Patriot Act: " The decision to use the Federal Reserve Bank to return the [North Korean] money to the original account holders came after government lawyers concluded that the Federal Reserve was not subject to the same legal provisions as the commercial banks." LAT....
Fed Governor Randall Kroszner last week said the Fed was struggling to figure out "how we can help to weed out abuses while also preserving incentives for responsible lenders."
The Federal Reserve on June 14 hauled off and approved BONY - Mellon, saying in footnote 19 that ICP / Fair Finance Watch as
A commenter expressed concern about BONY’s relationships with unaffiliated third parties engaged in subprime lending. BONY has represented that it provides corporate trust and custody services relating to some issuances backed by subprime loans or involving issuers who originate or securitize subprime loans. BONY also indicated that it provides commercial credit to some originators of subprime mortgages. In addition, BONY noted that it acts as a swap counterparty in connection with some subprime loan securitization transactions and that its proprietary treasury portfolio, and some funds for which BONY acts as investment manager, include securities that may be partially backed by subprime assets. BONY has represented that it does not play any role in the lending practices or credit review processes of its customers who engage in subprime lending. The Board expects all banking organizations to conduct their operations in a safe and sound manner with adequate systems to manage operational, compliance, and reputational risk.
CRA staff at the Fed as of mid-Thursday afternoon didn't know the application was being approved. This implies that no in-person meeting was even held on this major merger -- just "notational" voting. What a joke...
June 11, 2007
Citigroup complains that in India it can only set up branches in Akola and Nanded in Maharashtra and Kurnool in Andhra Pradesh, and not in the metros or the big cities where it wants to expand its presence much faster. India had decided to block proposals for fresh licenses from American banks since the US has been sitting on applications submitted by State Bank of India, Bank of Baroda and ICICI Bank for many years. Live by the sword, die by the sword... US Trade Representative Susan Schwab promised that she would help the treasury department, the Federal Reserve and the Indian banks sit across the table and discuss the issue. Fed politics... Reportedly, the commerce ministry as well as RBI were against granting any concessions to US banks but it was the finance ministry which suggested that a different strategy could be tried and then leave it to the US to act. So the Fed operates for Citigroup, again...
We'll report on / from Fed's June 14 hearings...
June 4, 2007
The WSJ blogs that "Four of next year’s Federal Open Market Committee meetings will last two days instead of one, the newly released schedule shows. That’s the same as in 2007. Before Ben Bernanke became chairman, in 2006, it was rare for the Fed to have more than two such meetings per year....The continued use of two-day meetings could signify that debate will go on a while longer, or perhaps officials anticipate moving next year from releasing forecasts twice a year to three or four times, instead; that may require additional time to hash things out behind closed doors. Or maybe they just enjoy spending more time together."
Whatever the rationale, consumers and communities sure haven't benefited from Bernanke's increased meeting times. In fact, on merger reviews the Fed is going less...
May 28, 2007
Along with its bogus pronouncements about HOEPA and what it's done on subprime lending, the Federal Reserve appears to have in essence repealed or much limited the Community Reinvestment Act, most recently with regard to FDIC-insured institutions on Guam. Issues were timely raised to the Federal Reserve Bank of New York, on ANZ's application to a bank on Guam. In any other previous case, the comments would have been referred to the Board in Washington, which would have asked ANZ to answer questions and then weighed the answers. But in a break with precedent, another diss to CRA and consumer protection, now the FRBNY takes it on itself to approve such applications without even asking any questions.
Here's a sampling of what the Fed ignored:
Note that in New Zealand, ANZ and its subsidiary National Bank have when added together received the most consumer ombudsman complaints (259), see, New Zealand Press Association of November 29, 2006 --
"Commission chair Sir Ian Barker noted a recent review showed a ``worryingly high'' number of bank staff knew little or nothing about their own bank's complaints procedures. And more than half of bank branches in a recent survey did not display the Banking Ombudsman leaflet. He endorsed a key recommendation on accessibility by a former ombudsman, now Governor-General, Anand Satyanand, in his review of the 14-year-old scheme this year. Ms Brown said an increasing number of complaints were about consumer finance and Internet fraud or Internet banking."
See also, "Lenders warned on limits, "The Australian Financial Review, November 14, 2006. ANZ's record in New Zealand, Australia, American Samoa, Cook Islands, Fiji, Kiribati, New Caledonia, Papua New Guinea, Samoa, Solomon Islands, Vanuatu, Tonga and Timor Leste should be reviewed, including at a public hearing, as a predictor of the impacts ANZ would have on Guam if allowed to acquire CSB.
There are other questions, and not only related to the environment and weapons, see also, "Your loss not our problem, bank tells duped investor; ANZ Bank won't discuss 'personal matter,'" The National Business Review (New Zealand), September 16, 2005.
ANZ enables and finances Rimbunan Hijau, the Malaysian logging company implicated in the widespread destruction of tropical forests in Papua New Guinea and elsewhere. See, e.g., " ANZ linked to illegal logging," ABC Premium News (Australia), April 12, 2007.That is, the Fed ignored consumer protection as well as environmental / managerial issues. The regular-mailed May 18 letter of the FRBNY's Ivan J. Hurwitz says by rote that the Fed is not required to consider consumer protection or other issues outside of the United States. As one of the common sense rebuttals, what if an applicants consumer protection record where it does business, outside the U.S., is the only predictor of how it would run a bank in the U.S.? By this Fed logic, it would approve an application by an international loan shark to buy a bank in the U.S.. It is a new low for the Fed -- if the Board does nothing, the rot has re-spread to the top.
Fed governor nominee Elizabeth "Betsy" Duke listed major holdings of a previous employer, Wachovia Corp., in financial disclosure forms filed in conjunction with her nomination to join the Fed Board. According to the disclosure forms, released Friday by the Office of Government Ethics, Duke reported holdings of Wachovia stock valued at between $5,000,001 and $25 million. She also reported holding Wachovia stock options.
Note: mere divestiture would not cure this conflict...
May 21, 2007 --
NEW YORK, May 20 -- The newest nominee to the U.S. Federal Reserve Board, recently under fire for inaction leading to the subprime lending and foreclosure crisis, comes from a notorious subprime lender, Capital One.
Larry Allan Klane, whose nomination was announced on May 15, before that worked at Deutsche Bank, whose involvement with lenders sued for predatory lending such as New York's Delta Funding has like Capital One's record been an issue considered but not acted on by the Fed.
With Fed chairman Ben Bernanke alternately promising greater scrutiny of and calling for restraint in restricting the subprime lending field, there are serious questions raised by the nomination of a longtime subprime lender to the Board. Whether these questions will arise in or even derail Klane's consideration by the U.S. Senate remains to be seen.
The May 15 personnel announcement stated that "Mr. Klane currently serves as President of Global Financial Services of Capital One Financial Corporation. Prior to this, he served as Managing Director of Corporate Trust and Agency Services at Deutsche Bank / Bankers Trust."
The connection to Capital One, but not Deutsche Bank, was reported without comment in the Washington Post and financial news wire services. Even casual television watchers associate Capital One with advertisements featuring Nordic or medieval rampaging hordes along with the promise of no- to low-fee loans from Capital One, regardless of one's credit history.
Capital One has been sued for these ads, and for the underlying business practices, by the state attorneys general in at least West Virginia and Minnesota. According to staff involved in these cases, Capital One has managed to get records of other enforcement actions against it sealed, as if the cases had never existed.
Sometimes the traces of Capital One's cover-ups are still available. A filing obtained by Inner City Press from the West Virginia Supreme Court of Appeals, for example, recites that "on June 8, 2005, Capital One Bank filed an action... to seal all records, pleadings and matters in Civil Action Nos. 05-C-71 and 05-C-72 and to enjoin the Attorney General from issuing press releases or public disclosures regarding any matter relating to its litigation against Capital One Bank."
In fact, in March 2005 when Capital One announced a proposal to buy Hibernia National Bank in (pre-Katrina) New Orleans, public records of state anti-predatory lending enforcement actions against Capital One were raised, regarding West Virginia and elsewhere. Associated Press on March 10, 2005 reported that
"Capital One's troubling practices were reflected most recently in Minnesota Attorney General Mike Hatch's lawsuit against the company. In the suit, filed in December, Hatch said Capital One's ads indicate that interest rates on its 'No Hassle' credit cards would remain at 4.99 percent. However, he says many consumers wind up paying higher rates, and those who miss payments or exceed credit limits could see rates in excess of 25 percent. Capital One said it continues to work with Hatch's office."
A Louisiana business publication noted Capital One's same-day public relations action:
"Spokeswoman Tatiana Stead emailed an additional statement this afternoon in response to the Minnesota lawsuit against the company: 'Capital One has cooperated fully with the Attorney General’s investigation, and believes it has acted properly and in full compliance with the law. Capital One regrets that the Attorney General has chosen to proceed with this lawsuit, but intends to continue to work with the Attorney General’s office to address the issues raised.'"
Whether because of this "work with Hatch's office" or not, comment has not been able to be obtained from office since Klane's nomination. The West Virginia attorney general's office, however, has indicated shock that an executive vice president from Capital One would be nominated to a seat on the Federal Reserve Board, which along with setting interest rates is charged with consumer protection. From another state, a regulator explicitly concerned about retaliation called this a nomination of a fox to serve as a hen-house's overseer.
Mr. Klane involvement with Capital One has extended beyond high-rate credit cards. He was a point-name when Capital One in 2005 bought the subprime mortgage lender eSmartloan. See, e.g., Card Line of Dec. 17, 2004.
A review of the last publicly-available Home Mortgage Disclosure Act (HMDA) data including eSmart;oan's information found 144 super high cost loans subject to the Fed-implemented Home Ownership and Equity Protection Act -- loans at rates more than eight percent higher than prime -- and 2193 loans over the Fed-defined subprime rate spread, of three percent over prime. While a purpose of HMDA is to allow for fair lending assessment by including racial and ethnic data, these eSmart (now Capital One) subprime loans were all were reported, as to race, "Information Not Provided."
The same might be said of the announcement and reporting of Mr. Klane's nomination: relThe seriousness of Senators' and the financial press' recently claimed concern about the subprime lending crisis will be tested during the consideration of Mr. Klane's qualifications for serving on the Federal Reserve Board.
* * *
The Fed's chairman Ben Bernanke, in some places described as finally taking predatory lending seriously, was in fact dismissive in his May 17 Chicago Fed speech. ''We must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers,'' he said, adding that the Fed -- or he -- sees ''no serious broader spillover.''
As we predicted last week, and will cover going forward, the predatory lending industry is spilling over into the Federal Reserve Board...
Meanwhile, the Bank of New York, enabler of predatory lenders, has been asked by the Federal Reserve about the scope of its subprime support, in response to ICP Fair Finance Watch's challenge the BONY - Mellon merger application. BONY responded, a month after the request -- and redacted even the number of subprime lenders it helps. Inner City Press has contested the redactions. We'll see.
May 14, 2007
Who will fill the two empty seats at the Fed? According to Dow Jones -- on which Murdoch's News Corp has bid -- under consideration is one Larry Klane, Capital One Financial Corp.'s president of global financial services since 2000 and previously worked at Deutsche Bank. Bad combo -- Capital One has been challenged by state attorneys general for credit card shenanigans, and Deutsche Bank, beyond its enabling and now direct role in predatory lending, last week admitted to its long-concealed role for the recently expired dictator Turkmenbashi. What are Mr. Klane's views on these matters, both of which have been and will be raised to the Fed? Would Klane recuse himself?
May 7, 2007
The Fed says it doesn't know what it can do under HOEPA, it doesn't know the extent of its jurisdiction. It never had such doubts when it allowed banks to get into securities, and then outright broke the Glass Steagall Act to benefit Citibank. The Fed only gets cautious when it's about consumers...
April 30, 2007
Look who's jumping in -- Edward Gramlich, Federal Reserve governor from 1997 to 2005 now identifies himself as author of the forthcoming book "Subprime Mortgages: America's Latest Boom and Bust." This in a Knight Ridder article that reports that "at least 21 non-bank lenders have filed for bankruptcy protection or shut down since early last year. And the stocks of investment banks with large subprime holdings, such as Merrill Lynch and HSBC, are taking a hit as mortgage defaults and foreclosures climb." Uh, HSBC is hardly an "investment" bank. And HSBC was the largest subprime lender in the U.S. in 2006. The article also ran as a correction: "A story on problems in the subprime mortgage market suggested that First Franklin Financial Corp. was not subject to federal regulation. Before its recent sale to Merrill Lynch, it belonged to National City, which as a nationally chartered bank was regulated by the Office of the Comptroller of the Currency." Who would have an interest in pointing this error out?
April 23, 2007
From the Federal Reserve Bank of NY, Inner City Press on April 21 received a copy of Bank of New York's heavily redacted application to acquire Mellon. BONY revised its still-too-extensive redactions to its application on April 16; ICP has a right to comment on this material. ICP contends that this proposed combination would be anti-competitive. BONY apparently disagreed, but the bases of its argument are still being hidden, with entire pages of its antitrust memo blacked-out. BONY repeatedly cites the case Inner City Press v. FRB, then redacts even portions of its argument. ICP has contested these redactions and withholdings, and requested an extension of the comment period until the information to which ICP and the public have a right is released.
April 16, 2007
Federal Reserve chairman Ben Bernanke spoke on Wednesday, April 11 at New York University, intoning that "market-based regulation has proven an effective supplement to (or substitute for) conventional command-and-control approaches." On the other hand, we're told that at the Gridiron Club event on the last day of March, Bernanke yawned and took his leave while Dick Cheney was speaking...
April 9, 2007
In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Among other findings, Wells Fargo, 19.23% of whose 2006 mortgage were subprime, denied the applications of African Americans 1.72 times more frequently than whites, while denying those of Latinos 1.57 times more frequently than whites. Wells Fargo in 2006 made 889 super high-cost HOEPA loans.
Wells Fargo's response was to hide behind the Federal Reserve. "The Federal Reserve has repeatedly emphasized that the limited data analyzed in the report cannot support a conclusion that lending practices are discriminatory," a spokesman for Wells Fargo said. "Banks Prone to Sell Minorities Pricy Loans," Reuters / Washington Post
The Federal Reserve has also said that
”black and Hispanic borrowers taken together are much more likely than non-Hispanic white borrowers to obtain credit from institutions that report a higher incidence of higher-priced loans. On the one hand, this pattern may be benign and reflect a sorting of individuals into different market segments by their credit characteristics. On the other hand, it may be symptomatic of a more serious issue. Lenders that report a lower incidence of higher-priced products may be either less willing or less able to serve minority neighborhoods. More troubling, these patterns may stem, at least in part, from borrowers being steered to lenders or to loans that offer higher prices than the credit characteristics of these borrowers warrant. Reaching accurate determinations among these alternative possible outcomes is one goal of the supervision system."
What the Federal Reserve, which missed the foreseeable crisis in the subprime lending industry, hasn't yet disclosed is that these disparities are most stark at the largest conglomerate in the country, Citigroup, including in its headquarters city's lowest-income borough.
Where the rubber will meet the road will be in how the Federal Reserve and other agencies act on specific disparities at specific lenders, including as these are formally raised to them in timely comments on merger applications, Fair Finance Watch concludes.
April 2, 2007
Ben Bernanke and the CRA: Narrow views. Last week the Fed chairman said, "Some observers have suggested extending the CRA to nonbank providers, but this proposal neglects a fundamental premise of the CRA legislation - that banks incur special obligations in exchange for the advantages conferred by their charters, such as deposit insurance." He also said, "To date, defining 'local community' for the purposes of CRA assessment has been manageable as most banks still lend in local communities where they have deposit-taking facilities or branches. However, if these trends continue, defining a 'local community' may become increasingly difficult, and the concept eventually may require reconsideration by regulators or even the Congress."
So in Bernanke's view, the CRA must remain limited to its initial "premises," but to help the banks, the regulators or Congress should reconsider its initial focus. If it's Congress that considers it, they'd be free to change the premise too, and extend CRA to the non-bank providers...
March 26, 2007
To the Dodd hearing last week, the Federal Reserve sent regulator Roger T. Cole, who finally acknowledged that "we could have done more sooner," while making much of the less than a handful of actions the Fed has taken, including its $70 million fine of Citigroup in 2004. But again, why was Citigroup not invited by Senator Dodd? And as noted, the Federal Reserve bent logic to deem U.S. Bancorp's holding to be only 24.99 percent, in order to ignore New Century issues. Now the Fed is mumbling about the fundamental strength of the economy.
March 19, 2007
Fed chairman Ben Bernanke has weighed in on whether, as with mortgages, the racial demographics of small business lending should be reported. And his answer is: no...
On the hand, Inner City Press wishes to thank the Fed legal staffer who looked into whether Comerica will need to apply for any approvals to move its headquarters from Detroit to Dallas. Apparently, while such filings are required for national bank, they are not, for state banks which are members of the Federal Reserve System, under the Federal Reserve Act.
March 12, 2007
Federal Reserve Governor Randall Kroszner said last week that his own research about larger banks suggests that as a whole U.S. banks have managed to avoid conflicts of interest that could arise from relationships such as links between boards of directors.
Uh, heard of Citigroup's Sandy Weill and AT&T?
March 5, 2007
From a Ben Bernanke speech last week: " I have foreshadowed my conclusions." That the case with Federal Reserve reviews of protested merger in their approval orders, too...
From FinancialWire: "Bank of America Corp.'s $3.3 billion acquisition of Charles Schwab Corp.'s wealth management subsidiary U.S. Trust will take about three months longer to complete than originally estimated. Charles Schwab expects to close the all-cash sale early in the third quarter instead of the early second-quarter target established late last year when the stock brokerage announced the deal with Bank of America." So now there'd be no reason for the Fed to rush on BofA's application, including on 10% deposit cap issues....
February 26, 2007
Outgoing Fed governor Susan Bies, signer of numerous FOIA denial letters, gave a speech last week about mortgage lending abuse: "There's a real transaction-based mentality in the industry today that you didn't have 20 years ago," she said. "To make a decision faster, and try to get the customer to say yes to you before they go and shop anywhere else, they'll waive terms." Now you tell us...
February 19, 2007
The Fed on Friday spoke out against a devious CRA scam:
The Federal Reserve has received inquiries and complaints from recipients of direct mail solicitations that suggest there is a "Community Reinvestment Act (CRA) program" that entitles certain homeowners to cash grants or equity disbursements. Some of these solicitations may be read to indicate that the Federal Reserve endorses or supports the offers they contain. These solicitations appear to be a deceptive effort to encourage consumers to apply for a mortgage loan secured by the consumer's home. The Federal Reserve cautions the public about loan solicitations or other offers from lenders or mortgage brokers that offer consumers cash grants or equity disbursements as part of a "CRA Program." No such federal programs exist and these programs are not required by the CRA.
Actually, under the Fed, virtually nothing is required by the CRA...
February 12, 2007
Last week the Fed announced a new head for its Atlanta Reserve Bank. It's Dennis Lockhart, of whom the Fed said he "served as managing partner at the private equity firm Zephyr Management L.P., based in New York, and held various positions with Citicorp/Citibank, which is now Citigroup Inc." Great....
We can also report, only in skeletal form for now, that there has been a development in the litigation sparked by the Federal Reserve's withholding of information concerning Wachovia's subprime connections, and refusal to conduct a search of public records to make sure it is not withholding information that is otherwise publicly available. The Federal Reserve has agreed, at the federal District Court's suggestion, to reconsider whether it should have made the search (and in implication should conduct such searches in the future before issuing blanket denials of FOIA requests). The Fed has 20 working days to decide; we'll see.
February 5, 2007
We're told of a paper by the Federal Reserve Bank of San Francisco, arguing that credit card small business lenders should be included in bank merger antitrust analysis, so that even more mergers could be approved, without any divestitures. Already, the Fed defined geographic markets so broadly that the only market in which it has denied a merger in years was in rural Georgia. The 10% deposit cap, then, is needed because the Fed refuses to effectively apply antitrust to the banking field...
January 29, 2007
And now the payday lenders' trade association heaps praise on the Federal Reserve for lending its perceived legitimacy to the fringe financial industry, most recently in a report called "Defining and Detecting Predatory Lending," by Federal Reserve Bank of New York Research Officer Donald P. Morgan. CFSA quotes the Fed report that "the problem of high prices may reflect too few payday lenders, rather than too many." Just what we need -- MORE payday lenders. The Fed has hit a new low.
Inner City Press / Fair Finance Watch has filed with the Federal Reserve a timely challenge to Bank of America's application to acquire U.S. Trust, click here for Charlotte Observer article. Now what will the Fed do? We'll see.
January 14, 2007
The arrogance of PNC, which has proposed to buy Baltimore-based Mercantile, is striking. In response to the timely challenge ICP Fair Finance Watch filed with the Federal Reserve under a Community Reinvestment Act, PNC's "chief regulatory officer," John Wixted, just by a coincidence a former Federal Reserve official, responded as tersely and conclusorily as possible. The Federal Reserve asked such questions as, describe PNC's plans to merge Mercantile's 11 banks into PNC, and describe the due diligence performed -- a foreseeable questions, since as noted in the protest, Mercantile negligently leaked many consumers' personal information. PNC answered both: "PNC's response to this item is contained in the Confidential Supplement," and didn't send this portion to ICP Fair Finance Watch. Finally the Fed asked questions about fair lending, in response to which PNC writes that "In order to meet this requirement, PNC current intends to [ ]," with four lines then whited-out and withheld. The Federal Reserve is required to review the propriety of these absurd proposed withholdings. But PNC's secrecy and arrogance, along with its disparate lending record, bode badly for communities. Developing...
January 8, 2007
On PNC - Mercantile, the Federal Reserve Bank of Cleveland has confirmed receipt of the timely protest of Fair Finance Watch. We'll see.
January 1, 2007
The Federal Reserve set December 26 as the expiration of its comment period of the $6 billion proposed acquisition of Baltimore-based Mercantile by Riggs-heir PNC. As Fair Finance Watch has had concerns about both institutions, a comment was quickly prepared. When submitted by email, auto-responders came back from both Cleveland and DC: "out of office." But if the past is any guide, if the absurd deadline had been missed, the Fed would stand on "principle" and deem the comment untimely and not to be considered. In this case, it's timely, including that in the most recent year for which HMDA data is publicly available, 2005, PNC Bank in the Washington DC MSA, where it bought Riggs, denied the conventional home purchase mortgage applications of African Americans 3.78 times more frequently than whites. In Pittsburgh, PNC's headquarters, PNC Bank in 2005 denied the conventional home purchase mortgage applications of African Americans twice as frequently than whites. We're waiting for PNC's response.
December 25, 2006
The Federal Reserve makes announcements it doesn't want you to understand. For example last week it announced that it had terminated an enforcement action against Citigroup. But it didn't say what the enforcement action had been about, only the date on which it was entered. From you, only through research, you find "the Written Agreement follows a special review of transactions involving Citigroup and its subsidiaries and the Enron Corporation, Houston, Texas. The Written Agreement requires Citigroup on its own behalf and on behalf of its subsidiaries to continue to strengthen risk-management practices, particularly those associated with complex structured-finance transactions."
December 18, 2006
In the UK, "there has been a lot of fallout following the Financial Services Authority's statement that many brokers' sub-prime mortgage advertising is misleading clients... More than 200 brokers have been forced to withdraw or amend misleading sub-prime advertising."
Why doesn't the US Federal Reserve work on these issues, with even half the energy and independence?
December 4, 2006
Last week the Federal Reserve put on its Thrift Advisory Counsel the CEO of the nation's largest savings bank, Washington Mutual. Kerry Killinger is added to a group including representatives from American Express and ING. What is the purpose of the Thrift Advisory Counsel? If it's to get a view of savings (as opposed to commercial) banking views, why put on an European insurer like ING?
November 27, 2006
In the hoopla about Fed chairman Bernanke agreeing to ride shotgun with Hank Paulson on his trip to pressure Beijing, something missed was the Federal Reserve's duty to scrutinize the China moves of U.S.-based holding companies like BofA and Citigroup. For these, the Fed is home country supervisor. And yet there's no public scrutiny, and little at the Fed, of the deals these banks are making. Citi buying into Guangdong will have no comment period. The Fed will issue no order describing what it considered. Citi may give notice along after the fact. Will Ben Bernanke ask? We'll see.
November 20, 2006
Of the Federal Reserve System, what can be said? They're getting worse and worse, more open in their contempt for public comment. A recent example is the Federal Reserve Bank of New York's decision to disregard detailed comments about HSBC's predatory lending and alleged money laundering, for being a few days late. In fact, there was no way to know what HSBC's application to the Fed was about, until a copy of HSBC's related application to another agency came in. Meanwhile the Federal Reserve Bank of Atlanta tried to demand money for copy of the Regions - AmSouth application. And as set forth below, when the Fed does get paid, for HMDA data on disk, it takes more than a month to get it.
We've held off but now it must be said: the Federal Reserve is one of the worst order-processors in the United States. Last week when Inner City Press ordered up the HMDA data, it took the Fed weeks to send. This year, they sent the wrong year's data, then apologized, saying they'd Fed Ex the correct data the next day at their expense. This never happened, not even close.
Maybe *this* is why the Fed is so reluctant to criticize abuses of consumers by banks -- the Fed itself misserves consumers, with one of the few products it sells...
November 13, 2006
In Washington, the (CRA) talk is of oversight hearings, more likely in the House than Senate, on the agencies' non-enforcement of the Community Reinvestment Act and consumer protections. Examples given include last week's Federal Reserve approval of Capital One buying North Fork, in which the Fed's order ignores the Cap One predatory lending issues including not only in timely comments to the Fed, but even Business Week, in its November 6 expose. The Fed's rubber-stamp approval of the Regions - AmSouth merger, despite the banks' records in the Katrina Zone, is exhibit number two.
There is also the question of Dodd, Chris Dodd, and where he stands on consumer protection. He has spoken of credit cards, but less of insurance. In anti-predatory lending he has largest been unseen. Will Capital One, and the Fed's velvet glove treatment of Cap One's gouging of consumers, trigger some Dodd deeds? We'll see.
November 6, 2006
For those following the delay on the Capital One - North Fork deal, Business Week of Nov. 6 explains some of the issues, including that "according to Cap One's regulatory filings, 30% of its credit card loans are subprime. Representatives of 32 credit counseling agencies contacted by BusinessWeek say that Cap One has long stood out for the number of cards it's willing to give to subprime borrowers." As Fair Finance Watch raised in its comments to the Fed, " Last year, West Virginia Attorney General Darrell V. McGraw Jr. filed an action in state court seeking documents from Cap One related to its issuance of multiple cards, as well as other credit practices. Other than that, however, Cap One's practices do not appear to have drawn regulatory scrutiny. A spokesman for the Federal Reserve, Cap One's primary federal overseer, declined to comment about Cap One, but said that in general the regulator doesn't object to multiple cards."
Increasingly typical, that the Fed would try to provide comfort to a predator...
October 30, 2006
Fed governor Susan Bies last week at the agency's Consumer Advisory Board -- fewer than one half of whose members are consumer advocates -- promised those present that the Fed will "reconsider" its guidance on exotic mortgages, issued only last months. "We will go through a process to clarify exactly what the terms are, what the scope is," she said, adding that the Fed's lawyers "have heard from some of the folks ... Apparently we do need to make some technical corrections to make this more 'principle' based as opposed to 'detail' based." Sort of like the Fed's recent merger approval orders -- why get bogged down in the detail of lending disparities and even adverse CRA sub-ratings, when the Fed can recite generalities and then approve a merger? And the mysterious limbo of Capital One - North Fork continues...
October 23, 2006
The Fed on Friday hauled off and approved Regions - AmSouth. Of CRA the Fed said:
"Several commenters expressed concern about the less-than-satisfactory ratings the bank received for its CRA performance in some of its assessment areas. The bank received an overall rating of 'needs to improve' in the Chattanooga multistate metropolitan area, and received 'low satisfactory' ratings under the lending test for Louisiana and the Augusta and Texarkana multistate metropolitan areas. In each of these assessment areas, examiners noted that there are a relatively high proportion of families below the poverty level and that these families may not qualify for residential real estate loans because of their lower capacity for debt repayment. Examiners indicated that these conditions may have hindered the bank's efforts to lend to LMI individuals in these assessment areas. The bank received higher ratings under the lending and other tests in other areas, and examiners concluded that the bank’s record of CRA performance during the review period, when viewed as whole, merited a rating of 'satisfactory.'"
How nice, to explain away even adverse CRA sub-ratings. Meanwhile inquiring minds increasingly wonder what is up with Capital One - North Fork...
October 16, 2006
Last week the Federal Reserve handed an approval to National City to buy Harbor Federal, noting "that on September 5, 2006, National City signed an agreement to sell its principal subsidiary that originates subprime mortgage loans, First Franklin Financial Corporation to Merrill Lynch & Co., and also announced its intention to sell to Merrill Lynch $5.6 billion of loans originated by First Franklin." Of course, the Fed won't be reviewing that transaction...
October 9, 2006
Becoming evermore perfunctory, the Federal Reserve on September 19 asked Wachovia to "discuss the extent of any subprime loans in the World Savings Bank loan portfolio." Wachovia's Courtney D. Allison's misleading answer, dated September 25 but mailed only days later to Inner City Press, was received after the Fed had approved the merger, and it had been consummated...
Similarly, in an email of September 26 to National City that was not cc-ed to Fair Finance Watch, the Fed has apparently asked questions about Harbor Florida Bankshares' appraisal company, with an eye toward allowing National City to continue in the business. Since the Fed in violation of its own rules on ex parte communications didn't send Inner City Press a copy of the questions it posed to National City, and Nat City's curt answer didn't repeat the questions, there's no way to know...
October 2, 2006
The Federal Reserve's approval on Sept. 25 of Wachovia - Golden West reaches new loans. The Fed writes for example that ICP Fair Finance Watch
"also alleged that World Savings directs customers to low- or no-documentation loan products as a means to exaggerate the customer’s income and places the customers in loan products that exceed their ability to repay, which ultimately results in foreclosures. According to information provided by Wachovia and Golden West, World Savings requires low- or no-documentation on 90 percent of the loan applications it processes and uses the same underwriting standards for all applications."
But ICP Fair Finance Watch pointed out that this absurd level of no- and low-doc lending results in forced sales of homes, not foreclosures. The Fed recites that ICP Fair Finance Watch
"expressed concern about Wachovia’s relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states in which they operate when so required. Wachovia stated that it makes loans to these types of nontraditional providers under terms, circumstances, and due-diligence procedures that are more stringent than those it applies to other borrowers."
But again the information was withheld. The Fed gives weight to
"more than 200 comments supporting the proposed transaction. These commenters stated that Wachovia and Golden West have been responsive to the needs of their communities through innovative mortgage products designed for LMI borrowers and have provided significant financial, technical, and personnel support for community development projects."
None of these were sent to Inner City Press, despite its timely challenge to the deal.
September 25, 2006
The Federal Reserve, which despite its own internal rules no longer sends commenters a copy of its letters to banks requesting additional information on protested application, does still suggest to banks that they send copies of their responses to the commenters. And so last week National City Corporation's terse answer to the Fed's September 8 questions -- which are not reproduced in Nat City's answer -- arrived, in connection with the challenge of Fair Finance Watch of Nat City's proposal to acquire Harbor Florida Bankshares. The response included Cincinnati foreclosure data, 2004 and 2005:
"For the year 2005, National City has sixty-seven (67) mortgage loan foreclosures in Hamilton County, Ohio with sixty-six (66) of those foreclosures being within the City of Cincinnati. Therefore, for 2004, the number of National City foreclosures in Hamilton County amounted to 1.11% of the total of National City's loans in that County, and 1.16% of the total number of National City loans in Cincinnati. For the year 2005, National City has eighty-nine (89) mortgage loan foreclosures in Hamilton County, Ohio with eighty-four (84) of those foreclosures being within the City of Cincinnati. Therefore, for 2005, the number of National City foreclosures in Hamilton County amounted to 1.21% of the total of National City's loans in that County, and 1.24% of the total number of National City loans in Cincinnati."
As it is clear, the foreclosure trend is up...
September 18, 2006
From the Sept. 11 speech of the Boston Fed's Cathy Minehan to the National Association of Business Economists"
"In our estimation, the run-up in housing values over the past several years did not spur much of a bigger-than-expected increase in consumer spending - if anything, the response was a bit on the low side compared to the historical average. So we wonder about how large a spending effect one should expect to accompany a fall in housing prices, if that were to occur. Clearly mortgage equity withdrawals have been sizable during the housing 'boom,' but many of these withdrawals were used to reduce other forms of consumer debt and to make one-time improvements in the housing stock. Indeed, as a result, overall household balance sheets today continue to look fairly strong. That is not to say, however, that rising mortgage interest rates are not negatively affecting borrowers. It also does not mean that new types of mortgages won't contain more than a few nasty surprises. Of particular concern are sub-prime borrowers and perhaps some depository institutions specializing in subprime lending."
Then why has there been virtually NO inquiry by the Fed into Regions Financial's subprime lending, which makes up seventy-some percent of all its mortgages to African Americans? And why is the Fed withholding virtually all antitrust information from Regions on AmSouth? The Fed continues hitting new lows...
September 11, 2006
Welcome to the world of the lawless. Last week's Federal Reserve order on Credit Agricole, Boetie, et al., recites in footnote 12 that ICP Fair Finance Watch
"asserted that Boetie violated the BHC Act by acquiring the voting shares of Credit Agricole before submitting the proposal to the Board for approval. In addition, the commenter complained that Boetie and Credit Agricole violated the BHC Act through the acquisition of all the shares of Credit Lyonnais in 2003 without the Board’s prior approval for the acquisition of Credit Lyonnais’s nonbanking operations. The commenter asserted that the Board lacked authority to waive the BHC Act’s application filing requirements with respect to such transactions and inappropriately shielded such transactions from comment. As noted above, Boetie and Credit Agricole have operated the U.S. subsidiaries under the temporary authority granted by the Board under section 4(c)(9) of the BHC Act, which does not provide for public notice."
So the Fed says it can grant temporary approvals to transactions without even telling the public... The next footnote, 13, is on money laundering, that FFW
"cited various news and congressional reports from 2003 through 2005 regarding allegations that ES Bank concealed assets and money laundering in connection with accounts held for the benefit of certain international individuals, including former Chilean President Augusto Pinochet."
What a generous description, "international individuals." And how kind the Fed is to Espiritu Santo Bank, of which FFW
" questioned the veracity of ES Bank’s reporting of no denials of home mortgage applications in 2001 and 2002 and generally alleged that the bank prescreened its home mortgage applications. Specifically, the commenter contended that ES Bank violated HMDA by not accurately reporting its home mortgage applications and violated the Equal Credit Opportunity Act (“ECOA”) (15 U.S.C. § 1691 et seq.) by not providing adverse action notices when required. ES Bank has represented that it reported no denials because it is a wholesale bank engaged primarily in international private banking and that its residential mortgages are generally extended as an accommodation to private banking customers where a mortgage loan approval would be expected. The commenter also questioned ES Bank’s characterization of loans generated by brokers as accommodation loans. Applicants represented that ES Bank began using two licensed mortgage brokers in 2001 in an effort to increase its loan portfolio during a period when internal referrals had slowed. Applicants also represented that ES Bank’s brokers referred a small number of mortgage loans to the bank in 2005."
In footnote 16, the Fed doesn't even bother spelling correctly, writing that FFW
"alleged Credit Agricole and Credit Lyonnais are signatories to international human rights and environmental agreements and that the organizations have exhibited a lack of envirnonmental and human rights standards."
Much care went into this Order, it's clear...
September 4, 2006
Will the Federal Reserve take note, while it considers Wachovia's application to buy Golden West, of Money Marketing of August 31, reporting that Wachovia will specifically target the sub-prime and non-conforming home loan sector via intermediaries, adding to the commercial mortgage operation it is building. A spokesman says: "We will be looking at mortgages, sub- prime, non-conforming as well as consumer loans and credit cards." If only Wachovia were nearly as honest in the USA, or in the portions of its filings with the Fed that get provided to commenters like Fair Finance Watch...
August 28, 2006
In the run-up to the Federal Reserve's spin of the 2005 Home Mortgage Disclosure Act data, Inner City Press can this week report on the Fed's partial Freedom of Information Act response to its request for all records concerning the Fed's list of lenders with disparate 2004 HMDA data. The Fed withheld "five linear feet of documents," and has so far sent only a fax of parts of a single document, the required mailed copy of which Inner City Press is awaiting in order to file its FOIA appeal. (The Fed is far behind in its FOIA responses, then because sending garbled faxes which do not comply with the regulation.) This particular fax, which the Fed's cover letter describes as "a description of the methodology used in generating the HMDA lenders list," is in fact a manual directed at the Fed's examination staff. It states that
"The purpose of the Federal Reserve's matched-pair analysis is to compute lender-specific racial or gender disparities in denial rates, high rate pricing incidences and average APR spreads for loans above the threshold controlling for other factors including, market, income and loan amount. Each minority (or female) is matched to as many non-minority (or male) applicants (or borrowers) as meet the matching criteria. The outcomes of the minority (female) is compared with the average outcome of the non-minority (males) matched to it. The difference is the individual minority's (female's) 'matched pair disparity.' The disparities of all matches minorities (females) are averaged by product area or for sub areas such as MSAs...
"Optionally, the matched pair procedures can be used to test for 'steering' within an organization such as a holding company. The outcome variable is the selection of a particular subsidiary of an organization (say a subprime lender) over another (say a prime lender) and the analysis tests whether this choice is related to the race of gender controlling for other factors including, market, income and loan amount. The user needs to specify how to classify lenders into the 'subprime' and 'prime' groups."
While Inner City Press will have more once it receives the required mailed version of this document, we now we note Citigroup's recent announcement that it will merge its subprime CitiFinancial into its mostly-prime CitiMortgage, thereby evading this "optional" steering analysis....
On Regions - AmSouth, the sleazing has begun. Regions has provided Fair Finance Watch with a copy of a CRA submission, with the names of all groups it funds blacked out. Meanwhile Regions solicits letters of support from such groups. Separately, Regions writes to thank such groups, starting "Thank you for taking the time to write a letter of support for the application by Regions Financial Corporation to merge with AmSouth Bancorporation... We at Regions very much appreciate your positive attitude toward our organization." But the identity of funded groups must be unmasked to weigh their testimony. Developing...
August 21, 2006
The Federal Reserve has received, via Wachovia, a response from World Savings to comments FFW filed "with respect to World's Quick Qualifier (QQ) loan process." The purported response states that under World's QQ, "the customer may specify his or her income without necessarily having to pull together the documentation traditionally associated with the mortgage loan application process."
Yeah -- like a form W-2...
The letter continues that "turning to the specific questions asked by FFW in its letter, we are glad to provide the following information. FFW first asked what percentage of World's loans are QQ loans. To date in 2006, approximately 94% of World's loan originations have been submitted as QQ loans... FFW questions why World would allow a loan applicant who can produce a W-2 for earned wages to apply on a QQ basis." Yes, FFW is asking that -- as the Federal Reserve should. Developing....
August 14, 2006
Hitting a new low, the Federal Reserve on August 11 telephone Fair Finance Watch for the second time denying any extension of that day's expiration of the comment period on Wachovia's application to acquire Golden West. Then at 5:36 p.m. on August 11, the Federal Reserve faxed FFW documents responsive to its FOIA request of July 16, including various support letters that Wachovia solicited. A new low...
August 7, 2006
A specific indication of the Federal Reserve's lackadaisical approach to enforcing even the antitrust laws is to be found in Florida in the Punta Gorda market. As presented by the Sarasota Herald-Tribune in a July 31 report on Fair Finance Watch's opposition to Wachovia's application to acquire Golden West, the group also notes the bank will wind up with an 'anti-competitive' market share in Charlotte. As of Dec. 31, Wachovia's 11 branches held $763.8 million in deposits in Charlotte, a 22.17 percent market share. Adding World's single office and $184 million in deposits in Punta Gorda would boost its market share to 27.51 percent.... Wachovia isn't even the largest bank in Charlotte County right now. Bank of America's seven branches held $775.9 million in deposits, a 22.52 percent market share, as of Dec. 31." Talk about duopoly...
July 31, 2006
The Fed's FOIA sleaze continues. Responding to Inner City Press' complaint last week that, after for years granting ICP a FOIA fee waiver, as all other bank regulatory agencies do, the Fed suddenly responded with a letter that fees are expected -- this in the midst of ICP's Wachovia FOIA litigation against the Fed, and the Fed having delayed six to eight months on ICP's subsequent FOIA requests. Last week the Fed provided a slightly amended acknowledgement letter, not granting the always-previously-granted fee waiver, but rather stating:
This will acknowledge receipt of your letter dated 7/16/2006, and received by the Board on 7/17/2006, in which you request, pursuant to the [FOIA] records pertaining to the application by Wachovia Corporation to acquire Golden West and thereby indirectly acquire the voting shares of World Savings... unless a request for a fee waiver is granted, this letter also confirms our assumption that you will pay all fees incurred in the processing of your request. 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. Please feel free to contact the Board's FOIA Requester Service Center at (202) 452-3684 to obtain information about the status of your FOIA request.
Well, given how many of Inner City Press' FOIA requests have been delayed six to eight months, that newly provided phone number must be busy...
July 24, 2006
Hitting yet another new low, the Federal Reserve last week after for years granting Inner City Press / Fair Finance Watch fees waivers under FOIA, tried to charge fees, even for processing requests. Substantively, ICP has contested the withholding of the exhibits Wachovia has unilaterally deemed "confidential," and continues to await the other records responsive to the July 16, 2006, FOIA request. The Board's response states that it "confirms our understanding that you will pay all fees incurred in the processing of your request." The FRB has granted ICP and its affiliates fee waivers for years. An observer, a court, even the Department of Justice, could easily surmise that the FRB's attempt to impose fees is no more than retaliation for having dared to challenge in the Federal District Court for the Southern District of New York the FRB's withholding of Wachovia's subprime lending information. Ever since that case was filed, the FRB has begun delaying up to eight months on FOIA requests, and now seeks to impose fees. We'll see.
July 17, 2006
The Federal Reserve, which has spent many hours of legal work trying to withhold information about Wachovia's assistance to subprime lenders, now has before it an application by Wachovia to acquire Golden West and World Savings. Inner City Press / Fair Finance Watch has submitted a FOIA request which "includes a complete copy of the application, it also includes all other communications and records during the time frame that relate to the issues, including managerial issues, that the FRB must consider in connection with the application. We specifically refer to Wachovia's engagement with subprime lenders, regarding which the Federal Reserve has previously withheld information from Inner City Press, giving rise to FOIA litigation, a partial chiding of the FRB by District Court Judge Cote, and the recently-heard appeal in the Second Circuit. We note as part of this request the arguments in the FRB reply brief in that case is that Wachovia's provision of a list of the subprime lenders it assists was "voluntary" because Wachovia submitted it early in the process. The FRB acknowledges that in cases "prior to Wachovia" SouthTrust, it asked for the names of subprime lenders assisted, but that Wachovia include this in its application, making it voluntary. That sleight of hand cannot legitimately be used to evade FOIA."
July 10, 2006
Seven months ago, Inner City Press submitted to the Federal Reserve Board a Freedom of Information Act request, for records "regarding the Federal Reserve System having compiled a list of lenders with disparate 2004 Home Mortgage Disclosure Act data and transmitting such lists beyond the FRS."
Under the Freedom of Information Act, the Fed is supposed to provide records within twenty business day. But with a single letter six months ago, the Fed unilaterally extended its time to respond. Now, as it prepares its required annual FOIA report to the Department of Justice, the Fed begrudgingly sends a second letter, which states that "approximately five linear feet of documents will be withheld from you... no reasonably segregable nonexempt information was found."
An appeal will follow... Also last week, Synovus' Columbus Bank & Trust along with CompuCredit were forced to pay $11 million in restitution to residents of New York State for failing to disclose activation fees of up to $179 on Aspire Visa cards. Inner City Press has raised Synovus' consumer abuse to the Federal Reserve a number of times in recent years. Now what will the Fed do?
July 3, 2006
This now from the Fed, dated the 21st of June: "This is in response to your letter, dated and received by the Board's Freedom of Information office on October 3, 2005... In an October 20, 2005, telephone conversation with Ms. Alison Thro of the Board's Legal Division, you clarified..."
Why then did it take EIGHT MONTHS to act on Inner City Press' clarified and narrowed request? And what will DOJ say?
Given the disparities in Citigroup's 2005 HMDA data, the Federal Reserve's wordless lifting of its 2004 cease-and-desist predatory lending order against CitiFinancial is shameful. So too was Citigroup's meeting with the Office of Management and Budget in June, to lobby about Basel II...
June 26, 2006
In the Second Circuit Court of Appeals on June 22, thee Federal Reserve lawyers appeared, to defend the Fed's withholding despite Inner City Press' Freedom of Information Act request a list of subprime lenders assisted by Wachovia. Since the arguments on both sides involved whether the names on the list are "otherwise publicly available" in SEC documents, the Fed was asked who thought of checking the SEC database. Rather than acknowledge that the issue was raised in ICP's comments on the Wachovia - Southtrust merger, the Fed's lawyer claimed that the District Court judge in the subsequent FOIA case thought it up. But that wasn't true....
Inner City Press has been informed that the Federal Reserve's long-time fair lending guru Robert Cook now works at and for Countrywide, which has the subprime unit Full Spectrum. When Inner City Press asked about anti-revolving door provisions, noting that even the OCC prohibits a bank's examiner from going to work for the bank for a year after leaving the OCC, it was noted that Mr. Cook recently attended a Federal Reserve meeting with and for Countrywide. That is to say, he appeared, quite literally, for Countrywide, which was and is a bank holding company regulated by the Fed...
June 19, 2006
The Federal Reserve hits new lows daily. Last week we reported that the Fed has for months stopped responding to Freedom of Information Act requests, including a request Inner City Press filed months ago about the Fed's actions (or inaction) on disparities in the 2004 Home Mortgage Disclosure Act data.
Now the Fed is turning a blind eye to glaring disparities in the 2005 data. For example, in its BB&T Order last week, the Fed ignores the issues raised about BB&T's refers-down to its subprime unit Lendmark. BB&T's response to Inner City Press / Fair Finance Watch's comments included the volume of loans referred up in 2005, but no such figure for referrals-down. Nor did the Fed request it. Despite the speechmaking about HMDA data, the Fed is hitting new lows daily.
And this coming week, on June 22, the Fed will be in the Second Circuit Court of Appeals in New York, on the cross-appeals concerning the Fed's withholding of the names of subprime lenders assisted by Wachovia and SouthTrust. While the case has been pending, the Fed has stopped responding to ICP's FOIA requests, and has stopped asking application for the names of the subprime lenders they assist. Like we said, the Fed is hitting new lows daily...
June 12, 2006
From Inner City Press / Fair Finance Watch's just-filed comment to the Federal Reserve just after receiving from the FDIC a copy of HSBC's related tax Refund Anticipation Loan (RAL) application, which ICP timely requested: Note for the record on this request that ICP made its FOIA request for the application to the FDIC and not the FRB because the FRB has allowed fully 22 FOIA request from ICP to remaining pending, some for over eight months -- ICP recently waived and limited some, to get at least some documents -- in the interim, ICP directs its FOIA request to other, non-FRS agencies -- for shame...
June 5, 2006
Among the slipperier of the Fed's arguments in its reply brief in the ICP v. FRB Second Circuit FOIA case is that Wachovia's provision of a list of the subprime lenders it assists was "voluntary" because Wachovia submitted it early in the process. The Fed acknowledges that in cases "prior to Wachovia" SouthTrust, it asked for the names of subprime lenders assisted, but that Wachovia include this in its application, making it voluntary. What's worse, the Fed since the District Court decision no longer asks for any names. So secretive it has stopped regulating (at least on this point).
The Fed also complains that neither it nor applicants should have to make sure that withheld information is not otherwise publicly available, that it should fall to requesters to show that names they have not seen are, in fact, publicly available. Too much burden for a multi-billion dollar bank to certify that the information it is trying to withhold is not contained in its own SEC filings...
May 29, 2006
In the Fed's Santander-Sovereign rubber stamp last week, this, from footnote 30: ICP "expressed concerns about Santander’s acquisition of Island Finance Puerto Rico Inc. ("Island Finance"), an entity engaged in subprime lending. As a general matter, the activities of the consumer finance business identified by the commenter are permissible and the commenter did not provide evidence that Santander or Island Finance had originated, purchased, or securitized "predatory" loans or otherwise engaged in abusive lending practices." Hmm -- what ICP raised what Island Finance's practice of charging 25% on consumer loans, targeted at Latinos, without even checking people's credit histories. If that's not predatory, what is?
The Fed also recites that ICP "expressed concern about Santander’s ability to share information for purposes of complying with applicable U.S. anti-money laundering laws." The reference here is to the fact that Santander refused to disclose, even to its own US affiliates, the owner of accounts into which money was wired (as described in Senate's Riggs report, the owner was the dictator of Equatorial Guinea). So how can the Fed go on to "note[] that Santander has committed to make available to the Board information on the operations of Santander and any of its affiliates that the Board deems necessary to determine and enforce compliance with applicable laws"? Does that mean that the Fed endorses the type of no-name offshore wiring (that is, money laundering) as is described in the Senate's Riggs report? We'll see...
May 22, 2006
A deafening no-comment, and lack of action by the Fed -- following the Wall Street Journal's May 11 article on the continuing investigation into the billions looted from Nigeria by ex-dictator Sani Abacha, which named as a conduit for Abacha's Transnational Bank's nostro accounts Citigroup and only one other institution (Deutsche Bank), nothing said by Citigroup, or the Fed...
While the Federal Reserve fights on appeal to keep confidential the list it has of subprime lenders helped by Wachovia, on March 24, 2006, subprime lender NovaStar simultaneously announced the purchase of a $940 million pool of payment option adjustable rate mortgages, and plans to structure its first securitization of the year as an on-balance sheet transaction. The $1.35 billion on-balance sheet deal closed April 28, led by Wachovia Securities -- enabler of predatory lending, as is coming to a head in the FOIA litigation now in the 2d Circuit Court of Appeals in New York...
A non-bank deal we see as significant was last week's announcement by Deutsche Bank that it intends to acquire California-based subprime mortgage lender Chapel Funding LLC. The idea is to cut out the middle man. The head of Deutsche Bank's Global Markets Americas unit, Phil Weingord, said that "the integration of a mortgage originator will provide significant competitive advantages, such as access to a steady source of product." Deutsche Bank is not only a trustee on subprime loans, it is also a securitizer. It has begun subprime lending in the United Kingdom, and last December bought a mortgage lender in Mexico, to securitize. And what is the Federal Reserve doing to review these moves? Nothing, that we can see...
And here's a development -- on Credit Agricole SAS Rue La Boetie, on which ICP commented long ago, finally the Fed has asked questions, about the glaring lack of denials in the lending of Espiritu Santo Bank. Credit Agricole (under a Caylon cover letter) tried to claim that the borrowers are "mostly" individuals with a Private Banking relationship with ESB. But in one of the years reviewed, non-clients were 75% of the borrowers. Something's fishy (and not only on this) -- we'll see what the Fed does.
May 15, 2006
For the attention of the Federal Reserve, which has given its rubber stamp approval to the anti-money laundering regime in Japan, despite scandal after scandal, including that involving Citigroup -- Regarding money laundering in Japan: "Banker off hook in loan shark money-laundering," blared The Japan Times on March 23. The Yomiuri Shimbun chimed in with "Court ruling could make Japan a money-laundering haven", questioning the Tokyo District Court ruling that experts say undermines claims that Japan is making progress on due diligence compliance. The case behind the headlines involved Susumu Kajiyama - the "loan-shark king" of the Yamaguchi-gumi underworld group - hiding $659.47 million raised from loaning money at illegally high interest rates. The funds were transferred to accounts opened at Credit Suisse in May 2003, in transactions completed by Atsushi Doden, an employee of the Hong Kong branch. A report on the transfer led to Kajiyama being sentenced to 61/2 years in prison in November. The judge ruled on March 22 that "reasonable doubt" existed that Doden knew the money was profits from criminal activities and that testimony from another gangster about a conspiracy with Doden was not trustworthy. Observers are quoted in the SCMN that while "suspicious transaction reports" are being filed, but that those identified by Japanese watchdog Financial Intelligence Unit as requiring further investigation by the National Police Agency cannot all be examined adequately. In 2005, there were 98,935 STRs filed by financial institutions in Japan, of which 66,812 were referred to the police for investigation. In 2003, the number of STRs stood at 43,768 and, in 1998, just 13 such reports showed up on the authorities' radar. The FIU still employs only about 20 staff, including financial intelligence analysts examining suspicious transactions. Japan's anti-money laundering regime is covered by The Law Concerning Confirmation of Client Identity of Fiscal Institutions, The Organized Crime Punishment Law and The Foreign Exchange and Foreign Trade Law. These laws have remained substantially unchanged over the past two years, despite the scandals, including the one involving Citigroup. Good place to launder -- will the Federal Reserve reconsider its FBSEA rubber stamp? We'll see.
Inner City Press / Fair Finance Watch has filed its reply brief in the ongoing case about the Federal Reserve's withholding of information about the subprime lenders enabled by Wachovia. The Fed's arguments have been shifting; we'll see what they say at oral argument next month. Developing...
May 8, 2006
In a May 3 letter faxed to Inner City Press, the Federal Reserve states that "under the terms of the proposal, JPMC is to sell its corporate trust assets to BNY, and BNY is to sell its retail and middle-market banking business to JPMC... prior approval of the Federal Reserve System is not required to effect the proposal. The FRS therefore does not expect to receive any application in connection with the proposed transactions."
This is the same Federal Reserve which just found Bank of New York money laundering for the second time... And what will the Fed do on this -- on May 2, BofA announced a proposal to acquire a $2.2 billion stake in Banco Itau through an asset-swap, which would involve Itau taking control of BofA's BankBoston unit in Brazil, which has about 140 offices and $9 billion of assets under management. Itau has also been given exclusive rights to buy subsidiaries of BankBoston in Chile and Uruguay. For a U.S.-based holding company to buy such a stake in a bank in another country -- does the Fed even review these acquisitions?
May 1, 2006
Here's a variation on the revolving door -- the repeat settlement. Bank of New York, which the Federal Reserve hit with a $38 million money laundering fine in 2000 (for having moved $7 billion in hot Russian money), has now settled again, without even paying a fine. The Fed and the New York Banking Department have slapped Bank of New York on its BONY wrist for new deficiencies in the bank's money laundering controls, giving it 60 days to comply with yet another order.And if it doesn't? Well, it can just settle again. This will be raised, and reviewed, in connection with JPMorgan Chase's application[s] to acquire 338 (presumably money laundering) branches from BONY...
April 24, 2006
The Federal Reserve has let AmSouth off the hook, releasing it from anti-money laundering scrutiny. We'll see how that works. AmSouth is a lender which refused to provide it mortgage data in analyzable form, and the Fed did nothing about it. Meanwhile at the Citigroup annual shareholders' meeting on April 18, CEO Chuck Prince said that if the Fed has removed the block on significant expansions, Citi must be good. Hmm...
April 17, 2006
The Fed continues contorting its bank supervision in order to keep the public in the dark. We now have an April 13 response from Santander (and Sovereign, apparently) to questions posed by the Federal Reserve. The first question is about Sovereign's connections with "alternative financial providers" such as "pawn shops, check cashers, or money service businesses." Santander admits that Sovereign has such connections, specifically confirming exhibits submitted by ICP about Century Pawnbroker and Cash Advance System, and implying there are more but leaving these unnamed. The Fed, of course, is striving not to ask for names, since a Federal court has said these can't be withheld.
Click here to view Inner City Press / Fair Finance Watch's challenge to JPMorgan Chase's proposal to buy 338 branches from Bank of New York (and to close at least 50 of the branches)....
April 10, 2006
Last week the Federal Reserve Board filed a 59-page brief in the Second Circuit Court of Appeals, continuing it defend its withholding of information about assistance to subprime lenders provided by banks -- in this case, Wachovia and its SouthTrust. The Fed continues to argue that it can withhold the names of subprime lenders with which an applicant bank does business, even if these business connections and names are required to be public in SEC filings, as long as the requester doesn't read the Board's mind and name the precise names, without having seen them. Earlier the Fed had argued that it should be entitled to withhold names that must be public because most requesters don't have access to professional searches of public records like Lexis, and free searches like Edgar are unlikely to dig up the connections. The Fed has become a defender of questionable subprime lenders and the banks which enable them -- in fact, during the pendency of this case, and now the Fed's appeal, the Fed has stopped asking applicants to provide the names of subprime lenders they assist, but rather only their "policies." This shows that, in order to protect and coddle banks, the Fed will even forego information that it previously made clear it needed, in order to appropriately regulate. For shame...
Amazing too that the Federal Reserve System last week gave Citigroup the gift of saying, "go forth for large acquisitions," just as Citigroup got sued for insider trading by the Australian regulator, and while the Fed already had Citigroup's 2005 mortgage lending data, which is even more disparate than in 2004.
Inner City Press / Fair Finance Watch has just released a study of the new 2005 Home Mortgage Disclosure Act data, click here for more.
April 3, 2006
The Federal Reserve approval order last week approval to BB&T - Main Street Bank noted that Inner City Press / Fair Finance Watch
"expressed concern about referrals of loan applicants to Lendmark Financial Services ('LFS'), a nonbank subsidiary of BB&Tthat makes subprime loans. BB&T has represented that it might refer to LFS applications denied by a BB&T subsidiary bank that do not meet the bank's underwriting guidelines. Before making a referral, however, these applications undergo an internal second-review procedure. In addition, BB&T notes that LFS has a policy to refer applicants who meet the Freddie Mac underwriting guidelines to BB&T's subsidiary banks."
But BB&T's referrals up and down do not use the same standard. On fringe finance the Fed says that ICP"expressed concern about BB&T's relationships
with unaffiliated pawn shops and other nontraditional providers
of financial services. As a general matter, the activities of
the consumer finance businesses identified by the commenter are
permissible, and the businesses are licensed by the states where
they operate. BB&T has stated that it does not focus on
marketing credit services to such nontraditional providers and
that it makes loans to those firms
under the same terms, circumstances, and due diligence
procedures applicable to BB&T's other small business
borrowers."
BB&T admitted in its responses into the record relationships with 45 payday and other fringe financiers. BB&T is growing in subprime -- as ICP and then the Fed noted, in its order
"A commenter asserted that the Board should, in the context of the current proposal, review BB&T's recently announced plans to acquire the assets of FSB Financial Ltd. ("FSB"), Arlington, Texas, a nonbanking company that purchasesautomobile-loan portfolios. The FSB acquisition is not related to the current proposal. Moreover, if the FSB acquisition is consummated under authority of section 4(k) of the BHC Act, the acquisition would not require prior approval of the Federal Reserve System. BB&T would require prior Federal Reserve System approval if the acquisition were proposed under sections 4(c)(8) and 4(j) of the BHC Act, and the transaction would be reviewed in light of the requirements and standards discussed above."
Thanks to the GLB Act, subprime
lenders can be acquired with no prior review by the Federal
Reserve (which is at the same time fighting for greater
regulatory rights with regard to Industrial Loan Companies, for
example the ILC proposed be Wal-Mart).
ICP/Fair
Finance Watch will be continuing its watchdogging of BB&T
and its growing (and murky) involvements in subprime lending.
March 27,
2006
The Federal Reserve has now asked about Santander's acquisition of the subprime lender Island Finance from Wells Fargo, seeking confirmation that Santander "intends to file a post-transaction notice under section 225.87 of Regulation Y" and asking generically for information on Santander's due diligence on Island. Santander responds that it will file by March 29. Why let a company buy a controversial subprime lender and only "notify" the Fed of the acquisition a month after it is consummated?
Meanwhile in response to Federal Reserve questions, BB&T has disclosed that it has made at least 45 loans to subprime lenders, including to pawn shops, rent to own businesses and even to a "pay day loan provider"...
Speaking March 20 at the Economic Club of New York, new Fed chairman Ben Bernanke began with advice from his daddy back in South Carolina: "if you ever get the opportunity to keep your mouth shut, take advantage of it."
But United States anti-money laundering, or at least FinCEN, has devolved into a revolving door. Two months after Bill Fox cashed out to Bank of America, now FinCEN's William D. Langford jumps to JP Morgan Chase. “I have an absolutely incredible opportunity with an incredible institution – it’s that simple,” Langford said in a telephone interview. Again - if the Treasury Department's OCC has adopted anti-revolving door safeguards in the wake of the Riggs Bank scandal, why hasn't FinCEN?
March 20, 2006
Now the Federal Reserve doesn't care if an investment for which it gave Community Reinvestment Act credit turns out to be fraudulent and to benefit not a single low or moderate income person. In its M&I - Gold Bank order last week, the Fed said that Inner City Press / Fair Finance Watch
"criticized Gold Bank's investment-performance record and investment rating because of credit Gold Bank received in its 2005 CRA Evaluation from the Kansas City Reserve Bank for making an investment in multifamily housing revenue bonds that were ultimately intended to benefit LMI residents. The Board has consulted with the Kansas City Reserve Bank on this matter. Through no fault of Gold Bank, the bonds were called and no multifamily housing was constructed. Gold Banc made various, timely public disclosures regarding the impairment of the bonds"...
That sure is friendly to Gold Bank. As the old saw has it, when something sounds too good to be true, it's usually fraudulent. In this case, the bond Gold Bank bought had a 30% return. ICP has also been told, by a knowledgeable source, that Gold Bank's management knew of the problems with the bonds well before it told the Fed. And in any event, the Fed never amended the CRA credit it gave, for an investment that did not benefit a single low or moderate income person.
On mortgage lending, the Fed in its M&I - Trustcorp order said that ICP commented, "based on 2004 HMDA data, M&I FSB imposed higher-cost loans to Latinos as compared to nonminority borrowers in Missouri. M&I FSB has no assessment areas in Missouri." But M&I FSB does M&I's subprime lending all over the country, and is an insured financial institution. So now, according to the Fed, it can ignore subprime affiliates not only if they are mortgage companies, but even if they're insured financial institutions, as long as they keep their headquarters (and limited assessment areas) away from the merger zone. By this logic, banks that are affiliated should trade lending and reporting such that all problematic subprime lending is done by the affiliated headquarters out-of-market. Is this how the Fed is assessing and acting on the economy?
Question: why didn't the Fed include Santander in its March 17 cease-and-desist orders against three (other) Puerto Rico banks which had to restate their earnings? Could it be because Santander has a contested application pending, and a cease-and-desist order would only add fuel to the fire?
March 13, 2006
The
U.S. Federal Reserve, despite its talk about anti-money
laundering and fair lending, is even more committed to doling
out approvals to any proposed merger or acquisition. On fair
lending, the Fed last week approved an application by Whitney to
buy 1st National, reciting that Inner City Press / Fair Finance
Watch
"alleged, based on 2004 HMDA data, that Whitney Bank and 1st
Bank disproportionately denied applications for HMDA-reportable
loans by minority applicants in several Metropolitan Statistical
Areas... Although the HMDA data might reflect certain
disparities in the rates of loan applications, originations,
denials, or pricing among members of different racial or ethnic
groups in certain local areas, they provide an insufficient
basis by themselves on which to conclude whether or not
Whitney Bank or 1st Bank is excluding or imposing higher credit
costs on any racial or ethnic group on a prohibited basis."
The "certain disparities" alluded to by the Fed includes these, identified to the Fed by ICP: In the New Orleans MSA in 2004, Whitney National Bank denied the conventional home purchase applications of African Americans fully 3.53 times more frequently than whites. These disparities at Whitney extend into each of its other footprint states: In Mississippi, in the Gulfport - Biloxi MSA, Whitney National Bank in 2004 denied the refinance loan applications of African Americans 5.48 times more frequently than whites. In Alabama, in the Mobile MSA, Whitney National Bank in 2004 denied the conventional home purchase applications of African Americans 3.22 times more frequently than whites.The Fed's approval order also notes that ICP
"expressed concern
about Whitney Bank's relationship with a rent-to-own company,
which is an unaffiliated, nontraditional provider of financial
services. As a general matter, the activities of this type of
business are permissible, and such businesses are licensed by
the states where
they operate. Whitney Bank has implemented a policy for its
commercial credit facilities to finance companies or other
consumer lenders to fund consumer loans. This policy provides
for an evaluation of the practices of such borrowers to identify
any potentially predatory lending practices and for ongoing
monitoring and management of relationships with such borrowers."
But it's not at all clear in the record what practices or safeguards Whitney has -- and in previous cases, the Fed has tried to withhold such information (leading to a brief ICP filed last week in the Second Circuit Court of Appeals in the ongoing ICP v. FRB Freedom of Information Act case about Wachovia's enabling of predatory lenders).
Also last week, In the face of public reports of Bank Hapoalim's involvement in ongoing money laundering investigations, the Fed gave Bank Hapoalim an approval. The Fed's order noted the comments of ICP Fair Finance Watch that
"expressed concern about the proposal based on news reports of investigations by Israeli authorities into allegations of money laundering at Bank Hapoalim. As a matter of practice and policy, the Board generally has not tied consideration of a proposal to the scheduling or completion of an investigation if, as in this case, the applicant or notificant and reviewed reports of examination from the appropriate federal and state supervisors of the U.S. operations of Bank Hapoalim that assessed its managerial resources. Based on all the facts of record, the Board has concluded that considerations relating to the financial and \managerial resources of Notificants are consistent with approval."
So the Fed's policy is to ignore active investigations? And to ignore reports of its sister agency, the State Department? The Fed's Hapoalim order says that ICP/FFW
"expressed concern about Israel's anti-money laundering
policies and procedures [but] in June
2002, the FATF recognized that Israel had addressed the
deficiencies identified in its 2000 report. FinCEN withdrew its
advisory in July 2002, noting that Israelhas in place a
counter-money laundering system that generally meets
international standards." FinCEN Advisory Withdrawal Issue 17A."
But the U.S. State Department's more recent 2006 report, also released last week, states that in Israel, "there is a continuing need for more effective bank supervision and proactive investigations of money laundering associated with criminal activity, especially on the part of organized crime figures and syndicates." Oh but don't let that get in the way of a merger...
March 6, 2006
At Howard University on March 3, the exiting Roger Ferguson played econo-nerd to a generally befuddled audience, saying for example, in answer to a question read by Mr. Diallo, "You know that an economist will predict either the direction or the timing or never both," and musing about housing costs in Australia. One was left wondering why there are never any dissents, on the Federal Reserve Board… Meanwhile back in the real world, in a response just filed with the Federal Reserve, BB&T among other things claims that the questions that the Fed has asked other banks about due diligence conducted before lending to pawn shops and payday lenders are "unreasonable and overbroad." But the Fed has asked NC-based Wachovia exactly these questions, and Wachovia answered. BB&T's response is essentially ideological -- not surprising, perhaps, given the bank's CEO's recent fulminations on the AP that his favorite writer is Ayn Rand. Then again, ex-chairman Greenspan was also once a fan…
February 27, 2006
Last week we reported on and raised to the Federal Reserve a Community Reinvestment Act scam, in which Gold Bank, which M&I is trying to buy, was given CRA credit by the Federal Reserve for buying bonds which in fact never resulted in a single unit of housing, low- or moderate-income or otherwise. In response, M&I and Gold Bank filed letters with the Fed specifying at least the names and dates of the bonds, while admitting that no housing was built, and that the CRA credit has never been withdrawn or corrected --
“On July 19, 2001, Gold Bank purchased the City of Lee’s Summit, Missouri, Multifamily Housing Revenue Bonds, Series 2001C, for $4,600,000 (the ‘Missouri Bonds’). On February 28, 2002, Gold Bank purchased the Oklahoma Housing Development Authority, Multifamily Housing Revenue Bonds, 2002 Series C, for $5,000,000 (the ‘Oklahoma Bonds’). On August 15, 2002, Gold Bank purchased the Community Development Authority of the City of Manitowoc, Wisconsin Multifamily Housing Revenue Bonds, 2002 Series C, for $4,600,000 (the ‘Wisconsin Bonds’)… In August and September 2005, in large part because no housing projects were funded with the proceeds of the Bonds, the [IRS] notified Gold Bank that it had made preliminary determinations that the interest which the Issuers previously paid Gold Bank on the Bonds was not excludable from the gross income of Gold Bank for tax purposes. On October 17, 2005, Gold Bank paid approximately $3.5 million to settle the IRS claim…
“Gold Bank purchased the Bonds based upon representations from the Issuers that the proceeds of the Bonds would be used by the Issuers to make loans for low and moderate income multifamily housing projects… Notwithstanding such Issuer representations, the Issuers subsequently did not fund any low and moderate income multifamily housing projects with the proceeds of the Bonds… In fact, prior to the CRA examination, Gold Bank had disclosed to the Kansas City Federal Reserve… the impairment in the value of the Bonds and the reasons for such impairment.”
CRA credit given (and not retracted) for a fraudulent investment which never resulted in a single unit of housing. Is this what the Federal Reserve has come to?
February 20, 2006
At new chairman Bernanke’s testimony to the House of Representatives last week, the Community Reinvestment Act was mentioned, albeit a single time. Mr. Bernanke said
“my very first trip as a governor of the Federal Reserve
was to Brownsville, Texas, to see how a set of nonprofit
organizations were using funds provided under the Community
Reinvestment Act from banking institutions to rede
(c) 2009-2011
Copyright 1999 - 2020 Inner City Press/Community on the Move, Inc.. All rights reserved. As should be clear, but in an excess of caution: under no circumstances does the information in this column (or web site) represent a recommendation to buy or sell securities. For further information, or to request reprint or other permission, contact: Permissions Coordinator, Legal Administration, Inner City Press, P.O. Box 580188, Mount Carmel Station, Bronx, NY 10458. Phone: (718) 716-3540. E-mail: MLee [at] innercitypress [dot] org
July 23, 2012
The Fed has done it again: improperly withheld basic information about an application, as admitted even by the pro-bank Governor now in charge of ruling on FOIA appeals. Governor Jay Powell, recently withholding ING - Capital One information, now finds on another application (BB&T) that information was improperly withheld under Exemption 5 and can now be released including records that "describe transaction filings and discuss comment period timings and news articles." The rest -- at least 156 full pages -- he withholds.
Meanwhile one of Governor Powell's ex
employers has decided to hold onto its stake in a
bank in Taiwan, Ta Chong. How does or will Powell
recuse himself? Watch this site.
Click here to Search This Site
How to Contact
Us Site Map
Search
This Site Inner City
Press' Community Reinvestment Reporter Global Inner
Cities Citigroup Watch
Inner City
Reporter 
Bank Beat
Inner City
Poetry Community
Reinvestment Environmental
Justice Insurance
Redlining In the Bronx
FCC/Telecommunications About Inner
City Press Inner City
Arts&Culture Inner City
Housing ICP's Freedom of
Information Guide Links/Resources Frequently Asked
Questions The Inner
City Reporter's Federal Reserve Beat Privacy Policy
What's New on
Site Archives For the Media
Inner City
Public Interest Law CenterWhat's New on
Site
Copyright 1999 - 2025 Inner City Press/Community on the Move, Inc.. All rights reserved. As should be clear, but in an excess of caution: under no circumstances does the information in this column (or web site) represent a recommendation to buy or sell securities. For further information, or to request reprint or other permission, contact: Permissions Coordinator, Legal Administration, Inner City Press, P.O. Box 580188, Mount Carmel Station, Bronx, NY 10458. Phone: (718) 716-3540. E-mail: MLee [at] innercitypress [dot] org