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        City Reporter's Federal Reserve Beat

  

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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."

Watch this site.

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."

   What - the comment period running to its conclusion, before any application to comment on is available? This seems far too bank-friendly. How does it relate to the administration's Antitrust Memo? Watch this site.

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.

Now on August 11, the Fed has belatedly asked Old National about its lending record, including "This correspondence relates to the application submitted by Old National Bancorp, Evansville, Indiana, to acquire through merger First Midwest Bancorp, 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 is requested. Supporting documentation, as appropriate, should be provided. 1. Please provide a list of organizations and community groups, if any, with which Old National Bank engaged since 2017 to help reach minority borrowers, including African American borrowers, in Minneapolis, MN, Indianapolis, IN, Grand Rapids, MI, Ann Arbor, MI, and Louisville, KY. In your response, please provide detailed information about the partnerships that Old National Bank engaged in with these organizations and community groups since 2017. 2. Please provide information about Old National Bank’s efforts to reach African American and other minority borrowers in the Minneapolis, MN, Indianapolis, IN, Grand Rapids, MI, Ann Arbor, MI, and Louisville, KY markets, including specialized products and marketing campaigns, since 2017. 3. Please identify the organizations and community groups, if any, with which Old National Bank has engaged since the last Community Reinvestment Act (“CRA”) examination to help reach low- and moderate-income (“LMI”) borrowers and geographies in the Grand Rapids, MI and Ann Arbor, MI markets. 4. Please provide further information about Old National Bank’s efforts to reach LMI borrowers and geographies in the Grand Rapids, MI and Ann Arbor, MI markets, including specialized products and marketing campaigns, since the last CRA examination.  Ms. Katie Wechsler August 11, 2021 Page 2  5. Please identify the organizations and community groups, if any, with which Old National Bank has engaged since the last CRA examination to help reach small businesses located in LMI geographies, and small businesses generally, in the Minneapolis, MN, Ann Arbor, MI, and Louisville, KY markets. 6. Please provide further information about Old National Bank’s efforts to reach small businesses located in LMI geographies, and small businesses generally, in the Minneapolis, MN, Ann Arbor, MI, and Louisville, KY markets, including specialized products and marketing campaigns, since the last CRA examination. 7. Please describe Old National Bank’s efforts to improve CRA performance under the Investment Test in Illinois since the last CRA examination. In your response, please provide detailed information about the bank’s level of qualified investments in the bank’s Illinois assessment areas. Please submit your response to the Federal Reserve Bank of St. Louis within eight business days." Watch this site.

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."

This is a pro-corporate circus, that should be exposed under the new Antitrust Executive Order.

August 2, 2021

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

July 26, 2021

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

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

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

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

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

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

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

July 12, 2021

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

July 5, 2021

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

June 28, 2021

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

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

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

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

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

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

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

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

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

June 21, 2021

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

June 14, 2021

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

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

June 7, 2021

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

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