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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.

On October 14, the banks' counsel sent Fair Finance Watch what purported to be a copy of its submission to the Fed under the Ex Parte Rules -- but the entire thing was withheld, under this cover message: "Attached is the public portion of the BMO response to the Federal Reserve Bank of Chicago’s request for additional information received on October 3, 2022.      Please feel free to reach out to me with any questions.     Best,  Ro     Ro Spaziani Wachtell, Lipton, Rosen & Katz."  No substance was attached, just a request for confidential treatment

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."

On November 2, to that, this: "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. BHB is in the final stages of completing a Community Benefit Plan that will cover the first five years after consummation of the Proposed Transaction. In connection with that plan, BHB will increase its overall level of community development lending, investments and philanthropic giving above current levels. When considering its qualified community development lending, investments and philanthropy during the five year plan period, BHB will prioritize investments in affordable housing, rural housing needs, economic development, workforce development, sustainability, digital inclusion and financing for homeowners and small businesses. BHB will be in a position to share the Community Benefit Plan shortly.  3  The Proposed Transaction will expand the combined organizations community development activities in a number of ways. BHB has an experienced community development team that lend to and invest in affordable housing and economic development projects and will bring their expertise and innovative approach to affordable housing, revitalization and economic development to the BOTW markets. With respect to community development lending, BHB and BOTW both provide loans in connection with Low Income Housing Tax Credit (“LIHTC”) financing products. However, BHB also owns a “qualified Community Development Entity” (“CDE”), which allocates federal new market tax credits (“NMTC”) for economic development and social service projects. As a combined organization, BHB’s CDE would expand its allocation focus to BOTW’s footprint and surrounding rural markets. BHB will also continue to support government, non-profit and middle market lending that benefit LMI communities and communities of color. BHB will continue to expand its investments in bonds to school districts and municipalities that assist with infrastructure for LMI communities or constituents, and loans to municipalities to aid with infrastructure and other needs, especially those that benefit LMI geographies or other underrepresented groups. With respect to community development investments, both BHB and BOTW currently invest in LIHTCs, which BHB will continue following closing. BHB is also an active investor in asset classes beyond those of BOTW’s, with investments in CRA-qualified private equity funds, Small Business Investment Company-licensed funds, loan funds and Community Development Financial Institutions. The combined organization will increase BHB’s current investment activity in these asset classes to target BOTW’s CRA assessment areas. In addition to the foregoing, BHB recognizes that organizations led by women and persons of color face obstacles in attracting funding and investments, and BHB will prioritize its philanthropic giving to these organizations where possible. In connection with the upcoming Community Benefit Plan, BHB will reserve 75% of its philanthropic commitment for endeavors that serve minority organizations or communities, or are led by people of color or women. In connection with the Community Benefit Plan, BHB will support at least 75 organizations it has not supported in the past over the five years of the plan, with at least 10 new philanthropic partnerships in BHB’s top three states by deposits (IL, CA and WI) and five new philanthropic partnerships in next four top states by deposits (MN, AZ, CO and IN). BHB also will work to increase the average size of CRA-qualified grants from an average of approximately $32,000, to an average of $40,000-50,000 by the end of the five year plan period."

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."

Watch this site.

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.

On October 14, the banks' counsel sent Fair Finance Watch what purported to be a copy of its submission to the Fed under the Ex Parte Rules -- but the entire thing was withheld, under this cover message: "Attached is the public portion of the BMO response to the Federal Reserve Bank of Chicago’s request for additional information received on October 3, 2022.      Please feel free to reach out to me with any questions.     Best,  Ro     Ro Spaziani Wachtell, Lipton, Rosen & Katz."  No substance was attached, just a request for confidential treatment

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: The following additional information request relates to the application filed by Bank of Montreal, Montreal, Canada, and BMO Financial Corp., Wilmington, Delaware, the parent companies of BMO Harris Bank National Association, Chicago, Illinois, to acquire 100 percent of BancWest Holding Inc. and thereby indirectly acquire Bank of the West, both of San Francisco, California, pursuant to section 3 of the Bank Holding Company Act of 1956. 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." Watch this site.

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.."

This is outrageous. The Fed itself should made these exhibits public. Watch this site.

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