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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."

 But here on January 15 is the Federal Reserve Bank's non-responsive response: "Dear Mr. Lee:  January 15, 2020  We acknowledge receipt on January 13, 2020 of your e-mail dated January 11, 2020 ("Comment Letter"), commenting on the application submitted 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)( I) 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 SAC Florida Bank, Coral Gables, Florida. The Board generally provides a period of at least 30 days for interested members of the public to comment on applications submitted under the BHC Act. See 12 C.F.R. §§ 225.16 and 262.3(e). Comments received after the end of the public comment period generally will not be made pa1i of the record considered by the Board, though the Board may, in its sole discretion and without notifying the paiiies, take into consideration the substance of late comments. See 12 C.F.R. § 262.3( e ). The public comment period for this application ended on August 12, 2019. Since your Comment Letter was received after the end of the public comment period, it will not be made a part of the record of this application unless the Board in its sole discretion determines to consider your late comments. By email dated August 10, 2019, however, you previously submitted timely comments that have been made a part of the application record that the Board will consider. Sincerely,  cc: Board of Governors Reena Sahni, Esq.- Shearman & Sterling LLP  ~ Brian S. Steffey Assistant Vice President Bank Applications Function." Really? Watch this site.

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.   

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." Watch this site.

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.

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. Here's the memo: Hello Mr. Lee,     I’m writing regarding the section 3 application by Banco Bradesco S.A. (“Bradesco”) and certain affiliates to acquire BAC Florida Bank pursuant to section 3 of the Bank Holding Company Act.  Attached, please find a summary of a meeting that took place between representatives of Bradesco and Federal Reserve staff.  This document has been included as part of the application’s public record.     Regards,        Evans Muzere  Legal Division  Board of Governors of the Federal Reserve System:  TO: File   FROM: Staff  SUBJECT: Meeting with representatives of Banco Bradesco S.A.   DATE:  December 12, 2019  Meeting attendees     • Board of Governors of the Federal Reserve System: Evans Muzere and Jon Stoloff (Legal Division); Betsy Howes-Bean and Pat Soriano (Division of Supervision and Regulation); and Peggy Naulty (Division of Consumer and Community Affairs).   • Federal Reserve Bank of New York: Lisa Kraidin (Legal).1  • Shearman & Sterling LLP: Mr. Timothy Byrne, Esq. and Ms. Reena Sahni, Esq.  • Banco Bradesco S.A.: Mr. Henrique Leme Pinto Lima, Officer; Ms. Yara Piauilino, M&A Superintendent Executive.    Summary:  On Monday, November 25, 2019, staff of the Board of Governors of the Federal Reserve System (“Board”) held a meeting with outside counsel and employees of Banco Bradesco S.A. (“Bradesco”), Osasco, São Paulo, Brazil.  The meeting occurred at the request of Bradesco and took place at the Board’s main office building in Washington, D.C.      The meeting focused on the structure and home country supervision of Bradesco’s four parent companies: (1) Fundação Bradesco, (2) BBD Participações S.A., (3) Nova Cidade de Deus Participações S.A., and (4) Cidade de Deus Cia. Comercial de Participações, all of Osasco, São Paulo, Brazil.  Meeting attendees discussed the management structure and activities of Bradesco’s parent companies.  Bradesco’s representatives described the rationale for the group structure and answered questions regarding the ownership chain and activities of the parent companies.  Attendees also discussed the home country supervision of Bradesco’s parent companies by Brazilian authorities, including the Brazilian Central Bank.  This discussion focused on the methods by which the Brazilian Central Bank and other Brazilian authorities exercise oversight over Bradesco’s parent companies." And what was said? And what about this? We'll have more on this.

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?


October 28, 2019

How corporate can you get? The Federal Reserve Board on Wednesday announced the inaugural 21 members of the Insurance Policy Advisory Committee (IPAC). The IPAC provides information, advice, and recommendations to the Federal Reserve Board on domestic and international insurance issues, including negotiations at the International Association of Insurance Supervisors (IAIS).  The inaugural IPAC members include expertise in life insurance, property and casualty insurance, and reinsurance. Members have professional backgrounds in insurance accounting, actuarial science, academia, insurance regulation, policyholder advocacy, capital markets, and other areas.  The inaugural IPAC members will serve staggered terms ranging from one to three years. Starting next year, the Board intends to annually appoint new members to the IPAC to serve three-year terms.  Members  Keith Bell Travelers Senior Vice President, Corporate Finance  Birny Birnbaum Center for Economic Justice Executive Director  John Bruno The Auto Club Group Executive Vice President, General Counsel, Secretary & Chief Human Resources Officer  Joseph Engelhard MetLife Senior Vice President, Head of Regulatory Policy Group  Bridget Hagan The Cypress Group Partner, Head of Insurance Practice Group  Halina von dem Hagen Manulife Global Treasurer and Head of Capital Management  Michael Ferik Guardian Chief Financial Officer  Tom Finnell Finnell & Co. LLC Owner Former Vice Chair of the IAIS's Capital Solvency and Field Testing Working Group  William Hines Milliman Principal & Consulting Actuary  Laura Lazarczyk Zurich Insurance Chief Legal Officer of Zurich North America  Michael Lockerman PricewaterhouseCoopers LLP Principal  Patricia McCoy Boston College Law School Liberty Mutual Insurance Professor of Law  Julie Mix McPeak Greenberg Traurig, LLP Former President of the NAIC and Vice Chair of IAIS's Executive Committee  Wayne Peacock USAA President, Property & Casualty Group  Maurice Perkins Aegon Senior Vice President, Global Head of Government & Policy Affairs  Pooja Rahman New York Life.

We'll have more on this.

October 21, 2019

The Federal Reserve Banks, and the Board of Governors, were sued in a third-party complaint in the SDNY court by Economic Alchemy LLC. Tellingly, the Federal Reserve Bank despite have legal departments made their filing(s) in the SDNY court through an outside privat law firm, Menuier Carlin of Atlanta, Georgia. Why? The firm filed identical Rule 7.1 Statements, that the Federal Reserve Bank is "a federally chartered corporate instrumentality chartered under the laws of the US pursuant to the Federal Reserve Act of 1913.. and that it has not parent corporation(s)."

October 14, 2019

Powell: “How should we value the luxury of never needing to ask for directions?” he asked. “Or the peace and tranquility afforded by speedy resolution of those contentious arguments over the trivia of the moment?” One answer: don't just rubber stamp mergers, now complicit in the withholding of basic HMDA race and ethnicity information...

October 7, 2019

Federal Reserve Governor Bowman Says Mergers Are Good Showing Bias Should Recuse

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).    

Thank you for your attention.  Matthew Lee, Executive Director Inner City Press / Fair Finance Watch

September 30, 2019

While letting Citi, Chase and other off the hook, this: "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 Bettie McGuire Shomaker (“Shomaker”), 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 Highlands Union Bank (the “Bank”), a state-member bank; WHEREAS, in 2017 and 2018, while employed as manager of the Bank’s Banner Elk branch, Shomaker, in violation of Bank policy, generated loans for relatives, did not send these loans to the Bank’s loan operations department for booking, and used one of these loans for her own benefit; WHEREAS, Shomaker’s misconduct described above constituted unsafe or unsound banking practices, demonstrated a reckless disregard for the safety and soundness of the Bank, and caused financial loss the Bank."

September 23, 2019

  Annals of deregulation: The Federal Reserve Board on Thursday announced the termination of the enforcement action listed below:  Optimumbank Holdings, Inc., Ft. Lauderdale, Florida Written Agreement, dated June 22, 2010 Terminated September 11, 2019

September 16, 2019

The Federal Reserve which routinely tells Fair Finance Watch and Inner City Press that it simply will not consider anything submitted after it closes a comment period, even if the bank applicant has withheld information improperly, said this in Vista Bank: "After the comment period ended, the commenter filed a second objection, noting that the proposed branch." So the Fed has a double standard....

September 9, 2019

Fed Questions After Community Reinvestment Act Protest to Banco Bradesco Bid For BAC Florida

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.

 5. Page 23 of Bradesco's Reference Form (2019) in Public Exhibit 2 states that as of December 31, 2018, Fundacao directly and indirectly held 59.1 percent of Bradesco's common shares. As a result, Fundacao "has the power, among other things, to prevent a change in control of our company, even if a transaction of that nature would be beneficial to our other shareholders, as well as to approve related party transactions or corporate reorganizations." In view of the direct and indirect control of more than 50 percent of Bradesco's outstanding voting shares explain how Fundacao's financial statements in Financial Exhibits 6 and 7, which do not consolidate Bradesco, are consistent both with IFRS and Brazilian accounting standards. Organizational Structure 6. Page 1 of the filing notes that each of Bradesco' s Parent Companies ( as defined in the filing) has previously elected to be treated as a financial holding company ("FHC"). Confirm that BBD is the successor company for Elo Participacoes S.A., Vihich was listed on the January 30, 2004 FHC approval letter. 7. Pages 9-12 of the filing provide a description of the Parent Companies and various limitations on their activities. Provide a more specific explanation of the legal limitations of the activities of each Parent Company, including: a. with respect to Fundac;:ao, describe the legal limits on the scope of its investments and activities; b. with respect to BBD, discuss the requirements for amending its bylaws; c. with respect to Nova Cidade, discuss the requirements for changing its governing documents; and, d. with respect to Cidade, discuss the requirements for changing its governing documents. 8. The filing states that apart from its publicly traded shares, Bradesco is owned by Fundacao, an educational foundation, the senior managers of Bradesco, and family members of the founder. In that respect, discuss the business rationale for the three nonoperating parent companies, BBD, Nova Cidade, and Cidade, focusing in particular on their various interrelated and complex cross-holdings, and the additional NCF Participacoes, S.A. ("NCF") intermediate holding company. With respect to the crossholdings, it is noted that Fundac;:ao has direct ownership in Nova Cidade ( 46.3 percent), Cidade (35.4 percent), (25.1 percent), and Bradesco (17.1 percent); Cidade has direct ownership in Bradesco (45.6 percent) and NCF (74.7 percent); and NCF has direct ownership in Bradesco (8.43 percent)." We'll have more on this.

September 2, 2019

  Many keep saying that the Federal Reserve will stand up to Joe Otting on his crusade to weaken the Community Reinvestment Act. But where IS the Fed on this? Watch this site.

August 26, 2019

On Bangladesh Bank US Federal Reserve Upholds Its Own Withholding of FOIA Records

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.

  This is the opposite of transparency.

August 19, 2019

Community Reinvestment Act Challenge to Banco Bradesco Bid For BAC Florida on Fraud Disparate Lending

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?      

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." We'll have more on this.

August 12, 2019

Capital One Inactive On Hacking 127 Days While Federal Reserve At Amazon Dog and Pony Show

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?

 Now we learn that the Federal Reserve nosed around at Amazon AWS in Virginia, accepting that it could not take any information. So how are they regulating Capital One? Inner City Press files Freedom of Information Act requests with the Fed, which delays for months and then , as on money laundering at BB&T, produces one page, then the FDIC a mere three. There is no accountability - yet.

August 5, 2019

Money Laundering Endgame At Truist Concealed As FDIC Gives Only 3 Pages To Inner City Press

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.

  Yet at the July 24 House hearing about the merger, "U.S. Rep. Bill Huizenga, R-Mich., said the banks’ domestic focus and lack of international banking exposure gives him confidence that a combined Truist would meet its socio-economic obligations within its territory." What about the dubious record on money laundering, and too convenient termination of enforcement in order to approve the merger, then withholding of all documents?

July 29, 2019

  Drum beat: "The agencies are requesting additional specific information in the next resolution plans from seven firms: HSBC Holdings plc; BNP Paribas; Royal Bank of Canada; Banco Bilbao Vizcaya Argentaria, S.A.; Bank of Montreal; Banco Santander, S.A.; and Toronto-Dominion Bank.  The agencies extended the filing deadline for the 82 foreign banks and 15 domestic banks until July 1, 2021. This extension will mitigate uncertainty around the banks' filing requirements while the agencies' April proposal to revise the resolution plan rule remains pending.  Finally, the agencies extended the next full resolution plan submission date for four other foreign banks—Barclays PLC, Credit Suisse, Deutsche Bank AG, and UBS AG—to July 1, 2021. These banks remain required to submit limited plans by July 1, 2020, describing how they have addressed the shortcomings identified in December 2018 and providing updates concerning certain resolution projects." We'll have more on this.

July 22, 2019

On Money Laundering After Federal Reserve Withheld 133 Pages On Truist Inner City Press Appeal Gets 1 More Page

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.

  The one page is not even from the Federal Reserve: it is from the North Carolina regulator. Now on July 18 after Inner City Press' appeal the Fed - not even a Governor, as in the past, but Secretary Ann E. Misback, has upheld the failure to provide information, expect for one additional page, an approval letter to BB&T's Board of Directors. Secretary Misback writes: "Dear Mr. Lee:  This is in response to your email message dated May 3, 2019, and received by the Board's Information Disclosure Section on May 6, in which you appeal, pursuant to 12 C.F .R. § 26 l. l 3(i), the decision of the Deputy Secretary of the Board ("Deputy Secretary") to deny your request for information under the Freedom oflnformation Act ("FOIA"), 5 U.S.C. § 552.  Background  By email message dated and received by the Board's Information Disclosure Section on April 29, 2019, you requested records regarding "the 18 April 2019 termination of the money laundering [ enforcement] action against BB&T."  By letter dated May 2, 2019, the Deputy Secretary infonned you that staff searched Board records and located information responsive to your request. The Deputy Secretary advised that the majority of the responsive records consist of internal and inter-agency pre-decisional deliberations and recommendations as well as confidential supervisory infonnation related to the supervision and examination of a Federal Reserve-regulated financial institution. The Deputy Secretary further advised that this information is exempt and would be withheld from you under the authority of exemptions 5 and 8 of the FOIA, 5 U.S.C. §§ 552(b)(5) and (b)(8), respectively. The Deputy Secretary explained that the records had been reviewed under the requirements of subsection (b) of the FOIA, 5 U.S.C. § 552(b), and all reasonably segregable nonexempt infonnation would be made available to you. The Deputy Secretary advised that approximately one" - page, and now only one more. Outrageous.

July 15, 2019

On the Federal Reserve web site on July 13, the furthest-out comment period was July 16. So there has not been a single merger or other application to the Fed for a month?

Provident Bancorp Inc., Amesbury, Massachusetts;    to become a bank holding company by acquiring 100 percent of the voting shares of Provident Bank, also of Amesbury, Massachusetts, upon the conversion of Provident Bancorp from mutual to stock form.    3    Boston    07/16/2019 First Merchants Corporation, Muncie, Indiana;    to merge with MBT Financial Corp. and thereby indirectly acquire Monroe Bank & Trust, both of Monroe, Michigan.    3    Chicago    07/15/2019 First State Bancshares, Inc., New London, Wisconsin;    to merge with Pioneer Bancorp, Inc. and indirectly acquire Pioneer Bank, both of Auburndale, Wisconsin.    3    Chicago    07/15/2019

July 8, 2019

To Federal Reserve Cadence Bank Redacted 80% of Letter About FIS Leverage Now Inner City Press Gets

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.

  Now after delaying for six months, effectively covering up for these two banks, the Federal Reserve on 5 July 2019 emailed Inner City Press the unredacted letter. It said: "Delaying action on the Application such that Cadence and SBFC could not consummate the holding company merger and related bank merger by year-end would result in significant financial costs and other substantial hardships. All of the additional costs and hardships incurred by Cadence and SBFC from having to operate two separate banks for a longer period would materially reduce the value of the proposed transaction. In particular, a delay in closing the proposed transaction beyond year-end 2018 would seriously jeopardize the timing of the systems conversion date, which is now scheduled for February 15, 2019. This date was chosen to provide an optimum three-day weekend to facilitate a smooth conversion. Cadence and SBFC already have a tight schedule of pre-conversion testing, employee training and related events to help ensure a smooth conversion. Various testing aspects cannot be fully conducted until after the proposed transaction closes, so a delay in closing would unreasonably compress the pre-conversion schedule and significantly threaten a successful conversion. Having to reschedule the conversion date would likely postpone the systems conversion date by several months due to the near term unavailability of Fidelity Information Services, LLC (“FIS”), resulting in higher conversion costs, additional consulting fees, payroll and operational expenses. The delay also would materially impact Cadence’s negotiations with FIS for a new Information Technology Services Agreement (“Agreement”), along with various addenda and related statements of work. Under the Agreement, Cadence receives multiple applications and professional services from FIS that are integral to Cadence’s operations, products and services. Cadence anticipates that successful negotiations with FIS for a new Agreement could result in significant savings to Cadence after the mergers and systems conversion. Cadence expects that a further delay in regulatory approval would significantly reduce its negotiating position with FIS and diminish the potential savings." Photo here. It's all about the Benjamins. We'll have more on this.

July 1, 2019

On Bangladesh Bank Heist US Federal Reserve Provides Only 1 Page Under FOIA Amid SDNY Case

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.   

We requested and request: 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.  and, for the record, from Inner City Press' May 21 submission: " 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."    Inner City Press is hereby appealing from the withholding, demanding that all segregable information be provided, immediately." Watch this site.

June 24, 2019

Four days after Inner City Press submitted its FOIA comment to the Fed, they robo-acknowledged it:

"Thank you for commenting on the Board's recent proposal. Your views will be helpful to the Board in its consideration of this matter    Office of the Secretary  Board of Governors of the Federal Reserve System "

June 17, 2019

Federal Reserve Proposes Weakening Its Duties Under FOIA As Withholds Docs on Mergers and Bangladesh Bank

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"

No response at all three weeks later from the FRB.

June 10, 2019

Barclays Withdraws Cayman Islands Bid For Federal Reserve Approval Inner City Press Opposed and Reports

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%.

June 3, 2019

Bangladesh Bank Heist Case Hits Jurisdiction and Forum Questions In SDNY As Briefs Due June 14

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...

May 27, 2019

The Fed terminates enforcement actions so that banks can do mergers, like BB&T and now this:

May 23, 2019  Federal Reserve Board announces termination of enforcement actions For release at 11:00 a.m. EDT  Share The Federal Reserve Board on Thursday announced the termination of the enforcement actions listed below:  Fulton Financial Corporation, Lancaster, Pennsylvania, and Lafayette Ambassador Bank, Bethlehem, Pennsylvania Cease and Desist Order, dated September 4, 2014 (PDF) Terminated May 20, 2019  United Bank Limited, Karachi, Pakistan and United Bank Limited, New York Branch, New York, New York Written Agreement, dated July 2, 2018 (PDF) Terminated May 20, 2019

But the Fed refuses, even when FOIA-ed, to say why...

May 20, 2019

Last week Governor Quarles told the Senate Banking Committee about the two public meeting - he called them hearings, which they were not - the Fed has held on BB&T / Suntrust. But the banks have not even responded to written comments, much less on BB&T AML violations. Watch this site.

May 13, 2019

How cozy is the Fed with its former senior lawyers? This week Inner City Press belatedly received a partial FOIA response to a request from last year about Cadence Bank - and Pat Robinson of Wachtel Lipton asked Alison Thro to meet about the merger and the response, including location, is redacted as "private."...We'll have more on this.

May 6, 2019

As Federal Reserve Rubber Stamps Mergers Covering For BB&T At Least No More Moore

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.

  On April 22, Herman Cain was out of the running. Opposition to Cain's nomination grew include four Republican Senators: Sens. Kevin Cramer of North Dakota, Lisa Murkowski of Alaska, Mitt Romney of Utah, and according to many, Cory Gardner of Colorado.  Now on April 22 Trump said Monday that he would not nominate Herman Cain to the Federal Reserve after the former GOP presidential candidate asked him not to.  Senate Republicans had warned the White House against naming the businessman and 2012 presidential hopeful to serve on the body's board of governors.   "My friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board," Trump tweeted. "I will respect his wishes. Herman is a great American who truly loves our Country!"  But it is still important to note that the Fed's own fraud in its Reserve Bank directors has been highlighted by Cain's nomination: from 1992 to 1996, Cain served as a director of the Federal Reserve Bank of Kansas City. Why? The Fed can be a fraud, as it is proving on FOIA.

April 29, 2019

While Sumitomo stands accused of discrimination and retaliation in the SDNY, the FRBNY a few blocks south settles on the cheap: "WHEREAS, on April 23, 2019, the board of directors of the Bank, at a duly constituted meeting, adopted a resolution authorizing and directing Mr. Masahiko Oshima and Mr. Nobuyuki Kawabata to enter into this Written Agreement (the “Agreement”) on behalf of the Bank and the Branch, respectively, and consenting to compliance with each and every provision of this Agreement by the Bank and the Branch. NOW, THEREFORE, the Reserve Bank, the Bank, and the Branch hereby agree as follows: Corporate Governance and Management Oversight 1. Within 60 days of this Agreement, the Bank’s board of directors and the Branch’s management shall jointly submit a written plan to enhance oversight, by the management of the Bank and Branch, of the Branch’s compliance with the BSA/AML Requirements and the OFAC Regulations acceptable to the Reserve Bank." Inner City Press will have more on this.

April 22, 2019

As BB&T Tries Taking Over Suntrust Fed Lifts Enforcement Action But Named in SDNY Inner City Press Will Raise

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.


 this: "The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on Thursday announced that they will jointly hold two public meetings on the proposed merger of