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February 15, 2016

After ICP's Protest of NYCB - Astoria Bank, Fed Asks Qs Due Feb 26

By Matthew R. Lee

NEW YORK, February 13 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 After Inner City Press / Fair Finance Watch filed a timely protest, the Federal Reserve on January 8 asked NYCB 14 questions. Inner City Press has put the Additional Information letter online here, including a request to know which branches NYCB would close, how it would try to sell of Astoria's loans, etc. Inner City Press said, there should now be more fair lending questions, and the comment period should be extended.

 On January 21, the Federal Reserve has informed Inner City Press / Fair Finance Watch that the Fed is re-opening and extending its comment period on NYCB - Astoria until February 16.

 But on February 12, the Federal Reserve asked NYCB a series of questions, due February 26, telling NYCB to send a copy of its response then to Inner City Press. How can the comment period close ten days before that? On February 13 Inner City Press commented to the Fed in New York and Washington:

"This is a second timely comment opposing and requesting a further extension of the FRB's public comment period on the Application by New York Community Bancorp (“NYCB) to acquire 100% of the voting shares of Astoria Financial Corp and indirectly acquire Astoria Bank.

ICP commented on this application on January 6. On February 12, the Fed asked NYCB questions including

“Please describe in further detail NYCB’s business model with respect to mortgage loans secured by one-to-four family residential properties. In your description, discuss the channels NYCB uses to originate or acquire such loans, and describe the key elements of NYCB’s policies, procedures, and practices to ensure compliance with fair lending and consumer protection laws as they relate to such lending. Where such policies, procedures, and practices differ by channel, explain the key differences. Your response should discuss NYCB’s third party vendor management program, to the extent NYCB relies on third parties to originate or acquire such loans.”

ICP has commented on those issues and wishes to comment on NYCB's response, due on February 26. The comment period should be extended.

Furthermore on February 2 NYCB in an investors' presentation (here) bragged about how many of Astoria's branches are within one mile of an NYCB branch (52%). Clearly, the issue of which branches NYCB should be address before the comment period closed, including at the public meeting ICP is requesting.

Note for the record how NYCB's (and Astoria's) branching pattern disproportionately excludes Upper Manhattan and especially The Bronx, the most predominantly minority and the lowest income community in New York State. This map is incorporated into the record by reference. Action should be taken on this pattern, including on this merger application (which should be denied.)"

February 8, 2016

Just another Friday: “The Federal Reserve Board on [Feb 5] announced a $131 million penalty against HSBC North America Holdings, Inc. and HSBC Finance Corporation for deficiencies in residential mortgage loan servicing and foreclosure processing.”

February 1, 2016

Now, based on Inner City Press' comments, the Fed has asked:

This letter refers to the application filed by Republic Bancorp, Inc. (“Republic”), Louisville, Kentucky, to merge with Cornerstone Bancorp, Inc., and thereby indirectly acquire its subsidiary bank, Cornerstone Community Bank, both of St. Petersburg, Florida, pursuant to section 3 of the Bank Holding Company Act of 1956 (“BHC Act”), as amended. Based on staff’s review of the current record, the following information is requested. Supporting documentation, as appropriate, should be provided.

1. In a comment letter dated December 3, 2015, Matthew Lee of Inner City Press/Fair Finance Watch alleges that Republic Bank & Trust Company engaged in low levels of lending to African Americans and Latinos in the Louisville market in 2014 compared to its lending to whites. Specifically, Mr. Lee alleges that Republic Bank & Trust Company made 651 home purchase loans to whites, 22 to African Americans and 13 to Latinos, 215 refinance loans to whites and 10 to African Americans, and 129 home improvement loans to whites and one to an African American. Please provide information that is responsive to these allegations.

2. In responding to Mr. Lee’s allegations regarding disparate denial rates between white and African American loan applicants in the Louisville market, Republic represented in its January 14, 2016 letter to the Federal Reserve (“Republic Letter”) that “[t]he applicants fairly represented the population and presented a myriad of individual application characteristics that were significant hurdles in the credit process.” Please clarify the meaning of Republic’s representation that “the applicants fairly represented the population.”

January 25, 2016

Goldman Sachs Blacks Out Most of Its Jan 18 Fed Submission, ICP FOIAs

By Matthew R. Lee

NEW YORK, January 22 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 Goldman Sachs on January 14 withheld basic information from the response it was required to send to Inner City Press, see below.

 Absurdly, when on January 22 Goldman Sachs sent Inner City Press a copy of its January 18 answer to the Fed, it withheld whole pages and exhibits. Inner City Press has already FOIA-ed:

"the entirety of the January 18, 2016 submission in connection with the Application by Goldman Sachs with regard to GE Capital Bank  of which a heavily redacted copy was sent to Inner City Press on January 22, as a timely commenter, by Goldman Sachs.

  "Goldman Sachs' submission is largely blacked-out, with many exhibits withheld -- all of which we are hereby requesting under FOIA. Simply as examples:  Page 1 has some redactions, which we challenge, but page 2 is almost entirely redacted.  On Page 3, only twelve words are NOT redacted -- and three of those are 'Confidential Exhibit 2,' which ICP is requesting, along with all else.

  "Nearly all of “Notices and Disclosures” is redacted --- some disclosure -- as is “Policies” and “Procedures” -- Inner City Press is challenging these redactions and requesting the entire submission under FOIA."

  That has been submitted, and receipt confirmed.

January 18, 2016

Goldman Sachs Tries to Withhold GE's Deposits by State, ICP FOIAs Fed

By Matthew R. Lee

NEW YORK, January 14 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 Goldman Sachs on January 14 withheld basic information from the response it was required to send to Inner City Press and others. GE Capital Bank's deposits by state is presumptive public, but Goldman Sachs said:

"FRB Q: With respect to the retail online certificates of deposit and the retail online savings accounts to be assumed from GE Bank, a. provide the number of deposit customers and amount of deposits by state based on the address of the deposit customer...

Goldman Sachs Response: "A list of GE Bank’s retail deposit customers by state and U.S. territories as of January 7, 2016 is included as Confidential Exhibit A."

 This is not the names of any customer, but how much in insured deposits Goldman Sachs is seeking to acquire, by state: basic information. Inner City Press immediately submitted a FOIA request.

Earlier on January 14, the Federal Reserve asked one more question, referring to a Confidential Exhibit, below -- while belatedly releasing in response to Inner City Press' December 2 Freedom of Information Act request a heavily reacted submission, still withholding even its own Questions 6 and 7.

This is today's Fed; this is today's Fed question to Goldman:

"Below is an additional information request in connection with the application filed by Goldman Sachs Bank USA, New York, New York, for prior approval of the Board of Governors of the Federal Reserve System, to acquire by purchase and assumption certain deposit liabilities and certain non-financial assets of GE Capital Bank, Holladay, Utah, pursuant to Section 18(c) of the Federal Deposit Insurance Act.

"1.      Provide balance sheet and income statements for GS Bank as of December 31, 2015.  If unaudited statements are only available, then that is sufficient.  Otherwise provide statements as of September 30, 2015.  These statements should be provided on an actual and proforma basis, with adjustments and relevant explanatory footnotes.  In addition, provide actual and proforma regulatory capital ratios as of December 31, 2015, if available, otherwise, as of September 30, 2015.  This request updates Confidential Exhibit 2 of the Application dated August 19, 2015."

  More and more confidential, the Fed's -- and Goldman Sachs' -- processes more and more untransparent.

January 11, 2016

After ICP's Protest of NYCB - Astoria Bank, Fed Asks 14 Questions

By Matthew R. Lee

NEW YORK, January 8 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the middle, seeking to become a Systemically Important Financial Institution like New York Community Bancorp is, applying to buy Astoria Bank.

 Now, after Inner City Press / Fair Finance Watch filed a timely protest, the Federal Reserve has asked NYCB 14 questions. Inner City Press has put the Additional Information letter online here, including a request to know which branches NYCB would close, how it would try to sell of Astoria's loans, etc. There should now be more fair lending questions.

 NYCB's home mortgage lending is extremely disparate; its multi-family lending, some to slumlords, is no defense.

Meanwhile Goldman Sachs is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period. But now the Fed has given itself an extension to respond to Inner City Press' December 3 FOIA request for Goldman Sachs' withheld December 2 submission, writing this to Inner City Press:
"Re: Freedom of Information Act Request No. F-2016-0056
 
Dear Mr. Lee,
 
On December 3, 2015, the Board of Governors (“Board”) received your electronic message dated December 2, 2015, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entirety of the December 2 submission in connection with the “Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank.”
 
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until January 19, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before January 19, 2016, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law."

January 4, 2016

Inner City Press / Fair Finance Watch has commented to the Federal Reserve, on Republic Bank, quoting the WSJ: "“Washington-based Fenway Summer LLC, in January reached a deal with Louisville, Ky.-based Republic Bancorp Inc. to offer a credit card that is being pitched as a more affordable alternative to payday loans, which are short-term loans that often charge triple-digit interest rates. The Build Card, which is being rolled out later this year, will charge an annualized interest rate of 25% to 30% and will cap borrowers’ initial credit lines at $500.”

Thirty percent interest? In New York, that's called usury.

But Republic has told the Federal Reserve that it's just "adequately priced for risk." We'll have more on this.

December 28, 2015

Federal Reserve Asked BNC for CRA Info, Which Withholds It, Ozarks Inquiry

By Matthew R. Lee

NEW YORK, December 21 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example.

  A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, prospectively, High Point Bank & Trust.

  There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. But after Fair Finance Watch protested the deal, and the Fed told BNC to send it a copy of the bank's response, the response was provided six days later with with the entirety of the Community Reinvestment Act response withheld. See here.

Inner City Press has immediately filed a Freedom of Information Act request, and a second comment with the Fed.

 Separately, Inner City Press / Fair Finance Watch has filed the second of two comments to the St Louis Fed:

"This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Bank of the Ozarks to acquire Community & Southern.

This proposed transaction raises troubling Community Reinvestment Act issues. Bank of the Ozarks has a disparate lending record, including in the Atlanta MSA where it proposes to acquire C&S (which itself just acquired branches from CertusBank while leaving behind others to be closed, evading any review).

In the Atlanta MSA in 2014 for home purchase loans, Bank of the Ozarks made 25 such loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

For refinance loans, it made 17 loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

There is more to be said, but this is outrageous, and in the MSA in which Bank of the Ozark proposes to make this acquisition.

In the Little Rock MSA in 2014 for home purchase loans, Bank of the Ozarks made 332 such loans to whites and only 13 to African Americans -- it denied the applications of African Americans 4.3 times more frequently than those of whites.

This is outrageous, and systematic. Bank of the Ozarks has also had consumer compliance issues."

On BNC, Fair Finance Watch has raised to the Federal Reserve:

In the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites.

  Southcoast in the Charleston MSA in 2014 for conventional home purchase loans made 136 such loans to whites and NONE to African Americans. For refinance loans, Southcase made 35 loans to whites and only TWO to African Americans. To combine these two banks would make them worse.

  In the Greenville MSA in 2013 for home purchase loans, BNC made 117 such loans to whites and only SIX to African Americans, and only seven to Latinos.  For refinance loans, it made 31 loans to whites and only one to an African Americans and none to Latinos.

  BNC admits, as it must, that it is below-market in lending to African Americans, but paradoxically tries to use that the fact that it is subject to a compliance order as its defense to the Fed.

 To Fair Finance Watch, too. FFW asked to see, in writing, what are BNC's CRA plans going forward. BNC replied that it is "unable to share this with you. It is an internal document that is only shared with our Board of Directors and the FDIC (under the Order)."  FFW has requested a copy of the High Point application.

  Now the Federal Reserve has asked BNC for, among other things, for information about its Community Reinvestment Act compliance, and consumer compliance more generally. Inner City Press is putting the Fed's December 2 Additional Information letter online, here.

December 21, 2015

Inner City Press / Fair Finance Watch has filed the second of two comments to the St Louis Fed:

"This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Bank of the Ozarks to acquire Community & Southern.

This proposed transaction raises troubling Community Reinvestment Act issues. Bank of the Ozarks has a disparate lending record, including in the Atlanta MSA where it proposes to acquire C&S (which itself just acquired branches from CertusBank while leaving behind others to be closed, evading any review).

In the Atlanta MSA in 2014 for home purchase loans, Bank of the Ozarks made 25 such loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

For refinance loans, it made 17 loans to whites and NONE to African Americans -- it had a 100% denial rate for African Americans.

There is more to be said, but this is outrageous, and in the MSA in which Bank of the Ozark proposes to make this acquisition.

In the Little Rock MSA in 2014 for home purchase loans, Bank of the Ozarks made 332 such loans to whites and only 13 to African Americans -- it denied the applications of African Americans 4.3 times more frequently than those of whites.

This is outrageous, and systematic. Bank of the Ozarks has also had consumer compliance issues."

December 14, 2015

Inner City Press / Fair Finance Watch has filed a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Republic Bancorp, Inc. to acquire 100 percent of the voting shares of Cornerstone Bancorp

These transaction raises troubling Community Reinvestment Act issues. Republic has a disparate lending record and is growing worse. Significantly, after its rogue-like tax refund anticipation lending, now Republic is back with subprime cards. This should be reviewed, before this or any other acquisitions (see, e.g.http://www.bizjournals.com/tampabay/blog/morning-edition/2015/10/exclusive-republic-bancorp-eyes-1-operation-in.html) and ICP is requesting public evidentiary hearings on this. See, e.g., WSJ of Feb 18, 2015:

Washington-based Fenway Summer LLC, in January reached a deal with Louisville, Ky.-based Republic Bancorp Inc. to offer a credit card that is being pitched as a more affordable alternative to payday loans, which are short-term loans that often charge triple-digit interest rates. The Build Card, which is being rolled out later this year, will charge an annualized interest rate of 25% to 30% and will cap borrowers’ initial credit lines at $500.”

Thirty percent interest? In New York, that's called usury.

In the Louisville MSA in 2014 for home purchase loans, Republic made 651 such loans to whites and only 22 to African Americans, and only13 to Latinos. It denied the applications of African Americans 2.15 times more frequently than those of whites. For refinance loans, it made 215 loans to whites and only 10 to African Americans; for home improvement loans it made 129 loans to whites and only ONE to an African American, while denying 7 of 10 applications received from African Americans.

In Nashville in 2014, Republic made 13 home purchase loans to whites, NONE to African Americans or Latinos.

December 7, 2015

Inner City Press / Fair Finance Watch has commented to the Fed, "On October 22, Inner City Press / Fair Finance Watch belatedly received from the Fed SOME of the documents about this proposal as early as it could, on September 2. Dated December 3, and provided to Inner City Press on December 4, Governor Powell belatedly ruled on ICP's FOIA appeal - and while continuing to wrongfully (for ICP's perspective) withhold much information, acknowledged that basic information about what was to be acquired for wrongfully withheld. Accordingly, the comment period must be re-opened. We submit this at the earliest possible time and await confirmation that the comment period has been re-opened."

November 30, 2015

Inner City Press / Fair Finance Watch has commented to the Federal Reserve:

...The irregularities in this proceeding, including under FOIA, have been noted for example in http://www.americanbanker.com/news/law-regulation/fed-under-the-microscope-in-goldmans-deal-for-ge-deposits-1077968-1.html -- for which the Federal Reserve declined any comment. For the record:

"Fed Under the Microscope in Goldman's Deal for GE Deposits

November 23, 2015

WASHINGTON — The criticism by consumer advocates of Goldman Sachs' acquisition of GE Capital's online deposits has now given way to questions over how the Federal Reserve Board has handled the application... "They're kind of preapproving something before the public can learn anything about it," said Matthew Lee, founder of Inner City Press and Fair Finance Watch. "This is not the way it's supposed to be. It's just wrong. Wrong, wrong, wrong."

...The Fed declined to comment on the record and Goldman Sachs declined to comment beyond what it has said in public materials... The National Community Action Foundation — a Washington-based coalition of community groups — said in a Sept. 28 letter to the New York Fed that Goldman Sachs has "been a leader in helping develop effective and innovative programs to better our fight against poverty." The Carver Federal Savings Bank, which describes itself as "one of the largest African- and Caribbean-American managed banks in the United States," said in its Sept. 30 letter that it supports Goldman's application based on its investment in Carver and support in construction investment in its service area in Brooklyn.”

Note: ICP did not receive either of those submissions, nor it appears other parts of the record. These should be provided, and the comment period must be extended.

The rogue-like culture of Goldman Sachs has been further on display since ICP's last comment, see, e.g., https://www.sec.gov/news/pressrelease/2015-267.html

Washington D.C., Nov. 25, 2015 — The Securities and Exchange Commission today announced insider trading charges against a former Goldman Sachs employee accused of stealing nonpublic information in the firm’s e-mail system so he could trade illegally in advance of client mergers and make more than $450,000 in illicit profits.

November 23, 2015

Goldman Sachs Uses Small Bank Relief For Federal Reserve Pre-Review on GE

By Matthew R. Lee

NEW YORK, November 19 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example.

Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act show, is inappropriately bent on helping, including by closing its comment period.

 On November 19, Goldman Sachs submitted a purported reply to the Federal Reserve, stating among other things that "Certain Comment Letters express concern with the contact between GS Bank and Board staff prior to GS Bank submitting the Application. GS Bank respectfully submits that the contact was both appropriate and ordinary in the context of the Board’s own guidance on pre-filing communications.11 Additionally, the allegations of contact are not germane to the scope of the statutory factors set forth for Board consideration under the Bank Merger Act."

  The 2012 Fed letter Goldman Sachs cites was meant to benefit smaller banks - and did not envision Additional Information letters before the public was even notified of the proposal. The misuse of small bank "regulatory relief" by the likes of Goldman Sachs casts new light of legislative riders being considered for the US spending bill due December 11.

 Going forward, KeyCorp is trying to buy First Niagara, and NY Community Bank wants to buy Astoria; there will be opposition.

November 16, 2015

 The Fed has STILL not ruled on Inner City Press' October 24 FOIA appeal... And there are yet more adverse developments regarding Goldman Sachs:

Goldman Sachs faces investigation over auction of securities,” November 3, 2015, Bloomberg and Chicago Tribune: http://www.chicagotribune.com/news/sns-wp-blm-goldman-e45af72c-8242-11e5-8bd2-680fff868306-20151103-story.html

Goldman Sachs added the offering and auction of securities, as well as 'when-issued trading,' to a list of activities that regulators and other government bodies are investigating.The bank made the disclosure Tuesday in a quarterly regulatory filing, without specifying which agencies or regulators are probing the items on the list.”

See also, Nov 3, 2015, “Goldman Sachs settles CDO class action,”http://www.lexology.com/library/detail.aspx?g=d1e75f3f-239c-42d9-8eea-8f68c8a41152

On November 3, 2015, Goldman Sachs Group Inc. agreed to settle a lawsuit brought by a class of investors over Goldman’s sale of two collateralized debt obligations.”

November 9, 2015

  The Fed's said this: "The Federal Reserve Board on Thursday permanently barred Rohit Bansal, a former investment banker at Goldman Sachs & Co., from participating in the banking industry following his guilty plea for misdemeanor theft of confidential information from the Federal Reserve. Bansal agreed to enter into a consent order with the Federal Reserve Board barring him from the banking industry and requiring him to cooperate in the Board's ongoing investigation.

Bansal had obtained confidential information from Jason Gross, a former employee of the Federal Reserve Bank of New York. On Wednesday, Gross also pled guilty to misdemeanor theft of confidential information of the Federal Reserve. As part of Gross's plea agreement, Gross is barred from participating in the affairs of any insured depository institution."

  But no extension or hearing on Goldman Sachs - GE Capital?

November 2, 2015

On Goldman Sachs, ICP / FFW timely commented to the Fed: "The comment period must be extended. This is particularly the case given that even in the past week, Goldman Sachs entered yet another settlement agreement, this time concerning a former Federal Reserve employee giving them information."

October 26, 2015

FOIA Response to ICP Shows Goldman Met Fed in May on GE, Pre-Reviewed

By Matthew R. Lee, Exclusive

NEW YORK, October 23 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent, example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents just released to Inner City Press under the Freedom of Information Act show, is inappropriately bent on helping.

  It began by overbroad withholding of basic parts of Goldman's application, click here to view, which Goldman in an October 14 submission to the Fed, here, says has been cured (it has not been).

  Now the Federal Reserve has belatedly responded to Inner City Press / Fair Finance Watch's September 2 FOIA request, with some of its internal documents, many heavily redacted. FOIA letter here; FOIA documents released to ICP here, and embedded below.

 While Inner City Press is appealing, even as released the documents show that Goldman Sachs through its law firm Sullivan & Cromwell reached out to Fed General Counsel Scott Alvarez in May 2015 about the transaction, and was largely able to vet it with the Fed's staff by July, even receiving an "additional information" request before any application was filed.

  Since the public cannot comment or ask questions before a transaction is announced, this "pre-review" by the Fed in essence cuts public review and transparency out of the process. The Fed's rules against ex-parte communications can't be triggered before there is an application. But should Fed review be held, and apparently completed, before there is any public notice?

  The documents Inner City Press has obtained under FOIA show that on May 14 and May 18, Goldman Sachs and its outside counsel Rodgin "Rodge" Cohen of Sullivan & Cromwell told the Fed and its General Counsel Scott Alvarez of their plans for GE Capital Bank.

 On May 28, the Fed met with Goldman which presented a "deck" of information about "Project Apple," much of it still redacted as provided to Inner City Press (which is appealing under FOIA).

  As precedents, Goldman Sachs cited Capital One - ING and RBC - City National (see below).

 This was followed by a May 29, 2015 letter from "Rodge" to the Fed's Scott Alvarez, asking for confidential treatment of everything including the letter, and including from any Governmental inquiry. (Page 28 of FOIA response to ICP.) A similar letter was submitted by Cohen on June 16, attaching a letter the Fed has redacted in full from Goldman Sachs' Esta E. Stecher.

  Scott Alvarez took the conversation onto the telephone, not subject to FOIA, on June 16. His accompanying e-mails, as redacted, only say "Thanks! Scott."

 On June 26, the Fed' Alison Thro wrote that "Rodgin Cohen was in today briefly to discuss, among other things, GS’s plans to acquire the deposits of GE’s ILC. He asked what the next steps might be." What were those "other things"?

 On July 13, the Fed sent Cohen a "request for additional information concerning the proposal by GS Bank to purchase certain assets and assume the deposit liabilities of GE Capital Bank."

  A request for additional information is usually what the Fed sends a bank or bank holding company after it has submitted an application; a commenter would get a copy. Here, the Fed was pre-reviewing Goldman Sachs' proposal, entirely outside of any public scrutiny. (The later public questions are as if by rote: the fix was already in.)

  On Friday, July 17 the Fed's Thomas Baxter wrote to Scott Alvarez that the transaction would be public announced the next Monday -- AFTER the Fed's "additional information request" -- based on a long voicemail from Harvey Schwartz of Goldman Sachs. (Page 59 of FOIA response to ICP). Alvarez was on the phone with "Esta of GA and Rodge Cohen."

  Alvarez said he was willing to talk with Goldman Sachs on Sunday, July 19. Cohen had written to Alvarez:

"In view of the various communications on Friday and the intended announcement of the deposit assumption transaction on Monday, GS believes that it must decide over this weekend whether it can proceed as scheduled and, as a matter of fairness and transparency, what it can tell GE. As we have discussed, this transaction appears to be a centerpiece of the GE restructuring. We would therefore most appreciate the opportunity to have a conference call as soon as possible over the weekend to obtain as much clarity as possible as to timing and other relevant matters.
We apologize for intruding into your weekend and thank you your consideration of this request." (Page 65 of FOIA response.)

   The reference to "fairness and transparency" was apparently without irony. But Goldman stood the Fed up.

  But this announcement was postponed. Alvarez wrote on July 20 that "Rodge just sent a note that GS wants to postpone signing the deal with GE and the announcement for 2 to 3 weeks." More review continued, outside of public scrutiny. Alvarez made himself available on Sunday, July 26. But to no avail.

 The deal was publicly announced on August 13 and Goldman Sachs on August 18 submitted the apparently pre-approved application. Inner City Press / Fair Finance Watch submitted a comment and FOIA request (delayed until now); the end of the FOIA response has a redacted reaction to the "public comment." Now others have commented and a campaign has begun. But has the Fed already made up its mind?

On Goldman Sachs, Federal Reserve's Initial FOIA Response to Inner City Press on GE Capital Bank by Matthew Russell Lee

October 19, 2015

On Goldman, Federal Reserve Ignores Oct 16 FOIA Deadline, Collusion Like CIT?

By Matthew R. Lee

NEW YORK, October 17 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with CIT and OneWest a major, and Goldman Sachs the most recent, example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by overbroad withholding of basic parts of Goldman's application, click here to view, which Goldman in an October 14 submission to the Fed, here, says has been cured (it has not been).

  Inner City Press still has a pending Freedom of Information Act request; Fair Finance Watch and others, including NCRC, asked the Fed to extend its comment period, which has now been done, until October 30, with the Fed's FOIA response to Inner City Press due on October 16. But as of October 17, no response from the Fed, despite this letter:

"Re:       Freedom of Information Act Request No. F-2015-0336
 
Dear Mr. Lee,
 
On September 2, 2015, the Board of Governors (“Board”) received your electronic message dated September 2, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for the entirely of the “Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank,” and for all records reflecting FRS communications with Goldman Sachs for the past twelve (12) months. On September 3 and September 9, the Board provided you with the public portions of the application.
 
Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until October 16, 2015, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before October 16, 2015, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law.
 
Very truly yours,
 
/signed/
 
Jeanne M. McLaughlin
Manager, Freedom of Information Office"

 But even by October 16, no response from the Fed. Only this from Goldman Sachs, only snail-mailed by its counsel:

Goldman Sachs' 2d Reply to Inner City Press, As Fed Withholds FOIA Documents by Matthew Russell Lee

October 12, 2015

Fed Rubber-Stamps RBC - City National Which Bragged of Collusion, FOIA Finds

By Matthew R. Lee

NEW YORK, October 7 -- The largest US  bank merger proposed so far in 2015, that of Royal Bank of Canada and affluent-focused Los Angeles-based City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

 On October 7, a week after belatedly releasing hundreds of pages of documents of its communication with RBC, and after the banks bragged of working together on a loan, the Fed approved the application, ruling on the latter that

"A commenter alleged that RBC and City National collaborated to extend credit to a customer during the pendency of these applications. The BHC Act prohibits an applicant from exercising, or attempting to exercise, a controlling influence over the management or policies of a bank or bank holding company, without prior approval of the Board. C-B-G, Inc., 91 Federal Reserve Bulletin 421, 421–22 (2005). RBC represents that after
announcing RBC’s proposed acquisition of City National, RBC and City National established internal controls and processes designed to ensure compliance with the applicable limitations of the BHC Act and sent notifications and reminders of such controls to their respective employees. RBC also represents that it did not extend credit to the customer at issue in view of the BHC Act’s limitations. "

  That's not what executive(s) told the media... But it's rubber-stamp season at the Fed. Will that extend to Goldman Sachs - GE, on which after requests the Fed extended its comment period to October 30?

October 5, 2015

As Fed Blesses Hudson City Discrimination, Silent on Goldman Sachs

By Matthew R. Lee

NEW YORK, October 1 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Hudson City, trying to be bought by M&T, and Goldman Sachs trying to buy GE Capital Bank the most recent examples.

  The Federal Reserve's September 30 M&T approval order exemplifies this lack of seriousness. Less than a week after Hudson City settled racial discrimination changes, the Fed approved the application, declining to compare fair lending with the M&T money laundering in which it engaged in this dicta:

"The Board expects that a banking organization will resolve all material weaknesses identified by examiners before applying to engage in expansionary activity. See, e.g., SR Letters 14-2 and 13-7. As noted, M&T’s issues largely arose during processing of
this application, and the Board took the highly unusual step of permitting the case to pend while M&T addressed its weaknesses. The Board does not expect to take such action in future cases. Rather, in the future, if issues arise during processing of an application, the Board expects that a banking organization will withdraw its application pending resolution of any supervisory concerns."

  Fair Finance Watch  raised Hudson City's disparate lending record to the Federal Reserve throughout the stalled review of the M&T proposal, stating to the Fed that "Hudson City's record was even worse in 2013 than in the 2011 data cited above. In the NYC MSA for conventional home purchase loans, while Hudson City made (only) five such loans to African Americans in 2011, this fell to only FOUR such loans to African Americans in 2013, compared in 2013 to 427 such loans to whites: a more than one hundred to one ratio, totally out of step with the demographics and other lenders' records."

  Hudson City on September 24 announced a $32 million settlement with the Justice Department and Consumer Financial Protection Bureau. But Fair Finance Watch and Inner City Press, reviewing the just-released 2014 data, found that Hudson City did WORSE in 2014, even while it knew its deal was stalled.

  In 2014 in the New York City MSA, Hudson City made 233 home purchase loans to whites - and only ONE to an African American, denying African Americans' application 4.16 times more frequently than those of whites.

 In this context, is the $32 million anything more than a discrimination tax? Inner City Press and Fair Finance Watch have now raised to the Fed: watch this site.

September 28, 2015

Goldman Sachs - GE Comment Period Extended by NYS, Fed Silent

By Matthew R. Lee

NEW YORK, September 25 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by withholding basic parts of Goldman's application, click here to view.

  Inner City Press has a pending Freedom of Information Act request; Fair Finance Watch and others, including NCRC, have asked the Fed to extend its comment period, with no response.

  Inner City Press made a similar request to the New York State Department of Financial Services and on September 25, some information was released -- not enough -- and the NYS comment period was extended for 30 days.

 NYSDFS Senior Attorney George Bogdan wrote:

"Dear Mr. Matthew Lee: Your FOIL request has been granted in part. My response letter and 2 Goldman Sachs documents are attached to this e mail. Also note that the comment period for the Goldman Sachs application has been extended by 30 days. An official notice for the extension will be posted online in the DFS Weekly Bulletin for the week ending September 25, 2015."

  While Inner City Press prepares a FOIL appeal, why hasn't the Federal Reserve even ruled on its FOIA request, and extended the comment period like its state counterpart? We'll have more on this.

  On September 22, 2015, the Federal Reserve belatedly released the 2014 Home Mortgage Disclosure Act data. A quick review of the lending of Goldman Sachs Bank USA in the New York City Metropolitan Statistical Area shows the Goldman Sachs focus which should require publish hearings in this case.

  Fair Finance Watch, hours after the data was released, has commented to the Federal Reserve at the highest level that "in the New York City MSA in 2014, for conventional home purchase loans (Table 4-2), Goldman Sachs Bank USA made 45 such loans to whites, only two to African Americans and only one to a Latino. For refinance loans (Table 4-3), Goldman Sachs Bank USA made 16 loans to whites and NONE to African American or Latinos. This is inconsistent with the demographics of the New York City MSA and with other lenders' records; it further militate for the timely requested public hearings."

  Goldman Sachs has purported to respond to the comments of Inner City Press / Fair Finance Watch by releasing a small amount of the withheld information, and arguing that what the wider Goldman Sachs does cannot or will no be considered by the Federal Reserve on this Bank Merger Act application by Goldman Sachs Bank. We've put Goldman Sachs' response online, here. It says:

“FFW states that the audio released by examiner Ms. Carmen Segara requires an extension of the comment period and a public hearing... GS Bank believes the issue is outside the scope of the statutory factors for Board consideration under the Bank Merger Act... Goldman Sachs Bank USA ('GS Bank') hereby submits its response to the three comment letters, submitted on September 2, September 3 and September 9, 2015 (the 'Comment Letters'), by the Inner City Press's Fair Finance Watch ('FFW')....

"FFW makes accusations of 'predatory practices' in the 'mortgage field' and 'municipal finance,' and states that there are a number of compliance settlements that must be reviewed in connection with the Application. FFW references several articles related to lawsuits, settlements and other events, all but one of which involve Goldman Sachs but not GS Bank. GS Bank respectfully submits that such comments are not substantiated by specific arguments or facts. GS Bank notes that none of the articles relate to GS Bank itself, and believes these issues are outside the scope of the statutory factors for Board consideration under the Bank Merger Act.”

  Goldman Sachs is arguing that the acts of a parent company cannot be considered when its bank applies to buy ($16 billion) in insured deposits, an absurd argument. FFW has submitted another comment to the Fed, including that

"ICP has received by mail from Goldman Sachs' counsel a purported response which claims that issues ranging from conflict of interest and under-regulation by the FRB (evidenced for example by the audio leaked by whistleblower Carmen Segarra) is not cognizable under the Bank Merger Act - an absurd argument. The FRB would be the decision maker, therefore such issues must be addressed.

 "Goldman Sachs cavalierly states that since it withdrew some of its indefensible requests for confidential treatment of its application, that issues is resolved. It is not - too much is still being withheld. Significantly, Goldman Sachs has offered no explanation of the specious requests for confidential treatment it made, denying commenters access to information during the comment period. As others now argue, the comment period would be extended and hearing held."

  Inner City Press will be covering this wider National (Community Reinvestment Coalition) protest, in which it joins; it has also submitted more comments to the New York State regulator, in a proceeding currently slated to come to a head on September 28, the first day of the UN General Assembly debate.

September 21, 2015

Goldman Sachs Tells Fed to Ignore Segarra Leak & Settlements, ICP Reply

By Matthew R. Lee

NEW YORK, September 19 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, with Goldman Sachs the most recent example. Goldman is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed so far seems bent on helping. It began by withholding basic parts of Goldman's application, click here to view.

  Now Goldman Sachs has purported to respond to the comments of Inner City Press / Fair Finance Watch by releasing a small amount of the withheld information, and arguing that what the wider Goldman Sachs does cannot or will no be considered by the Federal Reserve on this Bank Merger Act application by Goldman Sachs Bank. We've put Goldman Sachs' response online, here. It says:

“FFW states that the audio released by examiner Ms. Carmen Segara requires an extension of the comment period and a public hearing... GS Bank believes the issue is outside the scope of the statutory factors for Board consideration under the Bank Merger Act... Goldman Sachs Bank USA ('GS Bank') hereby submits its response to the three comment letters, submitted on September 2, September 3 and September 9, 2015 (the 'Comment Letters'), by the Inner City Press's Fair Finance Watch ('FFW')....

"FFW makes accusations of 'predatory practices' in the 'mortgage field' and 'municipal finance,' and states that there are a number of compliance settlements that must be reviewed in connection with the Application. FFW references several articles related to lawsuits, settlements and other events, all but one of which involve Goldman Sachs but not GS Bank. GS Bank respectfully submits that such comments are not substantiated by specific arguments or facts. GS Bank notes that none of the articles relate to GS Bank itself, and believes these issues are outside the scope of the statutory factors for Board consideration under the Bank Merger Act.”

  Goldman Sachs is arguing that the acts of a parent company cannot be considered when its bank applies to buy ($16 billion) in insured deposits, an absurd argument. FFW has submitted another comment to the Fed, including that

"ICP has received by mail from Goldman Sachs' counsel a purported response which claims that issues ranging from conflict of interest and under-regulation by the FRB (evidenced for example by the audio leaked by whistleblower Carmen Segarra) is not cognizable under the Bank Merger Act - an absurd argument. The FRB would be the decision maker, therefore such issues must be addressed.

 "Goldman Sachs cavalierly states that since it withdrew some of its indefensible requests for confidential treatment of its application, that issues is resolved. It is not - too much is still being withheld. Significantly, Goldman Sachs has offered no explanation of the specious requests for confidential treatment it made, denying commenters access to information during the comment period. As others now argue, the comment period would be extended and hearing held."

  Inner City Press will be covering this wider National (Community Reinvestment Coalition) protest, in which it joins; it has also submitted more comments to the New York State regulator, in a proceeding currently slated to come to a head on September 28, the first day of the UN General Assembly debate.

September 14, 2015

On Goldman Sachs - GE Capital, ICP has formally demanded that the Fed provide a FOIA ruling that can be appealed, before the comment period closes, whether on September 19 or later...

So M&T, noted discriminator, has settled a Fair Housing Act case. But its purported partner Hudson County has not - the merger should not be considered for any approval. Time for a hearing.

September 7, 2015

 Even as New York regulators says their comment period on Goldman Sachs' GE Capital proposal extends at least through September 28, Goldman has published fine print notices in the New York Post and a newspaper in Utah saying the Federal Reserve will stop listening on September 19.

  Really? After the Fed made Goldman Sachs a bank holding company with no public comment period at all, so Goldman could get a bail-out? After the Fed's coziness with Goldman Sachs was again demonstrated, by the audio taped by then-Fed examiner Carmen Segarra?

  Inner City Press immediately submitted a Freedom of Information Act request for all of Goldman Sachs' GE Capital application and related records. The Federal Reserve has provided a heavily redacted copy, on which Inner City Press / Fair Finance Watch has commented to the FRB in Washington:

"Among many other things, Goldman Sachs believes it can withhold the volume of deposits it seeks to acquire from GE Capital Bank, WHAT is seeks to acquire (and what not to acquire) from GE Capital Bank, its number of employees in Utah, the contact people on its application, the number of non profit organizations it tells the FRB it serves on the board of -- presumptively public -- and even the NAMES of the exhibits it seeks to withhold entirely. This is abusive and unprecedented and the FRB must, in response, have the comment period begin again. Otherwise, applicants only benefit by making absurd and abusive requests for confidential treatment. There is much more to be said, including at the public hearings ICP is requesting, but it is imperative that the Board act on this as quickly as possible."

When Goldman Sachs became a bank holding company literally overnight in 2008, Inner City Press / Fair Finance Watch and others including NCRC asked the Fed how this was done with no public comment period at all.

  The answer, it seems, is to be found in the audio leaked by Carmen Segarra of the Federal Reserve, showing further Fed favors for Goldman Sachs.

 With this history, and Goldman's history in predatory lending with Litton Servicing and as an underwriter, see Occupy Wall Street video here, and UN / migration connection here, it seems clear that the Fed must hold public hearings on Goldman Sachs' GE Capital application, when it is filed.

  But with the Federal Reserve, you can never be too sure, or too careful.

August 31, 2015

So the Federal Reserve produces a video purporting to say what the Community Reinvestment Act is - without any description of the public comment on merger process. Hmm...

August 24, 2015

Why would the Fed pick yet another Goldman Sachs alumni to head the Federal Reserve Bank of Dallas? We'll have more on this.

August 17, 2015

When the FRBNY's William Dudley spoke in Rochester NY, apparently the Goldman Sachs - Carmen Segarra scandal did not come up...

August 10, 2015

Federal Reserve Asks Community Bank System - Oneida To Drop Two Merger Agreement Provisions

By Matthew R. Lee

NEW YORK, August 8 -- The lack of seriousness in US bank regulation extends from large to smaller banks. As Inner City Press exposed last month, Royal Bank of Canada jumped the gun and began doing business with City National Bank without any Federal Reserve approval (see Los Angeles Times, here.)

  Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and tried to withhold fully eight of the nine responses. More here.

  Now an August 7 letter from the Federal Reserve to Community Bank System indicates problems with its February merger agreement, specifically Sections 5.7(b)(9) and (10). Click here to view Fed letter, uploaded by Inner City Press.

  How could a bank of this size, that wants to become bigger, write and sign a merger agreement like this?

 To find out, Inner City Press immediately filed a Freedom of Information Act request for the whole submission - and even the Federal Reserve has seen through Community Bank System's absurdly -- and tellingly -- overbroad withholding, releasing all but one part of one of the eight withheld responses.

  Here's is the Federal Reserve's letter to Inner City Press granting most of its FOIA request

August 3, 2015

Fed Rejects Community Bank System - Oneida Withholding 8 of 9 Responses - but Gov Powell Rubber-Stamps on FOIA Appeals

By Matthew R. Lee

NEW YORK, August 1 -- The lack of seriousness in US bank regulation extends from large to smaller banks. As Inner City Press exposed last month, Royal Bank of Canada jumped the gun and began doing business with City National Bank without any Federal Reserve approval (see Los Angeles Times, here.)

  Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and tried to withhold fully eight of the nine responses. More here.

  Inner City Press immediately filed a Freedom of Information Act request for the whole submission - and even the Federal Reserve has seen through Community Bank System's absurdly -- and tellingly -- overbroad withholding, releasing all but one part of one of the eight withheld responses.

  Here's is the Federal Reserve's letter to Inner City Press granting most of its FOIA request:here is the now unredacted version of Community Bank System's submission.

  Meanwhile, Fed governor Jay Powell continues rubber-stamping on FOIA appeals - on this, we'll have more.

July 27, 2015

To Federal Reserve Board, Community Bank System - Oneida Withhold 8 of 9 Responses - ICP Challenges Under FOIA

By Matthew R. Lee

NEW YORK, July 25 -- The lack of seriousness in US bank regulation extends from large to smaller banks. Last week the Federal Reserve hauled off and approved CIT - One West, with whose executives the Fed met before the deal was even announced a year ago.

  Further down the food chain, Community Bank System of upstate New York filed with the Fed nine answers to questions asked after Inner City Press' challenge -- and is trying to withhold fully eight of the nine responses. More here.

  Inner City Press is challenging this under the Freedom of Information Act, comparing Community Bank System's outrageous withholding at the Fed with other banks, and with Community Bank System's to the OCC, more here.

July 20, 2015

RBC - City National Gun Jumping Covered by LAT, After FFW Raised It, CBSI Contrasted

By Matthew R. Lee

NEW YORK, July 18 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused Los Angeles-based City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  Now the LA Times has reported on the "letter from the Fed [which] asks the banks to respond to questions raised in written comments by [FFW]. Spokesmen for the banks declined to comment.... Fair Finance Watch, a New York advocacy group for minorities, questioned a deal between the banks in a June 11 comment letter to the Fed."

  Inner City Press first put that Fed letter online, here; then Canada's National / Financial Post reported without credit it had "obtained" it.

  By contrast, in another pending proposal, CBSI - Oneida, the Syracuse Post-Standard disclosed that "Inner City Press forwarded the letter to news outlets. Some of the Fed's questions focus on whether Community could improperly control matters at Oneida in advance of the acquisition. Community is working on Fed's questions, said Hal Wentworth, Community's senior vice president for retail banking."

  One common theme is that non-control (and therefore antitrust) laws are being violated. One difference is that CBSI does comment to the media -- if only to blame the messenger -- while larger RBC and CNB do not. Arrogance?

 On CBSI's blaming the messenger, FFW has commented to the Fed that it will "will comment again when CBSI has provided a copy of its response to the FRS' questions of July 13. Beyond the CRA and impermissible “control” questions raised therein, we wish at this time to raise the issues that, in a public response to ICP's comments, CBSI's SVP for retail banking said the following, in a prepared statement no less:

'In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. "This activist does not do business with either Oneida or Community Bank."'

If it would be inappropriate for CBSI to comment on or disclose information about its customers, in this context the same applies to the above-quoted, which, separately, is reminiscent of human rights abusing countries emphasizing where the rights groups who study and report on them are based."

July 13, 2015

  When the Fed acted on BB&T  - Susquehanna with FOIA issues not satisfactorily resolved, it said "in the first quarter of 2015, the FDIC also approved a proposal by Branch Bank to acquire 41 branches of Citibank, National Association, in Texas. In connection with that proposal, the FDIC directed Branch Bank to develop a CRA strategic plan." We'll have more on this.

July 6, 2015

RBC - City National Gun Jumping Questioned by Fed, After FFW Raised It

By Matthew R. Lee

NEW YORK, July 3 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  Now Royal Bank of Canada has been asked more questions by the Federal Reserve. Inner City Press has uploaded the letter, here.

  On June 6, FFW submitted into the record before the Fed:

"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015, quoted from below.

  Now the Federal Reserve has asked RBC:

"A commenter alleged that in May 2015 RBC and CNB collaborated to extend credit to a customer of CNB.  Please address this claim. In your response, discuss in detail in detail whether RBC exercises a controlling influence over the management or policies of CNC or CNB without prior approval of the Board. In addition, discuss whether, since entering into the proposed transaction, RBC and CNB have collaborated, or plan to collaborate, on extending credit to any other borrower, and describe the nature and circumstances of those collaborations."

  There are other problems, including RBC's non-compete agreement with PNC Financial Services. But this gun-jumping should be fatal to the proposed merger.

June 29, 2015

 So rather than trying to explain to the Federal Reserve why it violated the law and began to collaborate with City National it hasn't been approved to acquire, Royal Bank of Canada on June 24 told the Fed it had managed to get another comment withdrawn. Well, not that of Inner City Press / Fair Finance Watch. Lawless....

June 22, 2015

Talk about phoning it in. The Fed on June 15 wrote or ruled, on an application where Inner City Press / Fair Finance Watch was the commenter:

The Board received two comments from a single commenter who objected to the proposal principally on the basis of Sterling Bank’s record of extending home mortgage credit to minority individuals in the New York-Wayne-White Plains, New York-New Jersey Metropolitan Division (“New York City MSA”) and the NassauSuffolk Metropolitan Division (“Nassau-Suffolk MD”), as reflected in data reported under the Home Mortgage Disclosure Act (“HMDA”)17 for 2013. The commenter expressed concerns that, based on 2013 HMDA data, Sterling Bank was not meeting th credit needs of minority individuals in the communities served by the bank.18 The commenter also contended that Sterling Bank’s HMDA data are “irregular.” The commenter noted that the bank reported three withdrawn and three incomplete applications for refinance loans to African Americans in the New York City MSA and no denials, suggesting that the bank is prescreening minority borrowers.

Fn 18: Sterling represented that Hudson Valley Bank is primarily a commercial lender and does not have a material mortgage program. Mortgage loans represented approximately 14 percent of the bank’s overall lending portfolio as of December 31, 2014.”

FN 19: Sterling asserted that three loan applications were withdrawn at the prospective borrowers’ request because they did not wish to continue the transaction and that the three other applications were deemed incomplete because the prospective borrowers did not provide the requested property, asset, or income documentation needed by the bank to make a lending decision.”

So the Fed accepts 14% as “not material”? And that all people of color “requested” to withdraw their applications is acceptable? This vague commitment does not make up for it:

Sterling Bank has determined to increase its marketing and outreach efforts to better serve the needs of its communities and has adopted its revised CRA Plan. Although the bank intends to remain primarily a commercial lender, it expects to increase its outreach efforts for residential mortgages. Sterling Bank also stated that it will continue pursuing the other community development and CRA-related initiatives set forth in its revised CRA Plan. Sterling plans to reassess the goals and objectives in its CRA Plan to determine if any adjustments are necessary to reflect the acquisition of Hudson Valley.”

We'll have more on this. And this - on another application ICP has commented on, this was reported:

In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. 'This activist does not do business with either Oneida or Community Bank, but nonetheless made vague allegations regarding Community,' Wentworth said. 'These allegations were entirely without merit and will be fully addressed by Community Bank and Oneida Savings in the application process.'”

If it would be illegal for CBSI to so disclose information, for its own purposes, about those who have accounts with it, how is this not illegal too? And from a human rights perspective, what a pathetic and telling response. We'll have more on this.

June 15, 2015

With all due respect, are there any applicable Federal Reserve revolving door rules? "Wolters Kluwer Financial Services recently announced that former federal regulator Sandra Braunstein will provide compliance management and Community Reinvestment Act consulting services to the company’s U.S. banking clients. 'The deep insight and experience that Sandy brings not only to Wolters Kluwer Financial Services’ consulting practice and clients but to our executive leadership team is truly unique and extraordinary,' said Timothy Burniston, EVP of Wolters Kluwer Financial Services' Consulting Practice in the US"...

June 8, 2015

RBC - City National Comment Period Extended, Banks Jumped the Gun

By Matthew R. Lee

NEW YORK, June 6 -- The largest bank merger recently proposed, that of Royal Bank of Canada and affluent-focused City National Bank, has since April been the subject of a Community Reinvestment Act challenge by Fair Finance Watch.

  Now the Federal Reserve Board has granted FFW an extension of the comment period on the proposed merger, through June 11, FRB letter here, due to RBC improperly withholding information which was subsequently released after a Freedom of Information Act (FOIA) request by Inner City Press.

   FFW will comment by June 11 - but has submitted to the Fed an objection dated June 6 noting the two banks admitted they are already working together on transactions, without any authorization.

   FFW on June 6 submitted into the record before the Fed:

"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015

June 1, 2015

Here's a scam: Royal Bank of Canada and City National wrongfully withheld basic information like their list of subsidiaries during the comment period, now after Inner City Press' FOIA request they release some of the information -- but with the Fed having closed the comment period. This is a scam.

May 25, 2015

Now belatedly the Fed replies on FOIA on CIT - and DOJ comes through, much later, FDIC on BB&T.

May 18, 2015

  The Federal Reserve Board has hit a new low on Freedom of Information Act compliance. On May 15, its Governor Jerome Powell, put in charge of FOIA appeals after joining the Fed from Deutsche Bank and the Carlyle Ground, rubber stamped by rote all of the Fed's FOIA withholdings, for example on CIT - OneWest. Previous Governor in that post have most often overturned parts of the underlying denial, but Powell upholds each and every withholding -- like a FISA court, some say, or a court in Egypt. Inner City Press predicted this back in 2011-2012, and noted it on Capital One. But it has gotten worse.

  When New York Fed president William Dudley read a prepared speech to the Bronx Bankers earlier this month, he had a lot of canned advice on how to help the borough. He didn't say what he would do to actually enforce the Community Reinvestment Act and resist regulatory capture by Citi, Chase and Goldman Sachs...

May 11, 2015

Fed Withholds OneWest Branch Closing, CIT Internet Deposit Info, ICP Appeals

By Matthew Russell Lee

NEW YORK, May 9 -- Federal bank regulators remain captured by large and becoming-large banks like the CIT Group, a Freedom of Information Act response to Inner City Press from the Federal Reserve this week shows.

  Like the Fed's previous FOIA response, exclusively published here, that showed its officials met CIT and OneWest before their proposed merger was announced, this time the Fed is withholding information on services and branches to be shuttered by OneWest.

  These include a low income branch at 390 W. Valley Parkway, Escondido, CA 92025 and another at 2245-B Ventura Blvd, Camarillo, CA 93010.

  For another branch to be shuttered, the address is entirely redacted, blacked out. Inner City Press has submitted an appeal under FOIA, also for information withheld about CIT Bank's Internet Deposit Data by County. How can the Community Reinvestment Act be enforced in this way? Even the names of the counties have been withheld.

  Now that the US House Oversight Committee, though spokesperson Melissa Subbotin Sillin, is asking for FOIA horror stories, the Federal Reserve and the other bank regulators -- and the US State Department, on delay -- should and will be looked at.

May 4, 2015

On the application of Royal Bank of Canada and City National Bank, the Federal Reserve has hit a new low - Inner City Press' request under FOIA of April 11, it waited to acknowledge until the stated end of the comment period. More than a week later, still none of the requested documents have been provided. We'll have more on this.
April 27, 2015

 In a new low, the Federal Reserve waited until the absolute deadline of the RBC - City National Bank comment period... to extend its time to even respond to Inner City Press' FOIA request about the application. UNacceptable.

April 20, 2015

On April 17 the Federal Reserve has asked Sterling questions about inconsistencies in its previous responses, and about Green Campus Partners. We'll have more on this.

April 13, 2015

Not only has the Federal Reserve not told its bank holding companies not to speciously request confidential treatment for their CRA plans - when the request is made, the Fed sends copies of merger applications without the CRA plan, thereby granting the specious request. We'll have more on this.

April 6, 2015

You'd think the Federal Reserve would automatically revive CRA comments that were filed on an application that got withdrawn, if that application is re-submitted. But you'd be wrong. The Fed wrote to Inner City Press / Fair Finance Watch last week:

You have requested that the comments that you filed previously on these cases that were withdrawn be incorporated into these proposals. Because of your specific request in this case, you earlier comments will be incorporated. Staff asks, however, that you resend a copy of those earlier comments to us so we can ensure that staff has all the relevant comments so they can be reviewed as part of the new applications.”

So we send this reply:

Inner City Press / Fair Finance Watch continues to believe that the Federal Reserve System should have some policy on reviving timely submitted, substantive CRA comments if an application is withdrawn then resubmitted in say, one or two years: some period of time.”

The answer? “Thanks you.” We'll have more on this.

March 30, 2015

The Federal Reserve says it is doing a better job ensuring that the public and the public interest are represented on the boards of directors of its Reserve Banks. But consider the “Class C” - public interest -- directors of the Federal Reserve Bank of Cleveland: representatives of U.S. Steel, Smuckers and Sherwin - Williams. Corporations are the public interest? We'll have more on this.

March 23, 2015

Should the Fed be more transparent? It should. Will this be raised? It will. Watch this site.

March 16, 2015

The Federal Reserve has asked Sterling Bank, who attempt to buy Hudson Valley has been protested by Inner City Press / Fair Finance Watch, these questions:

Answer in more detail the following portions of question 9 of the February 4 information request relating to the proposed merger and integration of Hudson Valley's subsidiary bank, Hudson Valley Bank, N.A., Yonkers, New York ("HVB") into Sterling' s subsidiary bank, Sterling National Bank, Montebello, New York ("SNB"), and the potential impact on the target bank' s products, services, lending, branching and CRA program:

Indicate any changes contemplated in HVB's home mortgage, small business, consumer (other than home mortgage), and community development lending; retail banking products; community development
investments and services; or branching. Also indicate any contemplated changes in CRA program administration, staffing, resources, policies, procedures, and training. Indicate how the applicant will provide effective oversight of the CRA program and the relevant experience of the individual(s) to be charged with such oversight.

... Provide an explanation for the decrease in SNB's number and dollar amount of community development lending from 3 1 to 23 and from about $83 million to $77 million.

Watch this site - there's more.

March 9, 2015

While in the WSJ's piece on the Fed in Washington reigning in the New York Fed Governor Tarullo comes out looking good, we note former Comptroller Eugene Ludwig, complaining about how complicated it is - or bragging, and telling banks, come hire me, I can navigate this for you...

March 2, 2015

Beyond Inner City Press / Fair Finance Watch testimony read into the record in Los Angeles by CRC on February 26, here is its second FOIA appeal on this:

On behalf of Inner City Press / Fair Finance Watch (ICP), this is a timely appeal under the Freedom of Information Act of the Federal Reserve Board's (the “FRB's”) February 23, 2015 Denials of ICP's October 18, 2014 FOIA Request regarding the Application of CIT' Group to acquire OneWest and for the Federal Reserve's communications with or about the companies.

After MORE THAN FOUR MONTHS, the Fed e-mailed Inner City Press a heavily redacted file of documents and denial letter which described referrals to other agencies and the right to appeal. This is a timely appeal.

The Fed waited until three days before what is for now its one and only public hearing on this proposal to release, heavily redacted, records requested more than four months ago. Inner City Press is hereby appealing the redactions.

Simply as one example, the Fed redacts after this sentence: “Clawback provisions exist for the First Fed and La Jolla portfolios [REDACTION.” This information should be released, along with other withheld information in the pages after, about the Consent Orders, liquidity risk and Risk Appetite, Resolution Plan, Prepaid cards (“Confidential” question 2, and 3 - and response to Question 10, 11, 1, etc), Integration Governance -- and the redacted portion of “Confidential” Question 2, and all of “Confidential” question 3...

February 23, 2015

   The Federal Reserve, which meets with insiders then withholds the records for seven months even after a FOIA request, here, last week bragged for approving four mergers...
February 16, 2015

On First Horizon's application to acquire TrustAtlantic Financial Corporation of Raleigh NC, the Fed has asked a series of questions on CRA and fair lending, and there may be new public notice - watch this site.

M&T, with its long pending application to acquire Hudson City protested by Fair Finance Watch, NCRC and others, has a mandatory pre-trial conference in the fair lending case against it scheduled for April 7. Will the Federal Reserve take note? Inner City Press submitted the complaint in the case to the Fed...

February 9, 2015

From a (much) belated Fed FOIA response:

In one Fed market, Martinsburg, WV, the parties are proposing a divestiture to bring the market to safe harbor levels. In the Cumberland, MD-WV-PA market, the parties believe that certain factors in the market mitigate the need for a divestiture, as discussed below in detail.”

This, of course, is only given out AFTER the Fed closes the public comment period. We'll have more on this.

February 2, 2015

Here is a problem with the Federal Reserve - they call whatever portion of an application an applicant tries to withhold under FOIA the “confidential portion” - presuming thereby that applicants don't make requests to withhold which don't comply with FOIA, essentially privatizing FOIA. This is the case on a current application, and we oppose it. Watch this site.

January 26, 2015

Last week we asked if the Federal Reserve would allow a comment period to expire when it had not responded to FOIA request, after the applicant bank through its outside counsel wouldn't provide the application - now, we'll find out...

January 19, 2015

  So this month we have an experiment. Actually it started last month, with a request to a Reserve Bank for an application. It hadn't yet been filed - but when it was, no follow up was given. Despite a request to the applicant's counsel, the applicant did not come in that way either. Finally a request to the Board, which gave portions but with key parts withheld, improperly, at the request of the applicant. Does the Fed just let a comment period expire on this basis? Watch this site.
January 12, 2015

For Fed, Obama Taps Landon, Evader of HMDA, Impropriety at FHLB

By Matthew Russell Lee

SOUTH BRONX, January 6  -- The US Federal Reserve, already accused of being too close to industry and playing hide the ball on CIT - OneWest and other proposed mergers, will receive under President Barack Obama another banker, Allan Landon -- one forced to resign from the Federal Home Loan Bank of Seattle after the "appearance of impropriety." Predatory bender continues?

  Landon headed Bank of Hawaii which as Inner City Press previously reported - and re-upped earlier today - was one of the few bank to try to evade the Home Mortgage Disclosure Act by providing it data not electronically in a form it could be analyzed, but only in paper form.

  The Federal Reserve told Fair Finance Watch such evasion was permitted due to the regulation's lack of specificity. Now today Bank of Hawaii's Landon is nominated to join this Federal Reserve Board. Fox guarding the hen house?

  Here is the SEC settlement concerning Landon and the FHLB fo Seattle - which is being allowed, without public input, to merge with the FLHB of Des Moines.

January 5, 2015

What does the Federal Reserve System do, when it through a Reserve Bank is asked about a merger proposal and whether or not an application has been filed yet? Nothing, apparently – no notice, no copy, nothing. We'll have more on this.

December 29, 2014

As CIT Says Wait For Its CRA Plan, Federal Reserve's New Precedent? 

By Matthew Russell Lee

UNITED NATIONS, December 23 -- The US government's ongoing corporate bailout following the 2008 meltdown triggered by predatory lending continues to reverberate in one of the largest proposed mergers of 2014.

  On December 22, pressing for approval of its application to acquire OneWest, CIT told the Federal Reserve, "CITB and OWB are not yet able to provide specific details about the expanded Community Reinvestment Act portfolio because this will be based, in part, on input from CITBNA’s to-be-formed Community Development Advisory Board following the closing of the Transaction."

  That's basically saying, approve our merger (on which the Fed is required to consider CRA), and THEN we'll tell you about CRA.

  The Fed had asked CIT to "provide the final version of the document 'CIT Bank N.A. Community Reinvestment Act Plan,' the draft of which was included as Annex C to the letter responding to the public comments submitted to the Federal Reserve Bank of New York."

  One question is, will the Federal Reserve Board in this case and in others coming up, and fast, require the actual submission for CRA plans and allow for public comment on them?

December 22, 2014

Something is strange at the Federal Reserve. Its public notices for pending merges includes those on which the comment period has closed. But in the December 19 version, a particular pending application has simply disappeared. It was previously disclosed this way:

BB&T Corporation, Winston-Salem, North Carolina to merge with The Bank of Kentucky Financial Corporation, and thereby indirectly acquire The Bank of Kentucky, Incorporated, both in Crestview Hills, Kentucky 3 Richmond 11/10/2014

And now it is gone. It has not been approved; it has simply disappeared, with the effect that those interested in commenting, even after the formal expiration of the period, won't. BB&T's applications to the Federal Reserve, as Fair Finance Watch has noted and complained, are by a former supervisor of the Fed's Legal Division. So now what will be done?

December 15, 2014

  On Midland - Heartland, on which ICP commented, the Federal Reserve last week said "In addition, in response to the public comments on the proposal, the Reserve Bank conducted a fair lending examination during the pendency of this application, including a redlining review across Midland Bank’s assessment areas."  Redlining review? We'll have more on this.

December 8, 2014

As CIT Tells Fed OneWest Will Apply to GSEs

By Matthew Russell Lee

UNITED NATIONS, December 5 -- Four days before a rare Senate hearing on the regulatory capture of the Federal Reserve, on November 17 the Federal Reserve Bank of New York posed a series of questions to CIT Group, trying to buy OneWest.

  Today, CIT provided Inner City Press with a copy of its answer to the Fed's November 17 questions (answers to the Fed's November 25 questions have not yet been provided.)

  CIT says "OneWest has discussed the Transaction with staff of each of FannieMae and FreddieMac (the 'GSEs') and will be filing an application in connection with the change of control of OWB in order for OWB to continue as a seller/servicer for the respective GSE. OneWest is now in the process of preparing the appropriate applications, which it expects to submit as soon as possible, and no later than year-end."

  But will OneWest provide notice of these applications to the GSEs to the groups which have timely protested its applications to the Fed and OCC? The OCC heard much about OneWest, and CIT, at a December 2 EGRPRA hearing in Los Angeles. Why not just hold public hearings on this proposed mega-merger? And on another one, announced but not yet applied for?

December 1, 2014

Fed Asks CIT of Repos & Risk, Dudley's Spin

By Matthew Russell Lee

UNITED NATIONS, November 25 -- At the end of a week that began with a rare Senate hearing on the regulatory capture of the Federal Reserve on November 21, the Federal Reserve posed a few more questions to CIT Group, trying to buy OneWest:

Based on staff’s review of the applications, the following information is requested. Please provide a complete, detailed response to each of the following questions. Provide
supporting documentation as appropriate.

1. From the following activities, identify those in which either CIT Group, Inc. or its subsidiaries (“CIT”) or IMB Holdco LLC or its subsidiaries (“IMB”) is involved. To the extent not already provided in the applications, describe the nature of the activities and provide dollar volumes for CIT and IMB, and include any available information relating to the national market share of CIT and IMB, along with a brief description of other firms that engage in the same activity in the United States. You may confine your responses to information that is maintained in the regular course of business.

a. Holding assets under custody;
b. Provision of short-term funding through bilateral repurchase
agreements;
c. Provision of short-term funding in the tri-party repo market;
d. Provision of prime brokerage services;
e. Provision of short-term lines of credit to financial firms;
f. Securities lending;
g. Lending in the Fed funds market;

h. Provision of bond and equity underwriting services in any of the following markets:
i. Commercial paper;
ii. Asset-backed commercial paper;
iii. Corporate bonds;
iv. High-yield bonds;
v. Municipal bonds;
vi. U.S. Agency debt;
vii. U.S. Agency mortgage backed securities;
viii. Private label asset backed securities;
ix. Seasoned offerings; or
x. Initial public offerings;
i. Tri-party repo dealing;
j. Clearing and settlement;
k. Provision of business credit in any of the following markets:
i. Commercial and industrial lending;
ii. Commercial real estate lending;
iii. Construction loans;
iv. Middle market lending;
v. Small business lending;
vi. Receivables factoring;
vii. Equipment financing/leasing; or
viii. Syndicated lending;

l. Direct dollar lending to foreign institutions and dollar lending
through foreign exchange swaps;
m. Trade letters of credit;
n. Interest rate and credit derivatives trading;
o. Commodities trading;
p. Credit card lending;
q. Mortgage servicing;
r. Corporate trust;
s. Correspondent banking; and
t. Reinsurance.

2. Describe any financial markets (trading-type activities) in which either CIT or IMB is a “market-maker.”

3. Report the current market value, gross and net of collateral, and other risk mitigants for the three largest OTC derivatives counterparties of each of CIT and IMB as measured by the following metrics:

a. by positive current market value (after netting arrangements); and

b. by negative current market value (after netting arrangements).

  We'll see.

November 24, 2014

As Fed's Dudley Spins Regulatory Capture, Of CIT, BB&T, Susquehanna Next

By Matthew Russell Lee

UNITED NATIONS, November 21 -- In a rare Senate hearing on the regulatory capture of the Federal Reserve on November 21, Federal Reserve Bank of New York President Dudley described anti revolving door safeguards and a desire for "good culture" at banks.

  Good culture? How then did the predatory lending meltdown take place? And anti-revolving door? How can it be, then, that a former Federal Reserve Legal Division supervisor is writing for BB&T's deals to those who used to work under her?

  As soon as Dudley left the stand, a more serious anti revolving door protection was proposed.

  Dudley was asked about Goldman Sachs' warehouses, and JPM Chase's abuse of the energy markets, but didn't directly answer.

  The Fed on November 17 itself asked from answers to four questions it sent to the CIT Group, with a copy to Inner City Press.

  Inner City Press and others have challenged CIT's application to acquire OneWest; as set forth below, Inner City Press / Fair Finance Watch has been challenging BB&T even before its November 12 proposal to acquire Susquehanna Bank for $2.5 billion.  What questions will the Federal Reserve have on that one?

  As to CIT - OneWest, the Fed on November 17 has asked:

Based on staff’s review of the applications, the following information is requested. Please provide a complete, detailed response to each of the following questions. Provide supporting documentation as appropriate.

1. Provide a pro forma shareholders list that identifies any shareholder or group of shareholders that would own or control, directly or indirectly, five percent or more of any class of voting securities, or 10 percent or more of the total equity, of the combined organization. Your response should indicate whether any identified shareholder is a bank or bank holding company. In calculating the voting ownership, include any warrants, options, and other convertible instruments, and show all levels of voting ownership on both a fully diluted and an individually diluted
basis. Aggregate the interests of any related shareholders, including, for example, shareholders that are acting in concert (pursuant to definitions and presumptions in 12 CFR 225.41) and shareholders that are commonly controlled or advised.

2. Your October 8, 2014, letter responding to staff’s request for additional information (the “Response”) states that while “CIT and OneWest do not believe the proposed Transaction requires the consent of the GSEs . . . [t]he parties will provide the GSEs with formal notice of the transaction and engage with them as appropriate.” Provide the specific timeframes in which the parties will file a formal notice and consult with the GSEs about this proposed transaction.

3. The Response indicates that several integration planning decisions and actions have already been made or taken with respect to the integration of the CIT and IMB organizations. Confirm or clarify our understandin that the decisions and actions identified in the Response will not apply to the companies and their operations prior to the Board’s approval of the proposed transactions.

4. The Response also indicates that the parties will execute a number of actions prior to the closing of the proposed transaction “to ensure that, on ‘Legal Day One’, the combined institution operates in manner consistent with . . . expectations.” To the extent not already provided, identify all pre-closing actions that will be executed in connection with the integration of the CIT and IMB organizations.

  We will report on the responses, upon receipt.

  On BB&T, well before the bank's November 12 mega-merger announcement seeking to buy Susquehanna Bancshares for $2.5 billion, Inner City Press / Fair Finance Watch has been showing the disparities in BB&T's lending record.

  On BB&T's application to acquire 41 branches in Texas from Citibank, Fair Finance Watch showed the FDIC for example that for conventional home purchase loans in the Houston Metropolitan Statistical Area in 2013, BB&T made 65 such loans to whites, and NONE to African Americans.
 
  The FDIC's Acting Deputy Regional Director for Compliance replied that "the FDIC deems your correspondence to constitute a protest."

  BB&T through law firm Wachtell, Lipton, Rosen & Katz submitted a response which admitted that in Houston “the percentage of Mortgage Loans made to low and moderate income borrowers during the first six months of 2014 was also below the 2013 aggregate industry average.” BB&T Response at Page 11, which also notes at 10 that at least one of the Citibank branches BB&T seeks to acquire, it would shutter.

  And so on November 10 Fair Finance Watch submitted more extensive comment opposing BB&T's application to acquire Bank of Kentucky, including that bank's disparities in the Cincinnati regional area and BB&T's in the Louisville MSA, where in 2013 BB&T made 229 conventional home purchase loans to whites, and only 12 to African Americans and only six to Latinos, while denying 41.7% of applications from Latinos versus only 17.5 of application from whites, a disparity of 2.38 to 1.

   Now BB&T announces a much larger proposal, to buy Susquehanna and its 245 branches in Pennsylvania, New Jersey, Maryland and West Virginia. Such an application requires approval, after a comment period and possible public hearings, by the Federal Reserve. We'll have more on this.

  The secret recordings of then Federal Reserve examiner Carmen Segarra about Goldman Sachs and regulatory capture have given rise to calls for oversight hearings by at least two US Senators. Their hearing will now occur on November 21. Relatedly, BB&T's response from the law firm of Wachtell, Lipton, Rosen & Katz is penned by a former Federal Reserve Board Legal Division supervisor.

November 17, 2014

The Senate hearings on regulatory capture of the Federal Reserve, triggered by whistleblower Carmen Segarra's 46 hours of taped audio, are set for November 21. We'll be covering it.

November 10, 2014

After CIT Is Forced To Release Cash Flow & Risk Mgmt, ICP Slams Both

By Matthew Russell Lee

UNITED NATIONS, November 7 -- The secret recordings of then Federal Reserve examiner Carmen Segarra about Goldman Sachs and regulatory capture have given rise to calls for oversight hearings by at least two US Senators, and to spin from the Federal Reserve Bank of New York.

 On November 7, Inner City Press was sent a redacted copy of CIT Group's "Cash Flow Projections" and "Risk Management" from its application to acquire OneWest and go above the $50 billion, Too Big Too Fail threshold. Inner City Press immediately put the partially redacted document online on its website, here.

  First, how could such information be withheld for a bank seeking to become Too Big To Fail?

  Second, how could the Federal Reserve insist that the comment period is closed, while information that was improperly withheld is belatedly released?

  On October 10, Inner City Press was sent heavily redacted copies of two letters from the CIT Group concerning its proposed acquisition of OneWest to the Federal Reserve Bank of New York, supposedly in compliance with the Freedom of Information Act - now uploaded to Scribd here and here.

   On October 18, Inner City Press & Fair Finance Watch challenged these redactions under FOIA, and submitted  comments on CIT's mockery of the Community Reinvestment Act to both the Federal Reserve and the Office of the Comptroller of the Currency.

  CIT sought to withhold even its CRA plan. Inner City Press raised the issue to Fed Chair Yellen in Washington

November 3, 2014

Now CIT says, “In a comment letter, dated October 18, 2014, from Inner City Press/Fair Finance Watch, [FFW] states that CITB’s assessment area is improper. CITB’s assessment area was designated in accordance with the federal banking agencies’ CRA regulations and guidelines.” They are referring to limited their CRA assessment area to Utah, while admitting their business in New York, New Jersey, Florida and elsewhere. #RegulatoryFail

CIT also cites the Fed's previously laxity as precedent: “Letter from William W. Wiles, Secretary of the Board, to Inner City Press/Community on the Move, 1995 Fed. Res. Interp. Ltr LEXIS 240 (August 29, 1995).”

October 27, 2014

  While the Federal Reserve lists contacts for its Reserve Banks, they are only phone numbers, not email. And most Reserve Banks don't make it clear to the public and community groups how to submitte comments by email. Why not? We'll have more on this.

October 20, 2014

  The Federal Reserve extended its CIT comment period one week, but it still withholding. ICP has submitted:

As to CIT's October 8 letter, ICP has already timely commented “there is also the question of the agreement the FDIC reached with IndyMac / OneWest, and whether wannabe SIFI CIT would assume it, as a windfall. These are important questions militating for both the required extension of the comment period, and for public hearings.”
 
  In the October 8 letter, CIT begins a sentence on page 3 “Clawback provisions exist for the First Fed and La Jolla portfolios [REDACTED.]” CIT also redacts, on page 6, information related to the OnWest / IndyMac Consent Order; HAMP (Page 7); deposits collected over the Internet (Page 8); Lending (Page 9); Governance and Risk Management (page 10-12); and Resolution Plan (Page 12). CIT also heavily redacts what it calls “confidential questions” (pages 14-16), and exhibits. This information must be released, and the comment period extended.  In an abundance of caution, ICP has submitted a FOIA request to this effect to the Federal Reserve. Watch this site.

October 13, 2014

After Fed Exposed, CIT Gives ICP Redacted Letters to FRBNY, Captured

By Matthew Russell Lee

UNITED NATIONS, October 10 -- The secret recordings of then Federal Reserve examiner Carmen Segarra about Goldman Sachs and regulatory capture have given rise to calls for oversight hearings by at least two US Senators, and to spin from the Federal Reserve Bank of New York.

  On October 10, Inner City Press was sent heavily redacted copies of two letters from the CIT Group to the Federal Reserve Bank of New York, supposedly in compliance with the Freedom of Information Act - now uploaded to Scribd here and here.

  Inner City Press / Fair Finance Watch has asked the Fed to extended / re-open the comment period.

There is also the question of the agreement the FDIC reached with IndyMac / OneWest, and whether wannabe SIFI CIT would assume it, as a windfall. These are important questions militating for both the required extension of the comment period, and for public hearings.

October 6, 2014

After the Federal Reserve / Goldman Sachs audio leaks by whistleblower Carmen Segarra, Senators Elizabeth Warren and Sherrod Brown have called for hearings. But will they be held? We're ready -- regulatory capture is widespread...

September 29, 2014

As Whistleblower Exposes Fed & Goldman, FOIA Requests Show CIT Capture

By Matthew Russell Lee

UNITED NATIONS, September 26 -- The secret recordings of then Federal Reserve examiner Carmen Segarra about Goldman Sachs and regulatory capture should trigger oversight hearings in Congress, and the break-up of Goldman Sachs and its peers.

 But this type of sleaze is the rule, not the exception. Inner City Press routinely submits Freedom of Information Act requests for communication between the Fed and banks applying for mergers.

  Most recently, the Fed has extended its deadline for responding to Inner City Press' request on CIT - OneWest, on which it purported to close its public comment period on September 24:

FOIA Request No. F-2014-00380

Dear Mr. Lee,

On August 27, 2014, the Board of Governors ("Board") received your electronic message dated August 26, pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552... On August 28, 2014, the Board’s Freedom of Information Office made an interim production of responsive documents consisting of the public portion of the application by CIT Group Inc. and Carbon Merger Sub LLC to acquire and merge with IMB HoldCo LLC, and thereby indirectly acquire voting shares of OneWest Bank... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until October 9, 2014, in order to consult with two or more components of the Board having a substantial interest in the determination of the request. If a determination can be made before October 9, 2014, we will respond to you promptly.

How can the public be shut out before it has the basic information it has requested?

Tellingly, when lawyers leave the Federal Reserve's Legal Division, many go to white shoe law firms that submit bank merger applications to the same people they until recently worked with or supervised.

  Inner City Press, Bronx-based Fair Finance Watch and NCRC have repeatedly raised this to the Fed, without meaningful response.

So here's hoping that Carmen Segarra's courage, in secretly making the recordings and then releasing them, leads to increased oversight of and reform at the Fed.

 The problem is, while some in Congress are willing to criticize the Fed, the real parties in interest here are the largest banks and investment banks in the country. Who in Congress will directly challenge those? Watch this site.

September 22, 2014

How can the Federal Reserve Board take until September 18 to respond to a FOIA request from May 28 on a pending application? We'll have more on this.

September 15, 2014

Fed Governor Tarullo's testimony to Congress last week was widely viewed as a call to shink the size of the US mega-banks. But the Fed has been so solicitous to them, can they be believed?

September 8, 2014

Here's what the Fed said, more than 10 days ago, without providing the bank's CRA Plans:

Dear Mr. Lee,

This is in reference to your electronic message dated August 26, 2014, and received by the Board’s Freedom of Information Office August 27. Attached is the public portion of the application by CIT Group Inc. and Carbon Merger Sub LLC to acquire and merge with IMB HoldCo LLC, and thereby indirectly acquire voting shares of OneWest Bank, N.A., including Carbon Merger Sub LLC’s application to become a bank holding company.

Board staff are currently processing the remainder of the FOIA request, which seeks the confidential portions of the application and all records reflecting FRS communications with or about the two entities (or their affiliates) regarding the proposal since January 1, 2014.

Freedom of Information Office, Federal Reserve Board

September 1, 2014

So Inner City Press / Fair Finance Watch requested from the Federal Reserve Board, under the Freedom of Information Act no less, the application by CIT Group to buy OneWest. As provided, the Fed has for now allowed CIT and its outside counsel to withhold from the public CIT's and OneWest's Community Reinvestment Act plans. We'll have more on this.

August 25, 2014

Noteworthy: on August 22, the Federal Reserve Board “requested comment on a proposal to repeal its Regulation AA (Unfair or Deceptive Acts or Practices).”

August 18, 2014

How can Fed vice chair Stanley Fischer give a long speech in Sweden about the “Great Recession” and not once in it mention “subprime,” much less Citigroup?

August 11, 2014

On August 6 the Fed announced “it has not objected to a resubmitted capital plan from Bank of America Corporation. The Federal Reserve in April required Bank of America to resubmit its capital plan and to suspend planned increases in capital distributions. The action followed the disclosure by Bank of America that it incorrectly reported data used in the calculation of regulatory capital ratios and submitted as inputs for the stress tests conducted by the Federal Reserve in 2014.”

But what about disclosing, census tract, any predatory lending settlement it reaches?

August 4, 2014

The Fed and official corruption: On July 23 Thomas Baxter, General Counsel for the New York Federal Reserve Bank questioned the FCPA’s “exception for ‘facilitating or expediting payments’ made in furtherance of routine government action.” Baxter stated that “official corruption is a problem that some U.S. financial institutions have found challenging during the last year.”

Ya don't say...

July 28, 2014

The CFPB is “proposing that financial institutions provide more information about underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan.” Good - but what about the small business data?

July 21, 2014

The Federal Reserve Board's website claims that it will be updated on pending mergers every three days. But on July 19, there had been no update since July 9 -- ten days...

July 14, 2014

Fed Vice Chairman Stanley Fischer gave a long speech at the National Bureau of Economic Research in Cambridge on July 10 about Financial Sector Reform -- and didn't mention the words “subprime” much less “predatory” lending even once. Ah, Citigroup...

July 7, 2014

IMF's Lagarde Lauds Yellen, After Urging Fed to Communicate More, FOIA Qs

By Matthew Russell Lee

UNITED NATIONS, July 2 -- When the International Monetary Fund's Christine Lagarde introduced Federal Reserve chair Janet Yellen to give the first Michel Camdessus Central Banking Lecture on July 2, she did not repeated what she said only two weeks earlier, that the Fed should communicate more frequently.

  In laying out lessons learned from the subprime financial meltdown of 2008, Lagarde did not question the role of the Federal Reserve in failing to take action on the predatory lending by the Big Four banks, or the pooling and pitching by investment banks of predatory mortgages by Ameriquest, New Century, et al.

  So what, really, was learned?

 On July 2, Lagarde compared central bankers to mountaineers, and told Yellen, "Janet, you may not be surprised to know that when you give your press conferences a group of passionate staff here at the IMF get together to watch you live on screen. I am told they even bring pop corn to the meetings!"

June 30, 2014

The Federal Reserve has rubber stamped a number of Regions Bank mergers. But on June 25, the Fed “announced that Regions Bank, Birmingham, Alabama, will pay a $46 million penalty for misconduct related to the process followed by the bank in the first quarter of 2009 for identifying and reporting non-accrual loans. The Federal Reserve also issued a consent order requiring Regions Bank to continue to improve its relevant policies and procedures. The Federal Reserve's consent order is being issued jointly with the Alabama Department of Banking, which is assessing Regions Bank a $5 million penalty, and in conjunction with actions by the Securities and Exchange Commission.”

June 23, 2014

The name "RAYS Act" is a nod to its intellectual godfather - Ray Boshara, director of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis...

And in San Francisco, kids enrolled in school are shunted into bank accounts at... Citibank.

June 16, 2014

On June 9 in DC, Fed Governor Tarullo said “Mergers and acquisitions involving banking organizations are subject to review, and possible disapproval, on a broad range of grounds beyond the antitrust considerations relevant in all industries. These include an assessment of the adequacy of the financial resources of the firms, the "competence, experience, and integrity" of the officers and directors, and the impact of the acquisition on systemic risk. [FN3] Bank Holding Company Act of 1956 §3, 12 U.S.C. §1842(c). The Bank Merger Act requires consideration of a roughly comparable set of factors. Acquisitions are also subject to special scrutiny where an acquiring firm has less-than-satisfactory supervisory ratings.”

What about the Community Reinvestment Act?

June 9, 2014

The majority of applications at the Federal Reserve with comment periods open are under the Change in Bank Control Act - which makes this a test case: “Mr. Lee, Attached you will find a letter acknowledging your May 30 comments on the change in control notice filed by Mr. Love, as well as our transmittal letter to Notificant counsel.” We'll see.

June 2, 2014

ICP / Fair Finance Watch filed this with the Fed:

Dear Chair Yellen, Secretary deV. Frierson and others in the FRS:

Since 2013 Inner City Press / Fair Finance Watch (ICP) has been watching with interest and concern the protested Midlands - Heartland proposal (see sample HMDA analysis below). Then it became aware of a related Change in Bank Control Act notice, which has given rise to public concern and confusion, for example:

Midland States Bank Acquisition of St. Louis Bank Continues

Published on May 16 2014 5:41 am

The previously-announced acquisition of Heartland Bank in St. Louis by Midland States Bank of Effingham is moving ahead with the formal request by the owners of Heartland to the Federal Reserve Board to acquire 10% or more of the shares of Midland States Bancorp.

Midland States Bancorp, based in Effingham, controls Midland States Bank. Midland announced last year that it was acquiring Heartland Bank, which has 13 locations in St. Louis as well as one in Denver, Colorado. As part of the transaction, the Love family, which currently owns Heartland, will be acquiring Midland States Bancorp stock.

Midland States Bancorp President and CEO Leon Holschbach said the acquisition is proceeding as planned. Holschbach said no one should be concerned that a legal notice about the Love family acquiring stock in Midland means a change in control of Midland. He said the term "control" in the legal notice means that the Loves will have as much say in the bank as their share of stock gives them. Holschbach said the vast majority of Midland States stock is still in the hands of Effingham families.

Holschbach said the acquisition of Heartland Bank by Midland States Bancorp should close early in the third quarter. He said the Heartland Bank locations will be changed to Midland States Bank locations, while a credit lending firm in St. Louis will remain Heartland Business Credit, but will be listed as a subsidiary of Midland States Bank.

That even the applicants saw confusion among the public which they sought to assuage - without, of course, saying there is a public review and comment process -- is indicative. Inner City Press filed a Freedom of Information Act request and yesterday, May 29, received this:

Dear Mr. Lee,

This is in reference to your electronic message dated and received by the Board’s Freedom of Information Office on May 28, 2014, in which you request the following:

the Change in Bank Control Notice by Andrew Sproule Love, Jr., St. Louis, Missouri, acting individually, and in concert with a control group, which consists of Andrew Sproule Love, Jr.; Trust Established U/T/W of Andrew Sproule Love FBO Andrew Sproule Love, Jr., Andrew Sproule Love, Jr., and Bank of America, N.A., as co-trustees; Inter Vivos Trust created by Andrew Sproule Love U/I/T dated December 30, 1941, as amended by instrument dated August 3, 1959, Andrew Sproule Love, Jr., and Bank of America, N.A., as cotrustees; Love Group, LLC; Love Investment Company; Love Real Estate Company; and Sarah Otto Love, all of St. Louis, Missouri; Daniel Sproule Love, New York, New York; Laura Kate Love, Bozeman, Montana; Martha Farr Love, and John Overton Robertson, both of Portland, Maine; Amy Farr Robertson, Denver, Colorado; Bruce Clendenin Robertson, Rockville, Maryland; Caroline Bill Robertson Evans, Jacksonville, North Carolina, and Laurence Arnold Schiffer, St. Louis, Missouri; to acquire voting shares of Midland States Bancorp, Inc., and thereby indirectly acquire voting shares of Midland States Bank, both in Effingham, Illinois.

Attached is the public portion of the Change in Bank Control Notice. The remainder of the FOIA request, which seeks the confidential portions of the application and seeks FRS communications with the Notificants and/or Target regarding the proposal since January 1, 2014 is currently being processed by Board staff.

Thank you,

Freedom of Information Office

Federal Reserve Board

While the turn-around time on the “public” portion of the notices is appreciated, we are concerned at how much the applicants have asked the Fed to withhold, for example “Confidential” Attachment 3, “further discussion of the merger terms.”

ICP cannot yet submit a FOIA appeal, since the FRS has yet to rule on its FOIA request. ICP hereby requests that the information be released and / or the comment period on these notices extended -- and on the proposed (now amended) merger reopened -- until the information is released.

For the record, in 2012 Midland States Bank in the St Louis MSA for refinance loans made 197 such loans to whites and only two to African Americans, none to Latinos.

For conventional home purchase loans in the St Louis MSA in 2012, Midland State made 43 such loans to whites, none to African Americans or Latinos (which received one each in Table 4-1).

For home improvement loans in the St Louis MSA, Midland State made eight such loans to whites, none to African Americans or Latinos.

On the current record, including those raised by NCRC members incorporated herein by referecne, hearings should be held and the applications / notices should not be approved.

May 26, 2014

Federal Reserve Bank of San Francisco President John Williams said May 22 that he's surprised by weakness in the housing sector. He said, "While home construction and sales showed substantial momentum in 2012 and the first half of 2013, the wind has been taken out of the sails since then.” Sail away.

May 19, 2014

With Governor Stein in his way on May 28, how can the Federal Reserve legitimately function with only three Governors? Inner City Press / Fair Finance Watch raised the question in a recent filing. What will Congress say? Watch this site.

May 12, 2014

   On rogue bank Mercantile the follow has been filed with the Federal Reserve:

This is a timely request for reconsideration of the Board's May 8, 2014 approval of the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank

Starting in October 2013, Inner City Press / Fair Finance Watch on fair lending grounds protested the Applications of Mercantile Bank Corporation to merge with Firstbank Corporation and thereby indirectly acquire Firstbank. For example, in 2012 in the Grand Rapids MSA for conventional home purchase loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 42 such loans to whites, NONE to African Americans or Latinos.

To assess in Mercantile's record is improving or further deteriorating, ICP asked Mercantile through counsel for its 2013 HMDA-LAR. Amazingly and tellingly, Mercantile provided its LAR only in paper form, so that it could not be computer analyzed. This contrasts to other banks' timely responses to ICP with their LAR in the requested .DAT format in which it is filed.

This is outrageous. Even with only four Governors, for the Board to allow this is a dereliction of the Board's duty under HMDA, under CRA and the BHC Act. While there are numerous other problems with Mercantile and its proposals, we are limited this request for reconsideration to this issue so that the Board must squarely face this issue and shoulder its responsibilities.

To date, the Board's inaction on Mercantile's lawless behavior is reflected by this:

Mike Price, Mercantile’s chairman and CEO, maintained Mercantile complied with the letter of the law when it emailed the documents to Lee’s organization several weeks ago. 'Mercantile Bank has complied with everything it’s supposed to have complied with,' Price said. 'He may want electronic forms, but that’s the form we delivered it in'... Mr. Lee can interpret data anyway he wants,' Price said.. 'I know what the bank stands for and what it’s concern for the community is and its pretty darn strong.'”

In 2012 in the Grand Rapids MSA for refinance loans, Mercantile Bank lent ONLY to whites. Its mortgage company made 159 such loans to whites. It had a 100% denial rate for African American applicants. That's strong evidence of discrimination - followed by an attempt to conceal its 2013 record.

After that quote, in connection with Mercantile's shareholders' meeting, Price predicted the Board's rubber-stamp:

"'We have a pretty strong feeling that we’re very close to the end of the process and that we will have an answer fairly soon,” Price said this morning during the annual meeting of Mercantile Bank shareholders... Inner City Press/Fair Finance Watch claims that Mercantile Bank has a poor record of residential mortgage lending to minorities. The objections triggered a higher level review of the deal and 'it takes a longer time to walk through the process,' said Price, who anticipates an affirmative decision from the Federal Reserve. Price said Lee is 'cherry-picking data.'”

There are simply no loans to people of color to pick: In 2012 in the Grand Rapids MSA for home improvement loans, both Mercantile's bank and mortgage company lent only to whites.

After the Board's four-Governor order

Mike Price said, 'This approval validates our history of community involvement and outstanding performance under the Community Reinvestment Act, and follows a thorough analysis of our lending practices.'”

With Price's knowledge and presumably at his initial direction, Mercantile sought to and did conceal its 2013 record from the public.

This issue must be directly presented to each Governor, not only the FRS staff, the issue should be addressed and ruled on in writing, and the approval should be reconsidered and rescinded.

May 5, 2014

So Fed Chair Yellen went to the White House Correspondents Dinner - but didn't reconsider Umpqua - Sterling approval or explain why under CRA is it now ok to "commit to commit" later...

April 28, 2014

So the Fed asked Old National, or its outside counsel at Krief DeVault LLP in Indianapolis, what the public benefit of acquiring United Bancorp in Ann Arbor might be, telling them to send a copy to Inner City Press / Fair Finance Watch. But there's a problem: despite the clear instructions in ICP's comment letters, Old National / Krief DeVault send a previous submission to the wrong place, then resent, late, And this one?

April 21, 2014

Inner City Press / Fair Finance Watch has filed a timely request for reconsideration:

Board of Governors of the Federal Reserve System
Attn: Chair Janet Yellen, Secretary Robert deV. Frierson
20th Street and Constitution Avenue, N.W., Washington, DC 20551

Re: Timely Request for Reconsideration of the Board's April 1 "Conditional" Approval of the the Applications of Umpqua Holdings Corporation to merge with Sterling Financial Corporation and thereby indirectly acquire Sterling Savings Bank

Dear Chair Yellen, Secretary Robert deV. Frierson, General Counsel and others in the FRS:

This is a timely request for reconsideration of the Board's April 1, 2014 "conditional" approval of the Applications of Umpqua Holdings Corporation to merge with Sterling Financial Corporation and thereby indirectly acquire Sterling Savings Bank.

Inner City Press / Fair Finance Watch and others, including other members of NCRC, submitted comments weaknesses in the lending records of Umpqua and Sterling, weaknesses confirmed by the FDIC and the Board. The conditional approval order states that

"the Board’s review indicates that low volume of loan applications is a key factor in Umpqua Bank’s relatively low volume of lending to LMI individuals, to African American, Asian, and Hispanic individuals, and to small businesses in predominantly minority census tracts, in certain of its assessment areas, as compared with the aggregate. To that end, Umpqua has committed that, within 60 days following consummation of the merger with Sterling, Umpqua will develop a plan consistent with the combined organization’s size and complexity, to assist the combined organization in continuing to help meet the credit needs of its communities, in accordance with the CRA. The plan will establish specific performance goals and measures to assist the combined organization in helping to meet community credit needs, including through outreach and marketing of its products and services to LMI and underserved individuals and communities and by identifying opportunities for community development–related investments in its communities."

While the only enforcement mechanism of the Community Reinvestment Act is in connection with merger and expansion applications, the above impermissibly grants approval for a later, unspecified plan.

It is not even stated that the plan will be public. That should be confirmed in connection with this request for reconsideration.

Since April 1, consider also:

Blank Rome LLP | Target Data Breach Suit By Banks Extends To ...Linex Legal (press release) (registration)-Apr 10, 2014 0:14-cv-00643, by Umpqua Bank, Steinhafel's statement “omits” the fact that “it is the nation's financial institutions—and not Target—ensuring that this is the case ...

and

April 9, Courthouse News, "As their trial date approached, a class has settled claims that Umpqua Bank uses special software to maximize the amount of overdraft fees it charges. The parties have until May 19 to move for preliminary approval of the settlement, U.S. District Judge Jon Tigar said in a Friday order vacating the trial schedule."

The Order, referring to ICP's comments, states that

"A commenter also suggested that a conflict of interest exists because a former Secretary of the Treasury will be affiliated with a shareholder of the combined organization. No evidence of a conflict was presented, and the Board expects that the parties involved will abide by all laws governing conflicts of interest."

For example, the OCC has anti revolving door rules for transfer between itself and national banks. Here, former Treasury Secretary Geithner through Warburg Pincus colorably engaged in the same thing. ICP said that a hearing was needed, and reiterates that.

April 14, 2014

   Inner City Press / Fair Finance Watch has been challenging BancorpSouth, now this:

April 12, 2014

Board of Governors of the Federal Reserve System
Attn: Chairman Janet Yellen, Secretary Robert deV. Frierson
20th Street and Constitution Avenue, N.W.
Washington, DC 20551

Re: The Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas

Dear Chairman Yellen, Secretary Robert deV. Frierson and others in the FRS:

This concerns the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas.

Back on March 24, ICP submitted comments on BancorpSouth's Ouachita / Louisiana application on March 24, receiving in the two week after only this:

From: Juanetta Price <juanetta.price@frb.gov>

Date: Mon, Mar 24, 2014 at 4:18 PM

Subject: Automatic reply: Request for Full Copy of, & Timely Comments On, Requesting Hearings & an Extension of the Comment Period On the Applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independ...

To: "Matthew R. Lee" at InnerCityPress.org

I am out of the office until March 31.

As noted in ICP's timely April 7 comments on BancorpSouth's Central Community Corporation proposal, the public portions of applications should be given on a timely basis, and timely comments acknowledged.

Then, on April 8 -- two weeks after ICP's March 24 request -- this arrived:

Subject: Public Portion of Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Tue, Apr 8, 2014 at 5:53 PM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: "Sparks, Yvonne S [at] stls.frb.org,Blase, Dennis [at] stls.frb.org, Goldberg, Amory R (Board) [at] frb.gov

Dear Mr. Lee:

Attached is the public portion of the application by BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank.

There was no explanation of the two week delay. The next day, April 9, this arrived:

Subject: Revised Public Portion of Application BancorpSouth - Ouachita
From: Windsor, Cathie [at] stls.frb.org
Date: Wed, Apr 9, 2014 at 11:48 AM
To: Lee [at] fairfinancewatch.org, Inner City Press
Cc: Sparks, Yvonne S [at] stls.frb.org

Dear Mr. Lee:

Please disregard the public portion of the application sent to you yesterday for BancorpSouth, Inc. to merge with Ouachita Bancshares Corporation. It appears that pages 1-32 were left out.

Leaving out pages, it happens. But what of the two week gap in providing any of the public portion of the application? Inner City Press asserts and request that the comment periods be extended. ICP also notes that on April 10 BancorpSouth announced yet another proposed acquisition, of Lafayette, La.-based Knox Insurance Group, LLC.

Reviewing the 2012 HMDA data released by the FFIEC (and largely unaddressed in existing CRA performance evaluations and fair lending exams), ICP has examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi, Baton Rouge, Louisiana and Memphis, Tennessee MSAs and finds them troubling.

In 2012 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 258 loans to whites, only 17 to African Americans and five to Latinos. BancorpSouth's denial rate for whites was 7.4% while for African Americans it was 25.8% -- 3.49 times higher. This is troubling.

In 2012 in the Baton Rouge LA MSA for conventional home purchase loans in 2012, BancorpSouth made 60 such loans to whites; only three to African Americans and one to a Latino.

On March 24 we stated: next time we will analysis next-door Texas. But for now, in 2012 in the Memphis TN MSA for conventional home purchase loans, BancorpSouth made 243 loans to whites, only 14 to African Americans and four to Latinos. BancorpSouth's denial rate for whites was 4.2% while for African Americans it was 22.7% -- 5.4 times higher. This is outrageous.

On April 7 we stated: BancorpSouth in 2012 did not report any data in the Austin, Texas MSA. First State Bank Central Texas, for home purchase loans there, made 13 such loans to whites, NONE to African Americans or Latinos. Likewise, it made no refinance loans to African Americans or Latinos.

Now we note that BancorpSouth in the Lafayette, Louisiana MSA in 2012 for conventional home purchase loans, BancorpSouth made 37 loans to whites, NONE to African Americans or Latinos. In Table 4-1, BancorpSouth made 15 loans to whites and ONE to an African American applicant. That is, ALL of its home purchase loans to people of color were in Table 4-1, none in Table 4-2. This is troubling, and a pattern. The comment periods must be extended.

BancorpSouth should be required to fully disclose all branches it would close, and other changes, before the comment period closed. After for example the precedent of Huntington (and, in the Northeast, of Rockville and United in Connecticut and Massachusetts), both of which disclosed which branches they would close during the comment period, Huntington even re-starting the comment period to do so, to not extend this comment period on these five or more branches would be a major step backward for the Federal Reserve.

ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit.

If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.

Very Truly Yours,

Matthew Lee, Executive Director, Inner City Press/Fair Finance Watch

April 7, 2014

From the Federal Reserve's Umpqua - Sterling order:

"The Board’s review indicates that low volume of loan applications is a key factor in Umpqua Bank’s relatively low volume of lending to LMI individuals, to African American, Asian, and Hispanic individuals, and to small businesses in predominantly minority census tracts, in certain of its assessment areas, as compared with the aggregate. To that end, Umpqua has committed that, within 60 days following consummation of the merger with Sterling, Umpqua will develop a plan consistent with the combined organization’ size and complexity, to assist the combined organization in continuing to help meet the credit needs of its communities, in accordance with the CRA. The plan will establish specific performance goals and measures to assist the combined organization in helping to meet community credit needs, including through outreach and marketing of its products and services to LMI and underserved individuals and communities and by identifying opportunities for community development–related investments in its communities."

But will it be public? It should be. Watch this site.

March 31, 2014

The Fed last week banned the "U.S. units of HSBC Holdings PLC, Royal Bank of Scotland Group PLC, and Banco Santander SA from increasing the dividends they send overseas after their "stress test" results didn't meet the Fed's standards." We'll have more on this.

March 24, 2014

The Federal Reserve has hit a new low: in its "public record" on M&T's stalled-out application to acquire Hudson City Savings Bank, the Fed has only 2012 HMDA data. So last week Inner City Press / Fair Finance Watch submitted analysis of the just-obtained 2013 data. But the Fed sends back essentially a form letter, you have not shown exceptional circumstances that would warrant providing additional time to comment on the proposal, cc-ing one of its former FRB Staff Counsels now representing M&T. Isn't getting up to date information, instead of data more than a year old, enough of a reason to put the comment in the record?

March 17, 2014

So Umpqua Bank has committed to commit - it has told the Federal Reserve that it will (or would) submit a CRA plan sixty days after it consummates its proposed acquisition of Sterling Bank. But will Umpqua's plan be made public? And will it be able to be enforced? The Federal Reserve should answer this.

March 10, 2014

Should the Federal Reserve really be parading big bank representatives as its experts on the CRA?

March 3, 2014

In the Senate, new Fed chairperson Yellen said "there’s no intersection at all in any way between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate. So the Federal Reserve simply does not have authority to supervise or regulate Bitcoin in any way."

February 24, 2014

The Fed's Eric Kollig declined to comment when asked about Mercantile Bank of Michigan, whose CFO Chuck Christmas is dismissive of the CRA questions raised not only by Inner City Press / Fair Finance Watch, but also by the Fed (and FDIC), saying "there's nothing that has come up as far as we know in our communications that could cause us any angst." That's part of the problem, that Mercantile doesn't care or is in denial... But is the Fed enabling it?

February 17, 2014

On February 11, Senator Elizabeth Warren (D-MA) and Representative Elijah Cummings (D-MD) sent a letter to new Fed Chairman Janet Yellen, asking that she reverse Bernanke's policy of delegating supervisory and enforcement powers to staff. In the last 10 years, the Board voted on only 11 of nearly 1,000 enforcement actions, and that under current application of the Federal Reserve’s enforcement delegation policy, the Fed can enter into consent orders without ever receiving formal approval of senior staff. The letter urges that (i) the Board vote on any consent order that involves $1 million or more or that requires a bank officer to be removed and/or new management installed; (ii) staff formally notify the Board before entering into a consent order under delegated authority; (iii) each Board member be provided with the necessary staffing capacity to review and analyze pending enforcement actions; and (iv) all Board members receive a copy of all letters sent to the Chairman or another Board member by a committee or member of Congress.

But what about the Governors getting more involved in merger review, including CRA?

February 10, 2014

And now on Umpqua's application to acquire Sterling, the Federal Reserve has asked Umpqua if it has a CRA plan, first tweeted from @FinanceWatchOrg, and if it has one, to submitted a copy. We'll see.

February 3, 2014

So now the Fed has asked Umpqua and Sterling which branches they would close...

January 27, 2014

Is the Federal Reserve watching the Off Shore Leaks series? They should be. We'll see. Watch this site.

January 20, 2014

The Federal Reserve on January 17 asked Umpqua Bank a series of questions in connection with its proposal to acquire Sterling, challenged by Inner City Press / Fair Finance Watch, which has put the Fed's "Additional Information" letter online, first via @FinanceWatchOrg here: http://www.innercitypress.org/umpqua1frbicp011714.pdf

January 13, 2014

  One thing that should be expected from the Federal Reserve is to answer its mail -- on Huntington, for example. How can a bank holding company try to buy another (Camco) without submitting an application for review by (and public comment to) the Fed? Especially given the issues