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June 29, 2020

From the Fed, after a long day, this: "Staff searched Board records and located the letter dated April 24 that is responsive to the first part of your request. I have determined, however, that the redacted portions of the letter contain confidential commercial and financial information (e.g., pro forma financials; projected asset quality and capital ratios; and business plans and strategies). This information is subject to withholding and will be withheld from you pursuant to exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4). I have also determined that the information should be withheld because it is reasonably foreseeable that disclosure would harm an interest protected by an exemption described in subsection (b) of the FOIA, 5 U.S.C. § 552(b). The responsive document has been reviewed under the requirements of subsection (b) and all reasonably segregable nonexempt information will be provided to you. The document being provided to you will indicate the amount of information that has been withheld and the applicable exemption." All information about the impact o COVID-19 redacted. UNacceptable.

June 22, 2020

Varo Dodges on CRA and Covid Outage When Challenged on Federal Reserve Application For Banking

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

South Bronx, June 15 –  With fintechs pushing to get into banking, through now ex-Comptroller Joseph Otting who after trashing the Community Reinvestment Act left and immediately joined fintech Black Knight, and through the PPP, on June 10 Fair Finance Watch with Inner City Press on FOIA submitted timely comments to the Federal Reserve opposing Varo's application, pointing for example at Varo's service interruption in October 2019, including declined debit card transactions, which they tried to blame on their processor Galileo. See here. 

  Now on June 15 Varo's CEO Colin Walsh, as submitted by outside counsel Mitchell S. Eitel at Sullivan & Cromwell has passed the buck again on its service disruption, and sought to hide behind the OCC of Otting and Brooks, which has no credibility: "Varo Money, Inc. (“Varo”) hereby responds to the comment letter submitted by Mr. Matthew Lee of Inner City Press/Fair Finance Watch (the “Commenter”) on June 10, 2020... We strongly disagree with the Commenter’s suggestion that Varo itself was the cause of a “service interruption in October 2019, which [Varo] tried to blame on [Varo’s] processor Galileo.” On October 16, 2019, Galileo Processing experienced an impact to their systems, and it was reported that the customers of Chime, another Galileo client principally discussed in the article cited by the Commenter, were prevented “from making purchases and accessing cash"... we note that as it transitions to a bank, Varo Bank will use Visa DPS, not Galileo, as its processor after a brief transition period.... Varo has filed its Strategic Plan with the Office of the Comptroller of the Currency and believes that it will be approved in the near future. Varo respectfully submits that the OCC process is the ap- propriate forum for his comments.   Finally, with respect to the Commenter’s request that “all comment periods” for applications before the Federal Reserve be extended until “at least Phase Two of the Coronavirus restrictions in New York”, Section 262.25(b)(2) of the Federal Reserve’s Rules of Procedure state that the Secretary of the Federal Re- serve may grant a brief extension of the comment period in cases where a commenter for good cause is una- ble to send its comment within the specified comment period upon “clear demonstration of hardship or other meritorious reason for seeking additional time” to comment. In general and as it relates to Varo’s Application, we believe that the Commenter’s request is overly broad and that there is no basis to extend the com- ment period. The Comment Letter vaguely references the “COVID-19 pandemic” and “Coronavirus restrictions” without providing any clear or definite demonstration as to how such pandemic or restrictions have interfered with the Commenter’s ability to meet the specified comment period or given rise to any hardship to Commenter or other meritorious reason to extend the comment period, or how the arbitrarily chosen “Phase Two” of such restrictions would alleviate any such unsubstantiated causes for delay. To the contrary, by virtue of the scope and content of the Comment Letter itself, the Commenter has clearly demonstrated his ability to comment within the specified comment period."

June 15, 2020

Varo Challenged on Federal Reserve Application For Banking After Service Outage and CRA Dodge

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

SDNY / South Bronx, June 10 –  With fintechs pushing to get into banking, through now ex-Comptroller Joseph Otting who after trashing the Community Reinvestment Act left and immediately joined fintech Black Knight, and through the PPP, on June 10 Fair Finance Watch with Inner City Press on FOIA submitted timely comments to the Federal Reserve opposing Varo's application, pointing for example at Varo's service interruption in October 2019, including declined debit card transactions, which they tried to blame on their processor Galileo. See here. 

        Fair Finance Watch has timely asked the Federal Reserve for a hearing on weakened CRA duties, and disproportionate exclusion: low and moderate consumers disproportionately have prepaid or limited data plans and face disconnections of their mobile service. And just because consumers have email addresses does not mean that they have regular internet access, and if they close or move their accounts, they may lose access to their financial records.    

Despite or perhaps because of these and the service interruptions, using OCC deregulation, "Varo Money has raised an additional $241 million in Series D funding, the company announced today. The investment was co-led by new investor Gallatin Point Capital and existing investor The Rise Fund, co-founded by TPG. Also participating in the round were Bono (yes, that one, also trying to get Ireland onto the UN Security Council in a June 17 virtual election), along with entrepreneur, impact investor and movie producer Jeff Skoll; plus HarbourVest Partners and Progressive Insurance.  To date, Varo has raised $419.4 million in funding."      

See also, for the record on which Inner City Press / Fair Finance Watch are timely requesting evidentiary hearings on this application, " NEWS Technology Finance  Unregulated Fintech Could be the Source of the Next Market Crash Posted to TechnologyFinance."   

     At to the Fed itself, currently the FRB's H2A states "The H.2A is released each Friday and will be updated at least every three days.  June 8, 2020 - Updates to current release May 29, 2020 - Current release."

June 8 and May 29 are more than three - more than ten - days apart.  As previously raised to the Board, without any response, as of December 28, 2019 the most recent application on the FRB's online H2A had a comment period ending December 20 - that is, already closed.

June 8, 2020

Federal Reserve Amid Covid Lets Banco Bradesco Go Secret On Travel Ban As Fair Finance Watch Says No

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, June 7 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

 Now amid the Coronavirus pandemic, it continues to appear that the Federal Reserve is churning forward to try to rubber stamp a bank merger. On April 7 the Fed asked Banco Bradesco's New York law firm to supplement the record with how it is dealing with current economic situation. On April 24 the bank's law firm Shearman & Sterling sent an answer to the Fed - with the entire Covid section, as sent as required to Fair Finance Watch and Inner City Press, entirely redacted. Inner City Press FOIA-ed that, then was asked to narrow the request.

 So S&S submitted another filing, with even the name of the exhibits redacted. As of June 7, the Fed has simply extended its time to reply.

  Next the Fed telephoned Bradesco to ask about the impact of the US travel ban on Brazil on the proposed transaction and integration. The question was not conveyed to Inner City Press until Bradesco's entirely redacted answer. This is Orwellian. Inner City Press has written to the Fed: "This is a FOIA request for the all withheld portions of the additional information submitted by Banco Bradesco on or about May 29, 2020 as part of its challenged but still being processed amid the COVID-19 pandemic to aquire BAC including but not limited to the redaction of the entire answer to the Fed's telephonic question (not otherwise provided to ICP) about the effect of the travel ban on Brazil on the proposed transaction. This follows up on our previous and still outstanding FOIA request which we voluntarily narrowed on April 30 in response to the inquiry by Katrina Allen-Austin of the Legal Division dated the same date and the FOIA after that. Note: processing of this application should be suspended until COVID-19 restrictions, which continue in New York after June 8, are lifted." Watch this site.

June 1, 2020

What is the Fed going to do about this?

LIBOR Case Against JPMorgan and Bank of America Settled As SDNY Judge Buchwald Signs Off

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, May 26 – In a multi-district antitrust case about LIBOR dating back to 2011, on May 26 U.S. District Court for the Southern District Judge Naomi Reice Buchwald held a short proceeding, covered by Inner City Press, then signed off on a settlement ending the case: "FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE, GRANTING FINAL APPROVAL OF SETTLEMENT BETWEEN LENDER PLAINTIFFS, JPMORGAM CHASE & CO. AND JPMORGAN CHASE BANK, N.A. ("JPMORGAN") AND BANK OF AMERICA CORPORATION AND BANK OF AMERICA, N.A. ( "BOA") AND UBS AG ("UBS"): NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT: Unless indicated otherwise, capitalized terms used herein have the same meanings defined in each of the Agreements. For purposes of finally approving the Settlements, the Court has jurisdiction over the subject matter of the Lender Action, Lender Plaintiffs, all Lender Class Members, and, solely for purposes of effectuating the Settlements and subject to the limitations contained in the Agreements, the Settling Defendants.

Lender Plaintiffs' Counsel are awarded attorneys' fees in the amount of $1,120.000 plus interest at the same rate as earned by the Settlement Funds, and expenses in the amount of $11,688.47 plus interest at the same rate as earned by the Settlement Funds, if such amounts are not paid from out of the Settlement Funds within five (5) business days following the entry of this Final Judgment and Order of Dismissal with Prejudice. Plaintiff The Government Development Bank for Puerto Rico is awarded the sum of $ 15,000 plus interest at the same rate as earned by the Settlement Funds, as reasonable costs and expenses and as a service award directly relating to the representation of the Lender Class. 

All agreements made and orders entered during the course of this Lender Actionrelating to the confidentiality of information shall survive the Settlements and be binding on the Parties, including but not limited to the Stipulation and Protective Order entered on March 21, 2016 (ECF No. 1347). And as set forth herein., Bank of America Corporation, Bank of America Corporation, Bank of America N.A., Bank of America, N.A., J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., JPMorgan Chase & Co., JPMorgan Chase Bank National Association, JPMorgan Chase Bank, National Association, JPMorgan Chase Bank, National Association, UBS AG, UBS AG, UBS AG, UBS AG, Bank Of America Corporation and Bank of America Corp. terminated. (Signed by Judge Naomi Reice Buchwald on 5/26/2020) (ama) (Entered: 05/26/2020)."

May 25, 2020

  Now the Fed takes 12 days to acknowledge an emailed FOIA request, while preparing to rubber stamp the underlying bank merger application - UNacceptable. From May 22: "May 22, 2020   FOIA Request No. F-2020-00214   Dear Mr. Lee:     This will acknowledge receipt of your correspondence dated May 10, 2020 and received by the Board’s Information Disclosure Section on May 11, 2020, in which you request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, “all withheld portions of the additional information submitted by Banco Bradesco on or about May 6, 2020.”     The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation." Really?
May 18, 2020

As US Bank Regulators Suspend Non Critical Exams Or Go 95% Off-Site New Project on Abuses

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

UN GATE / SDNY COURT, May 11 –     Amid the COVID-19 pandemic, fair lending and Community Reinvestment Act are taking a back seat, or worse.

While U.S. Comptroller of the Currency Joseph Otting is pushing forward with his proposal to weaken the CRA, his new chief national bank examiner Blake Paulson said bank examinations have gone 95% off-site.

  The Federal Reserve says it is suspending "non-critical" examinations, even at the largest institutions.

Meanwhile the Fed is pushing forward to approve bank merger applications, like Banco Bradesco - BAC which Fair Finance Watch has been opposing, as it has commented to the OCC against the acquisition of State Farm's health savings account business by Webster Bank, based in part of Webster's problematic Paycheck Protection Program performance.

   Fintechs and other non-bank financial firms are now at the PPP trough and are getting sued. For example, there is the lawsuit filed as a class action against Fountainhead Commercial Capital LLC on May 6, noting the finance firm advertised that it would process loan requests on a first-come, first-served basis and then stealthly shuffled its line of PPP applicants so that it would lock down the largest lending fees first.

     Meanwhile Paulson of the OCC, which wants to admit fintechs into banking without regulation, says no one is in PPP for the money. This while in response to Inner City Press' FOIA request for Otting's schedule the OCC redacted the names of banks that he met without, and obscured others. (A FOIA appeal has been filed.)

May 11, 2020

Federal Reserve Amid Covid Lets Banco Bradesco Redact Exhibit Names As Fair Finance Watch Says No

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, May 10 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

 Now amid the Coronavirus pandemic, it continues to appear that the Federal Reserve is churning forward to try to rubber stamp a bank merger. On April 7 the Fed asked Banco Bradesco's New York law firm to supplement the record with how it is dealing with current economic situation. On April 24 the bank's law firm Shearman & Sterling sent an answer to the Fed - with the entire Covid section, as sent as required to Fair Finance Watch and Inner City Press, entirely redacted. Inner City Press FOIA-ed that, then was asked to narrow the request.

 So S&S submitted another filing, with even the name of the exhibits redacted.

May 4, 2020

EDNY Probe of FIFA Makes Bank Hapoalim Pay $30M For Money Laundering, More to Fed

By Matthew Russell Lee, Patreon, Thread Video
Honduras - The Source - The Root - etc

SDNY COURTHOUSE, April 30 -- From the U.S. District Court for the Eastern District of New York, this: "Bank Hapoalim B.M. (“BHBM”), an Israeli bank with international operations, and its wholly owned subsidiary, Hapoalim (Switzerland) Ltd. (“BHS”), have agreed to forfeit $20,733,322 and pay a fine of $9,329,995 to resolve an investigation into their involvement in a money laundering conspiracy that fueled an international soccer bribery scheme."

From DC: "Federal Reserve Board announces it has fined Bank Hapoalim B.M. $37.35 million for the firm’s unsafe and unsound practices resulting in violations of U.S. tax laws."

More EDNY: "Specifically, BHBM and BHS have admitted that they, through certain of their employees, conspired to launder over $20 million in bribes and kickbacks to soccer officials with Fédération Internationale de Football Association (“FIFA”) and other soccer federations."

 EDNY prosecutors' FIFA cases include 26 publicly announced individual guilty pleas (including Blazer, Rocha, Hawilla, Callejas all 4 are deceased).  Several defendants who pleaded guilty were sentenced, including Takkas, Hector Trujillo, Li, Jimenez, Salguero, Pletsch.  They have completed their sentences (except for supervised release and financial components).  Others who pleaded guilty are awaiting sentencing - 2 individual defendants (Napout and Marin) convicted at trial. They have been sentenced.  Napout is in prison.  Marin was granted compassionate release last week and is in Brazil - 4 corporate guilty pleas (two Traffic entities, Mimo, US Imagina LLC) - 1 corporate Deferred Prosecution Agreement - 2 corporate Non Prosecution Agreement."

  Regarding those cases with particular regard to Honduras (which saw another indictment on April 30 across the East River in the SDNY, here), The death of FIFA scandal plagued former Honduras president Rafael Callejas was confirmed by current drug scandal plagued president Juan Orlando Hernandez on April 5; AP reported that "Callejas, 76, pleaded guilty in 2016 and was reportedly being held at a prison in Atlanta when he died."

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS-CI), made the announcement. “Today’s resolution marks another successful chapter in this District’s effort to hold accountable those corporations and individuals who participated in a bribery scheme that corrupted international soccer,” stated United States Attorney Donoghue. “This Office, along with our law enforcement partners, will continue to identify wrongdoers who manipulate international soccer in order to reap illicit profits and bring them to justice.” “For nearly five years, Bank Hapoalim employees used the U.S. financial system to launder tens of millions of dollars in bribe payments to corrupt soccer officials in multiple countries,” stated AAG Benczkowski. “Today’s announcement demonstrates the Department’s commitment to holding financial institutions to account when they knowingly facilitate corruption and other criminal conduct.”  2  “This announcement illustrates another aspect in the spider web of bribery, corruption and backroom deals going on behind the scenes as soccer games were played on the field. Bank Hapoalim admits executives looked the other way, and allowed illicit activity to continue even when employees discovered the scheme and reported it. The New York FBI Eurasian Organized Crime Task Force and our law enforcement partners have doggedly pursued every strand uncovered in this criminal investigation, and  will keep at it until they root out all of the bad actors,” stated FBI Assistant Director-in- Charge Sweeney.  “This forfeiture sends a clear message that no matter how complex or far reaching the conspiracy, justice will prevail. Bank Hapoalim B.M. and its subsidiary, Hapoalim Ltd., participated in a conspiracy that corrupted international soccer, its confederations, and member associations,” stated IRS-CI Special Agent-in-Charge Korner. “IRS-CI is proud to work alongside our international law enforcement partners, the FBI, and the United States Attorney’s Office to bring closure to this egregious international scandal that corrupted the sport of soccer.”  According to admissions in the statement of facts stipulated to by BHBM and BHS as part of the agreement, from approximately December 10, 2010 to February 20, 2015, BHBM and BHS personnel conspired with sports marketing executives, including executives associated with Full Play Group S.A. (“Full Play”), a sports media and marketing business based in Argentina, and others, to launder at least $20,733,322 in bribes and kickbacks to soccer officials. In exchange for those bribes and kickbacks, the soccer officials awarded or steered broadcasting rights for soccer matches and tournaments to the sports marketing executives and their companies. Full Play allegedly executed the illegal payments from accounts held at BHS and BHBM’s branch in Miami, Florida, which were held in the names of Full Play subsidiaries and affiliates. BHBM and BHS admitted they, through BHS and BHBM’s Miami branch, conspired to launder money for Luis Bedoya, who at various times served as the president of the Federación Colombiana de Futbol, a vice president of the Confederación Sudamericana de Fútbol (CONMEBOL), and a member of FIFA’s executive committee. BHBM and BHS allowed accounts controlled by Bedoya to be used to receive illicit bribe and kickback payments. In November 2015, Bedoya pleaded guilty to racketeering conspiracy and wire fraud conspiracy in the Eastern District of New York. He is awaiting sentencing.  Despite BHS compliance personnel repeatedly raising concerns about certain payments made to soccer officials from the accounts associated with Full Play, BHBM and BHS failed to take action. Instead, the banks’ relationship managers continued executing illicit bribe and kickback payments on behalf of Full Play. As outlined in the agreement, the government’s decision to enter into a three-year, non-prosecution agreement with BHBM and BHS was premised upon the banks’ thorough and complete cooperation, BHBM’s pledge to review and improve its  3  anti-money laundering program, and the banks’ other substantial remedial efforts, which include closing Bank Hapoalim (Latin America) S.A. and BHBM’s branch in Miami. BHS is also in the process of closing its operations." Inner City Press will follow these cases as much as possible.

  As to previously SDNY target on FIFA Rafael Callejo there was only one problem with that. Even a cursory search of the U.S. Bureau of Prisons website for Rafael Callejas finds one, 76,  Register Number: 81120-053, released from U.S. custody on 12/17/2015.

April 27, 2020

Federal Reserve Amid Covid 19 Letting Banco Bradesco Redact All on Virus Fair Finance Watch Says No

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, April 25 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

 Now amid the Coronavirus pandemic, it still appears that the Federal Reserve is churning forward to try to rubber stamp a bank merger. On April 7 the Fed asked Banco Bradesco's New York law firm to supplement the record with how it is dealing with current economic situation. On April 24 the bank's law firm Shearman & Sterling sent an answer to the Fed - with the entire Covid section, as sent as required to Fair Finance Watch and Inner City Press, entirely redacted.

  Inner City Press has written to the Fed: "This is a FOIA request for the all withheld portions of the applications and applications additional information submitted by Banco Bradesco to aquire BAC including but not limited to the redacted portions of the April 24 submission, required to be sent to Fair Finance Watch and Inner City Press under the ex parte rules, which redacted the ENTIRE RESPONSE as to the impact of the Coronavirus economic downturn on the banks and merger. This is unacceptable."

April 20, 2020

  Let the conflicts of interest begin, while many small businesses are excluded by the big banks getting the PPP cash (and leaving their ATMs empty) - "The Federal Reserve Board on Friday announced a rule change to bolster the effectiveness of the Small Business Administration's (SBA) Paycheck Protection Program (PPP). The change will temporarily modify the Board's rules so that certain bank directors and shareholders can apply for PPP loans for their small businesses.  To prevent favoritism, Board rules limit the types and quantity of loans that bank directors, shareholders, officers, and businesses owned by these persons can receive from their related banks. These requirements have prevented some small business owners from accessing PPP loans—especially in rural areas.  The SBA recently clarified that PPP lenders can make PPP loans to businesses owned by their directors and certain shareholders, subject to certain limits and without favoritism. The Board's change will allow those individuals to apply for PPP loans... The rule change is effective immediately and will be in place while the PPP is active. Comments will be accepted for 45 days after publication in the Federal Register."
April 13, 2020