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July 15, 2024

On Capital One Discover 3 Minutes Each OCC Withholds 185 Pages Inner City Press Appeals - Still Nothing from the Fed

by Matthew R. Lee

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.

Meanwhile Capitol One lobbying continues, for example with a Pennsylvania state legislator extolling Capital One's  subprime, here.


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

by Matthew R. Lee

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. 

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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?

We still don't know. But now LINKBANCORP is selling branches that it acquired to a credit union, American Heritage Credit Union, and thereby taking more than $100 million of deposits out from the Community Reinvestment Act. We'll stay on this

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

by Matthew R. Lee

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

by Matthew R. Lee

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

by Matthew R. Lee

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